AVC - Interim / Quarterly Report 2021

ASIA VITAL COMPONENTS CO. , LTD

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020

Address: No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City 806, Taiwan (R.O.C.) Telephone: 886-7-815-7612

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese financial statements shall prevail.

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REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

English Translations of a Report Originally Issued in Chinese

To Asia Vital Components Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Asia Vital Components Co., Ltd. and subsidiaries (collectively, the "Company ") as of September 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three-month and nine-month periods ended September 30, 2021 and 2020 and consolidated statements of changes in equity and cash flows for the nine-month periods ended September 30, 2021 and 2020, and notes to the consolidated financial statements, including the summary of significant account policies (together “the consolidated financial statements”). Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China, Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except for the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 65, ”Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As discussed in Note 4(3), certain non-significant subsidiaries included in the consolidated financial statements were unreviewed. These subsidiaries’ total assets amounted to NT$11,884,870 thousand and NT$10,018,919 thousand, or 26% and 26% of the total consolidated assets as of Septmeber 30, 2021 and 2020, respectively. These subsidiaries’ total liabilities amounted to NT$7,809,702 thousand and NT$6,474,011 thousand, or 24% and 23% of the total consolidated liabilities as of Septmeber 30, 2021 and 2020, respectively. The comprehensive income of these subsidiaries amounted to NT$3,765 thousand and NT$3,159 thousand, or 0% and 0% of the consolidated comprehensive income for the three-month periods ended September 30, 2021 and 2020, respectively. The comprehensive income of these subsidiaries amounted to NT$64,460 thousand and NT$(70,513) thousand, or 3%and (5%) of the consolidated comprehensive income for the nine-month periods ended September 30, 2021 and

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2020, respectively. As discussed in Note 6(10) to consolidated financial statements mentioned, the investments accounted for under the equity method were NT$223,733 thousand and NT$287,455 thousand as of Septmeber 30, 2021 and 2020 respectively. The share of income of associates under the equity method amounted to NT$12,440 thousand and NT$5,128 thousand for the three-month periods ended Septmeber 30, 2021 and 2020, respectively. The share of income of associates under the equity method amounted to NT$13,360 thousand and NT$18,049 thousand for nine-month periods ended September 30, 2021 and 2020, respectively. The share of the other comprehensive income of associates under the equity method amounted to NT$(44) thousand and NT$3,751 thousand for the three-month periods ended Septmeber 30, 2021 and 2020, respectively. The share of the other comprehensive income of associates under the equity method amounted to NT$874 thousand and NT$611 thousand for the nine-month periods ended September 30, 2021 and 2020, respectively. These amounts were based on the investees’ unreviewed financial statements. The information on Note 13 to consolidated financial statements was not reviewed by the independent accountants.

Qualified Conclusion

Based on our reviews, except for the information of certain non-significant subsidiaries and investees mentioned in the Basis for Qualified Conclusion paragraph where were based on the unreviewed financial statements that might be adjusted if they were reviewed by the independent accountants, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of September 30, 2021 and 2020, their consolidated financial performance for the three-month and nine-month periods ended September 30, 2021 and 2020, and cash flows for the nine-month periods ended September 30, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

ERNST & YOUNG

Taiwan Republic of China Nov 11, 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions, The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

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English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

UNAUDITED CONSOLIDATED BALANCE SHEETS As of September 30, 2021, December 31, 2020 and September 30, 2020

(September 30, 2021 and 2020 are unaudited)

(Expressed in thousands of New Taiwan Dollars)

Assets	Notes	September 30, 2021	September 30, 2021	December 31, 2020	December 31, 2020	September 30, 2	020
		Amount	％	Amount	％	Amount	％
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss-current Financial assets measured at amortized costs-current Notes receivable, net Accounts receivable, net Other receivables Other receivables-related parties Inventories, net Prepayments Other current assets Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income-noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Investment property Intangible assets Deferred tax assets Other non-current assets Total non-current assets Total assets	6(1) 6(2) 6(3), 8 4, 6(4) 4, 6(5) 6(5).(6) 6(6) 6(7) 6(8) 4, 6(9) 6(10) 4, 6(11), 8 4, 6(23), 8 4, 6(12), 8 6(13) 4, 6(27) 6(14), 8	$13,491,704 63,292 556,572 494,082 3,756,690 568,411 8,682 12,925,776 1,005,666 705,260	30 0 1 1 8 1 0 28 2 2 73 0 1 17 4 0 0 2 3 27 100	$11,108,016 － 578,286 549,666 3,691,461 458,422 15,812 11,535,314 313,113 889,814	27 － 2 1 9 1 0 29 1 2 72 0 1 19 4 0 0 2 2 28 100	$10,487,475 55,497 356,402 738,024 4,542,232 396,034 3,428 9,664,451 205,091 820,291 27,268,925 96,761 287,455 7,032,267 1,691,056 121,983 141,520 865,332 1,029,005 11,265,379 $38,534,304	27 0 1 2 12 1 0 25 1 2
		$33,576,135		29,139,904			71
		94,933 223,733 7,620,850 1,857,085 102,859 156,822 910,131 1,168,492		101,449 216,069 7,773,383 1,733,023 122,467 149,594 827,675 612,672			0 1 18 5 0 0 2 3
		12,134,905		11,536,332			29

		$45,711,040		$40,676,236			100

(The accompanying notes are an integral part of the consolidated financial statements.)

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English translation of Consolidated Financial Statements Originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

UNAUDITED CONSOLIDATED BALANCE SHEETS As of September 30, 2021, December 31, 2020 and September 30, 2020 (September 30, 2021 and 2020 are unaudited)

(Expressed in thousands of New Taiwan Dollars)

Liabilities and Equity	Notes	September 30, 2021	September 30, 2021	December 31, 2020	December 31, 2020	September 30,	2020
		Amount	％	Amount	％	Amount	％
Current liabilities Short-term loans Contract liabilities, current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities-current Other current liabilities Current portion of long-term loans Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred tax liabilities Lease liabilities-noncurrent Long-term deferred revenue Net defined benefit liabilities-noncurrent Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other components of equity Total equity attributable to the parent company Non-controlling interests Total equity Total liabilities and equity	6(15) 6(22) 6(16) 4, 6(27) 4, 6(23) 6(18) 6(17) 6(18) 4, 6(27) 4, 6(23) 6(19) 4, 6(20) 6(21) 6(21) 6(21) 6(21)	$4,531,034 368,969 2,503,459 11,288,532 3,242,532 754,245 187,815 320,579 882,001	10 1 5 25 7 2 0 1 2	$2,452,594 80,298 2,463,026 11,313,507 2,914,738 493,153 170,345 267,920 1,309,287	6 0 6 28 7 1 1 1 3	$2,530,551 784,057 2,262,432 9,253,108 3,409,224 500,145 157,122 303,537 1,448,810	7 2 6 24 9 1 0 1 4
		24,079,166	53	21,464,868	53	20,648,986	54
		2,400,000 2,680,222 1,437,598 1,205,674 723,130 5,232 9,405	5 6 3 3 1 0 0	2,400,000 2,475,331 1,228,920 1,048,455 755,714 5,233 9,377	6 6 3 2 2 0 0	2,400,000 2,180,217 1,140,376 1,018,055 743,673 7,382 9,187	6 6 3 2 2 0 0
		8,461,261	18	7,923,030	19	7,498,890	19
		32,540,427	71	29,387,898	72	28,147,876	73
		3,533,101 1,260,103 1,057,847 1,326,487 5,965,744	8 3 2 3 13	3,533,101 1,601,099 865,492 1,402,573 4,500,820	9 4 2 3 11	3,533,101 1,540,817 865,492 1,402,573 3,986,005	9 4 2 4 10
		8,350,078	18	6,768,885	16	6,254,070	16
		(1,551,980)	(3)	(1,326,487)	(3)	(1,542,667)	(4)
		11,591,302 1,579,311	26 3	10,576,598 711,740	26 2	9,785,321 601,107	25 2
		13,170,613	29	11,288,338	28	10,386,428	27

		$45,711,040	100	$40,676,236	100	$38,534,304	100

(The accompanying notes are an integral part of the consolidated financial statements.)

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English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME As of September 30, 2021, December 31, 2020 and September 30, 2020 (Expressed in thousands of New Taiwan Dollars, except for earnings par share) (September 30, 2021 and 2020 are unaudited)

Items	Notes	For the three-month period ended September 30, 2021	For the three-month period ended September 30, 2021	For the three-month period ended September 30, 2020	For the three-month period ended September 30, 2020	For the nine-month period ended September 30, 2021	For the nine-month period ended September 30, 2021	For the nine-month period ended September 30, 2020	For the nine-month period ended September 30, 2020
		Amount	`％`	Amount	`％`	Amount	`％`	Amount	`％`
Operating revenues Operating costs Gross profit Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Expected credit impairment (losses) gains Subtotal Operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of associates Subtotal Income from continuing operations before income tax Income tax expense Net income Other comprehensive income (loss) Items that will not be reclassified subsequently to profit or loss: Unrealized gains from equity instruments investments measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Share of other comprehensive income (loss) of associates Income tax related to items that may be reclassified subsequently Total other comprehensive loss, net of tax Total comprehensive income Net income attributable to: Stockholders of the parent Non-controlling interests Comprehensive income (loss) attributable to: Stockholders of the parent Non-controlling interests Earnings per share (NTD) Earnings per share-basic Earnings per share-diluted	4, 6(22) 6(23).(24) 6(23).(24) 6(25) 6(25) 6(25) 6(25) 4, 6(10) 6(27) 6(26) 4, 6(28)	$11,772,620 (9,636,679)	100 (82)	$10,048,192 (8,235,665)	100 (82)	$35,120,197 (29,007,217)	100 (83)	$29,139,567 (24,775,544)	100 (85)
		2,135,941	18	1,812,527	18	6,112,980	17	4,364,023	15
		(161,886) (136,720) (616,983) (10,391)	(2) (1) (5) (0)	(156,072) (126,590) (560,906) 4,903	(1) (1) (6) (0)	(475,426) (400,037) (1,811,498) (2,946)	(2) (1) (5) (0)	(423,415) (334,999) (1,426,457) 40,918	(1) (1) (5) 0
		(925,980)	(8)	(838,665)	(8)	(2,689,907)	(8)	(2,143,953)	(7)
		1,209,961	10	973,862	10	3,423,073	9	2,220,070	8
		5,951 184,032 2,976 (36,059) 12,440	0 2 0 (0) 0	7,190 121,831 (146,398) (39,263) 5,128	0 1 (1) (1) 0	18,585 433,752 (150,612) (107,302) 13,360	0 1 (0) (0) 0	27,486 271,667 (274,933) (149,272) 18,049	0 1 (1) (1) 0
		169,340	2	(51,512)	-	207,783	1	(107,003)	(1)
		1,379,301 (430,105)	12 (4)	922,350 (259,817)	9 (2)	3,630,856 (1,095,245)	10 (3)	2,113,067 (629,676)	7 (2)
		949,196	8	662,533	7	2,535,611	7	1,483,391	5
		7,474 (16,305) (44) 1,951	0 (0) (0) 0	8,190 161,171 3,751 (17,651)	0 1 0 (0)	27,164 (268,471) 874 31,208	0 (1) 0 0	11,357 (169,355) 611 24,055	0 (0) 0 0
		(6,924)	(0)	155,461	1	(209,225)	(0)	(133,332)	(0)
		$942,272	8	$817,994	8	$2,326,386	7	$1,350,059	5
		$853,970 95,226	7 1	$639,913 22,620	7 0	$2,189,830 345,781	6 1	$1,401,513 81,878	5 0
		$949,196	8	$662,533	7	$2,535,611	7	$1,483,391	5
		$848,674 93,598	7 1	$791,128 26,866	8 0	$1,991,658 334,728	6 1	$1,268,639 81,420	5 0
		$942,272	8	$817,994	8	$2,326,386	7	$1,350,059	5
		$2.42		$1.81		$6.20		$3.97
		$2.41		$1.81		$6.18		$3.96

(The accompanying notes are an integral part of the consolidated financial statements.)

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English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO. , LTD

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine-month periods ended September 30, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

Items				EquityAttributable	to the Parent Company	to the Parent Company	to the Parent Company		Non-Controlling Interests	Total Equity
	Capital	Additional Paid- in Capital		Retained Earnings		Other Components of Equity		Total
	Common Stock		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	(Losses) From Equity Instruments Investments Measured At Fair Value Through Other Comprehensive Income
Balance as of January 1, 2020 Appropriation and distribution of 2019 retained earnings Legal reserve Special reserve Cash dividends Income for the nine-month period ended Septmeber 30, 2020 Other comprehensive income (loss) for the nine-month period ended Septmeber 30, 2020 Total comprehensive income (loss) Increase in non-controlling interests Disposal of equity investments at fair value through other comprehensive income Balance as of Septmeber 30, 2020 Balance as of January 1, 2021 Appropriation and distribution of 2020 retained earnings Legal reserve Cash dividends Special reserve Cash dividends from capital surplus Income for the nine-month period ended Septmeber 30, 2021 Other comprehensive income (loss) for the nine-month period ended Septmeber 30, 2021 Total comprehensive income (loss) Increase in non-controlling interests The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries Disposal of equity investments at fair value through other comprehensive income Balance as of Septmeber 30, 2021	$3,533,101 － $3,533,101 $3,533,101 － $3,533,101	$1,540,817	$769,695 95,797	$995,284 407,289	$3,539,661 (95,797) (407,289) (459,303) 1,401,513	($1,063,568) (144,231)	($339,005) 11,357	$8,975,985 －－ (459,303) 1,401,513 (132,874)	$357,925 81,878 (458)	$9,333,910 －－ (459,303) 1,483,391 (133,332)
		－	－	－	1,401,513	(144,231)	11,357	1,268,639	81,420	1,350,059
					7,220		(7,220)	－－	161,762	161,762 －
		$1,540,817	$865,492	$1,402,573	$3,986,005	($1,207,799)	($334,868)	$9,785,321	$601,107	$10,386,428
		$1,601,099 (353,310)	$865,492 $192,355	$1,402,573 ($76,086)	$4,500,820 (192,355) (635,958) 76,086 2,189,830	($997,070) (225,336)	($329,417) 27,164	$10,576,598 - (635,958) - (353,310) 2,189,830 (198,172)	$711,740 345,781 (11,053)	$11,288,338 - (635,958) - (353,310) 2,535,611 (209,225)
		－	－	－	2,189,830	(225,336)	27,164	1,991,658	334,728	2,326,386
		12,314			27,321		(27,321)	－ 12,314 －	545,157 (12,314)	545,157 －－
		$1,260,103	$1,057,847	$1,326,487	$5,965,744	($1,222,406)	($329,574)	$11,591,302	$1,579,311	$13,170,613

(The accompanying notes are an integral part of the consolidated financial statements.)

