Stock Code:2324

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: No.581 & 581-1, Ruiguang Rd., Neihu District, Taipei, Taiwan Telephone: (02)8797-8588

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information	Page
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Contents
1. Cover Page
2. Table of Contents
3. Representation Letter
4. Independent Auditors’ Report
5. Consolidated Balance Sheets
6. Consolidated Statements of Comprehensive Income
7. Consolidated Statements of Changes in Equity
8. Consolidated Statements of Cash Flows
9. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial
statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major
sources of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information

Page

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Representation Letter

The entities that are required to be included in the combined financial statements of COMPAL ELECTRONICS, INC. as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated and Separate Financial Statements." In addition, the information required to be disclosed in the combined financial statements and is included in the consolidated financial statements. Consequently, COMPAL ELECTRONICS, INC. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: COMPAL ELECTRONICS, INC. Chairman: Sheng-Hsiung Hsu (Rock Hsu) Date: March 15, 2022

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

電話 Tel + 886 2 8101 6666 傳真 Fax + 886 2 8101 6667 網址 Web home.kpmg/tw

Independent Auditor’s Report

To COMPAL ELECTRONICS, INC.:

Opinion

We have audited the consolidated financial statements of COMPAL ELECTRONICS, INC. and its subsidiaries (the “ Group”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statement of comprehensive income, changes in equity and cash flows for the years ended December 31, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended December 31, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“ the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

4-1

Inventory valuation

Please refer to Note (4)(h) and Note (5) for the accounting policy of inventory valuation, as well as the estimation and assumption uncertainty of the valuation of inventory, respectively. Information of estimation of the valuation of inventory are disclosed in Note (6)(f) of the consolidated financial statements.

Description of key audit matters:

The inventory is measured at the lower of cost or net realizable value. The short life cycle of electronic products may cause significant changes in customers’ demand and sales of related products. Consequently, the book value of inventory may be lower than the net realizable value of inventory. Therefore, the valuation of inventory is one of the key audit matters.

Our key audit procedures performed in respect of the above area included the following:

In order to verify the rationality of assessment of inventory valuation estimated by the Group, our key audit procedures included reviewing the consistency of prior year and accounting policy, inspecting the Group's inventory aging reports, analyzing the change of inventory aging, as well as verifying the inventory aging reports and the calculation of lower of cost or net realizable value.

Other Matter

Compal Electronics Inc. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2021 and 2020, on which we have issued an unqualified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC, endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

4-2

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

4-3

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Kuan-Ying Kuo and SzuChuan Chien.

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KPMG

Taipei, Taiwan (Republic of China) March 15, 2022

Notes to Readers

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

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note (6)(a)) 1110 Current financial assets at fair value through profit or loss (note (6)(b)) 1170 Notes and accounts receivable, net (note (6)(e)) 1180 Notes and accounts receivable due from related parties, net (notes (6)(e) and (7)) 1200 Other receivables, net (notes (6)(e) and (7)) 1310 Inventories (note (6)(f)) 1470 Other current assets (note (8)) Non-current assets: 1550 Investments accounted for using equity method (note (6)(g)) 1510 Non-current financial assets at fair value through profit or loss (note (6)(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(c)) 1600 Property, plant and equipment (notes (6)(k) and (8)) 1755 Right-of-use assets (note (6)(l)) 1780 Intangible assets (note (8)(h)) 1840 Deferred tax assets (note(6)(s)) 1990 Other non-current assets (note (8)) Total assets	December 31, 2021 Amount % $ 75,162,103 14.0 400,754 0.1 288,436,522 53.7 1,729,332 0.3 2,445,690 0.5 115,012,365 21.4 3,928,624 0.7 487,115,390 90.7 8,369,312 1.6 259,778 - 6,235,063 1.2 26,990,364 5.0 3,066,218 0.6 1,548,508 0.3 1,646,524 0.3 1,864,183 0.3 49,979,950 9.3 $ 537,095,340 100.0	December 31, 2020 Amount % 89,126,923 19.1 2,245,254 0.5 231,830,964 49.7 378,934 0.1 1,628,657 0.3 96,151,959 20.6 3,097,944 0.6 424,460,635 90.9 7,949,925 1.7 201,608 0.1 4,817,011 1.0 22,085,340 4.7 3,496,952 0.8 1,506,101 0.3 1,514,208 0.3 893,918 0.2 42,465,063 9.1 466,925,698 100.0 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(m)) 2120 Current financial liabilities at fair value through profit or loss (note (6)(b)) 2125 Current financial liabilities for hedging (note (6)(d)) 2130 Current contract liabilities (note (6)(w)) 2170 Notes and accounts payable 2180 Notes and accounts payable to related parties (note (7)) 2200 Other payables (note (7)) 2230 Current tax liabilities 2250 Current provisions (note (6)(q)) 2280 Current lease liabilities (note (6)(p)) 2300 Other current liabilities 2365 Current refund liabilities 2321 Bonds payable, current portion (note (6)(o)) 2322 Long-term borrowings, current portion (note (6)(n)) Non-Current liabilities: 2530 Bonds payable (note (6)(o)) 2540 Long-term borrowings (note (6)(n)) 2570 Deferred tax liabilities (note(6)(s)) 2580 Non-current lease liabilities (note (6)(p)) 2640 Non-current net defined benefit liability (note(6)(r)) 2670 Non-current liabilities, others (note (6)(g)) Total liabilities Equity: Equity attributable to owners of parent (note (6)(t)): 3110 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2021	December 31, 2020 Amount % 92,838,733 19.9 136,617 - 2,192 - 820,016 0.2 196,837,439 42.2 2,888,624 0.6 23,397,683 5.0 5,378,651 1.2 870,050 0.2 377,161 0.1 1,470,466 0.3 1,574,469 0.3 - - 8,932,615 1.9 335,524,716 71.9 980,219 0.2 10,401,738 2.2 992,470 0.2 1,910,601 0.4 786,173 0.2 340,131 0.1 15,411,332 3.3 350,936,048 75.2 44,071,466 9.4 8,342,813 1.8 62,566,181 13.4 (7,266,708) (1.6) (881,247) (0.2) 106,832,505 22.8 9,157,145 2.0 115,989,650 24.8 466,925,698 100.0
			Amount %
			$ 118,422,407 22.0 1,589 - - - 1,065,954 0.2 220,549,039 41.1 3,517,324 0.7 29,701,088 5.5 7,013,976 1.3 1,204,115 0.2 625,292 0.1 2,037,822 0.4 2,035,437 0.4 326,571 0.1 15,741,481 2.9 402,242,095 74.9 - - 9,219,032 1.7 1,226,805 0.2 1,679,504 0.3 822,033 0.2 366,068 0.1 13,313,442 2.5 415,555,537 77.4 44,071,466 8.2 6,724,856 1.2 69,651,940 13.0 (8,206,750) (1.5) (881,247) (0.2) 111,360,265 20.7 10,179,538 1.9 121,539,803 22.6 $ 537,095,340 100.0

See accompanying notes to consolidated financial statements.

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

4000 Net sales revenue (notes (6)(w) and (7)) 5000 Cost of sales (notes (6)(f),(6)(r), (7) and (12)) Gross profit Operating expenses: (notes (6)(r) and (12)) 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Net operating income Non-operating income and expenses: 7100 Interest income (note (6)(y)) 7210 Other gains and losses, net (notes (6)(d), (6)(g), (6)(k), (6)(y) and (6)(aa)) 7050 Finance costs (notes (6)(o) and (6)(p)) 7190 Other income (note (6)(y)) 7590 Miscellaneous disbursements 7670 Impairment loss (note (6)(k)) 7770 Share of profit (loss) of associates and joint ventures accounted for using equity method (note (6)(g)) Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (note (6)(s)) Profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (note (6)(s)) Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8368 Gains (losses) on hedging instrument (note (6)(z)) 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss (note (6)(s)) Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income 8500 Total comprehensive income Profit, attributable to: 8610 Profit, attributable to owners of parent 8620 Profit, attributable to non-controlling interests Comprehensive income attributable to: 8710 Comprehensive income (loss), attributable to owners of parent 8720 Comprehensive income (loss), attributable to non-controlling interests Earnings per share (note 6(v)) 9750 Basic earnings per share 9850 Diluted earnings per share	2021 Amount % $1,235,682,015 100.0 1,194,190,441 96.6 41,491,574 3.4 7,088,418 0.6 4,562,706 0.4 16,491,857 1.3 28,142,981 2.3 13,348,593 1.1 2,017,314 0.2 2,511,423 0.2 (1,049,137) (0.1) 648,106 - (52,513) - (404,513) - 448,562 - 4,119,242 0.3 17,467,835 1.4 3,727,347 0.3 13,740,488 1.1 (56,056) - 630,396 0.1 135,751 - 50,190 - 659,901 0.1 (1,892,168) (0.2) 2,192 - (25,372) - (17,539) - (1,897,809) (0.2) (1,237,908) (0.1) $ 12,502,580 1.0 $ 12,632,667 1.0 1,107,821 0.1 $ 13,740,488 1.1 $ 11,445,530 0.9 1,057,050 0.1 $ 12,502,580 1.0 $ 2.90 $ 2.86	2020
		Amount % 1,048,929,251 100.0 1,013,470,729 96.6 35,458,522 3.4 4,604,361 0.4 4,198,621 0.4 15,162,995 1.5 23,965,977 2.3 11,492,545 1.1 1,636,257 0.2 261,043 - (1,149,215) (0.1) 493,920 0.1 (47,491) - - - 435,657 - 1,630,171 0.2 13,122,716 1.3 2,713,204 0.3 10,409,512 1.0 (65,862) - (78,590) - (54,128) - 2,632 - (201,212) - (3,323,038) (0.3) 2,679 - 161,498 - (18,727) - (3,140,134) (0.3) (3,341,346) (0.3) 7,068,166 0.7 9,361,893 0.9 1,047,619 0.1 10,409,512 1.0 6,083,542 0.6 984,624 0.1 7,068,166 0.7 2.15
		2.12

See accompanying notes to consolidated financial statements.

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

					Equity attributab	Equity attributab	Equity attributab	e to owners of	parent	parent	parent			Total equity attributable to owners of parent	Non- controlling interests	Total equity
Ordinary shares		Capital surplus		Retain	ed earnings				Total other equity interest				Treasury shares
								Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income		Others	Total other equity interest
			Legal reserve	Special reserve	Unappropriated retained earnings		Total retained earnings
$ 44,071,466 - - - - - - - - - - - - - 44,071,466 - - - - - - - - - - - - - $ 44,071,466		9,159,259 - -	19,719,150 - -	7,467,831 - -		30,539,623 9,361,893 (48,219) 9,313,674 (695,590) 3,366,088 (4,407,147) - (33,051) (9,055) - - (24,844) - 38,049,698 12,632,667 (40,067) 12,592,600 (924,672) (3,164,965) (5,288,576) - (25,946) (49,878) - - (142,441) - 41,045,820	57,726,604 9,361,893 (48,219) 9,313,674 - - (4,407,147) - (33,051) (9,055) - - (24,844) - 62,566,181 12,632,667 (40,067) 12,592,600 - - (5,288,576) - (25,946) (49,878) - - (142,441) - 69,651,940	(3,794,980) - (3,093,997) (3,093,997) - - - - - - - - - - (6,888,977) - (1,855,728) (1,855,728) - - - - - - - - - - (8,744,705)		(306,763) - (137,062) (137,062) - - - - 33,051 8,978 - - 24,844 - (376,952) - 707,754 707,754 - - - - 14,709 49,878 - - 142,441 - 537,830	(1,706) - 927 927 - - - - - - - - - - (779) - 904 904 - - - - - - - - - - 125	(4,103,449) - (3,230,132) (3,230,132) - - - - 33,051 8,978 - - 24,844 - (7,266,708) - (1,147,070) (1,147,070) - - - - 14,709 49,878 - - 142,441 - (8,206,750)	(881,247) - - - - - - - - - - - - - (881,247) - - - - - - - - - - - - - (881,247)	105,972,633 9,361,893 (3,278,351) 6,083,542 - - (4,407,147) (881,429) 1,735 2,151 60,021 999 - - 106,832,505 12,632,667 (1,187,137) 11,445,530 - - (5,288,576) (1,762,859) 50,588 2,132 80,027 918 - - 111,360,265	8,786,711 1,047,619 (62,995) 984,624 - - - - - - - - - (614,190) 9,157,145 1,107,821 (50,771) 1,057,050 - - - - - - - - - (34,657) 10,179,538	114,759,344 10,409,512 (3,341,346)
	-	-	-	-												7,068,166
	- - - - - - - - - -		695,590 - - - - - - - - -													- - (4,407,147) (881,429) 1,735 2,151 60,021 999 - (614,190)
	44,071,466 - -		20,414,740 - -													115,989,650 13,740,488 (1,237,908)
	-		-													12,502,580
	- - - - - - - - - -		924,672 - - - - - - - - -													- - (5,288,576) (1,762,859) 50,588 2,132 80,027 918 - (34,657)
	$ 44,071,466		21,339,412													121,539,803

See accompanying notes to consolidated financial statements.

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation and amortization
Increase (decrease) in expected credit loss
Net loss (gain) on financial assets or liabilities at fair value through profit or loss
Finance cost
Interest income
Dividend income
Compensation cost of share-based payments
Share of loss (profit) of associates and joint ventures accounted for using equity method
Gain on disposal of property, plant and equipment, and right-of-use assets
Gain on disposal of investments
Impairment loss
Others
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) in financial assets at fair value through profit or loss
Decrease (increase) in notes and accounts receivable
Decrease (increase) in other receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease (increase) in other non-current assets
Total changes in operating assets
Changes in operating liabilities:
Increase (decrease) in financial liabilities at fair value through profit or loss
Increase (decrease) in notes and accounts payable
Increase (decrease) in other payables
Increase (decrease) in refund liabilities
Increase (decrease) in provisions
Increase (decrease) in contract liabilities
Increase (decrease) in other current liabilities
Others
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through profit or loss and through other comprehensive income
Proceeds from disposal of financial assets at fair value through profit or loss and through other comprehensive income
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
Net cash flow from acquisition of subsidiaries
Proceeds from liquidation of investments
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment and right-of-use assets
Acquisition of intangible assets
Acquisition of right-of-use assets
Decrease in restricted assets
Others
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Cash dividends paid
Change in non-controlling interests
Others
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Compal Electronics, Inc. (“the Company”) was incorporated in June 1984 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company’s registered office is No.581 and No.581-1 Ruiguang Rd., Neihu Dist., Taipei City, Taiwan. In accordance with Article 19 of the Business Mergers and Acquisitions Act, the Company merged its subsidiary, Compal Communications, Inc. (“CCI”) (the “Merger”), pursuant to the resolutions of the Board of Directors in November 2013. The Company was the surviving company and CCI was the dissolved company. The effective date of the Merger was February 27, 2014. The Company and its subsidiaries (together referred to as the “Group” and individually as the (“Group entities”) primarily are involved in the manufacture and sale of notebook personal computers (“notebook PCs”), monitors, LCD TVs, mobile phones and various components and peripherals.

(2) Approval date and procedures of the consolidated financial statements:

These consolidated financial statements were authorized for issuance by the Board of Directors and issued on March 15, 2022.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”

Content of amendment
Effective date per
IASB
The
amendments
aim
to
promote
consistency in applying the requirements
by helping companies determine whether,
in the statement of balance sheet, debt and
other
liabilities
with
an
uncertain
settlement date should be classified as
current (due or potentially due to be settled
within one year) or non-current. The
amendments
include
clarifying
the
classification requirements for debt a
company might settle by converting it into
equity.
January 1, 2023

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized as follows. The following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as the Regulations), the International Financial Reporting Standards, the International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to as the IFRS endorsed by the FSC).

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts in the statement of financial position, the consolidated financial statements have been prepared on the historical cost basis:

1) Financial instruments (including derivative financial instruments) measured at fair value through profit or loss are measured at fair value;
2) Financial instruments measured at fair value through other comprehensive income are measured at fair value;
3) Hedging financial instruments are measured at fair value;
4) The defined benefit liability (or asset) is recognized as plan assets less the present value of the defined benefit obligation and the effect of the asset ceiling mentioned in note (4)(r).
(ii) Functional and presentation currency

The functional currency of each Group entities is determined based on the primary economic environment in which the entities operates. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company's functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(c) Basis of consolidation
(i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and its subsidiaries. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its control over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Accounting policies of subsidiaries have been adjusted to ensure consistency with the policies adopted by the Group.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any differences between the Group’s share of net assets before and after the change, and any considerations received or paid, are adjusted to or against the Group reserves.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

When the Group loses control over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any interest retained in the former subsidiary is measured at fair value when control is lost, with the resulting gain or loss being recognized in profit or loss. The Group recognizes as gain or loss in profit or loss the difference between (i) the fair value of the consideration received as well as any investment retained in the former subsidiary at its fair value at the date when control is lost; and (ii) the assets (including any goodwill), liabilities of the subsidiary as well as any related non-controlling interests at their carrying amounts at the date when control is lost, as gain or loss in profit or loss. When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly disposed of the related assets or liabilities.

(ii) List of subsidiaries in the consolidated financial statements

Name of
investor
Name of Subsidiary
Nature of Operation
The Company
Panpal Technology Corp.
(“Panpal”)
Investment
〃
Gempal Technology Corp.
(“Gempal”)
〃
〃
Hong Ji Capital Co., Ltd.
(“Hong Ji”)
〃
〃
Hong Jin Investment Co.,
Ltd. (“Hong Jin”)
〃
The Company,
Panpal, et al.
Arcadyan Technology
Corp. (“Arcadyan”)
R&D, manufacturing and sales of
wireless network, integrated household
electronics, and mobile office products
The Company
Rayonnant Technology
Co., Ltd. (“Rayonnant
Technology”)
Manufacturing and sales of PCs,
computer periphery devices, and
electronic components
〃
HengHao Technology Co.,
Ltd. (“HengHao”)
Manufacturing and sales of PCs,
computer periphery devices, and
electronic components
〃
Ripal Optoelectronics Co.,
Ltd. (“Ripal”)
Manufacturing of electric appliance and
audiovisual electric products
〃
Mactech Co., Ltd
(“Mactech”)
Manufacturing of equipment and
lighting, retailing of equipment and
international trading
〃
General Life Biotechnology
Co., Ltd. (“GLB”)
Manufacturing and sales of medical
equipment
〃
Unicore BioMedical Co.,
Ltd. (“Unicore”)
Management consulting services, rental
and leasing business, wholesale and
retail sale of medical equipment
〃
Hippo Screen Neurotech
Co., Ltd. (“Hippo
Screen”)
Management consulting services, rental
and leasing business, wholesale and
retail sale of precision instruments and
international trading

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
100%
100%
Panpal held 31,648
thousand shares of the
Company as of December
31, 2021, which represented
0.7% of the Company’s
outstanding shares.
100%
100%
Gempal held 18,369
thousand shares of the
Company as of December
31, 2021, which represented
0.4% of the Company’s
outstanding shares.
100%
100%
100%
100%
34%
35%
The Group had the ability to
control Arcadyan. (Note 1)
100%
100%
100%
100%
100%
100%
53%
53%
50%
50%
100%
100%
91%
70%