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English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine-month periods ended September 30, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

Items		For the nine-month periods ended September 30, 2021		For the nine-month periods ended September 30, 2020
Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expanse adjustments : Depreciation Amortization Amortization of royalty Expected credit losses (profit) Interest expense Interest income Dividend revenue Compensation costs of share-based payment transaction Share of (profit) losses of associates Loss on disposal of property, plant and equipment (Gain) on disposal of investments Impairment loss on non-financial assets Others Changes in operating assets and liabilities: Notes receivable Accounts receivable Other receivables Other receivables-related parties Inventories Prepayments Other current assets Other operation assets Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash provided by operating activities Cash flows from investing activities: Proceeds from disposal of financial assets measured at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss (Increase) in advance payments in investment Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (Increase) in refundable deposits Acquisition of intangible assets (Increase) in other noncurrent assets-others Other prepayments Dividends received Net cash used in investing activities Cash flows from financing activities: Increase in short-term loans (Decrease) in short-term loans (Decrease) in short-term notes payable Increase in short-term notes payable Proceeds from long-term loans Repayments of long-term loans Increase (decrease) in guarantee deposits Repayment of lease liabilites Cash dividends Change in non-controlling interests Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year		$3,630,856 1,122,817 44,232 657 2,946 107,302 (18,585) － 4,053 (13,360) 82,317 (1,166) 36,727 346,973 55,905 (137,768) (40,076) 7,130 (1,740,318) (692,553) 184,554 21,714 288,671 40,433 (24,975) 332,874 52,659 (1) 3,694,018 19,089 (112,382) (676,723) 2,924,002 32,907 (237,240) 174,019 － (1,056,022) 15,571 248 (53,661) (204,557) (352,469) 3,240 (1,677,964) 8,698,049 (6,618,442) －－ 1,862,740 (2,083,695) 28 (148,885) (989,268) 541,104 1,261,631 (123,981) 2,383,688 11,108,016 $13,491,704		$2,113,067 861,218 34,575 2,198 (40,918) 149,272 (27,486) (763) 9,450 (18,049) 41,966 (312) 166,417 267,676 (188,650) 2,523,389 (26,472) 20,639 (1,681,524) 229,532 (82,428) (7,062) 767,954 163,798 (1,505,394) 289,981 86,174 － 4,148,248 27,486 (155,244) (488,017) 3,532,473 22,220 (128,402) 72,745 (19,723) (1,302,614) 53,772 (5,375) (37,357) (321,719) － 7,282 (1,659,171) 10,031,562 (9,458,159) (100,000) 2,400,000 6,170,000 (8,451,806) (9,824) (123,457) － 152,312 610,628 (151,011) 2,332,919 8,154,556 $10,487,475

(The accompanying notes are an integral part of the consolidated financial statements.)

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English Translation of Financial Statements Originally Issued in Chinese

ASIA VITAL COMPONENTS CO., LTD AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2020 AND 2019

(Unless otherwise stated, all amounts expressed are in thousands of New Taiwan Dollars)

1. History and organization

ASIA VITAL COMPONENTS CO., LTD. (the Company) was incorporated on December 17, 1991. The Company’s registered address is No.248-27, Xinsheng Rd., Qianzhen Dist., Kaohsiung City. The principal activities of the Company are to manufacture, process, assemble and to import and export electronic parts, electronic materials, communication electronic machinery products, automobile parts, lighting device, computer peripherals.

The Company’s ordinary shares were publicly listed on the Taiwan Stock Exchange (TWSE) on 27 September, 2002.

2. Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries (“the Group”) for the ninemonth periods ended September 30, 2021 and 2020 were authorized for issue by the Board of Directors on Nov 11, 2021.

3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments.

The Group adopted International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2021. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements	January 1, 2022

A. Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

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i. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)
The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.
ii. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
iii. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

iv. Annual Improvements to IFRS Standards 2018 – 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned amendments which are applicable for annual periods beginning on or after 1 January 2022 have no material impact on the Group.

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(3) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 17“Insurance Contracts”	January 1, 2023
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	January 1, 2023
d	Disclosure Intitative－Accounting Policies－Amendments to IAS 1	January 1, 2023
e	Definition of AccountingEstimates－Amendments to IAS 8	January 1, 2023
f	Deferred Tax related to Assets and Liabilities arising from a Single Transaction－Amendments to IAS 12	January 1, 2023

A.IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

B. IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

〜 11 〜

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

C. Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

D.Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

E. Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

－
F. Deferred Tax related to Assets and Liabilities arising from a Single Transaction Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently evaluating the potential impact of the aforementioned standards and interpretations listed under A, C ~ F, it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

4. Summary of significant accounting policies

(1) Statement of compliance

The consolidated financial statements of the Group for the nine-month periods ended September 30, 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

〜 12 〜

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

The Group's consolidated financial statements preparation principles are the same as the 2020 consolidated financial statements. Please refer to the Group's 2020 consolidated financial statements.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)	Percentage of ownership (%)
			2021.9.30	2020.12.31	2020.9.30
The Group	AVC INTERNATIONAL CO., LTD.`－`B.V.I. (AVCI`－`BVI)	Investmentholding	100.00%	100.00%	100.00%
	CHIHUNG INTERNATIONAL LTD.(CHIHUNG)	Investmentholding	100.00%	100.00%	100.00%
	RAYNEY INTERNATIONAL LTD.(RAYNEY)	Trade	100.00%	100.00%	100.00%
	MERIT TRADING CORPORATION (MERIT)	Trade	100.00%	100.00%	100.00%
	AVC AMERICA, INC. (AVCA)	Trade	100.00%	100.00%	100.00%
	AVC INTERNATIONAL (SAMOA) CO., LTD. (AVCI(SAMOA))	Trade	100.00%	100.00%	100.00%
	JADS CORPORATION (HK)LTD.(JADS)	Trade	100.00%	100.00%	100.00%
	AVC INTERNATIONAL CO., LTD.`－`SAMOA (AVCI－SAMOA)	Trade	100.00%	100.00%	100.00%
	HUNG YE INVESTMENT CO., LTD.(HUNGYE)	Investmentholding	100.00%	100.00%	100.00%
	D-MAX TECHNOLOGY CO., LTD. (D-MAX)	Sales and manufacture of electronic parts and relatedproducts	100.00%	100.00%	100.00%
	FOSITEK CORP. (FST)	Sales and manufacture of electronic parts and relatedproducts	19.25`％`	19.71%	22.71%
	AVC EUROPE TECHNOLOGY GMBH (AVCEU)	Trade	100.00%	100.00%	100.00%

〜 13 〜

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)	Percentage of ownership (%)
			2021.9.30	2020.12.31	2020.9.30
	AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED.(AVC(VN))	Sales and manufacture of electronic products	100.00%	100.00%	`－`
AVCI`－`BVI	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. (AVCSZ)	Sales and manufacture of electronic products	100.00%	100.00%	100.00%
	MACE TECH CORP. (MACE)	Trade	100.00%	100.00%	100.00%
	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. (AVCCD)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%	100.00%
	AVC OPTICS CORP. (AVCOC)	Investment holding	100.00%	100.00%	100.00%
MACE	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (AVCDG)	Manufacture, process and sales of electronic products	100.00%	100.00%	100.00%
AVCOC	AVC OPTICS (WUHAN) CORP. (AVCWH)	Sales and manufacture of computers, related parts and accessories	100.00%	100.00%	100.00%
AVCWH	WUHAN ASIA VITAL COMPONENTS CO.,LTD. (AVCWN)	Trade	100.00%	100.00%	100.00%
CHIHUNG	TONBRIDGE INVESTMENTS LTD. (TONBRIDGE)	Investment holding	100.00%	100.00%	100.00%
	ASIA VITAL COMPONENTS (CHINA) CO., LTD. (AVCCN)	Sales and manufacture of electronic products	100.00%	100.00%	100.00%
TONBRIDGE	ASIA VITAL COMPONENTS (SHANGHAI) CO.,LTD. (AVCSH)	Notebook thermal module	100.00%	100.00%	100.00%
AVCCN	BEIJING AVC TECHNOLOGY RESEARCH CENTER CO.,LTD. (AVCBJ)	Maintenance, research and development of electronic products	100.00%	100.00%	100.00%
	AVC PRECISION, CO., LTD.(AVCP)	Sales and manufacture of electronic products	100.00%	100.00%	100.00%
D-MAX	WUCHIDA INTERNATIONAL CO., LTD.(WUCHIDA)	Investment holding	100.00%	100.00%	100.00%

〜 14 〜

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)	Percentage of ownership (%)
			2021.9.30	2020.12.31	2020.9.30
WUCHIDA	D-Max INTERNATIONAL CO., LIMITED(D-Max HK)	Investment holding	100.00%	100.00%	100.00%
D-Max	(JIASHAN) D-MAX ELECTRONICS CO.,LTD.	Sales and manufacture of electronic and photographic equipment	100.00%	100.00%	100.00%
FST	FOREVER RICH INVESTMENTS CO.,LTD. (FOREVER RICH)	Investment holding	`－` (Note 1)	`－` (Note 1)	`－` (Note 1)
	MARKETHILL INVESTMENTS LIMITED (MARKETHILL)	Investment holding	100.00% (Note 1)	100.00% (Note 1)	100.00% (Note 1)
FOREVER RICH	MARKETHILL INVESTMENTS LIMITED (MARKETHILL)	Investment holding	`－` (Note 1)	`－` (Note 1)	`－` (Note 1)
MARKETHILL	DONG GUAN DOWA ELECTRONICS CO.,LTD.	Sales and manufacture of membrane switches	`－` (Note 2)	`－` (Note 2)	100.00%
	FIRST DOME CORP TELECOM.,LTD.	Sales and manufacture of rails, shafts and metal stampingtooling	100.00%	100.00%	100.00%

Note 1: FST, which was the surviving company, had a short-form merge with its 100% owned subsidiary, FOREVER RICH, as of May 15, 2020. The subsidiaries held by FOREVER RICH were transferred to FST.

Note 2: FST’s Board of Directors’ meeting approved the dissolution and liquidation of DONG GUAN DOWA ELECTRONICS CO.,LTD. on May 12, 2020.

Although the percentage of ownership interests in FST is less than 50%, the Group determined that it has control over FST. This is due to a combination of factors : the Group remains the single largest shareholder of FST since the increase of the investment in September 2014, the Group could obtain proxies to achieve relative majority in the absence of a contractual arrangement in place; and the ability of the Company to appoint or approve the key management personnel of FST who have the ability to direct the relevant activities.

The financial statements of part of the consolidated subsidiaries listed above had not been reviewed by auditors. As of September 30, 2021 and 2020, the related assets of the subsidiaries which were unaudited by auditors amount to $11,884,870 thousand and $10,018,919 thousand respectively, and the related liabilities amount to $7,809,702 thousand and $6,474,011 thousand, respectively. The comprehensive income of these subsidiaries amount to $64,460 thousand and ($70,513) thousand for the nine-month periods ended September 30, 2021 and 2020, respectively. The comprehensive income of these subsidiaries amount to $3,765 thousand and $3,159 thousand for the three-month periods ended September 30, 2021 and 2020, respectively.

〜 15 〜

(4) Basis of consolidationt

The accounting policies adopted by the Group in the consolidated financial statements from January 1 to September 30, 2021 are the same as the consolidated financial statements of 2020. For the summary of other important accounting policies, please refer to the Group’s 2020 consolidated financial statements.

5. Significant accounting judgements, estimates and assumptions

The major sources of significant accounting judgments, estimates and assumptions that are used in the Group's consolidated financial statements for the period from January 1 to September 30 2021 and 2020 are the same as the 2020 consolidated financial statements. Please refer to the Group's 2020 consolidated financial statements.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash on hand and demand deposits Time deposits Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$13,161,511 330,193	$10,978,910 129,106	$10,357,860 129,615
	$13,491,704	$11,108,016	$10,487,475

Cash and cash equivalents were not pledged.

(2) Financial assets at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Financial products	30 Sep2021	31 Dec 2020	30 Sep2020
	$63,292	`－`	$55,497

Financial assets at fair value through profit or loss were not pledged.

(3) Financial assets measured at amortized cost-current

Bank deposits	30 Sep2021	31 Dec 2020	30 Sep2020
	$556,572	$578,286	$356,402

The Group classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 8 for more details on financial assets measured at amortized cost under pledge and Note 12 for details on credit risk and assessment of impairment loss.

(4) Notes receivable, net

otes receivable, net A.
Notes receivable Less: loss allowance Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$497,211 (3,129)	$553,116 (3,450)	$743,014 (4,990)
	$494,082	$549,666	$738,024

〜 16 〜

B. Notes receivables arised from operating activities and were not pledged.
C. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its note receivables at an amount equal to lifetime expected credit losses. The movement in the provision for impairment of note receivables is as follows:
D. Movement of the loss allowance table:

As of 1 Jan 2021 (Reversal) for the current period Foreign exchange adjustments As of 30 Sep 2021 As of 1 Jan 2020 Charge for the current period Foreign exchange adjustments As of 30 Sep 2020	Loss allowance
	$3,450 (287) (34)
	$3,129
	$2,412 2,583 (5)
	$4,990

(5) Accounts receivable, net

ccounts receivable, net
A. Account receivables Less: loss allowance Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$3,882,811 (126,121)	$3,827,104 (135,643)	$4,654,909 (112,677)
	$3,756,690	$3,691,461	$4,542,232

B. Accounts receivables were not pledged.

C. Trade receivables are generally on 90-150 day terms. The total carrying amount as of September 30, 2021, December 31, 2020 and September 30, 2020 were $3,882,811 thousand, $3,827,104 thousand and $4,654,909 thousand, respectively. The Group follows the requirement of IFRS 9 to assess the impairment, measure the loss allowance of its trade receivables at an amount equal to lifetime expected credit losses, condsider the grouping of note receivables by counterparties’ credit rating, by geographical region and by industry sector, and its loss allowance is recognized based on expected loss ratio, details are as follow. Please refer to Note 12 for more details on credit risk management.

Neither past due nor impaired	Past	due but not impaired	due but not impaired	Total
	31~90 days	91~180 days	>=181 days
$3,859,656 0%~5% 109,774	$5,225 1%~10% 52	$1,617 5%~20% 81	$16,313 50%~100% 16,214	$3,882,811 126,121
$3,749,882	$5,173	$1,536	$99	$3,756,690

〜 17 〜

Neither past due nor impaired	Past	due but not impaired	due but not impaired	Total
	31~90 days	91~180 days	>=181 days
$3,796,894 0%~5% 125,078	$11,263 1%~10% 112	$1,467 5%~20% 74	$17,480 50%~100% 10,379	$3,827,104 135,643
$3,671,816	$11,151	$1,393	$7,101	$3,691,461
$4,628,018 0%~5% 106,538	$7,653 1%~10% 76	$13,717 5%~20% 686	$5,521 50%~100% 5,377	$4,654,909 112,677
$4,521,480	$7,577	$13,031	$144	$4,542,232

D. Movement of the loss allowance table:

Movement of the loss allowance table:
As of 1 Jan 2021 (Reversal) for the current period Foreign exchange adjustments As of 30 Sep 2021 As of 1 Jan 2020 (Reversal) for the current period Foreign exchange adjustments As of 30 Sep 2020	Collectively impaired	Total
	$135,643 (8,720) (802)	$135,643 (8,720) (802)
	$126,121	$126,121
	$156,055 (41,544) (1,834)	$156,055 (41,544) (1,834)
	$112,677	$112,677

E. The Group entered into a factoring agreement with the following banks to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognized the transferred accounts receivable.