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of
investor
Name of Subsidiary
Nature of Operation
The Company
Shennona Taiwan Co., Ltd.
(“Shennona TW”)
Management consulting services, rental
and leasing business, wholesale and
retail sale of precision instruments and
international trading
〃
Aco Smartcare Co., Ltd.
(“Aco Smartcare”)
Wholesale and retail sale of computer
software, software design services, data
processing services, wholesale and retail
sale of electronic materials, wholesale
and retail sale of precision instruments,
and biotechnology services
〃
Kinpo&Compal Group
Assets Development
Corporation(“Kinpo&C
ompal Group”)
Real estate development leasing and
related management business
〃
Shennona Corporation
(“Shennona”)
Medical care IOT business
〃
Auscom Engineering Inc.
(“Auscom”)
R&D of notebook PC related products
and components
〃
Just International Ltd.
(“Just”)
Investment
〃
Compal International
Holding Co., Ltd.
(“CIH”)
〃
〃
Compal Electronics
(Holding) Ltd. (“CEH”)
〃
〃
Bizcom Electronics, Inc.
(“Bizcom”)
Warranty services and marketing of
monitors and notebook PCs
〃
Flight Global Holding Inc.
(“FGH”)
Investment
The Company
and BSH
High Shine Industrial Corp.
(“HSI”)
〃
The Company
Compal Europe (Poland)
Sp. z o.o. (“CEP”)
Maintenance and warranty services of
notebook PCs
〃
Big Chance International
Co., Ltd. (“BCI”)
Investment
〃
Compal Rayonnant
Holdings Limited
(“CRH”)
〃
〃
Core Profit Holdings
Limited (“CORE”)
〃
〃
Compalead Electronics
B.V. (“CPE”)
〃
〃
CGS Technology (Poland)
Sp. z o.o. (“CGSP”)
Maintenance and warranty services of
notebook PCs
Panpal and
Gempal
Compalead Eletronica do
Brasil Industria e
Comercio Ltda.
(“CEB”)
Manufacturing of notebook PCs
〃
Compal Electronics India
Private Limited
(“CEIN”)
Manufacturing and warranty service of
mobile phones
Panpal and CEB Compal Electronica DA
Amazonia Ltda. (“CEA”)
Manufacturing of notebook PCs
Just
Compal Display Holding
(HK) Limited
(“CDH (HK)”)
Investment
〃
Compal Electronics
International Ltd.
(“CII”)
〃
〃
Compal International Ltd.
(“CPI”)
〃

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
100%
100%
52%
52%
70%
-
Kinpo&Compal Group was
established in December
2021.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of
investor
Name of Subsidiary
Nature of Operation
CDH (HK)
Compal Electronics
(China) Co., Ltd.
(“CPC”)
Manufacturing and sales of monitors
〃
Compal Optoelectronics
(Kunshan) Co., Ltd.
(“CPO”)
Manufacturing and sales of LCD TVs
〃
Compal System Trading
(Kunshan) Co., Ltd.
(“CST”)
International trade and distribution of
computers and electronic components
CPC
Compal Smart Device
(Chongqing) Co., Ltd.
(“CSD”)
Research, manufacturing and sales of
communication devices, mobile phones,
electronic computer, smart watch, and
providing related technical service
CII
Smart International
Trading Ltd. (“Smart”)
Investment
〃
Amexcom Electronics Inc.
(“AEI”)
Sales and maintenance of LCD TVs
〃
Mexcom Electronics, LLC
(“MEL”)
Investment
〃
Mexcom Technologies,
LLC (“MTL”)
〃
CIH
Compal International
Holding (HK) Limited
(“CIH (HK)”)
〃
〃
Jenpal International Ltd.
(“Jenpal”)
〃
〃
Prospect Fortune Group
Ltd. (“PFG”)
〃
〃
Fortune Way Technology
Corp. (“FWT”)
〃
CIH (HK)
Compal Electronics
Technology (Kunshan)
Co., Ltd. (“CET”)
Manufacturing of notebook PCs
〃
Compal Information
(Kunshan) Co., Ltd.
(“CIC”)
〃
〃
Coompal Information
Technology (Kunshan)
Co., Ltd. (“CIT”)
〃
〃
Kunshan Botai Electronics
Co., Ltd. (“BT”)
〃
〃
Compal Digital
Technology (Kunshan)
Co., Ltd. (“CDT”)
Manufacturing and sales of notebook
PCs, mobile phones, and digital products
BT
Compower Global Service
Co., Ltd. (“CGS”)
Maintenance and warranty service of
notebook PCs
CDH (HK)
and CIH (HK)
Compal Investment
(Jiangsu) Co., Ltd.
(“CIJ”)
Investment
CIJ
Compal Display
Electronics (Kunshan)
Co., Ltd. (“CDE”)
Manufacturing and sales of LCD TVs
The Company
and Webtek
Etrade Management Co.,
Ltd. (“Etrade”)
Investment
The Company
Webtek Technology Co.,
Ltd. (“Webtek”)
〃
〃
Forever Young Technology
Inc. (“Forever”)
〃
〃
UniCom Global, Inc.
(“UCGI”)
Manufacturing and sales of computers
and electronic components

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of
investor
Name of Subsidiary
Nature of Operation
The Company
Palcom International
Corporation (“Palcom”)
Sales of mobile phones
CDH (HK) and
Etrade
Compal Communication
(Nanjing) Co., Ltd.
(“CCI Nanjing”)
Manufacturing and processing of mobile
phones and tablet PCs
Etrade
Compal Digital
Communication
(Nanjing) Co., Ltd.
(“CDCN”)
〃
〃
Compal Wireless
Communication
(Nanjing) Co., Ltd.
(“CWCN”)
〃
Forever
Hanhelt Communication
(Nanjing) Co., Ltd.
(“Hanhelt”)
R&D and manufacturing of electronic
communication equipment
〃
Giant Rank Trading Ltd.
(“GIA”)
Sales of mobile phones
〃
Compal Wise Electronic
(Vietnam) Co., Ltd.
(“CWV”)
Manufacturing and sales of mobile
phones, tablet PCs, smart watches,
communication devices, other electronic
devices and providing related technical
service.
Arcadyan
Arcadyan Technology N.A.
Corp. (“Arcadyan
USA”)
Sales of wireless network products
〃
Arcadyan Germany
Technology GmbH
(“Arcadyan Germany”)
Technical support and sales of wireless
network products
〃
Arcadyan Technology
Corporation Korea
(“Arcadyan Korea”)
Sales of wireless network products
〃
Arcadyan Holding (BVI)
Corp. (“Arcadyan
Holding”)
Investment
〃
Arcadyan Technology
Limited (“Arcadyan
UK”)
Technical support of wireless network
products
〃
Arcadyan Technology
Australia Pty Ltd.
(“Arcadyan AU”)
Sales of wireless network products
〃
Arcadyan Technology
Corporation (Russia),
LLC. (“Arcadyan RU”)
Sales of wireless network products
〃
Zhi-Bao Technology Inc.
(“Zhi-Bao”)
Investment
〃
Tatung Technology Inc.
(“TTI”)
R&D and sales of household digital
electronic products
〃
AcBel Telecom Inc.
(“AcBel Telecom”)
Investment
Arcadyan and
Zhi-Bao
Arcadyan do Brasil Ltda.
(“Arcadyan Brasil”)
Sales of wireless network products
〃
Arcadyan India Private
Limited (“Arcadyan India”)
Sales of wireless network products

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
61%
61%
51%
51%
The company had decided
its dissolution and
liquidation on October 28,
2021.
100%
100%
100%
-
The subsidiary was
incorporated on March 25,
2021.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of
investor
Name of Subsidiary
Nature of Operation
The Company,
Arcadyan and its
subsidiaries
Compal Broadband
Network Inc. (“CBN”)
R&D and sales of cable modem, digital
set-up box, and other communication
products
CBN
Compal Broadband
Networks Belgium
BVBA (“CBNB”)
Import and export business, technical
support and consulting service of
broadband networks
〃
Compal Broadband
Networks Netherlands
B.V. (“CBNN”)
〃
The Company
and CBN
Starmems Semiconductor
Corp. (“Starmems”)
R&D of MEMS technology of
manufacturing process of semiconductor
and manufacturing of electronic
components
Arcadyan
Holding
Sinoprime Global Inc.
(“Sinoprime”)
Investment
〃
Arcadyan Technology
(Shanghai) Corp. (“SVA
Arcadyan”)
R&D and sales of wireless network
products
〃
Arch Holding (BVI) Corp.
(“Arch Holding”)
Investment
Arch Holding Compal Networking
(Kunshan) Co., Ltd.
(“CNC”)
Manufacturing of wireless network
products
Sinoprime
Arcadyan Technology
(Vietnam) Co., Ltd.
(“Arcadyan Vietnam”)
Manufacturing of wireless network
products
TTI
Quest International Group
Co., Ltd. (“Quest”)
Investment
〃
Tatung Technology of
Japan Co., Ltd.
(“TTJC”)
Sales of household digital electronic
products
Quest
Exquisite Electronic Co.,
Ltd. (“Exquisite”)
Investment
Exquisite
Tatung Home Appliances
(Wujiang) Co., Ltd.
(“THAC”)
Manufacturing of household digital
electronic products
HSI
Intelligent Universal
Enterprise Ltd. (“IUE”)
Investment
〃
Goal Reach Enterprises
Ltd. (“Goal”)
〃
IUE
Compal (Vietnam) Co.,
Ltd. (“CVC”)
R&D, manufacturing, sales, and
maintenance of notebook PCs, computer
monitors, LCD TVs and electronic
components
Goal
Compal Development &
Management (Vietnam)
Co., Ltd. (“CDM”)
Construction of and investment in
infrastructure in Ba-Thien industrial
district of Vietnam
Rayonnant
Technology and
CRH
Allied Power Holding
Corp. (“APH”)
Investment
APH
Primetek Enterprises
Limited (“PEL”)
〃
〃
Rayonnant Technology
(HK) Co., Ltd.
(“Rayonnant
Technology (HK)”)
〃

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
62%
64%
100%
100%
100%
100%
45%
-
The subsidiary was
incorporated in April, 2021
and the Group has
substantial control over it.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of
investor
Name of Subsidiary
Nature of Operation
Rayonnant
Technology
(HK)
Rayonnant Technology
(Taicang) Co., Ltd.
(“Rayonnant
Technology (Taicang)”)
Manufacturing and sales of aluminum
alloy and magnesium alloy products
HengHao
HengHao Holdings A Co.,
Ltd. (“HHA”)
Investment
HHA
HengHao Holdings B Co.,
Ltd. (“HHB”)
〃
HHB
HengHao Optoelectronics
Technology (Kunshan)
Co., Ltd. (“HengHao
Kunshan”)
Production of touch panels and related
components
〃
Lucom Display Technology
(Kunshan) Limited
(“Lucom”)
Manufacturing of touch panels and LCD
TVs
BCI
Center Mind International
Co., Ltd. (“CMI”)
Investment
〃
Prisco International Co.,
Ltd. (“PRI”)
〃
CMI
Compal Investment
(Sichuan) Co., Ltd. (“CIS”)
Outward investment and consulting
services
PRI
Compal Electronics
(Chongqing) Co., Ltd.
(“CEQ”)
R&D, manufacturing and sales of
notebook PCs, related components,
related maintenance and warranty
services
CIS
Compal Electronics
(Chengdu) Co., Ltd.
(“CEC”)
R&D and manufacturing of notebook
PCs, tablet PCs, digital products,
network switches, wireless AP, and
automobile electronic products
〃
Compal Management
(Chengdu) Co., Ltd.
(“CMC”)
Corporate management consulting,
training and education, business
information consulting, financial and tax
consulting, investment consulting, and
investment management services
CORE
Billion Sea Holdings
Limited (“BSH”)
Investment
BSH
Mithera Capital Io LP
(“Mithera”)
〃
〃
Compal USA (Indiana),
Inc. (“CIN”)
OEM of automotive electronic products
GLB
Rapha Bio Ltd. (“RBL”)
Detector and feature
Unicore
Raycore Biotech Co., Ltd.
(“Raycore”)
Animal medication retail and wholesale

Percentage of
ownership
December
31, 2021
December
31, 2020
Description
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
99%
99%
100%
-
The Group acquired 100%
of its shares in September
2021.
-
100%
The liquidation had been
completed in July 2021.
100%
51%
Raycore was merged with
Unicore in February, 2022.
Unicore was the surviving
company and Raycore was
the dissolved company.

Note 1: The Group holds less than half of the voting rights of the company, but the Group considers that the rest of the company's shareholding is extremely dispersed. The previous procedures for the participation of other shareholders in the shareholders' meeting show that the Group has the actual ability to unilaterally dominate the relevant activities, and there is no indication that there is an agreement among the other shareholders to make collective decisions, so the Group treats the company as a subsidiary.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Foreign currency

(i) Foreign currency transaction

Transactions in foreign currencies are translated to the respective functional currencies of the Group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between the amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the reporting date.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of translation.

Foreign currency differences arising on retranslation are recognized in profit or loss, except for the following differences which are recognized in other comprehensive income arising on the retranslation:

1) fair value through other comprehensive income financial assets;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent the hedge is effective

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Group entities' functional currency at exchange rates of the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to the Group entities' functional currency at average rate. Foreign currency differences are recognized in other comprehensive income and presented in the foreign currency translation differences in equity.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income and presented in the translation reserve in equity.

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting period; or
(iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not impact its classification.
(f) Cash and cash equivalents

Cash comprise cash on hand and demand deposits. Cash equivalents are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

The time deposits which meet the above definition and are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes are reclassified as cash equivalents.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(g) Financial instruments
(i) Financial assets

Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss (“FVTPL”).

The Group shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade date accounting.

2)
Fair value through other comprehensive income (“FVOCI”)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Some accounts receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group, therefore, those receivables are measured at FVOCI and presented as accounts receivable.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses, deriving from debt investments are recognized in profit or loss; whereas dividends deriving from equity investments are recognized as income in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses of financial assets measured at FVOCI are recognized in OCI. On derecognition, gains and losses accumulated in OCI of debt investments are reclassified to profit or loss. However, gains and losses accumulated in OCI of equity investments are reclassified to retain earnings instead of profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade date accounting.

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive payment is established, which in the case of quoted securities is normally on the date the shareholders' meeting approved the earning distribution.

3) Fair value through profit or loss (“FVTPL”)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest income, are recognized in profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade date accounting.

4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized costs, notes and accounts receivable, other receivable, guarantee deposit and other financial assets), debt investments measured at FVOCI, and accounts receivable measured at FVOCI.

The Group measures loss allowances at an amount equal to lifetime expected credit loss (“ECL”), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 90 days past due or the borrower is unlikely to pay its credit obligations to the Group in full.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ creditimpaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. An evidence that a financial assets is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than 90 days past due;
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

5) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets.

On derecognition of a debt instrument in its entirety, the Group recognizes the difference between its carrying amount and the sum of the consideration received or receivable and any cumulative gain or loss that had been recognized in other comprehensive income and presented in “ other equity – unrealized gains or losses on fair value through other comprehensive income” , in profit or loss, and presented it in the line item of nonoperating income.

On derecognition of a financial asset other than in its entirety, the Group allocates the previous carrying amount of the financial asset between the part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss, and presented in the line item of non-operating income and expenses. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity

Debt or equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

Equity instruments refer to surplus equities of the assets after the deduction of all the debts for any contracts. Equity instruments issued are recognized as the amount of consideration received, less, the direct cost of issuing.

Interest and loss or gain related to financial liabilities are recognized as profit or loss and are reported under non-operating income and expenses. Financial liabilities are reclassified as equity when converted, and conversions do not generate profit or loss.

2) Financial liabilities at fair value through profit or loss

A financial liability is classified in this category if acquired principally for the purpose of selling in the short term. This type of financial liability is measured at fair value at the time of initial recognition, and attributable transaction costs are recognized in profit or loss as incurred. Financial liabilities at fair value through profit or loss are measured at fair value, and changes therein, which take into account any interest expense, are recognized in profit or loss, and are included in non-operating income or expenses.

3) Other financial liabilities

Financial liabilities not classified as held-for-trading or designated as at fair value through profit or loss, which comprise loans and borrowings, and trade and other payable, are measured at fair value, plus, any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method other than significant interest on short-term loans and payables. Interest expense not capitalized as capital cost is recognized in profit or loss, and is included in non-operating income or expenses.

4) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligation has been discharged, cancelled or expired. The difference between the carrying amount of a financial liability removed and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss, and is included in nonoperating income or expenses.

5) Offsetting of financial assets and liabilities

The Group presents financial assets and liabilities on a net basis when the Group has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Derivative financial instruments and hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are initially measured at fair value. Any attributable transaction costs thereof are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss and are included in the line item of non-operating income. When a derivative is designated as, and effective for, a hedging instrument, its timing of recognition in profit or loss is determined based on the nature of the hedging relationship. When the fair value of a derivative instrument is positive, it is classified as a financial asset, whereas when the fair value is negative, it is classified as a financial liability.

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the non-financial asset’ s host contract are not closely related to the embedded derivatives and the host contract is not measured at FVTPL.

The Group designates its hedging instruments, including derivatives, embedded derivatives, and nonderivative instruments for a hedge of a foreign currency risk, as a fair value hedge, cash flow hedge, or hedge of a net investment in a foreign operation. Foreign exchange risks of firm commitments are treated as fair value hedges.

At initial designated hedging relationships, the Group documents the risk management objectives and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged items and hedging instrument are expected to offset each other.

The Group shall discontinue hedge accounting prospectively only when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after taking into account any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and － accumulated in “other equity gains (losses) on hedging instruments”. The effective portion of changes in the fair value of the derivative that is recognized in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss, and is presented in the line item of non-operating income and expenses in the statement of comprehensive income.

The Group designates only the change in fair value of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of the forward exchange contracts is separately accounted for as a cost of hedging and accumulated in a separate component within equity.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

When the hedged item is recognized in profit or loss, the amount accumulated in equity and retained in other comprehensive income is reclassified to profit or loss in the same period or in the periods during which the hedged item affects the profit or loss, and is presented in the same accounting item with the hedged item recognized in the consolidated statement of comprehensive income. However, for a cash flow hedge of a forecast transaction recognized as － a nonfinancial asset or liability, the amount accumulated in “other equity gains (losses) on hedging instruments in cash flow hedging securities” and retained in other comprehensive income is reclassified as the initial cost of the nonfinancial asset or liability. In addition, if that amount is a loss and the Group expects that all or a portion of that loss will not be recovered in future periods, it shall immediately reclassify the amount in profit or loss.

When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the cash flow hedge reserve (and costs of hedging) remains in equity until the hedged future cash flows are no longer expected to occur. Otherwise, that amount would be adjusted within the carrying amount of the non-financial item. For other cash flow hedges, the amount is reclassified to profit or loss in the same period or in the periods as the hedged expected future cash flows affect the profit or loss. However, if the hedged future cash flows are no longer expected to occur, the amount shall immediately be reclassified from cash flow reserve (and the cost of hedging reserve) to profit or loss.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average-cost principle and includes expenditure incurred in acquiring the inventories, production or transition costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less, the estimated costs of completion and selling expenses.

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or join control, over the financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition, less, any accumulated impairment losses.