As of 30 September 2021, 31 December 2020 and 30 September 2020, other receivables from banks incurred by accounts receivable factoring amounted to $330,733 thousand, $248,672 thousand and $213,917 thousand, respectively.

As of 30 September 2021, 31 December 2020 and 30 September 2020, the relevant information of accounts receivable factored and derecognised by the Group is as follows:

〜 18 〜

(a) 30 September 2021:

The Factor (Transferee) E.SUN CTBC Total	Interest Rate (%) `－` `－` `－`	Accounts receivable factoring not yet due(in thousands) $92,553 15,500 $108,053	Amount received (in thousands) $82,227 13,950 $96,177	Retention (recognized as other receivables) (in thousands) $10,326 1,550 $11,876

(b) 31 December 2020:

The Factor (Transferee) E.SUN CTBC Total	Interest Rate (%) `－` `－` `－`	Accounts receivable factoring not yet due(in thousands) $71,444 13,203 $84,647	Amount received (in thousands) $64,033 11,883 $75,916	Retention (recognized as other receivables) (in thousands) $7,411 1,320 $8,731	Credit Limit (in thousands)
					$110,000 20,000
					$130,000

(c) 30 September 2020:

		Accounts		Retention
	Interest		Amount
The Factor	Rate	receivable	received	(recognized as	Credit Limit
(Transferee)	(%)	factoring not yet due(in thousands)	(in thousands)	other receivables) (in thousands)	(in thousands)
E.SUN	`－`	$55,865	$50,003	$5,862	$110,000
CTBC	`－`	14,884	13,394	1,490	20,000
Total	`－`	$70,749	$63,397	$7,352	$130,000

(6) Other receivables and other receivables-related parties

A.
Tax refund receivable Other receivables Less: loss allowance Subtotal Other receivables`－`related parties Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$79,800 512,836 (24,225)	$80,335 390,669 (12,582)	$16,627 390,420 (11,013)
	568,411	458,422	396,034
	8,682	15,812	3,428
	$577,093	$474,234	$399,462

〜 19 〜

B. The Group follows the requirement of IFRS 9 to assess the impairment. The Group measures the loss allowance of its other receivables at an amount equal to lifetime expected credit losses, considers the grouping of note receivables by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is recognized based on expected loss ratio, details are as follow. Please refer to Note 12 for more details on credit risk management.

C. Movement of the loss allowance table:

As of 1 Jan 2021 Charge for the current period Foreign exchange adjustments As of 30 Sep 2021 As of 1 Jan 2020 (Reversal) for the current period Write off Foreign exchange adjustments As of 30 Sep 2020	Individually impaired `－` `－` `－` `－` $17,998 `－` (17,808) (190) `－`	Collectively impaired $12,582 11,953 (310) $24,225 $13,369 (1,957) `－` (399) $11,013	Total
			$12,582 11,953 (310)
			$24,225
			$31,367 (1,957) (17,808) (589)
			$11,013

Impairment loss that was individually determined for the nine-month periods ended 30 September 2020, arose due to the fact that the counterparty was in financial difficulties. The amount of impairment loss recognized was the difference between the carrying amount of other receivables and the present value of its expected recoverable amount. The Group does not hold any collateral for such receivables.

(7) Inventories

entories .
Raw materials Work in progress Finished goods Total	30 Sep2021 $3,208,385 1,350,383 8,367,008 $12,925,776	31 Dec 2020	30 Sep2020
		$2,608,661 980,302 7,946,351	$2,235,444 1,201,065 6,227,942
		$11,535,314	$9,664,451

B. Expenses and losses incurred on inventories for the nine-month periods ended September 30 2021 and 2020 were as follows:

and 2020 were as follows:
Cost of inventories sold Loss (reversal) on inventory valuation Loss on disposal of Inventory Cost of goods sale	For the three-month periods ended September 30		For the nine-month periods ended September 30
	2021	2020	2021	2020
	$9,503,216 74,540 58,923	$8,306,225 (102,678) 32,118	$28,639,658 191,831 175,728	$24,485,478 169,433 120,633
	$9,636,679	$8,235,665	$29,007,217	$24,775,544

C. For the Group's three-month period ended September 30 2020, due to factors such as the rebound in the inventory price of the provision for decline in inventories at the beginning of the period, or the sale or use of the inventory, the assessment of the allowance for the provisioned inventory is recognized. The reduction in inventory recognition benefits was $102,678 thousand.

〜 20 〜

D. No inventories were pledged.

(8) Prepayments

Prepayments
Payment in advance Other prepaid expenses Total	30 Sep2021 $946,190 59,476 $1,005,666	31 Dec 2020 $261,281 51,832 $313,113	30 Sep2020
			$148,150 56,941
			$205,091

(9) Financial assets at fair value through other comprehensive income-noncurrent

Debt instrument investments measured at fair value through other comprehensive income – Noncurrent: Unlisted companies stocks	30 Sep2021	31 Dec 2020	30 Sep2020
	$94,933	$101,449	$96,761

Financial assets at fair value through other comprehensive income were not pledged.

(10)Investments accounted for under the equity method

A. The following table lists the investments in associates of the Group:

Investees	30 Sep2021	30 Sep2021	31 Dec 2020	31 Dec 2020	30 Sep2020	30 Sep2020
	Carrying amount	Percentage of ownership (%)	Carrying amount	Percentage of ownership (%)	Carrying amount	Percentage of ownership (%)
Investments in associates: ZIMAG TECHNOLOGY CO., INC. (Note 1) FURUKAWA AVC ELECTRONICS (SUZHOU) CO., LTD. ZHUZHOU CRRC-AVC THERMAL TECHNOLOGY CO., LTD. KEY APPLICATION TECHNOLOGY CO., LTD. (Note 2) Total	$43,068 92,163 88,502 －	9.53`％` 30.00`％` 25.00`％` 16.31`％`	$40,112 92,085 83,872 －	9.53％ 30.00％ 25.00％ 16.31％	$38,302 99,934 142,219 －	9.53`％` 30.00`％` 45.00`％` 16.31`％`
	$223,733		$216,069		$287,455

Note 1: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.

Note 2: The Group evaluated and concluded that it has significant influence over Innovision, thus, this investment of the Group used the equity method for evaluation.

Investments accounted for using the equity method of the Company and its subsidiaries, were $223,733 thousand and $287,455 thousand as of 30 September 2021 and 30 September 2020, respectively. For the three-month periods ended 30 September 2021 and 2020 and for the ninemonth periods ended 30 September 2021 and 2020, the related shares of investment (loss) income from the associates were $12,440 thousand, $5,128 thousand, $13,360 thousand and $18,049 thousand, respectively. The related shares of other comprehensive income from the associates were ($44) thousand, $3,751 thousand, $874 thousand and $611 thousand, which were based solely on the financial reports of other independent accountants.

None of the aforementioned associates were pledged.

〜 21 〜

B. Financial information of associates:

There is no individually significant associate for the Group. When an associate is a foreign operation, and the functional currency of the foreign entity is different from the Group, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss).

The aggregate financial information of the Group’s investments in its joint ventures is as follows:

	For the three-month	periods	For the nine-month periods	For the nine-month periods
	endedSeptember30		endedSeptember30
	2021	2020	2021	2020
Net income	$12,440	$5,128	$13,360	$18,049
Other comprehensive income	(44)	3,751	874	611
Total comprehensive income	$12,396	$8,879	$14,234	$18,660

〜 22 〜

(11)Property, plant and equipment

Property, plant and equipment
Owner occupied property, plant and equipment	30 Sep2021	31 Dec 2020	30 Sep2020
	$7,620,850	$7,773,383	$7,032,267

A. Owner occupied property, plant and equipment

Land	Buildings	Machinery and equipment	Molding equipment	Other facilities	Construction in progress and equipment awaiting examination	Total
$167,151 －－－－	$3,332,327 3,244 － 27,391 (73,718)	$5,908,149 659,201 (303,178) － (123,071)	$981,027 100,544 (107,548) － (18,036)	$2,780,425 306,770 (147,460) － (40,832)	$191,427 (13,737) －－ (2,896)	$13,360,506 1,056,022 (558,186) 27,391 (258,553)
$167,151	$3,289,244	$6,141,101	$955,987	$2,898,903	$174,794	$13,627,180
`－` `－` `－` `－` `－` `－`	$859,059 84,450 `－` `－` 10,284 (34,812)	$2,584,059 410,709 36,727 (197,321) `－` (59,625)	$672,029 155,280 `－` (104,004) `－` (15,465)	$1,471,976 297,350 `－` (140,951) `－` (23,415)	`－` `－` `－` `－` `－` `－`	$5,587,123 947,789 36,727 (442,276) 10,284 (133,317)
`－`	$918,981	$2,774,549	$707,840	$1,604,960	`－`	$6,006,330

〜 23 〜

Land	Buildings	Machinery and equipment	Molding equipment	Other facilities	Construction in progress and equipment awaiting examination	Total
$167,151 －－－－	$3,323,319 2,332 (5,660) 32,919 (37,962)	$5,020,114 793,282 (327,470) － (86,514)	$807,979 76,953 (119,030) － (22,300)	$2,414,863 360,390 (147,560) － (45,792)	$166,170 69,657 －－ (1,311)	$11,899,596 1,302,614 (599,720) 32,919 (193,879)
$167,151	$3,314,948	$5,399,412	$743,602	$2,581,901	$234,516	$12,441,530
`－` `－` `－` `－` `－` `－`	$762,100 84,702 － (780) 4,579 (15,157)	$2,291,955 326,681 158,029 (219,622) － (106,703)	$696,130 89,145 － (118,684) － (17,061)	$1,437,369 207,487 － (138,652) － (32,255)	`－` `－` `－` `－` `－` `－`	$5,187,554 708,015 158,029 (477,738) 4,579 (171,176)
`－`	$835,444	$2,450,340	$649,530	$1,473,949	`－`	$5,409,263
$167,151	$2,370,263	$3,366,552	$248,147	$1,293,943	$174,794	$7,620,850
$167,151	$2,473,268	$3,324,090	$308,998	$1,308,449	$191,427	$7,773,383
$167,151	$2,479,504	$2,949,072	$94,072	$1,107,952	$234,516	$7,032,267

〜 24 〜

B. The Group has evaluated the value of some machinery and equipment has been impaired, and impairment losses are recognized amounted to NT$36,727 thousand and NT$158,029 thousand for the years ended 30 September 2021 and 2020, respectively. The recoverable amount is the difference between fair value and disposal cost, this fair value measurement is categorized under Level 3
C. Please refer to Note 8 for more details on property, plant and equipment under pledge.

(12)Investment property

Investment property includes the Group's own occupied investment property and the investment property held by the Group with the right-of-use assets. The Group enters into commercial property leasing contracts for its own investment property with a leasing period ranging from 1 to 10 years. The lease contract includes provisions for adjusting the rent based on the annual market environment.

Cost`：` As of 1 Jan 2021 Additions Transfers and reclassifications Exchange differences As of 30 Sep 2021 As of 1 Jan 2020 Additions Transfers and reclassifications Exchange differences As of 30 Sep 2020 Depreciation and impairment: As of 1 Jan 2021 Depreciation Transfers and reclassifications Exchange differences As of 30 Sep 2021 As of 1 Jan 2020 Depreciation Transfers and reclassifications Exchange differences As of 30 Sep 2020 Net carrying amount as at: As of 30 Sep 2021 As of 31 Dec 2020 As of 30 Sep 2020	Land $8,769 －－－ $8,769 $8,769 －－－ $8,769 `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` $8,769 $8,769 $8,769	Buildings $208,575 － (27,391) (1,141) $180,043 $240,624 － (32,919) (854) $206,851 $94,877 2,581 (10,284) (1,221) $85,953 $95,240 3,087 (4,579) (111) $93,637 $94,090 $113,698 $113,214	Total
			$217,344 － (27,391) (1,141)
			$188,812
			$249,393 － (32,919) (854)
			$215,620
			$94,877 2,581 (10,284) (1,221)
			$85,953
			$95,240 3,087 (4,579) (111)
			$93,637
			$102,859
			$122,467
			$121,983

〜 25 〜

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$4,012 (1,433)	$4,479 (1,493)	$12,836 (4,293)	$14,991 (4,720)
$2,579	$2,986	$8,543	$10,271

Please refer to Note 8 for more details on investment property under pledge.

The investment property held by the Group is industrial land and buildings, and the fair value is equivalent to the carrying value.

(13)Intangible assets

)Intangible assets
Cost: As of 1 Jan 2021 Addition Disposals Transfers and reclassifications Exchange differences As of 30 Sep 2021 As of 1 Jan 2020 Addition Disposals Transfers and reclassifications Exchange differences As of 30 Sep 2020 Amortization and impairment: As of 1 Jan 2021 Amortization Disposals Transfers and reclassifications Exchange differences As of 30 Sep 2021	Computer software	Patents	License fee	Goodwill	Total
	$301,734 53,661 (1,224) － (6,360)	$5,185 －－－－	$25,679 －－－－	$7,107 －－－－	$339,705 53,661 (1,224) － (6,360)
	$347,811	$5,185	$25,679	$7,107	$385,782
	$273,563 37,357 (23,705) － (2,106)	$5,185 －－－－	$25,679 －－－ `－`	$7,107 －－－－	$311,534 37,357 (23,705) － (2,106)
	$285,109	$5,185	$25,679	$7,107	$323,080
	$158,421 43,287 (428) `－` (4,667)	$5,185 `－` `－` `－` `－`	$19,398 657 `－` `－` `－`	$7,107 `－` `－` `－` `－`	$190,111 43,944 (428) `－` (4,667)
	$196,613	$5,185	$20,055	$7,107	$228,960

〜 26 〜

Computer

	Computer
As of 1 Jan 2020 Amortization Disposals Transfers and reclassifications Exchange differences As of 30 Sep 2020 Net carrying amount as at: 30 Sep 2021 31 Dec 2020 30 Sep 2020	software	Patents	License fee	Goodwill	Total
	$140,619 34,108 (23,291) `－` (1,347)	$5,185 `－` `－` `－` `－`	$16,981 2,198 `－` `－` `－`	$7,107 `－` `－` `－` `－`	$169,892 36,306 (23,291) `－` (1,347)
	$150,089	$5,185	$19,179	$7,107	$181,560
	$151,198	`－`	$5,624	`－`	$156,822
	$143,313	－	$6,281	－	$149,594
	$135,020	`－`	$6,500	`－`	$141,520

Amortization expense of intangible assets under the statement of comprehensive income:

For the three-month periods ended September 30 2021 2020 $1,985 $1,759 $11,741 $11,863	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2021	2020
$1,985	$5,680	$4,319
$11,741	$38,264	$31,987

(14)Other noncurrent assets

Advance payments in equipments Refundable deposits Other advance Other noncurrent assets - other Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$608,514 179,440 373,841 6,697	$407,087 179,670 21,372 4,543	$833,163 172,684 `－` 23,158
	$1,168,492	$612,672	$1,029,005

Please refer to Note 8 for more details on other noncurrent assets under pledge.

(15)Short-term borrowings

Unsecured bank loans	30 Sep2021	31 Dec 2020	30 Sep2020
	$4,531,034	$2,452,594	$2,530,551

B. Interest rate ranges are within 0.00 ％ ~1.25 ％ and 0.81%~4.03% as of 30 September 2021 and 2020, respectively.

〜 27 〜

C. As of 30 September 2021, 31 December 2020 and 30 September 2020, unused short-term lines of credit were $7,406,907 thousand, $7,597,009 thousand and $6,510,170 thousand, respectively.

(16)Other payables

Salaries and bonus Employee’s compensation and remuneration of directors Dividends payable Others Total Corporate Bonds payable 5 year secured bonds - issued at par value. Issued in August 2020. Interest at 0.62%, bullet repayment, payable annually. Less: current portion Ending balance	30 Sep2021 31 Dec 2020 30 Sep2020 $1,233,030 $991,444 $1,119,749 261,390 133,473 141,410 `－` `－` 459,303 1,748,112 1,789,821 1,688,762 $3,242,532 $2,914,738 $3,409,224 30 Sep2021 31 Dec 2020 30 Sep2020 Collateral $2,400,000 $2,400,000 $2,400,000 Bank guarantee `－` `－` `－` $2,400,000 $2,400,000 $2,400,000	30 Sep2021 31 Dec 2020 30 Sep2020 $1,233,030 $991,444 $1,119,749 261,390 133,473 141,410 `－` `－` 459,303 1,748,112 1,789,821 1,688,762 $3,242,532 $2,914,738 $3,409,224 30 Sep2021 31 Dec 2020 30 Sep2020 Collateral $2,400,000 $2,400,000 $2,400,000 Bank guarantee `－` `－` `－` $2,400,000 $2,400,000 $2,400,000	30 Sep2021 31 Dec 2020 30 Sep2020 $1,233,030 $991,444 $1,119,749 261,390 133,473 141,410 `－` `－` 459,303 1,748,112 1,789,821 1,688,762 $3,242,532 $2,914,738 $3,409,224 30 Sep2021 31 Dec 2020 30 Sep2020 Collateral $2,400,000 $2,400,000 $2,400,000 Bank guarantee `－` `－` `－` $2,400,000 $2,400,000 $2,400,000	30 Sep2021 31 Dec 2020 30 Sep2020 $1,233,030 $991,444 $1,119,749 261,390 133,473 141,410 `－` `－` 459,303 1,748,112 1,789,821 1,688,762 $3,242,532 $2,914,738 $3,409,224 30 Sep2021 31 Dec 2020 30 Sep2020 Collateral $2,400,000 $2,400,000 $2,400,000 Bank guarantee `－` `－` `－` $2,400,000 $2,400,000 $2,400,000
	$2,400,000 `－`	$2,400,000 `－`	$2,400,000 `－`	Bank guarantee
	$2,400,000	$2,400,000	$2,400,000

(17)Corporate Bonds payable

The issuance of the above corporate bonds payable is to repay existing loans and expand working capital, the Company entered into a syndicated credit facility agreement with 9 banks by E.SUN Commercial Bank, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Bank of Taiwan, Land Bank of Taiwan, Mega International Commercial Bank, The Shanghai Commercial & Savings Bank, First Commercial Bank and CTBC Bank for a NT$2,424,000 thousand credit line.

- (18)Long term borrowings

(18)Long-term borrowings
Unsecured Long-Term Loan from Mega International Commercial Bank Unsecured Long-Term Loan from Taiwan Cooperative Bank	30 Sep2021	31 Dec 2020	30 Sep2020 `－` $150,000	Redemption
	$490,000 `－`	$490,000 135,000		Effective 19 Oct 2020 to 19 Oct 2025. Five-year loan: interest-only for 18 months from the first date of allocation. Principal and interest are repaid in 14 quarterly payments. Effective 23 Jan 2018 to 23 Jan 2023. Five-year loan: principal is repaid in 20 quarterly payments with monthly interest payments.

〜 28 〜

Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Shanghai Commercial & Savings Bank Unsecured Long-Term Loan from Shanghai Commercial & Savings Bank Unsecured Long-Term Loan from Taipei Fubon Bank Unsecured Long-Term Loan from Hua Nan Bank Unsecured Long-Term Loan from Yuanta Commercial Bank	30 Sep2021	31 Dec 2020	30 Sep2020	Redemption
	$225,000 `－` 100,000 100,000 277,778 540,000	$270,000 125,000 `－` `－` 377,778 600,000	$285,000 137,500 `－` `－` `－` 600,000	Effective 17 Jun 2020 to 17 Jun 2025. Five-year loan: principal is repaid in 20 quarterly payments with monthly interest payments. Effective 15 Apr 2020 to 15 Apr 2023. Three-year loan: principal is repaid in quarterly payments with monthly interest payments. Effective 17 September 2021 to 17 September 2024. Three-year loan: principal is repaid in 8 quarterly payments with monthly interest payments. Effective 23 Jun 2021 to 31 Dec 2023. Three-year loan: split loan is available. The first period begins 18 months after first allocation. 16% of the principal is repaid in quarterly payments and the remaining principal is repaid on the maturity date. Effective 12 Oct 2020 to 12 Oct 2023. Three-year loan: principal is repaid in monthly payments with monthly interest payments. Effective 7 Sep 2020 to 7 Sep 2023. Three-year loan: split loan is available. The first period begins at the expiration date of interest- only. Principal is repaid in 9 quarterly payments with monthly interest payments. Payments 1 to 8 are for NT$60,000 thousand, and the final payment is for NT$120,000 thousand.

〜 29 〜

Unsecured Long-Term Loan from Jih Sun Bank Unsecured Long-Term Loan from Cathay United Bank Unsecured Long-Term Loan from Bank of Taiwan Unsecured Long-Term Loan from Bank of Taiwan Unsecured Long-Term Loan from Chang Hwa Bank Unsecured Long-Term Loan from Taiwan Business Bank Unsecured Long-Term Loan from Taiwan Business Bank Unsecured Long-Term Loan from E. Sun Bank	30 Sep2021	31 Dec 2020	30 Sep2020	Redemption
	`－` $100,000 `－` 100,000 `－` `－` 322,917 `－`	$262,500 `－` `－` `－` 136,111 133,334 416,667 150,000	$300,000 `－` 291,667 `－` 165,278 158,333 477,916 175,000	Effective 7 Jul 2020 to 7 Jul 2022. Two-year loan: principal is repaid in 8 quarterly payments with monthly interest payments. Revolving credit for 2 years from 12 Sep 2020 to 12 Sep 2022. Effective 19 Nov 2018 to 19 Nov 2021. Three-year loan: interest-only payment for the first year. Principal is repaid with monthly interest payments. Effective 25 May 2021 to 25 May 2024. Three-year loan: interest-only payment for the first year. Principal is repaid with monthly interest payments. Effective 18 Feb 2019 to 18 Feb 2022. Three-year loan: Principal is repaid with monthly interest payments. Effective 1 Apr 2019 to 1 Apr 2022. Three-year loan: Principal is repaid with monthly interest payments. Effective 1 Apr 2020 to 1 Apr 2024. Four-year loan: Principal is repaid with monthly interest payments. Effective 30 May 2019 to 30 May 2022. Three-year loan: Principal is amortized on a quarterly basis, and interest is paid on a monthly basis.

〜 30 〜

Unsecured Long-Term Loan from E. Sun Bank Unsecured Long-Term Loan from Kgi Bank Unsecured Long-Term Loan from Kgi Bank Unsecured Long-Term Loan from Taiwan Cooperative Bank Unsecured Long-Term Loan from Land Bank of Taiwan Unsecured Long-Term Loan from HSBC Unsecured Long-Term Loan from Bank of Taiwan Unsecured Long-Term Loan from Far Eastern International Bank	30 Sep2021	31 Dec 2020	30 Sep2020	Redemption
	$200,000 `－` 200,000 180,000 108,332 `－` 59,896 `－`	`－` $100,000 `－` 225,000 183,332 120,000 59,896 `－`	`－` $200,000 `－` 240,000 208,333 120,000 `－` 150,000	Effective 16 Sep 2021 to 16 Sep 2024. Three-year loan: Principal is amortized on a quarterly basis, and interest is paid on a monthly basis. Revolving credit for 2 years from the first day of allocation 24 Jun 2019. Revolving credit for 2 years from the first day of allocation 16 Jun 2021. Effective 3 Sep 2019 to 3 Sep 2024. Five-year loan: principal is repaid in quarterly payments with monthly interest payments. Effective 18 Oct 2019 to 18 Oct 2022. Three-year loan: Principal is repaid in monthly payments with interest. Effective 24 Feb 2020 to 24 Feb 2023. Three-year loan: first period begins 18 months after first allocation. Principal is repaid in 7 quarterly payments with monthly interest payments. Effective 12 Nov 2020 to 12 Oct 2025. Five-year loan: interest-only payment for the second year. Principal is repaid with monthly interest payments. Revolving credit for 2 years from 18 May 2020 to 18 Sep 2022.

〜 31 〜

30 Sep2021	31 Dec 2020	30 Sep2020	Redemption
$18,333 38,667 250,650 250,650	`－` `－` `－` `－`	`－` `－` `－` `－`	Effective 29 Apr 2021 to 29 Apr 2026. Five-year loan: principal is repaid in monthly payments with monthly interest payments. Effective 8 July 2021 to 8 July 2026. Five-year loan: principal is repaid in monthly payments with monthly interest payments. Effective 27 July 2021 to 27 July 2024. Three-year loan: Principal is amortized on a quarterly basis. Effective 9 Sep 2021 to 9 Sep 2024. Three-year loan: Principal is amortized on a quarterly basis.
3,562,223 (882,001)	3,784,618 (1,309,287)	3,629,027 (1,448,810)
$2,680,222	$2,475,331	$2,180,217
0.8%~1.25%	0.9%～1.08%	0.9%~1.08%

(19)Long-term deferred revenue

Government grants were as follows:

Long-term deferred revenue Government grants were as follows:
Beginning balance Released to the statement of comprehensive income Exchange differences Ending balance	For the nine-monthperiods ended September 30
	2021	2020
	$755,714 (20,345) (12,239)	$770,163 (19,976) (6,514)
	$723,130	$743,673

Government grants have been received for the purchase of certain items of property, plant and equipment.

(20)Post-employment benefits

A. Defined contribution plan

Expenses under the defined contribution plan for the three-month periods ended 30 September 2021 and 2020 are $7,982 thousand and $7,577 thousand, respectively; for the nine-month periods ended 30 September 2021 and 2020 are $23,584 thousand and $22,558 thousand, respectively.

〜 32 〜

B. Defined benefits plan

Costs under the defined benefits plan for the three-month periods ended 30 September 2021 and 2020 are $652 thousand and $656 thousand, respectively; for the nine-month periods ended 30 September 2021 and 2020 are $1,966 thousand and $1,989 thousand, respectively.

(21)Equities

A. Common stock

As of 30 September 2021, 31 December 2020 and 30 September 2020, the Group’s authorized capital was $4,000,000 thousand, and issued $3,533,101 thousand with 353,310 thousand shares, each at a par value of $10. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

Additional paid-in capital
Share premium Difference between consideration and carrying amount of subsidiaries acquired or disposed Donated assets received Premium from merger Employee stock option Share options of convertible bonds Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$702,297 72,336 3,148 443,730 15,300 23,292	$1,055,607 60,022 3,148 443,730 15,300 23,292	$1,055,607 `－` 2,887 443,730 15,300 23,293
	$1,260,103	$1,601,099	$1,540,817

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policies

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

(a) Payment of all taxes and dues;
(b) Offset prior years’ operation losses;
(c)Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve, except for when accumulated legal reserve has reached total authorized capital.
(d)Set aside or reverse special reserve in accordance with law and regulations; and
(e)The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.
(f) According to Paragraph 5, Article 240 of the Company Act, the resolution authorizing a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors shall, in the form of the distribution of dividends and dividends or all or part of the legal reserves and capital reserves provided for in Paragraph 1, Article 241 of the Companies Act, shall be paid in cash and shall be reported to the shareholders' meeting.

〜 33 〜

The policy of dividend distribution should reflect factors such as the current and future development plan, investment environment, fund requirements, domestic and international competition as well as the interest of the shareholders. A percentage of no less than 5% of the distributable profits of the accounting period shall be distributed as shareholders' dividends annually. When the accumulated distributable profits are less than 10% of our paid-up capital, we will no longer be required to make allowances for allocation. Shareholders' dividends could be paid in the form of shares or cash. Accordingly, at least 10% of the dividends must be paid in the form of cash.

According to the Company Act, the Company needs to set aside an amount to legal reserves unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal reserves that exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-SupervisorySecurities-Corporate-1010012865, which sets out the following provisions for compliance:

On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserves. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserves, from the profit/loss of the current period and the undistributed earnings from the previous period. The amount should equal to “other net deductions from shareholders’ equity for the current fiscal year, provided that the company has already set aside special reserves according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

As of 1 January 2021 and 2020, special reserve set aside for the first-time adoption of TIFRS amounts to $95,481 thousand. Furthermore, the Group has not reversed special reserve for the nine-month periods ended 30 September 2021 and 2020 as results of the no use, disposal or reclassification of related assets. As of 30 September 2021 and 2020, special reserve set aside for the first-time adoption of TIFRS amounts to $95,481 thousand.

Details of the 2021 and 2020 earnings distribution and dividends per share as approved and resolved by the shareholders’ meeting on 6 August, 2021 and 19 June, 2020, respectively, are as follows:

Legal reserve Special reserve Common stock -cash dividend	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2020	2019	2020	2019
	$192,355 (76,086) 635,958	$95,797 407,289 459,303	$1.8	$1.3

The shareholders’ meeting on 6 August, 2021 resolved to distribute $353,310 thousand from capital surplus to shareholders in the form of cash. Shareholders are entitled to receive $1.00 per share.

Please refer to Note 6.24 for further details on employees’ compensation and remuneration to directors and supervisors.