The consolidated financial statements include the Group’ s share of the profit or loss and other comprehensive income of equity-accounted investees after adjustments to align the accounting policies with those of the Group from the date that significant influence commences until the date that significant influence ceases. When changes in an associate’s equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the changes in ownership interests of its associate in capital surplus in proportion to its ownership.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Unrealized profits resulting from the transactions between the Group and an associate are eliminated to the extent of the Group’ s interest in the associate. Unrealized losses on transactions with associates are eliminated in the same way, except to the extent that the underlying asset is impaired.

When the Group’ s share of losses exceeds its interest in associates, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

The Group shall discontinue the use of the equity method from the date when its investment ceases to be an associate or a joint venture. The Group shall measure the retained interest at fair value. The difference between the fair value of retained interest and proceeds from disposal, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Group shall account for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss on the disposal of the related assets or liabilities, the entity shall reclassify the gain or loss from equity to profit or loss when the equity method is discontinued. If an entity’s ownership interest in an associate or a joint venture is reduced while the entity continues to apply the equity method, the entity shall reclassify the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest to profit or loss.

If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group shall continue to apply the equity method without remeasuring the retained interest.

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus, however, when the balance of the capital surplus arising from the investment was insufficient, the difference charged or credited to retained earnings. If the Group’ s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(j) Joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement. A joint venture shall recognize its interest in a joint venture as an investment and shall account for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless, the entity is exempted from applying the equity method as specified in that Standard.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

When assessing the classification of a joint arrangement, the Group shall consider the structure and legal form of the arrangement, the terms in the contractual arrangement and other facts and circumstances. The Group had previously reviewed the contractual structure of the joint arrangement, and has now decided to reclassify the investments in “Jointly Controlled Entities” to “Joint Ventures”. Although the investments have been reclassified, they are still recorded under the equity method. Thus, there is no effect in the recognized assets, liabilities and other comprehensive income.

(k) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset. The cost of the software is capitalized as part of the property, plant and equipment if the purchase of the software is necessary for the property, plant and equipment to be capable of operating.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and the depreciation method of a significant part of an item of property, plant and equipment are the same as the useful life and depreciation method of another significant part of that same item.

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as other gains and losses.

(ii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(iii) Depreciation

The depreciable amount of an asset is determined after deducting its residual amount, and it shall be allocated on a systematic basis over its useful life. Items of property, plant and equipment with the same useful life may be grouped in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on a systematic basis consistent with the depreciation policy the lessee adopts for depreciable assets that are owned. If there is reasonably certainty that the lessee will obtain ownership by the end of the lease term, the period of expected use is the useful life of the asset; otherwise, the asset is depreciated over the shorter of the lease term and its useful life.

Land has an unlimited useful life and therefore is not depreciated.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1) Buildings: 9~50 years
2) Building improvement: 2~30 years
3) Machinery and equipment: 2~14 years
4) Research equipment: 3~10 years
5) Modeling equipment: 0.5~5 years
6) Other equipment: 0.25~10 years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from the previous estimates, the change is accounted for as a change in an accounting estimate.

(l) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(ii) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

－ fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

－ amounts expected to be payable under a residual value guarantee; and
－
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－
there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
－ there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
－
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery and office equipment that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(m) Intangible assets

(i) Goodwill

1) Initial recognition

Goodwill arising from acquisition of subsidiaries is included in intangible assets. The measurement of initial recognition of goodwill, please refer to note (4)(u).

2) Subsequent measurement

Goodwill is measured at cost less accumulated impairment losses.

Goodwill related to an investment accounted for using equity method is included in the carrying amount of the investment, and not allocated to any asset, including goodwill, forms part of the carrying amount of the investment accounted for using the equity method.

(ii) Research & Development

During the research phase, activities are carried out to obtain and understand new scientific or technical knowledge. Expenditures during this phase are recognized in profit or loss as incurred.

Expenditures arising from the development phase shall be recognized as an intangible asset if all the conditions described below can be demonstrated; otherwise, they will be recognized in profit or loss as incurred.

1) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
2) Its intention to complete the intangible asset and use or sell it.
3) Its ability to use or sell the intangible asset.
4) How the intangible asset will generate probable future economic benefits.
5) The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
6) Its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Capitalized expenditure arising from the development phase is measured at cost less accumulated amortization and accumulated impairment losses.

(iii) Other intangible assets

Other intangible assets that are acquired by the Group are measured at cost, less accumulated amortization and any accumulated impairment losses.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(v) Amortization

The amortizable amount is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill and intangible assets with all indefinite useful life, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

1) Patents: the shorter of contract period and estimated useful lives
2) Royalty: amortized by contract period
3) Computer software: 1~7 years
4) Copyright: 10 years

The residual value, the amortization period, and the amortization method for an intangible asset with a finite useful life shall be reviewed at least annually at each fiscal year-end. Any change shall be accounted for as changes in accounting estimates.

(n) Impairment of non-derivative financial assets

Non-derivative financial assets except for inventories, deferred tax assets, assets arising from employee benefits and non-current assets classified as held for sale are assessed at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group shall estimate the recoverable amount of the asset. If it is not possible to determine the recoverable amount (fair value less cost to sell and value in use) for the individual asset, then the Group will have to determine the recoverable amount for the asset's cash-generating unit.

The Group assesses goodwill and intangible assets, which have indefinite useful lives and are not available for use, on an annual basis and recognizes an impairment loss on excess of carrying value over the recoverable amount.

The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair value, less costs to sell and its value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss shall be recognized immediately in profit or loss.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the purpose of impairment testing, goodwill acquired in a business combination shall, from the acquisition date, be allocated to each of the acquirer’ s cash-generating units, or groups of cashgenerating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquire are assigned to those units or group of units. If the carrying amount of the cash-generating units exceeds the recoverable amount of the unit, the entity shall recognize the impairment loss and the impairment loss shall be allocated to reduce the carrying amount of each asset in the unit. Reversal of an impairment loss for goodwill is prohibited.

The Group assesses at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’ s recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal of an impairment loss.

(o) Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

A provision for warranties is recognized when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

(p) Treasury stock

Repurchased shares are recognized under treasury shares (a contra-equity account) based on its repurchase price (including all directly accountable costs), and net of tax. Gains on disposal of treasury shares should be recognized under Capital Reserve – Treasury Shares Transactions; losses on disposal of treasury shares should be offset against existing capital reserves arising from similar types of treasury shares. If there are insufficient capital reserves to be offset against, then such losses should be accounted for under retained earnings. The carrying amount of treasury shares should be calculated using the weighted average different types of repurchase.

During the cancellation of treasury shares, Capital Reserve – Share Premiums and Share Capital should be debited proportionately. Gains on cancellation of treasury shares should be recognized under existing capital reserves arising from similar types of treasury shares; losses on cancellation of treasury shares should be offset against existing capital reserves arising from similar types of treasury shares. If there are insufficient capital reserves to be offset against, then such losses should be accounted for under retained earnings.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(q) Recognition of Revenue

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods

The Group manufactures and sells electronic products to electronic products brand vendor. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’ s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The Group assesses sales discounts based on historical experience, management's judgment and other known reasons. Such allowances are recognized as a deduction of sales revenue in the same period in which sales are made. The aforementioned provisions are expected to settle over the next year. A refund liability is recognized for expected discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales of electronic products are made with a credit term which is consistent with the market practice.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

2) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(r) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’ s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realizable during the life of the plan, or on settlement of the plan liabilities.

If the benefits of a plan are improved, the pension cost incurred from the portion of the increased benefit relating to past service by employees, is recognized immediately in profit or loss.

Re-measurement of net defined benefit liability (asset) (including actuarial gains, losses and the return on plan asset and changes in the effect of the asset ceiling, excluding any amounts included in net interest) is recognized in other comprehensive income (loss). The effect of remeasurement of the defined benefit plan is charged to retained earnings.

The Group recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets and change in the present value of defined benefit obligation.

(iii) Short term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(s) Share-based payment

The grant-date fair value of share-based payment awards granted to employee is recognized as employee expenses, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the sharebased payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

(t) Income taxes

Income tax expenses include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as well as tax adjustments related to prior years.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the following exceptions:

(i) Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) Initial recognition of goodwill.

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

(i) The entity has the legal right to settle tax assets and liabilities on a net basis; and
(ii) the taxing of deferred tax assets and liabilities fulfill one of the below scenarios:
1) levied by the same taxing authority; or
2) levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation, or where the timing of asset realization and debt liquidation is matched.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

A deferred tax asset should be recognized for the carry-forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible temporary differences shall also be re-evaluated every year on the financial reporting date, and they shall be adjusted based on the probability that future taxable profit that will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized.

The surtax on unappropriated earnings is recoded as current tax expense in the following year after the resolution to appropriate retained earnings is approved in a stockholders’ meeting.

(u) Business combination

Goodwill is measured as an aggregation of the consideration transferred (which generally is measured at fair value at the acquisition date) and as an amount of any non-controlling interest in the acquiree, net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed (generally at fair value). If the residual balance is negative, the Group shall re-assess whether it has correctly identified all of the assets acquired and liabilities assumed, and recognize a gain on the bargain purchase thereafter.

All the transaction costs incurred for the business combination are recognized immediately as the Group’s expenses when incurred, except for the issuance of debt or equity instruments.

If the business combination is achieved in stages, the Group shall measure any non-controlling equity interest in the acquire, either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Other non-controlling interest is measured (1) at fair value at the acquisition date or (2) by using other valuation techniques acceptable under the IFRS as endorsed by the FSC.

In a business combination achieved in stages, the Group shall re-measure its previously held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss, if any, in profit or loss. In prior reporting periods, the Group may have recognized changes in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was recognized in other comprehensive income shall be recognized on the same basis as would be required if the Group had disposed directly of the previously held equity interest. If the disposal of the equity interest required a reclassification to profit or loss, such an amount shall be reclassified to profit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group shall retrospectively adjust the provisional amounts recognized at the acquisition date, or recognize additional assets or liabilities to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period shall not exceed one year from the acquisition date.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(v) Earnings per share

The Group discloses the basic and diluted earnings per share attributable to ordinary equity holders of the Group. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholder of the Group divided by weighted average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Group divided by weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. Dilutive potential ordinary shares comprise employee compensation not yet approved by the Board of Directors.

(w) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may incur revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

There are no critical judgments in applying the accounting policies that have significant effect on the amounts recognized in the consolidated financial statements. In addition, information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Recognition and measurement of refund liabilities

Because of the sales returns and allowances, the Group records a refund liabilities (sales returns and allowance provisions) for estimated returns and other allowances in the same period the related revenue is recorded. The estimate is made based on historical experience, market and economic conditions, and any other known factors using the expected value or the most likely amount and it could be different from actual sales returns and allowances, therefore, the management periodically reviews the adequacy of the estimation used.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial changes, there may be significant differences in the net realizable value of inventories. Refer to note (6)(f) for further description of the valuation of inventories.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

December 31, 2021 Cash on hand $ 18,472 Checking accounts and demand deposits 17,073,664 Time deposits 58,069,967 Bonds purchased under resale agreements - $ 75,162,103	December 31, 2020
	18,637 19,537,842 69,560,444 10,000
	89,126,923

Please refer to note (6)(aa) for the disclosure of the exchange rate risk, the interest rate risk and the fair value sensitivity analysis of the financial assets and liabilities of the Group.

(b) Financial assets and liabilities at fair value through profit or loss

December 31, 2021 Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Structured deposits $ - Stock unlisted in domestic markets 137,540 Fund in domestic or foreign markets 399,550 Derivative instruments not used for hedging Foreign exchange contracts 120,897 Swap contracts 2,545 Total $ 660,532 Current $ 400,754 Non-current 259,778 $ 660,532	December 31, 2020
	2,234,184 100,190 101,419 - 11,069
	2,446,862
	2,245,254 201,608
	2,446,862

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

December 31, 2021 Financial liabilities held-for-trading: Derivative instruments not used for hedging Foreign exchange contracts $ 1,589 Swap contracts - $ 1,589	December 31, 2020
	130,865 5,752
	136,617

The Group uses derivative instruments to hedge foreign currency risk the Group is exposed to arising from its operating activities. The following derivative instruments not applied hedge accounting were classified as mandatorily measured at fair value through profit or loss and held-fortrading financial liabilities:

Contract amount (in thousand) Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 33,000 Forward exchange sold EUR 1,500 Forward exchange purchased USD 181,700 Swap contracts: Currency Swap USD 21,000 Derivative financial liabilities: Foreign exchange contracts: Forward exchange purchased USD 5,000 Forward exchange sold EUR 7,000 Contract amount (in thousand) Derivative financial assets: Swap contracts: Currency swap USD 37,000 Derivative financial liabilities: Foreign exchange contracts: Forward exchange sold EUR 49,000 Forward exchange purchased USD 122,300 Swap contracts: Currency swap USD 45,500	Contract amount (in thousand) EUR 33,000 EUR 1,500 USD 181,700 USD 21,000 USD 5,000 EUR 7,000		December	31, 2021
			Currency Maturity date EUR to USD January 10, 2022 ~ May 09, 2022 EUR to TWD January 5, 2022 USD to BRL January 5, 2022 ~ June 20, 2022 USD to TWD February 14~March 14, 2022 USD to CNY January 26, 2022 EUR to USD February 18, 2022 ~ March 4, 2022 December 31, 2020	Maturity date
			Currency USD to TWD EUR to USD USD to BRL USD to TWD	Maturity date
				January 13~February 26, 2021 January 13~April 14, 2021 January 7~August 26, 2021 March 12~April 29, 2021

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The market risk related to the financial instruments please refer to note (6)(aa).

As of December 31, 2021 and 2020, the Group did not provide any aforementioned financial assets as collaterals for its loans.

Financial assets at fair value through other comprehensive income
December 31, 2021 Equity investments at fair value through other comprehensive income: Stock listed in domestic markets $ 3,350,210 Stock listed in foreign markets 695,728 Stock unlisted in domestic markets 1,879,166 Stock unlisted in foreign markets 309,959 Total $ 6,235,063	December 31, 2020
	1,972,849 491,243 2,152,542 200,377
	4,817,011

The purpose that the Group invests in the above-mentioned equity securities is for long-term strategies, but rather for trading purpose. Therefore, these equity securities are designated as at FVOCI.

In order to strengthen business cooperation with its related party, Kinpo Electronics, Inc. (“Kinpo”), the Group acquired 46,197 thousand common stocks of Kinpo from its related party, Jipo Investment Inc. in May 2021, with a transaction price amounting to $616,864. The transaction has been completed and the price has been fully paid.

The liquidation procedures of Horizon Ventures Fund I, LP, Kunji Venture Capital Co., Ltd, and HeDing Venture Capital Co., Ltd, measured at fair value through other comprehensive income by the Group, had been completed in 2021. Proceed from the liquidation amounted to $1,172, resulting in a cumulative loss of $157,150, which was reclassified from other comprehensive income to retained earnings.

During 2020, the Group has sold all of its shareholdings, measured at fair value through other comprehensive income, in Global BioPharma, Inc. and Taiwan Sanga Co., LTD. The fair value of the shares upon disposal amounted to $52,105, resulting in a cumulative loss of $57,895, which was reclassified from other comprehensive income to retained earnings.

If there is an increase (decrease) in the market price by 5% on the reporting date of the equity securities hold by the Group, the increase (decrease) in other comprehensive income (pre-tax) for the years ended December 31, 2021 and 2020, will be $311,753 and $240,851, respectively. These analyses are performed on the same basis for the period and assume that all other variables remain the same.

The Group’s information of market risk please refer to note (6)(aa).

As of December 31, 2021 and 2020, the Group did not provide any financial assets at fair value through other comprehensive income as collaterals for its loans.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Financial instruments used for hedging
(i) Financial instruments used for hedging were as follows:

Financial instruments used for hedging were as follows:
December 31, 2021 Cash flow hedge: Financial liabilities used for hedging: Forward exchange contracts $ -	December 31, 2020
	2,192

(ii) Cash flow hedge

The Group’s strategy is to use forward exchange contracts to hedge its foreign currency exposure in respect of forecasted future sales.

As of December 31, 2021, the Group did not enter into any hedge contract.

As of December 31, 2020, the amounts related to the items designated as hedge instruments were as follows:

Derivative financial liabilities used for hedging Foreign exchange contracts: Forward exchange sold		December 31, 2020	December 31, 2020
	Contract amount (in thousands)	Currency EUR to USD	Maturity period April 29~June 29, 2021	Average strike price
	EUR 6,000			1.2192

(iii) For the years ended December 31, 2021 and 2020, the ineffective portion of cash flow hedge recognized in profits (losses) amounted of $0 and $67, respectively, recorded as “other gains and losses, net”.
(iv) For the years ended December 31, 2021 and 2020, the profits (losses) of changes in fair value of derivative financial instruments used for hedging reclassified from other equity to profit or loss is recognized as revenue in the statement of comprehensive income. Please refer to note (6)(z).

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(e) Notes and accounts receivable

December
31, 2021
Notes receivables from operating activities
$ 81,244
Accounts receivables – measured at amortized cost
261,179,612
Accounts receivables – fair value through other comprehensive
income
32,796,946
294,057,802
Less: allowance for uncollectible accounts
(3,891,948)
$ 290,165,854
Notes and accounts receivable
$ 288,436,522
Notes and accounts receivable – related parties
$
1,729,332

December
31, 2020
40,059
197,650,813
38,429,954
236,120,826
(3,910,928)
232,209,898
231,830,964
378,934

The Group has assessed a portion of its trade receivables that was held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; therefore, such trade receivables were measured at fair value through other comprehensive income.

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information.

(i) The loss allowance provision of IT product segment of the Group was determined as follows:

	December 31, 2021	December 31, 2021
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 268,016,952 0% 14,524,868 0.47% 3,795,534 100% $ 286,337,354 December 31, 2020		Lifetime ECLs Credit- impaired - No 68,262 No 3,795,534 Yes 3,863,796
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable $ 213,584,823 11,779,368 3,817,340 $ 229,181,531	Weighted- average ECL rate 0% 0.57% 100%	Lifetime ECLs Credit- impaired - No 66,757 No 3,817,340 Yes 3,884,097

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) The loss allowance provision of strategically integrated product segment of the Group was determined as follows:

	December 31, 2021	December 31, 2021
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable $ 2,142,077 5,042,739 517,585 - 18,047 $ 7,720,448	Weighted- average ECL rate 0% 0.10% 1.00% - 100%	Lifetime ECLs Credit- impaired - No 4,913 No 5,192 No - - 18,047 Yes 28,152

	December 31, 2020	December 31, 2020
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable $ 2,705,044 3,772,573 443,092 - 18,586 $ 6,939,295	Weighted- average ECL rate 0% 0.10% 1.00% - 100%	Lifetime ECLs Credit- impaired - No 3,814 No 4,431 No - - 18,586 Yes 26,831

The aging analysis of notes and accounts receivable was determined as follows:

December 31, 2021 Overdue 1 to 180 days $ 1,338,940 Overdue 181 to 365 days 7,679 $ 1,346,619	December 31, 2020 2,073,442 104,264
	2,177,706

The movement in the allowance for notes and accounts receivable was as follows:

Balance at January 1 Impairment losses recognized (reversed) Effect of changes in exchange rates Balance at December 31	2021 $ 3,910,928 (18,227) (753) $ 3,891,948	2020 3,928,716 (18,694) 906 3,910,928

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Allowance for uncollectible account is the balance of accounts receivable which are uncollectable. Except for evaluating the situation of the customers’ payment records and widely analyzing the credit rating of customers, the Group also takes all the necessary procedures for collection. The Group believes that there is no doubt for the recovery of the due but unimpaired accounts receivable, therefore, no allowance recognized.