〜 34 〜

D. Non-controlling interests

D. Non-controlling interests
For the nine-monthperiods endedSeptember30 2021 2020 Beginning balance $711,740 $357,925 Profit (loss) attributable to non-controlling interests 345,781 81,878 Other comprehensive income, attributable to non-controlling interests, net of tax: Exchange differences resulting from translating the financial statements of a foreign operation (11,053) (458) Increasing in non-controlling interests 545,157 161,762 The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries (12,314) － Ending balance $1,579,311 $601,107	For the nine-monthperiods endedSeptember30
		2021	2020
		$711,740 345,781 (11,053) 545,157 (12,314)	$357,925 81,878 (458) 161,762 －
		$1,579,311	$601,107

(22)Operating revenues

A. Disaggregation of revenue

For the three-month periods endedSeptember30	For the three-month periods endedSeptember30	For the nine-month periods endedSeptember30	For the nine-month periods endedSeptember30
2021	2020	2021	2020
$11,772,620	$10,048,192	$35,120,197	$29,139,567
$11,772,620	$10,048,192	$35,120,197	$29,139,567
		31 Dec 2020	30 Sep2020 $784,057
		$80,298

During the period, contract liabilities significantly decreased as performance obligations are partially satisfied and $80,298 thousand included in the contract liability balance at the beginning of the period was recognized as revenue during the period.

(23)Lease

A. Group as a lessee

The Group leases various properties, including real estate such as land and buildings, machinery and equipment and office equipment. The lease terms range from 1 to 50 years.

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

(a) Amounts recognized in the balance sheet

I. Right-of-use assets

The carrying amount of right-of-use assets

Land Buildings Transportation equipment Office equipment Total	30 Sep2021	31 Dec 2020 $558,558 1,158,909 15,093 463 $1,733,023	30 Sep2020
	$538,867 1,307,134 10,719 365		$551,066 1,129,904 9,810 276
	$1,857,085		$1,691,056

During the nine-month period ended 30 September 2021, the Group’s additions to right-ofuse assets amounted to $341,298 thousand.

〜 35 〜

II. Lease liabilities

Lease liabilities
Current Noncurrent Total	30 Sep2021	31 Dec 2020 $170,345 1,048,455 $1,218,800	30 Sep2020
	$187,815 1,205,674		$157,122 1,018,055
	$1,393,489		$1,175,177

Please refer to Note 6.25(4) for the interest on lease liabilities recognized during the ninemonth period ended 30 September 2021 and refer to Note 12.5 Liquidity Risk Management for the maturity analysis for lease liabilities as of 30 September 2021.

(b) Amounts recognized in the statement of profit or loss Depreciation charge for right-of-use assets

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020 $10,570 133,406 6,012 128 $150,116
$3,531 54,018 1,863 59	$3,522 44,454 1,962 44	$10,591 155,944 5,745 167
$59,471	$49,982	$172,447

The expenses relating to short-term leases	For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
	2021	2020	2021	2020
	$9,674	$8,433	$22,730	$24,160

(d) Cash outflow relating to leasing activities

During the nine-month period ended 30 September 2021, the Group’s total cash outflows for leases amounting to $171,615 thousand.

B. Group as a lessor (applicable to the disclosure requirement in IFRS 16)

Please refer to Note 6.12 for relevant disclosure of the Group's own occupied investment property. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

Lease income for operating leases Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
	2021	2020	2021	2020
	$6,646	$8,129	$22,176	$19,482

〜 36 〜

Please refer to Note 6.12 for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of 30 September 2021 are as follow:

follow:
Not later than one year Later than one year and not later than five years Later than five years Total	30 Sep2021	31 Dec 2020	30 Sep2020
	$14,386 51,467 953	$16,095 52,099 8,378	$12,020 49,333 10,803
	$66,806	$76,572	$72,156

(24)Summary statement of employee benefits, depreciation and amortization expenses by function:

Function Nature		For the three-monthperiods ended September 30	For the three-monthperiods ended September 30	For the three-monthperiods ended September 30	For the three-monthperiods ended September 30
		2021			2020
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$1,196,773	$476,979	$1,673,752	$940,892	$423,671	$1,364,563
Labor and health insurance	$84,594	$26,083	$110,677	$59,289	$21,509	$80,798
Pension	$1,191	$7,443	$8,634	$1,233	$7,000	$8,233
Other employee benefits expense	$22,105	$13,099	$35,204	$20,783	$11,308	$32,091
Depreciation	$305,980	$74,412	$380,392	$237,333	$58,327	$295,660
Amortization	$5,157	$8,882	$14,039	$1,759	$12,018	$13,777

Function Nature		For the nine-monthperiods ended September 30	For the nine-monthperiods ended September 30	For the nine-monthperiods ended September 30	For the nine-monthperiods ended September 30
		2021			2020
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$3,738,034	$1,421,850	$5,159,884	$2,912,292	$1,116,757	$4,029,049
Labor and health insurance	$238,012	$102,199	$340,211	$136,874	$61,507	$198,381
Pension	$3,434	$22,116	$25,550	$3,811	$20,736	$24,547
Other employee benefits expense	$63,513	$40,005	$103,518	$59,477	$31,672	$91,149
Depreciation	$911,935	$210,882	$1,122,817	$686,499	$174,719	$861,218
Amortization	$11,819	$33,070	$44,889	$5,057	$31,716	$36,773

〜 37 〜

According to the Company’s Articles of Incorporation, no less than 3% of profit of the current year is distributable as employees’ compensation and no higher than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributed as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the board of directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on the profit of the current year, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the three-month and nine-month periods ended 30 September 2021 to be $37,025 thousand, $15,868 thousand, $98,078 thousand and $42,034 thousand, respectively. The Company estimated the amounts of employees’ compensation and remuneration to directors and supervisors for three-month and nine-month periods ended 30 September 2020 to be $29,176 thousand, $12,504 thousand, $63,053 thousand and $27,023 thousand, respectively. The aforementioned amounts were recognized as employee benefits expense. If the Board of Directors resolves to distribute employees’ compensation in the form of stocks, the number of stocks distributed was calculated based on the closing price of the day before the Board of Directors meeting. The difference between the estimation and the resolution of the stockholder’s meeting will be recognized in profit or loss in the subsequent year.

The Company's 2021 employee compensation and director's compensation approved by the shareholders’ meeting on 6 August 2021 employee compensation and director's compensation reported by the shareholders' meeting of 19 June 2020 are as follows:

by the shareholders' meeting of 19 June 2020	are as follows:
Employee compensation Remuneration to directors and supervisors	2020	2019
	$84,863 36,370	$44,098 18,899

The distribution was passed by the Board of Directors meeting held on 23 March, 2021 to distribute NT$84,863 thousand and NT$36,370 thousand in cash as employee compensation and remuneration to directors and supervisors of 2020, which has no material differences between the expense listed in the financial report of 2020.

No material differences exist between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December, 2020 and 2019.

〜 38 〜

(25)Non-operating income and expenses

A. Interest income

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$5,173 775 3	$6,136 1,051 3	$15,424 3,150 11	$23,807 3,668 11
$5,951	$7,190	$18,585	$27,486

B. Other income

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$6,646 177,386	$8,129 113,702	$22,176 411,576	$19,482 252,185
$184,032	$121,831	$433,752	$271,667

C. Other gains and losses

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$2,246 618 21,118 (11,364) (9,642)	($28,115) 65 (85,492) (26,950) (5,906)	($82,317) 1,166 (4,216) (36,727) (28,518)	($41,966) 312 (53,802) (166,417) (13,060)
$2,976	($146,398)	($150,612)	($274,933)

D. Finance costs

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$14,283 3,720 14,010 4,046	$22,245 1,640 11,773 3,605	$42,874 11,160 41,269 11,999	$83,746 1,640 36,363 27,523
$36,059	$39,263	$107,302	$149,272

〜 39 〜

(26)Components of other comprehensive income (loss)

For the three - month period ended 30 September 2021:

Arising during theperiod	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
$7,474 (16,305) (44)	`－` `－` `－`	$7,474 (16,305) (44)	`－` $1,951 `－`	$7,474 (14,354) (44)
($8,875)	`－`	($8,875)	$1,951	($6,924)
		Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
$27,164 (268,471) 874	`－` `－` `－`	$27,164 (268,471) 874	`－` $31,208 `－`	$27,164 (237,263) 874
($240,433)	`－`	($240,433)	$31,208	($209,225)

〜 40 〜

For the three - month period ended 30 September 2020:

Arising during theperiod	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
$8,190 161,171 3,751	`－` `－` `－`	$8,190 161,171 3,751	`－` ($17,651) `－`	$8,190 143,520 3,751
$173,112	`－`	$173,112	($17,651)	$155,461
		Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
$11,357 (169,355) 611	`－` `－` `－`	$11,357 (169,355) 611	`－` $24,055 `－`	$11,357 (145,300) 611
($157,387)	`－`	($157,387)	$24,055	($133,332)

〜 41 〜

(27)Income tax

A. The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
$399,005 31,100	$216,678 43,139	$937,815 157,430	$551,622 78,054
$430,105	$259,817	$1,095,245	$629,676

B. Income tax relating to components of other comprehensive income

For the three-month periods ended September 30	For the three-month periods ended September 30	For the nine-month periods ended September 30	For the nine-month periods ended September 30
2021	2020	2021	2020
($1,951)	$17,651	($31,208)	($24,055)
($1,951)	$17,651	($31,208)	($24,055)

C. The assessment of income tax returns

The Company’s income tax returns through 2018 have been assessed and approved by the TaxAuthority.

(28)Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Diluted earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$)	For the nine-monthperiod ended 30 September 2021 Amount Number of shares (shares in thousands) Earningsper share $2,189,830 353,310 $6.20 `－` 1,238 $2,189,830 354,548 $6.18
		Number of shares (shares in thousands) 353,310 1,238 354,548	Earningsper share
			$6.20
			$6.18

〜 42 〜

For the nine-month period ended 30 September 2020

Amount Number of shares (shares in thousands) Earningsper share $1,401,513 353,310 $3.97 `－` 940 $1,401,513 354,250 $3.96 For the three-monthperiod ended 30 September 2021	Amount Number of shares (shares in thousands) Earningsper share $1,401,513 353,310 $3.97 `－` 940 $1,401,513 354,250 $3.96 For the three-monthperiod ended 30 September 2021	Earningsper share
		$3.97
		$3.96
Amount Number of shares (shares in thousands) Earningsper share $853,970 353,310 $2.42 `－` 467 $853,970 353,777 $2.41 For the three-monthperiod ended 30 September 2020		Earningsper share
		$2.42
		$2.41
Amount $639,913 `－` $639,913	Number of shares (shares in thousands) 353,310 699 354,009	Earningsper share
		$1.81
		$1.81

〜 43 〜

7. Related party transactions

Key management personnel compensation

	For the three-month periods	For the three-month periods	For the nine-month periods	For the nine-month periods
	ended	September 30	ended	September 30
	2021	2020	2021	2020
Short-term employee benefits	$7,383	$5,281	$21,336	$16,983
Post-employment benefits	257	162	769	459
Total	$7,640	$5,443	$22,105	$17,442

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

	Carryingamount
30 Sep2021	31 Dec 2020	30 Sep2020
$556,572 88,235 135,255 26,854 33,344 2,800	$578,286 88,235 125,261 28,037 51,871 2,800	$356,402 88,235 106,433 `－` 52,465 2,800
$843,060	$874,490	$606,335

9. Commitments and contingencies

(1) Legal claim contingency

None.

(2) The Group signed the contract of the land-use-right in Vietnam for opreating purpose, which total price is approximate 200 million dollars and 10,000 thousand dollars has not paid until 30 September 2021.
(3) The Group signed the contract of the new plant in Vietnam for opreating purpose, which total price is approximate 650 million dollars and 460 million dollars has not paid until 30 September 2021.

(4) Other:

The Group guaranteed a deposit for customs in the amount of $2,500 thousand and $300 thousand from Bank of Taiwan and Taiwan Cooperative Bank, respectively.

〜 44 〜

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Other

(1) Categories of financial instruments

Financial assets

Other 1) Categories of financial instruments Financial assets
Financial assets at fair value through profit or loss: Mandatorily measured at Fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents (excluding cash on hand) Financial assets measured at amortized cost Amounts receivables Subtotal Total Financial liabilities Financial liabilities at amortized cost: Short-term loans Amounts payables Corporate bonds payable (including current portion) Long-term loans (including current portion) Lease liabilities (including current portion) Total	30 Sep2021 $63,292 $94,933 13,478,667 556,572 4,827,865 $18,863,104 $19,021,329 30 Sep2021 $4,531,034 17,034,523 2,400,000 3,562,223 1,393,489 $28,921,269	31 Dec 2020 `－` $101,449 11,100,437 578,286 4,715,361 $16,394,084 $16,495,533 31 Dec 2020 $2,452,594 16,691,271 2,400,000 3,784,618 1,218,800 $26,547,283	30 Sep2020
			$55,497
			$96,761
			10,470,302 356,402 5,679,718
			$16,506,422
			$16,658,680
			30 Sep2020
			$2,530,551 14,924,764 2,400,000 3,629,027 1,175,177
			$24,659,519

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

〜 45 〜

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

A. Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore forming a natural hedge. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB. The information of the sensitivity analysis is as follows:

(a) When NTD strengthens/weakens against USD by 1%, the profit for the nine-month periods ended 30 September 2021 and 2020 is decreased/increased by $60,342 thousand and decreased/increased by $28,849 thousand, respectively.
(b) When NTD strengthens/weakens against RMB by 1%, the profit for the nine-month periods ended 30 September 2021 and 2020 is increased/decreased by $20,150 thousand and increased/decreased by $27,549 thousand, respectively.

B. Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to bank borrowings with fixed interest rates and variable interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period. A change of 10 basis points of interest rate in a reporting period could cause the profit for the nine-month periods ended 30 September 2021 and 2020 to decreased/increased by $3,721 thousand and $2,440 thousand, respectively.

〜 46 〜

C. Equity price risk

The fair value of the Group’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s unlisted equity securities are classified as financial assets at fair value through other comprehensive income.

The equity price sensitivity analysis is based on fair value changes as at the end of the reporting period. For the nine-month periods ended 30 September 2021 and 2020, a change of 5% in the price classified as equity instruments investments measured at fair value through other comprehensive income could cause the other comprehensive income to increased/decreased by $4,747 thousand and $4,838 thousand, respectively.

Please refer to Note 12.8 for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 30 September 2021, 31 December 2020 and 30 September 2020, amounts receivables from top ten customers represent 82.81 ％ , 88.19% and 88.96% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents and bank borrowings. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

〜 47 〜

Non-derivative financial liabilities

As of 30 September 2021 Loans Corporate bonds payable Amounts payables Lease liabilities As of 31 December 2020 Loans Corporate bonds payable Amounts payables Lease liabilities As of 30 September 2020 Loans Corporate bonds payable Amounts payables Lease liabilities	< 1year	2 to 3years	4 to 5years	> 5years	Total
	$5,455,362 $14,880 $17,027,801 $239,240 $3,768,323 $5,360 $16,679,469 $170,345 $3,984,510 $1,640 $14,917,975 $157,122	$2,443,111 $29,760 `－` $440,181 $1,982,061 `－` `－` $339,528 $1,942,300 `－` `－` $288,895	$264,119 $2,414,880 `－` $413,838 $493,270 $2,400,000 `－` $323,036 $237,917 $2,400,000 `－` $312,335	`－` `－` `－` $574,678 `－` `－` `－` $385,891 `－` `－` `－` $416,825	$8,162,592 $2,459,520 $17,027,801 $1,667,937 $6,243,654 $2,405,360 $16,679,469 $1,218,800 $6,164,727 $2,401,640 $14,917,975 $1,175,177

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the nine-month periods ended 30 September 2021:

As at 1 Jan 2021 Cash flows Non-cash changes As at 30 Sep 2021	Short-term borrowings	Corporate bonds payable	Long-term borrowings	Lease liabilities	Guarantee deposits	Total liabilities from financing activities
	$2,452,594 2,079,607 (1,167)	$2,400,000 －－	$3,784,618 (220,955) (1,440)	$1,218,800 (148,885) 323,574	$9,377 28 －	$9,865,389 1,709,795 320,967
	$4,531,034	$2,400,000	$3,562,223	$1,393,489	$9,405	$11,896,151

Reconciliation of liabilities for the nine-month periods ended 30 September 2020:

As at 1 Jan 2020 Cash flows Non-cash changes As at 30 Sep 2020	Short-term borrowings	Short-term notespayable	Corporate bondspayable	Long-term borrowings	Lease liabilities
	$2,000,456 573,403 (43,308)	$100,000 (100,000) －	－ $2,400,000 －	$5,910,833 (2,281,806) －	$271,377 (123,457) 1,027,257
	$2,530,551	－	$2,400,000	$3,629,027	$1,175,177

〜 48 〜

As at 1 Jan 2020 Cash flows Non-cash changes As at 30 Sep 2020	Guarantee deposits	Total liabilities from financing activities
	$19,011 (9,824) －	$8,301,677 458,316 983,949
	$9,187	$9,743,942

(7) Fair values of financial instruments
A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

(a) The carrying amount of cash and cash equivalents, trade receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
(b) Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
B. Fair value of financial instruments measured at amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized cost approximate their fair value due to their short maturities.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12.8 for fair value measurement hierarchy for financial instruments of the Group.

(8) Fair value measurement hierarchy
A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

〜 49 〜

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

Level 1	Level 2	Level 3	Total
`－` `－` Level 1	$63,292 `－` Level 2	`－` $94,933 Level 3	$63,292 $94,933 Total
`－` Level 1	`－` Level 2	$101,449 Level 3	$101,449 Total
`－` `－`	$55,497 `－`	`－` $96,761	$55,497 $96,761

〜 50 〜

C. Reconciliation for fair value measurements in Level 3 is as follows:

As at 1 Jan 2020 Unrealized income from equity instruments investments measured at fair value through other comprehensive income Settlements Exchange differences As at 30 Sep 2020 As at 1 Jan 2021 Unrealized income from equity instruments investments measured at fair value through other comprehensive income Settlements Exchange differences As at 30 Sep 2021	Financial assets at fair value through other comprehensive income
	$101,449 27,164 (32,907) (773)
	$94,933
	Financial assets at fair value through other comprehensive income
	$111,835 11,357 (22,220) (4,211)
	$96,761

D. Fair value measurement hierarchy of the Group’s assets and liabilities not measured at fair value but for which the fair value is disclosed:

The fair value of long-term loans is determined using discounted cash flow model, based on the Company’s current incremental borrowing rates of similar loans.

As at 30 September 2021 Corporate bonds payable Long-term borrowings (including current portion with maturity less than 1 year) As at 31 December 2020 Corporate bonds payable Long-term borrowings (including current portion with maturity less than 1 year) As at 30 September 2020 Corporate bonds payable Long-term borrowings (including current portion with maturity less than 1 year)	Level 1	Level 2	Level 3	Carrying amount
	`－` `－` `－` `－` `－` `－`	$2,400,000 $3,562,223 $2,400,000 $3,784,618 $2,400,000 $3,629,027	`－` `－` `－` `－` `－` `－`	$2,400,000 $3,562,223 $2,400,000 $3,784,618 $2,400,000 $3,629,027

〜 51 〜

(9) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

elow:
Financial assets		30 September 2021
	Foreign currencies (in thousands)	Foreign exchange rate	NT$ (in thousands)
	$502,200 $1,817,174 $285,531 $2,285,235	27.850 $13,986,272 4.305 $7,822,932 27.850 $7,952,039 4.305 $9,837,935 31 December 2020
Monetary items: USD RMB Financial liabilities
Monetary items: USD RMB Financial assets
	Foreign currencies (in thousands)	Foreign exchange rate	NT$ (in thousands)
	$357,475 $1,621,133 $289,848 $2,368,871	28.4800 $10,180,897 4.3770 $7,095,697 28.4800 $8,254,859 4.3770 $10,368,550 30 September 2020
Monetary items: USD RMB Financial liabilities
Monetary items: USD RMB Financial assets
	Foreign currencies (in thousands)	Foreign exchange rate	NT$ (in thousands)
	$350,919 $1,677,255 $251,781 $2,322,593	29.1000 4.2690 29.1000 4.2690	$10,211,733 $7,160,203 $7,326,839 $9,915,150
Monetary items: USD RMB Financial liabilities
Monetary items: USD RMB

〜 52 〜

The Group’s functional currency are various, and hence is not able to disclose the information of exchange gains and losses by each significant assets and liabilities denominated in foreign currencies. The foreign exchange gain was ($4,216) thousand and ($53,802) thousand for the nine-month periods ended 30 September 2021 and 2020, respectively.

(10)Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, returning capital to shareholders or issuing new shares.

13. Other disclosure

(1) Information at significant transactions and on investees
A. Financing provided to others for the nine-month periods ended 30 September 2021: Please refer to Attachment 1.
B. Endorsement/Guarantee provided to others for the nine-month periods ended 30 September 2021: Please refer to Attachment 2.
C. Securities held as of 30 September 2021: Please refer to Attachment 3.
D. Individual securities acquired or disposed of with accumulated amount exceeding the lowers of NT$300 million or 20% of the capital stock for the nine-month periods ended 30 September 2021: None.
E. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock for the nine-month periods ended 30 September 2021: Please refer to Attachment 4.
F. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock for the nine-month periods ended 30 September 2021: None.
G. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20% of the capital stock for the nine-month periods ended 30 September 2021: Please refer to Attachment 5.
H. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock as of 30 September 2021: Please refer to Attachment 6.
I. Direct or indirect significant influence or control over the investees for the nine-month periods ended 30 September 2021 (excluding investments in China): Please refer to Attachment 7.
J. Financial instruments and derivative transactions: None
K. Others: Significant inter-company transactions during the reporting periods: Please refer to Attachment 9.

〜 53 〜

(2) Information on investments in mainland China
A. Information on investments in mainland China: Please refer to Attachment 8.
B. Significant transactions with the investee companies in China directly or indirectly through the third area and the relevant prices, payment terms and unrealized gains and losses:
- (a)Purchase, ending balance of related payables and their weightings: Please refer to Attachment 5.
- (b)Sales, the ending balance of related receivables and their weightings: Please refer to Attachment 5.
- (c)Ending balance of endorsements/guarantees or collateral provided and the purposes: Please refer to Attachment 2.
- (d)Transactions that have significant impact on the profit or loss of current period or the financial position: None.
(3) Information of major shareholders: Please refer to Attachment 10.

14. Segment information

For management purposes, the Group is organized into business units based on their products and services and has two reportable operating segments as follows:

(1) General management segment:

The general management segment is responsible for the Group’s operation planning and owns manufacturing, R&D and sales functions.

(2) Overseas segment:

The overseas segment owns manufacturing and sales functions.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements.

However, finance costs, financial benefits and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

For the three-month periods ended 30 September 2021

Overseas	General management	Adjustment and elimination	Total
$4,183,751 10,165,360	$7,588,869 6,779,164	`－` ($16,944,524)	$11,772,620 `－`
$14,349,111	$14,368,033	($16,944,524)	$11,772,620
$956,285	$410,575	$12,441	$1,379,301

Note: Inter-segment revenues were eliminated on consolidation.

〜 54 〜

For the three-month period ended 30 September 2020

Overseas	General management	Adjustment and elimination	Total
$3,113,179 8,032,134	$6,935,013 5,767,244	`－` ($13,799,378)	$10,048,192 `－`
$11,145,313	$12,702,257	($13,799,378)	$10,048,192
$628,512	$288,710	$5,128	$922,350

Note: Inter-segment revenues were eliminated on consolidation.

For the nine-month period ended 30 September 2021

Overseas	General management	Adjustment and elimination	Total
$11,378,467 29,281,645	$23,741,730 19,491,037	`－` ($48,772,682)	$35,120,197 `－`
$40,660,112	$43,232,767	($48,772,682)	$35,120,197
$2,266,294	$1,351,201	$13,361	$3,630,856

Note: Inter-segment revenues were eliminated on consolidation.

For the nine-month period ended 30 September 2020

Overseas	General management	Adjustment and elimination	Total
$9,966,041 23,136,556	$19,173,526 16,451,594	`－` ($39,588,150)	$29,139,567 `－`
$33,102,597	$36,625,120	($39,588,150)	$29,139,567
$1,524,406	$570,612	$18,049	$2,113,067

Note: Inter-segment revenues were eliminated on consolidation.

As of 30 September 2021, 31 December 2020 and 30 September 2020, the assets of reportable segment information were as follows:

Overseas	General management	Adjustment and elimination	Total
$41,703,922	$23,939,334	($19,932,216)	$45,711,040
$35,971,889	$23,137,884	($18,433,537)	$40,676,236
$33,121,930	$19,730,686	($14,318,312)	$38,534,304

〜 55 〜

TABLE 1

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

FINANCING PROVIDED TO OTHERS

TABLE 1
No (Note 1)	Financing Company	Counter-party	Financial Statement Account (Note 2)	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Note 11)	Amount Actually Drawn	Interest Rate	Nature of Financing (Note 4)	Transaction Amounts (Note 5)	Reason for Financing (Note 6)	Allowance for Doubtful Accounts	Collateral		Financing Limits for Each Borrower	Financing Company's Total Financing Amount Limits	Note
													Item	Value
0 1 2 2 3 4 5 6	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC INTERNATIONAL (SAMOA) CO., LTD. AVC INTERNATIONAL (SAMOA) CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. D-MAX TECHNOLOGY CO., LTD. FOSITEK CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC TECHNOLOGY (VIETNAM) COMPANY LIMITE AVC PRECISION, CO., LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. (JIASHAN)D-MAX ELECTRONICS CO.,LTD. WUCHIDA INTERNATIONAL CO., LTD. FIRST DOME CORP TELECOM.,LTD. AVC PRECISION, CO., LTD.	D Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes	$557,000 (USD20,000 thousand) $365,926 (CNY85,000 thousand) $278,500 (USD10,000 thousand) $97,475 (USD3,500 thousand) $55,700 (USD2,000 thousand) $139,250 (USD5,000 thousand) $317,580 (NTD150,000 thousand) (USD6,000 thousand) $215,251 (CNY50,000 thousand)	$557,000 (USD20,000 thousand) $365,926 (CNY85,000 thousand) $139,250 (USD5,000 thousand) $97,475 (USD3,500 thousand) － $69,625 (USD2,500 thousand) $167,100 (USD6,000 thousand) $215,251 (CNY50,000 thousand)	$557,000 (USD20,000 thousand) $344,401 (CNY80,000 thousand) $139,250 (USD5,000 thousand) －－ $69,625 (USD2,500 thousand) $167,100 (USD6,000 thousand) $215,251 (CNY50,000 thousand)	2.00% 3.00% 3.00% 2.00% 2.00% 2.00% 3.00% 3.00%	`２` `２` `２` `２` `２` `２` `２` `２`	`－` `－` `－` `－` `－` `－` `－` `－`	Plant building, equipment purchasing and opreating revolving fund Operating capital Operating capital Material purchasing and loan repayment Business needs Business needs Operating capital Operating capital	－－－－－－－－	－－－－－－－－	－－－－－－－－	$4,636,520 $2,318,260 $2,318,260 $2,318,260 $2,318,260 $180,098 $782,321 $2,318,260	$4,636,520 $4,636,520 $4,636,520 $4,636,520 $4,636,520 $180,098 $782,321 $4,636,520	(Note 7) (Note 8) (Note 8) (Note 8) (Note 8) (Note 9) (Note 10) (Note 8)

Note 1 ： Companies are coded as follows ：

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".
(2) The investees are coded from "1" in the order presented in the table above.

Note 2 ： Receivables from affiliates and related parties, shareholder transactions, prepayments and temporary payments etc. are required to be disclosed in this field if they are financings provided to others.

Note 3 ： The maximum balance of financing provided to others for the year ended June 30, 2021.

Note 4 ： Nature of Financing are coded as follows ：

(1) Business transaction is coded "1".
(2) Short-term financing is coded "2".

Note 5 ： If nature of financing is business transaction, the amount of transaction should be disclosed.

Note 6 ： With respect to short-term financing, the reasons of financing and the purpose of use by the counter-party shall be specified, such as loan repayment, equipment acquisition or operating capital.

Note 7 ： ASIA VITAL COMPONENTS CO., LTD : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 8 ： For foreign companies of which the Company holds, directly and indirectly, 100% of the voting shares, the financing provided to any single entity shall not exceed 20% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 9： D-MAX TECHNOLOGY CO., LTD. : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.
Note 10： FOSITEK CORP. : The financing provided to any single entity shall not exceed 40% of the net worth. Total financing shall not exceed 40% of the net worth.

Note 11 ： If public companies, pursuant to Paragraph 1, Article 14 of Regulations Governing Loaning of Funds and Making of Endorsements / Guarantees by Public Companies, resolve each individual lending at the board meetings, the amounts resolved (before any drawing) shall be the publicly-announced balance to disclose the risk they assume; provided however,

if any repayment is made subsequently, the outstanding balance after such repayment shall be disclosed to reflect the risk adjusted. If public companies, pursuant to Paragraph 2, Article 14 of the same Regulations, authorize the chairperson by board resolution, within a certain monetary limit and a period not to exceed one year,
to give loans in instalments or to make a revolving credit line available, the amount resolved shall be the publicly-announced balance. Although repayment may be made subsequently, as drawings are likely to happen, the amount of financing resolved by the board shall be recorded as the publicly-announced balance.

Note 12 ： All the above transactions were eliminated on consolidation.