The Group entered into accounts receivable factoring agreements with banks. As of December 31, 2021 and 2020, except for the amount used under the actual sales amount in accordance with certain agreements, the factoring amount granted by the banks was USD 1,600,000 thousand and EUR 15,000 thousand, USD 1,600,000 thousand and EUR 59,700 thousand, respectively. Based on the agreements, the Group is not responsible for guaranteeing the ability of the accounts receivable obligor to make payment when it is affected by credit risk. Thus, this is a non-recourse accounts receivable factoring. The Group derecognized the above accounts receivable because it has transferred substantially all of the risks and rewards of their ownership and it does not have any continuing in involvement in them. After the transfer of the accounts receivable, the Group can request partial advanced amount, while the interest calculated at an agreed rate is paid to the bank in the period during the time of receiving advance and the accounts receivable is collected. The remaining amounts with no advance are received when the accounts receivable are settled by the customers. As of December 31, 2021 and 2020, the factored account receivable with no advance amounting $958 and $42,550, respectively, is accounted for as other receivables.

The Group, customers and banks signed the three-party contracts in which the banks purchase accounts receivable from the Group. The total amount of the accounts receivable should not exceed the facility limit provided by the banks to the Group’s customers. Based on the contracts, the banks have no right to request the Company to repurchase the accounts receivable. Thus, this is a nonrecourse accounts receivable transfer. As of December 31, 2021 and 2020, accounts receivable factored were recovered and derecognized since the conditions of derecognition were met.

As of December 31, 2021 and 2020, the details of the factored accounts receivable but unsettled were as follows:

		December	31, 2021
Purchaser Financial Institution	Accounts receivable factored (gross) $ 33,594,209	Amount advanced Unpaid Paid - 33,593,251 December	Amount recognized in other receivable 958 31, 2020	Collateral -	Amount derecognized Interest rate 33,594,209 0.47%~0.86%
		Unpaid -
Purchaser Financial Institution		Amount advanced Unpaid Paid - 42,555,222	Amount recognized in other receivable 42,550	Collateral -	Amount derecognized Interest rate 42,597,772 0.58%~0.93%
		Unpaid -

As of December 31, 2021 and 2020, the Group did not provide any aforementioned notes and accounts receivable as collaterals.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(f) Inventories

December 31, 2021 Finished goods $ 22,625,832 Work in progress 9,683,904 Raw materials 82,224,084 Raw materials in transit 478,545 $ 115,012,365	December 31, 2020 23,237,892 9,630,864 62,694,104 589,099 96,151,959

(i) For the years ended December 31, 2021 and 2020, inventory cost recognized as cost of sales amounted to $1,194,190,441 and $1,013,470,729, respectively.
(ii) The loss due to the write-down of inventories to net realizable value amounted $1,938,800 and $97,090 for the years ended December 31, 2021 and 2020, respectively.
(iii) As of December 31, 2021 and 2020, the Group did not provide any inventories as collaterals for its loans.
(g) Investments accounted for using equity method

A summary of the Group’s financial information for equity-accounted investees at the reporting date is as follows:

December 31, 2021 Associates $ 8,453,133 Joint venture (17,587) 8,435,546 Plus: credit balance of investment in equity method (other non-current liability) 43,020 Less: unrealized profits or losses (109,254) $ 8,369,312	December 31, 2020
	8,036,165 (17,106)
	8,019,059 43,177 (112,311)
	7,949,925

(i) Associates

1) The fair value of the shares of listed company based on the closing price was as follows:

December 31, 2021 Allied Circuit Co., Ltd. (“Allied Circuit”) $ 2,847,809 Avalue Technology Inc. (“Avalue”) 849,180 $ 3,696,989	December 31, 2020
	2,075,813 828,286
	2,904,099

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) The Group’s share of the net gain (loss) of associates was as follows:

		2021	2020
The Group’s share of the gain (loss) of associates	$	448,467	436,165
The Group’s financial information for investments accounted for using the			equity metho
that are individually immaterial was as follows:
		December	December
		31, 2021	31, 2020
Carrying amount of individually immaterial associates	$	8,453,133	8,036,165
		2021	2020
The Group’s share of the net income (loss) of associates:
Profit (loss) from continuing operations	$	448,467	436,165
Other comprehensive income		110,379	107,370
Total comprehensive income	$	558,846	543,535

3) The Group’s financial information for investments accounted for using the equity method that are individually immaterial was as follows:
4) For the year ended December 31, 2020, the Group had sold parts of its shares held in Allied Circuit and Avalue, with a consideration (net of costs of disposal) amounting to $38,952. The transaction has been completed and the price has been fully received, wherein the Group recognized a gain of $28,772, which was accounted for as other gain and loss.

(ii) Joint venture

In April 2010, the Group and another company established a jointly controlled entity, Compal Connector Manufacture Ltd. (“CCM”), and obtained an ownership interest of 51%. CCM’s actual paid-in capital amounted to USD10,000 thousands. Moreover, in May 2014, the Group and another company established a jointly controlled entity, Zheng Ying Electronics (Chongqing) Co., Ltd., (“Zheng Ying”), and obtained an ownership interest of 51%. Zheng Ying’s actual paid-in capital amounted to USD 2,500 thousands.

The Group’s financial information for investment accounted for using the equity method that are individually insignificant was as follows:

The carrying amount of the Group’s interests in all individually insignificant joint ventures $ The Group’s share of the net income (loss) of joint ventures: Losses from continuing operations (also the total comprehensive losses)	December 31, 2021 (17,587) 2021 $ 95		December 31, 2020 (17,106) 2020 (508)

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Although the Group is the single largest shareholder of some associates, after a comprehensive assessment that the remaining shares of these associates are not concentrated in specific shareholders, the Group is still not able to obtain more than half of the board seats, and it has not obtained more than half of the voting rights of shareholders attending the shareholders' meeting. The Group judges that it does not have absolute power and leading ability over the relevant activities and variable remuneration of these associates, so it assesses that the Group has no control over these associates.
(iv) As of December 31, 2021 and 2020, the Group did not provide any investments accounted for using equity method as collaterals for its loans.
(h) Acquisition of the subsidiary

In order to expand the automotive electronics business and build an automotive electronics production base in the US, the Group’s indirect investee, Billion Sea Holdings Ltd., acquired a 100% － ownership of Cal-Comp USA (Indiana), Inc. from the Group's related party Cal-Comp Electronics (USA) Co., Ltd. (“ CCUS” ). Cal-Comp USA (Indiana), Inc. was renamed to be Compal USA (Indiana), Inc. (“CIN”) after acquisition. The company signed a contract with CCUS on September 30, 2021, to acquire 100% of the equity at a total price of $226,421. The aforementioned price was paid, and the delivery of shares had been completed.

Since the acquisition of 100% equity of CIN on September 30, 2021, the revenue and net profit contributed by CIN were $139,834 and loss of $35,101, respectively. If the transaction takes place on January 1, 2021, the management estimates that the Group's revenue in 2021 would increase by $490,751, while net profit would decrease by $8,992.

In determining these amounts, management has assumed that the transaction occurred on January 1, 2021 and that the provisional fair value adjustment resulting from the acquisition date is the same.

The main categories of consideration transfer, assets acquired and liabilities on the acquisition date and the amount of recognized goodwill are as follows:

(i) Consideration transferred

Cash

$ 226,421

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) The identifiable assets acquired and the liabilities assumed

The fair value details of the identifiable assets acquired and the liabilities assumed on the acquisition date are as follows:

	acquisition date are as follows:
	Cash and cash equivalents	$	29,419
	Notes and accounts receivable, net		130,003
	Other receivables		29,994
	Inventories, net		211,240
	Prepayments and other current assets		3,798
	Property, plant and equipment		93,373
	Short-term borrowings		(158,743)
	Accounts payable		(124,352)
	Other payables		(27,525)
		$	187,207
(iii)	Goodwill arising from the acquisition of 100% equity is as follows:
	Consideration transferred	$	226,421
	Less: fair value of identifiable net assets		(187,207)
		$	39,214

Goodwill is mainly derived from the business value of CIN in the automotive electronics market. It is expected that CIN and the Group’s business will be integrated to generate synergy.

(i) Changes in subsidiaries’ equity
(i) Changes in subsidiaries’ equity did not result in the Group’s loss of control
- 1) Subsidiaries’ employee stock options exercised

CBN issued 38 thousand and 45 thousand new shares because of its employees' exercised stock options in 2021 and 2020, respectively, which resulted in the reduce of the Group’s ownership of CBN by 0.02% and 0.03%, respectively.

2) Issuance of new shares for cash of subsidiaries

The Group purchased newly issued shares of HippoScreen about $70,000, resulting in an increase in the ownership of the Group in HippoScreen by 21%.

3) Issuance of subsidiaries’ restricted shares

CBN issued 1,500 thousand restricted shares in the year ended December 31, 2021, resulting in a decrease in the ownership of the Group in CBN by 0.95%.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

4) Cancellation of subsidiaries’ restricted shares and conversion of convertible bonds

Arcadyan canceled 53 thousand and 126 thousand restricted shares in the years ended December 31, 2021 and 2020. Whereas, Arcadyan issued $8,136 new shares due to the conversion of convertible bonds during 2021. These two events, respectively, resulted in a decrease of 1.30% and an increase of 0.01% the ownership of the Company and its subsidiaries in Arcadyan in the years ended December 31, 2021 and 2020.