〜 56 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

TABLE 2

TABLE 2
(Note 1) No	Endorsement/Guarantee Provider	Guaranteed Party		Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 5)	Ending Balance (Note 6)	Amount Actually Drawn (Note 7)	Amount of Endorsement/ Guarantee secured by Properties	Ratio of Accumulated Endorsement/Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries (Note 8)	Endorsement provided by subsidiaries to parent company (Note 8)	Endorsement provided to subsidiaries in China (Note 8)	Note
		Name	Nature of Relationship (Note 2)
`０` `０` `０` `０` `０`	ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD ASIA VITAL COMPONENTS CO.,LTD	AVC INTERNATIONAL (SAMOA) CO., LTD. MERIT TRADING CORPORATION AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC OPTICS (WUHAN) CORP.	2 2 2 2 2	$11,591,302 $11,591,302 $11,591,302 $11,591,302 $11,591,302	$1,141,850 (USD41,000 thousand) $501,300 (USD18,000 thousand) $579,851 (USD10,000 thousand) (CNY70,000 thousand) $1,412,801 (USD43,000 thousand) (CNY50,000 thousand) $696,250 (USD25,000 thousand)	$1,002,600 (USD36,000 thousand) $278,500 (USD10,000 thousand) $493,751 (USD10,000 thousand) (CNY50,000 thousand) $1,412,801 (USD43,000 thousand) (CNY50,000 thousand) $696,250 (USD25,000 thousand)	－－ $278,500 (USD10,000 thousand) $1,114,000 (USD40,000 thousand) $417,750 (USD15,000 thousand)	－－－－－	8.65% 2.40% 4.26% 12.19% 6.01%	$17,386,953 $17,386,953 $17,386,953 $17,386,953 $17,386,953	Y Y Y Y Y	N N N N N	N N Y Y Y	(Note 3) (Note 3) (Note 3) (Note 3) (Note 3)

Note 1 ： Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".
(2) The investees are coded from "1" in the order presented in the table above.

Note 2 ： The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :

(1) A company that has a business relationship with AVC.
(2) A subsidiary in which AVC holds directly over 50% of common equity interest.
(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.

(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.

(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.
(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.
(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.
Note 3 ： ASIA VITAL COMPONENTS CO.,LTD. ： The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth.

The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.

Note 4 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD., AVC PRECISION, CO., LTD. :

The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars.

FOSITEK CORP.：The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 30% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 50% of the Company's equity net worth.

Note 5 : Maximum balance of endorsements/guarantees provided to others for current period.

Note 6 : The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.

Note 7 : The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

Note 8 : Public company provided endorsements/guarantees to subsidiary or subsidiary provided endorsements/guarantees to public company or provided endorsements/guarantees which located in CHINA area coded "Y".

( Continued )

〜 57 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ENDORSEMENT/GUARANTEE PROVIDED TO OTHERS

(Note 1) No	Endorsement/Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/Guarantee Amount Provided to Each Guaranteed Party (Note 3&4)	Maximum Balance for the Period (Note 5)	Ending Balance (Note 6)	Amount Actually Drawn (Note 7)	Amount of Endorsement/ Guarantee secured by Properties	Ratio of Accumulated Endorsement/Guarantee to Net Equity per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowed (Note 3&4)	Endorsement provided by parent company to subsidiaries (Note 8)	Endorsement provided by subsidiaries to parent company (Note 8)	Endorsement provided to subsidiaries in China (Note 8)	Note
		Name	Nature of Relationship (Note 2)
`１` `１` `１` `１` `１` 1 1 2 2 2 3	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. AVC OPTICS (WUHAN) CORP. FOSITEK CORP.	AVC OPTICS (WUHAN) CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD. AVC PRECISION, CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHINA) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. FIRST DOME CORP TELECOM.,LTD.	4 4 4 4 4 4 4 4 4 4 2	$5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $586,740	$645,752 (CNY150,000 thousand) $774,903 (CNY180,000 thousand) $430,501 (CNY100,000 thousand) $511,220 (CNY118,750 thousand) $764,140 (CNY177,500 thousand) $645,752 (CNY150,000 thousand) $1,076,254 (CNY250,000 thousand) $645,752 (CNY150,000 thousand) $430,501 (CNY100,000 thousand) $516,602 (CNY120,000 thousand) $77,225 (CNY5,000 thousand) (USD2,000 thousand)	$645,752 (CNY150,000 thousand) $774,903 (CNY180,000 thousand) － $511,220 (CNY118,750 thousand) $764,140 (CNY177,500 thousand) $645,752 (CNY150,000 thousand) $1,076,254 (CNY250,000 thousand) $645,752 (CNY150,000 thousand) $430,501 (CNY100,000 thousand) $516,602 (CNY120,000 thousand) $77,225 (CNY5,000 thousand) (USD2,000 thousand)	$34,725 (CNY8,066 thousand) $432,890 (CNY100,555 thousand) － $195,633 (CNY45,443 thousand) $227,908 (CNY52,940thousand) － $196,907 (CNY45,739 thousand) $406,931 (CNY94,525 thousand) $316,600 (CNY73,542 thousand) $304,209 (CNY70,664 thousand) －	－－－－ $419,739 (CNY97,500 thousand) －－－－－－	21.00% 17.08% － 6.00% 8.04% 8.32% 35.00% 13.79% 9.20% 5.76% 3.95%	$5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $5,570,000 (USD200,000 thousand) $977,901	N N N N N N N N N N N	N N N N N N N N N N N	Y Y Y Y Y Y Y Y Y Y Y	(Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4) (Note 4)

Note 1 ： Companies are coded as follows:

(1) ASIA VITAL COMPONENTS Co., LTD. is coded "0".
(2) The investees are coded from "1" in the order presented in the table above.
Note 2 ： The relationships between endorsement/guarantee providers and guaranteed parties are categorized into the following types :
(1) A company that has a business relationship with AVC.
(2) A subsidiary in which AVC holds directly over 50% of common equity interest.
(3) An investee in which AVC and its subsidiaries jointly hold over 50% of common equity interest.
(4) A parent company that holds directly over 90% or indirectly over 90% through a subsidiary of the company's common equity interest.
(5) A company that has provided guarantees to AVC, and vice versa, due to contractual requirements.
(6) A company in which AVC jointly invests with other shareholders, and for which AVC has provided endorsement/guarantee in proportion to its shareholding percentage.
(7) Companies in the same industry provide among themselves joint and several security for a perfomance guarantee of a sales contract for pre-construction homes pursunat to the Consumer Protection Act for each other.
Note 3 ： ASIA VITAL COMPONENTS CO.,LTD. ： The aggregate amount of endorsements/guarantees for any single entity shall not exceed 20% of the Company's net worth, and the aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 100% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 150% of the Company's equity net worth.
Note 4 ： ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD., ASIA VITAL COMPONENTS (CHINA) CO., LTD., ASIA VITAL COMPONENTS (CHENGDU) CO., LTD., AVC OPTICS (WUHAN) CORP., ASIA VITAL COMPONENTS (DONGGUAN) CO., LTD.,AVC PRECISION, CO., LTD. : The amount of guarantees/endorsements provided to any single entity shall not exceed USD200 million dollars.
FOSITEK CORP.：The aggregate amount of endorsements/guarantees for any single overseas associated company shall not exceed 30% of the Company's equity net worth. The overall amount of guarantees/endorsements shall not exceed 50% of the Company's equity net worth.
Note 5 : Maximum balance of endorsements/guarantees provided to others for current period.
Note 6 : The maximum balance for the period and ending balance represent the amounts approved by the Board Directors.
Note 7 : The company which endorsements/guarantees by AVC should disclosed the amount actually drawn within ending balance.

〜 58 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES)

TABLE 3

TABLE 3
Name of Held Company	Type and name of Marketable Securities	Relationship with the Company	Financial Statement Account	September 30, 2021
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Market Value
ASIA VITAL COMPONENTS CO.,LTD MERIT TRADING CORPORATION MACE TECH CORP. ASIA VITAL COMPONENTS (CHINA) CO., LTD.	RTR-TECH TECHNOLOGY CO., LTD. APTOS TECHNOLOGY INC. UBIQCONN TECHNOLOGY, INC. FURUKAWA ELECTRIC (SHENZHEN) CO., LTD. SHENG-SHING CORP. Not listed (OTC) stocks SHENZHEN TIMELINK TECHNOLOGY CO., LTD. Not listed (OTC) stocks Not listed (OTC) stocks Not listed (OTC) stocks	`－` `－` `－` Other related parties `－` `－`	Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent Financial assets measured at fair value through other comprehensive income, noncurrent	14,000 1,124 2,500 (Note) 703 2,273	－－－ $85,535 $9,398 －	19.42% 1.27% 6.10% 9.06% 14.06% 10.80%	－－－ $85,535 $9,398 `－`

Note ： None amount of shares is issued publicly by Limited Company.

〜 59 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 4

TABLE 4
Company Name	Types of Property	Transaction Date	Transaction Amount	Payment Term	Counterparty	Prior Transaction of Related Counterparty				Price Reference	Purpose of Acquisition	Other Terms
						Owner	Relationships	Transfer Date	Amount
AVC Tech (Vietnam) Co. , Ltd. (AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED)	Factory construction	26 Jul,2021	(VND545,000,000 thousand) $650,000	Based on the terms in the Contract	ZILEI STEEL & CONSTRUCTION CO., LTD	N/A	N/A	N/A	N/A	Price comparison and price negotiation	Manufacturing purpose	None

〜 60 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 5

TABLE 5
Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable		Note
			Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total
ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	AVC INTERNATIONAL (SAMOA) CO., LTD. MERIT TRADING CORPORATION TONBRIDGE INVESTMENTS LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. JADS CORPORATION (HK) LTD. AVC AMERICA, INC.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	(Purchases) (Purchases) (Purchases) (Purchases) (Purchases) (Purchases) (Purchases) Sales	($8,604,257) ($6,827,575) ($1,261,617) ($1,534,842) ($478,286) ($647,050) ($410,109) $268,911	(41%) (33%) (6%) (7%) (2%) (3%) (2%) 1%	Net 30 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 75 days from the end of delivery month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T	N/A N/A N/A N/A N/A N/A N/A N/A	N/A N/A N/A N/A N/A N/A N/A N/A	($2,471,988) ($3,058,246) ($399,291) ($631,514) ($258,531) ($160,228) ($200,878) $55,601	(32%) (39%) (5%) (8%) (3%) (2%) (3%) 2%

( Continued )

〜 61 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RELATED PARTY TRANSACTIONS WITH PURCHASE OR SALES AMOUNT OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 5-1

TABLE 5-1
Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable		Note
			Purchases/ Sales	Amount	Percentage to Total	Collection/ Payment Terms	Unit Price	Collection/ Payment Terms	Ending Balance	Percentage to Total
AVC INTERNATIONAL (SAMOA) CO., LTD. MERIT TRADING CORPORATION TONBRIDGE INVESTMENTS LTD. LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. JADS CORPORATION (HK) LTD. LTD. AVC AMERICA, INC.	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent	Sales Sales Sales Sales Sales Sales Sales (Purchases)	$8,604,257 $6,827,575 $1,261,617 $1,534,842 $478,286 $647,050 $410,109 ($268,911)	90% 89% 83% 67% 6% 92% 98% (26%)	Net 90 days from the end of the month of when invoice is issued by T/T Net 75 days from the end of delivery month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 30 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T Net 90 days from the end of the month of when invoice is issued by T/T Net 60 days from the end of the month of when invoice is issued by T/T	N/A N/A N/A N/A N/A N/A N/A N/A	N/A N/A N/A N/A N/A N/A N/A N/A	$2,471,988 $3,058,246 $399,291 $631,514 $258,531 $160,228 $200,878 ($55,601)	82% 93% 78% 67% 7% 94% 100% (20%)

Note ： All the above transactions were eliminated on consolidation.

〜 62 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

RECEIVABLES FROM RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

TABLE 6

TABLE 6
Company Name	Related Party	Nature of Relationships	(Note 3) Ending Balance	Turnover Ratio (times)	Overdue		Amounts Received in Subsequent Periods	Allowance for Doubtful Accounts
					Amount	Action Taken
AVC INTERNATIONAL (SAMOA) CO., LTD. MERIT TRADING CORPORATION TONBRIDGE INVESTMENTS LTD. ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD. ASIA VITAL COMPONENTS (CHENGDU) CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. JADS CORPORATION (HK) LTD.	ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD ASIA VITAL COMPONENTS CO., LTD	The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent The company's ultimate parent	$2,471,988 $3,058,246 $399,291 $258,531 $631,514 $160,228 $200,878	3.13 2.26 3.04 1.82 3.11 3.47 1.60	－－－－－－－	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	$689,405 $750,938 $148,506 $24,311 $163,788 $53,028 $42,588	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)

Note 1 ： The preparation of consolidated statements does not require recording the allowance for doubtful accounts.

Note 2 ： The Company balances its accounts regularly and writes off receivables against payables.

Note 3 ： All the above transactions were eliminated on consolidation.

〜 63 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

TABLE 7

TABLE 7
Investor Company	Investee Company	Address	Main businesses and products	Initial Investment		Investment as of June 30, 2021			Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount
ASIA VITAL COMPONENTS CO., LTD	AVC INTERNATIONAL CO., LTD.`－`B.V.I. CHIHUNG INTERNATIONAL LTD. MERIT TRADING CORPORATION RAYNEY INTERNATIONAL LTD. AVC AMERICA, INC. AVC INTERNATIONAL (SAMOA) CO., LTD. JADS CORPORATION (HK) LTD. ZIMAG TECHNOLOGY CO., INC. AVC INTERNATIONAL CO., LTD.`－`SAMOA FOSITEK CORP. HUNG YE INVESTMENT CO., LTD. D-MAX TECHNOLOGY CO., LTD. AVC EUROPE TECHNOLOGY GMBH AVC TECHNOLOGY (VIETNAM) COMPANY LIMITED	Vistra Corporate Services Centre, Wickhams Cay`Ⅱ`Road Town Tortola VG1110 Virgin Islands, British Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road ,Apia, Samoa Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa 48501 Warm Springs Blvd., Suite #109 Fremont, CA 94539-7750 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa FLAT/RM 6 16/F WORKINGBOND COMMERCIAL CENTRE 162-164 PRINCE EDWARD RD WEST MONGKOK KL No.2-2, Aly. 98, Ln. 800, Zhongshan S. Rd., Yangmei Dist., Taoyuan City 326, Taiwan (R.O.C.) Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa 8F.-4, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.) 7F.-3, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.) 7F.-3, No.24, Wuquan 2nd Rd., Xinzhuang Dist., New Taipei City 242, Taiwan (R.O.C.) Bismarckstraße 100 (c/o Regus Mönchengladbach City Center), 41061 Mönchengladbach Lot CN05, Dong Van III Supporting Industrial Zone, Dong Van Ward, Duy Tien Town, Ha Nam Province, Vietnam	Investment holding Investment holding Trade Trade Trade Trade Trade Trade Investment holding Trade Sales and manufacture of electronic Sales and manufacture of electronic parts and related products Sales and manufacture of electronic parts, computers and related products Manufacture, process and sales of molds and aluminum products	$5,147,294 $1,040,647 $29,088 $78,950 $91,903 $10,157 $327 $45,000 $32,120 $211,099 $60,000 $201,035 $9,050 $430,117	$5,147,294 $1,040,647 $29,088 $78,950 $91,903 $10,157 $327 $45,000 $32,120 $99,118 $60,000 $201,035 $9,050 $253,411	16 32,770 892 2,400 41 300 10 2,700 1,000 11,637 6,000 28,500 250 (Note)	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 9.53% 100.00% 19.25% 100.00% 100.00% 100.00% 100.00%	$8,702,369 $4,921,509 $184,042 $123,291 $129,634 $55,895 $23,672 $43,068 $245,703 $376,492 $5,383 $444,426 $8,246 $417,750	$754,270 $460,571 $19,244 $2,603 $17,403 ($1,743) $163 $60,406 ($37,441) $429,598 ($12) $59,651 $105 －	$617,164 $463,727 $19,383 $2,603 $17,403 ($2,240) $9,301 $5,806 ($37,441) $83,817 ($12) $53,831 $105 －

Note ： None amount of shares is issued publicly by Limited Company.

( Continued )

〜 64 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEE COMPANIES (Not including investment in Mainland China)

TABLE 7-1

TABLE 7-1
Investor Company	Investee Company	Address	Main businesses and products	Initial Investment		Investment as of June 30, 2021			Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount
AVC INTERNATIONAL CO., LTD.`－`B.V.I. CHIHUNG INTERNATIONAL LTD. HUNG YE INVESTMENT CO., LTD. D-MAX TECHNOLOGY CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. FOSITEK CORP.	MACE TECH CORP. AVC OPTICS CORP. TONBRIDGE INVESTMENTS LTD. KEY APPLICATION TECHNOLOGY CO., LTD. WUCHIDA INTERNATIONAL CO., LTD. D-MAX INTERNATIONAL CO., LIMITED MARKETHILL INVESTMENTS LTD.	Vistra Corporate Services Centre, Wickhams CayⅡRoad Town Tortola VG1110 Virgin Islands,British P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands. Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa 7F., No.147, Xianzheng 9th Rd., Zhubei City, Hsinchu County 302, Taiwan (R.O.C.) Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa FLAT/RM6 16F WORKINGBOND COMMERCIAL CENTRE 162-164 PRINCE EDWARD ROAD W MONG KOK KL Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Trade Investment holding Investment holding Investment holding Investment holding Investment holding Sales and manufacture of electronic products	$319,776 $3,128,775 $101,772 $15,300 $132,004 $132,004 $893,328	$319,776 $3,128,775 $101,772 $15,300 $132,004 $132,004 $390,575	11,068 100,000 3,000 1,115 4,000 4,000 31,200	100.00% 100.00% 100.00% 16.31% 100.00% 100.00% 100.00%	$2,026,765 $2,818,367 $222,329 `－` $371,120 $308,551 $1,685,004	$222,332 $121,964 ($5,176) $13,662 $74,715 $41,869 $454,619	$222,332 $121,964 ($5,176) － $74,715 $38,743 $449,386

〜 65 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified) INFORMATION ON INVESTMENT IN MAINLAND CHINA

TABLE 8	TABLE 8	TABLE 8	TABLE 8	TABLE 8	TABLE 8
Investor Company	Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method ofInvestment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows		Accumulated Outflow of Investment from Taiwan as of September 30, 2021	Percentage of Ownership (Direct or Indirect Investment)	Profits/ Losses of the Investee Company	Share of Profits/Losses	Carrying Amount as of September 30, 2021	Accumulated Inward Remittance of Earnings as of September 30, 2021
						Outflow	Inflow
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans	$642,719	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$642,719	－	－	$642,719	100.00%	$306,344	$306,344	$3,075,068	－
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA AVC ELECTRONICS (SUZHOU) CO., LTD.	Sales and manufacture of reflow machines, solder paste printers and notebook thermal modules	$267,247	(2) RAYNEY INTERNATIONAL LTD.	$54,176	－	－	$54,176	30.00%	$20,159	$6,048	$92,163	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHANGHAI) CO.,LTD.	Sales and manufacture of notebook thermal modules	$200,073	(2) CHIHUNG INTERNATIONAL LTD.	$101,772	－	－	$101,772	100.00%	($5,233)	($5,233)	$220,561	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	Sales and manufacture of computers, electronic products and related parts	$514,105	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$319,776	－	－	$319,776	100.00%	$225,557	$225,799	$1,744,439	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	Sales and manufacture of computers related products and computer cooling fans	$879,291	(2) CHIHUNG INTERNATIONAL LTD.	$879,291	－	－	$879,291	100.00%	$467,143	$467,143	$4,681,739	－
ASIA VITAL COMPONENTS CO. , LTD	FURUKAWA ELECTRIC (SHENZHEN) CO., LTD.	Sales and manufacture of automobile parts	$321,060	(2) MERIT TRADING CORPORATION	$29,088	－	－	$29,088	9.06%	$145,204	－	$85,535	－
ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	Sales and manufacture of computers, related parts and accessories	$1,055,897	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$1,055,897	－	－	$1,055,897	100.00%	$105,638	$105,638	$1,463,021	－
D-MAX TECHNOLOGY CO., LTD.	（JIASHAN）D-MAX ELECTRONICS CO.,LTD.	Sales and manufacture of electronic and photographic equipment	$132,004	(2) WUCHIDA INTERNATIONAL CO., LTD.	$132,004	－	－	$132,004	100.00%	$41,868	$41,868	$311,314	－
ASIA VITAL COMPONENTS CO. , LTD	AVC OPTICS (WUHAN) CORP.	Sales and manufacture of computers related products and computer cooling fans	$3,128,775	(2) AVC INTERNATIONAL CO., LTD.`－`B.V.I.	$3,128,775	－	－	$3,128,775	100.00%	$121,964	$121,964	$2,818,356	－
FOSITEK CORP.	FIRST DOME CORP TELECOM.,LTD.	Sales and manufacture of rails, shafts and metal stamping tooling	$790,562	(2) MARKETHILL INVESTMENTS LTD.	$287,809	$502,753	－	$790,562	100.00%	$455,219	$455,219	$1,679,416	－
(Note 3) Accumulated Outflow of Investment from Taiwan to Mainland China as of September 30, 2021 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment $7,134,060 $7,206,210 (US$233,893,010) (US$258,750,828)						`－` `－` `本` `期` `期` `末` `已` `清` `算` ( `解` `散` ) `之截至本期止已清算`( `解散`) `之` `大` `陸` `子` `公` `司` `自` `台` `灣` `累` `計` `投` `資` `金` `額大陸子公司已匯回投資收益`
Accumulated Outflow of Investment from Taiwan to Mainland China as of September 30, 2021		Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
$7,134,060 (US$233,893,010)		$7,206,210 (US$258,750,828)		(Note 3)

Note 1 ： The methods for investment in Mainland China are categorized into the following three types. Please specify the type.

(1) Direct investment in Mainland China.

(2) Indirectly investment in Mainland China through companies registered in the third area (Please specify the name of the company in third region).

(3) Others.

Note 2 ： The table is expressed in thousands of New Taiwan Dollars.

Note 3 ： The Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau, MOEA, the ceiling amount of the investment in Mainland China is not applicable to the Company.

Note 4 ： All the above transactions were eliminated on consolidation.

〜 66 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 9

TABLE 9
No. (Note 1)	Company Name	Counter Party	Nature of Relationship (Note 2)	IntercompanyTransactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets(Note 3)
0	ASIA VITAL COMPONENTS CO. , LTD	AVC INTERNATIONAL (SAMOA) CO., LTD.	1	Purchases	$8,604,257	General trading terms	24%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC INTERNATIONAL (SAMOA) CO., LTD.	1	Accounts payable	$2,471,988	General trading terms	5%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Sales	$268,911	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	AVC AMERICA, INC.	1	Accounts receivable	$55,601	General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	JADS CORPORATION (HK) LTD.	1	Purchases	$410,109	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	JADS CORPORATION (HK) LTD.	1	Accounts payable	$200,878	General trading terms	0%
0	ASIA VITAL COMPONENTS CO. , LTD	MERIT TRADING CORPORATION	1	Purchases	$6,827,575	General trading terms	19%
0	ASIA VITAL COMPONENTS CO. , LTD	MERIT TRADING CORPORATION	1	Accounts payable	$3,058,246	General trading terms	7%
0	ASIA VITAL COMPONENTS CO. , LTD	TONBRIDGE INVESTMENTS LTD.	1	Purchases	$1,261,617	General trading terms	4%
0	ASIA VITAL COMPONENTS CO. , LTD	TONBRIDGE INVESTMENTS LTD.	1	Accounts payable	$399,291	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Purchases	$1,534,842	General trading terms	4%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	1	Accounts payable	$631,514	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Purchases	$478,286	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	1	Accounts payable	$258,531	General trading terms	1%
0	ASIA VITAL COMPONENTS CO. , LTD	WUCHIDA INTERNATIONAL CO.,LTD.	1	Purchases	$647,050	General trading terms	2%
0	ASIA VITAL COMPONENTS CO. , LTD	WUCHIDA INTERNATIONAL CO.,LTD.	1	Accounts payable	$160,228	General trading terms	0%

〜 67 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

TABLE 9-1	TABLE 9-1	TABLE 9-1	TABLE 9-1
No. (Note 1)	Company Name	Counter Party	Nature of Relationship (Note 2)	Intercompany Transactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Accounts receivable	$156,131	General trading terms	0%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Sales	$444,222	General trading terms	1%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Purchases	$9,340,029	General trading terms	27%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Accounts payable	$2,880,271	General trading terms	6%
1	AVC INTERNATIONAL (SAMOA) CO., LTD.	AVC PRECISION, CO., LTD.	3	Other receivable	$139,250	General trading terms	0%
2	AVC AMERICA, INC.	MERIT TRADING CORPORATION	3	Purchases	$556,936	General trading terms	2%
3	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD. CO.,LTD.	3	Accounts receivable	$159,553	General trading terms	0%
3	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	ASIA VITAL COMPONENTS (CHINA) CO., LTD. CO.,LTD.	3	Sales	$285,009	General trading terms	1%
4	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Sales	$1,516,921	General trading terms	4%
4	AVC PRECISION, CO., LTD.	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	3	Accounts receivable	$435,898	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Accounts receivable	$131,213	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	AVC OPTICS (WUHAN) CORP.	3	Sales	$205,501	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	3	Purchases	$284,152	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	ASIA VITAL COMPONENTS (CHENGDU) CO., LTD.	3	Accounts payable	$159,553	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Sales	$423,734	General trading terms	1%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	JADS CORPORATION (HK) LTD.	3	Accounts receivable	$201,401	General trading terms	0%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	FIRST DOME CORP TELECOM.,LTD.	3	Purchases	$3,090,911	General trading terms	9%
5	ASIA VITAL COMPONENTS (CHINA) CO., LTD.	FIRST DOME CORP TELECOM.,LTD.	3	Accounts payable	$827,088	General trading terms	2%
6	AVC OPTICS (WUHAN) CORP.	TONBRIDGE INVESTMENTS LTD.	3	Accounts receivable	$508,898	General trading terms	1%
6	AVC OPTICS (WUHAN) CORP.	TONBRIDGE INVESTMENTS LTD.	3	Sales	$1,512,297	General trading terms	4%
7	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	MERIT TRADING CORPORATION	3	Accounts receivable	$3,237,692	General trading terms	7%
7	ASIA VITAL COMPONENTS (SHEN ZHEN) CO., LTD.	MERIT TRADING CORPORATION	3	Sales	$7,491,851	General trading terms	21%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	MACE TECH	3	Other payable	$135,372	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	MERIT TRADING CORPORATION	3	Accounts payable	$84,338	General trading terms	0%
8	ASIA VITAL COMPONENTS (DONGGUAN) CO.,LTD.	MERIT TRADING CORPORATION	3	Purchases	$144,185	General trading terms	0%

Note 1 ： The parent company and its subsidiaries are coded as follows:

No.1. The parent company is coded "0".

No.2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2 ： Transactions are categorized as follows:

No.1. Transactions from parent company to a subsidiary. No.2. Transactions from subsidiary to the parent company. No.3. Transactions between subsidiaries.

Note 3 ： Regarding the percentage of transaction amount to consolidated net revenue or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items; and based on interim accumulated amount to consolidated net revenue for income statement items.

〜 68 〜

ASIA VITAL COMPONENTS CO. , LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan Dollars unless Otherwise Specified)

Information of major shareholders

TABLE 10

TABLE 10
Shares Name	Number of shares (thousand)	Percentage of ownership
FURUKAWA ELECTRIC CO., LTD.	52,944,693	14.98%

Note 1 ： The main shareholder information in this form is calculated by the collection company, on the last business day of each quarter, that the total information of the common

shares and special shares held by shareholders of the company that have completed the non-entity login delivery (including the storage shares) of the company amounts

to more than 5%. As for the share capital recorded in the Company's financial report and the number of unregistered shares actually completed by the Company, there may be differences or differences due to the basis for the calculation of the company.

Note 2 ： The opening of the information, if the shareholders will share the shares to the trust, is disclosed to the trustees to open a trust account of the individual sub-accounts.

As for the shareholders to handle the internal ownership declaration of more than 10% of the shares in accordance with the Securities Exchange Act, the shareholding of the

shareholders includes their own shareholding plus their delivery of the trust and the use of decision-making rights for the trust property, etc., the relevant insider equity declaration information can be found in the Market Observation Post System.

〜 69 〜

AI assistant

AVC — Interim / Quarterly Report 2021

52251_rns_2021-12-14_37f3a8f4-c70a-492c-9ebc-cd93cd581273.pdf

ASIA VITAL COMPONENTS CO. , LTD

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

English Translations of a Report Originally Issued in Chinese

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

ERNST & YOUNG

Notice to Readers

English translation of Consolidated Financial Statements originally issued in Chinese ASIA VITAL COMPONENTS CO., LTD

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

English Translation of Financial Statements Originally Issued in Chinese

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

Amendment to IFRS 1

Amendment to IFRS 9 Financial Instruments

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

Amendment to IAS41

B. IFRS 17 “Insurance Contracts”

4. Summary of significant accounting policies

(1) Statement of compliance

(2) Basis of preparation

Preparation principle of consolidated financial statements

(4) Basis of consolidationt

5. Significant accounting judgements, estimates and assumptions

6. Contents of significant accounts

(1) Cash and cash equivalents

(2) Financial assets at fair value through profit or loss

(3) Financial assets measured at amortized cost-current

(4) Notes receivable, net

(5) Accounts receivable, net

(a) 30 September 2021:

(b) 31 December 2020:

(c) 30 September 2020:

C. Movement of the loss allowance table:

(7) Inventories

(10)Investments accounted for under the equity method

(11)Property, plant and equipment

(12)Investment property

(13)Intangible assets

Computer

(14)Other noncurrent assets

(15)Short-term borrowings

(16)Other payables

(17)Corporate Bonds payable

- (18)Long term borrowings

(19)Long-term deferred revenue

(20)Post-employment benefits

A. Defined contribution plan

B. Defined benefits plan

(21)Equities

B. Additional paid-in capital

C. Retained earnings and dividend policies

D. Non-controlling interests

(22)Operating revenues

A. Disaggregation of revenue

(23)Lease

A. Group as a lessee

(a) Amounts recognized in the balance sheet

(25)Non-operating income and expenses

A. Interest income

B. Other income

C. Other gains and losses

D. Finance costs

(26)Components of other comprehensive income (loss)

(27)Income tax

Income tax expense recognized in profit or loss

C. The assessment of income tax returns

(28)Earnings per share

7. Related party transactions

Key management personnel compensation

8. Assets pledged as security

9. Commitments and contingencies

AVC Interim / Quarterly Report 2021