5) The acquisition of additional equity in the subsidiary

In August 2021, the Group acquired 49% of equity interest in Raycore Biotech from minority shareholders with $15,129 in cash, increasing equity from 51% to 100%.

6) The following summarizes the effect of changes in equity of the parent due to changes in the ownership interest of subsidiaries:

Capital surplus – changes in ownership interest in subsidiaries Retained earnings	2021 $ 61,825 (11,237) $ 50,588	2020
		1,735 -
		1,735

(j) Material non-controlling interests of subsidiaries

The material non-controlling interests of subsidiaries were as follows:

Subsidiaries Arcadyan Technology Corporation	Main operation place Taiwan	Percentage of non-controlling interests
		December 31, 2021 December 31, 2020 % 66 % 65

The following information of the aforementioned subsidiaries have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Included in these information are the fair value adjustment made during the acquisition and relevant difference in accounting principles between the Group as at the acquisition date. Intra-group transactions were not eliminated in this information.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Arcadyan’s collective financial information

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Non-controlling interests Sales revenue $ Net income $ Other comprehensive income Comprehensive income $ Profit, attributable to non-controlling interests $ Comprehensive income, attributable to non-controlling interests $ Net cash flows from operating activities $ Net cash flows from investing activities Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents $	December 31, 2021 $ 28,532,932 5,368,181 (20,476,963) (501,037) $ 12,923,113 $ 8,796,235 2021	December 31, 2020 24,721,922 4,085,304 (15,368,928) (1,476,302) 11,961,996 8,024,032 2020
	38,240,058 1,701,800 (77,222) 1,624,578 1,083,011 1,032,457 (1,524,264) (1,789,637) 2,240,204 (35,292) (1,108,989)	33,765,295 1,630,605 (97,919) 1,532,686 1,033,182 970,772 3,352,208 (884,623) (974,048) (21,328) 1,472,209

(k) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2021 and 2020, were as follows:

Cost: Balance on January 1, 2021 Acquisition through business combination Additions Disposals and derecognitions Reclassifications Effect of movements in exchange rates Balance on December 31, 2021	Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
	$ 1,944,094 10,892 479,377 - 43,694 (1,138) $ 2,476,919	18,519,873 87,477 693,335 (1,893,781) 378,343 (401,448) 17,383,799	28,498,191 162,654 3,164,422 (915,011) 2,011,033 (915,221) 32,006,068	11,885,697 4,376 1,598,322 (1,142,655) 229,103 (831,423) 11,743,420	1,220,785 - 6,125,821 - (2,662,173) (90,951) 4,593,482	62,068,640 265,399 12,061,277 (3,951,447) - (2,240,181) 68,203,688

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Balance on January 1, 2020 Additions Disposals and derecognitions Reclassifications Effect of movements in exchange rates Balance on December 31, 2020 Depreciation and impairments loss: Balance on January 1, 2021 Acquisition through business combination Depreciation for the period Impairment loss Disposals and derecognitions Effect of movements in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Depreciation for the period Disposals and derecognitions Effect of movements in exchange rates Balance on December 31, 2020 Carrying amounts: Balance on December 31, 2021 Balance on January 1, 2020 Balance on December 31, 2020	Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
	$ 1,705,220 16,540 - 222,769 (435) $ 1,944,094 $ - - - - - - $ - $ - - - - $ - $ 2,476,919 $ 1,705,220 $ 1,944,094	16,966,779 1,555,668 (40,637) 568,695 (530,632) 18,519,873 10,855,109 18,824 923,523 - (622,536) (185,398) 10,989,522 10,352,434 905,054 (39,988) (362,391) 10,855,109 6,394,277 6,614,345 7,664,764	27,044,641 2,043,593 (781,081) 1,419,898 (1,228,860) 28,498,191 20,571,645 148,912 2,566,033 378,072 (812,833) (1,597,679) 21,254,150 19,850,259 2,369,810 (656,216) (992,208) 20,571,645 10,751,918 7,194,382 7,926,546	11,289,433 1,670,528 (484,944) 267,958 (857,278) 11,885,697 8,556,546 4,290 1,947,870 26,441 (1,009,328) (556,167) 8,969,652 8,141,591 1,569,827 (461,903) (692,969) 8,556,546 2,773,768 3,147,842 3,329,151	1,310,558 2,491,792 - (2,479,320) (102,245) 1,220,785 - - - - - - - - - - - - 4,593,482 1,310,558 1,220,785	58,316,631 7,778,121 (1,306,662) - (2,719,450) 62,068,640 39,983,300 172,026 5,437,426 404,513 (2,444,697) (2,339,244) 41,213,324 38,344,284 4,844,691 (1,158,107) (2,047,568) 39,983,300 26,990,364 19,972,347 22,085,340

As of December 31, 2021 and 2020, part of the Group’ s property, plant and equipment were provided as collateral for long-term borrowings. Please refer to note (8).

In order to activate the assets of the Group, the Board of Directors approved a resolution on May 7, 2021, that the subsidiary CDE and Kunshan Xincheng Construction Development Co., Ltd., a nonrelated party, signed a real estate purchase and sale contract. The transaction targets include land use rights and existing land building, with the transaction price of $4,147,946 (CNY $956,012 thousand) in total. The Group has completed the above transaction. The Group recognized a disposal gain of $1,961,419, which was accounted for as other gains and losses, after deducting the book value of assets and related transaction costs from the transaction price.

In 2021, the Group carried out the impairment test toward the partial production lines in Henghao and its subsidiaries, and assessed that the recoverable amount of the machinery and equipment was lower than its book value. The impairment loss of $404,513 was recognized, and accounted for nonoperating income and expenses.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(l) Right-of-use assets

The Group leases many assets including land and buildings, machinery and vehicles. Information about leases for which the Group as a lessee is presented as below:

Cost: Balance on January 1, 2021 Additions Deductions Effect of movements in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Additions Deductions Effect of movements in exchange rates Balance on December 31, 2020 Depreciation and impairment loss: Balance on January 1, 2021 Depreciation for the period Deductions Effect of movements in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Depreciation for the period Deductions Effect of movements in exchange rates Balance on December 31, 2020 Carrying amount: Balance on December 31, 2021 Balance on January 1, 2020 Balance on December 31, 2020	Land $ 1,268,129 - (362,689) (45,447) $ 859,993 $ 1,110,813 317,808 (106,518) (53,974) $ 1,268,129 $ 54,756 52,675 (37,698) (78) $ 69,655 $ 31,587 25,354 - (2,185) $ 54,756 $ 790,338 $ 1,079,226 $ 1,213,373	Buildings 3,378,467 996,820 (679,921) (31,336) 3,664,030 2,809,991 954,736 (350,896) (35,364) 3,378,467 1,175,689 805,895 (512,348) (10,411) 1,458,825 659,467 801,567 (258,054) (27,291) 1,175,689 2,205,205 2,150,524 2,202,778	Machinery 76,930 - - (328) 76,602 86,661 - (9,460) (271) 76,930 24,749 12,326 - (175) 36,900 22,270 12,138 (9,368) (291) 24,749 39,702 64,391 52,181	Vehicles and Other 74,969 22,824 (28,923) (248) 68,622 88,712 6,797 (19,825) (715) 74,969 46,349 20,421 (28,923) (198) 37,649 32,681 32,690 (18,742) (280) 46,349 30,973 56,031 28,620	Total 4,798,495 1,019,644 (1,071,533) (77,359) 4,669,247 4,096,177 1,279,341 (486,699) (90,324) 4,798,495 1,301,543 891,317 (578,969) (10,862) 1,603,029 746,005 871,749 (286,164) (30,047) 1,301,543 3,066,218 3,350,172 3,496,952

(m) Short-term borrowings

The details of short-term borrowings were as follows:

December 31, 2021 Unsecured bank loans $ 118,422,407 Unused credit line for short-term borrowings $ 113,777,000 Range of interest rates 0.05%~2.95%	December 31, 2020
	92,838,733
	95,910,000
	0.25%~2.58%

For information on the Group’s interest risk, foreign currency risk and liquidity risk, please refer to note (6)(aa).

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(n) Long-term borrowings

The details of long-term borrowings were as follows:

Unsecured bank loans Secured bank loans Less: current portion Total Unused credit lines for long-term borrowings		December 31, 2021 Annual range of interest rate Maturity year Amount	December 31, 2021 Annual range of interest rate Maturity year Amount
	Currency	Annual range of interest rate
	TWD TWD	0.62%~0.98% 1.00%~1.50%	2022~2024 $ 24,300,000 2022~2026 660,513 (15,741,481) $ 9,219,032 $ 12,345,000

Unsecured bank loans Unsecured bank loans Secured bank loans Less: current portion Total Unused credit lines for long-term borrowings		December 31, 2020 Annual range of interest rate Maturity year Amount	December 31, 2020 Annual range of interest rate Maturity year Amount
	Currency	Annual range of interest rate
	TWD USD TWD	0.66%~0.98% 0.69%~0.92% 1%~1.5%	2021~2023 $ 11,900,000 2021~2022 7,205,440 2022~2025 228,913 (8,932,615) $ 10,401,738 $ 15,327,000

For information on the Group’s interest risk, foreign currency risk and liquidity risk, please refer to note (6)(aa).

The Group pledged property, plant and equipment as collateral for its partial long-term borrowings. Please refer to note (8).

(o) Unsecured convertible corporate bonds

(i) The Company’ s subsidiary, Arcadyan, issued the first domestic unsecured convertible corporate bonds on June 6, 2019. The details were as follows:

December
31, 2021
Total convertible corporate bonds issued
$ 1,000,000
Unamortized discounts on corporate bonds payable
(1,433)
Unamortized issuance costs on corporate bonds payable
(496)
Accumulated converted amount
(671,500)
Balance of bonds payable of the reporting date
$
326,571
Conversion options included in equity components (classified
as capital surplus and non-controlling interests)
$
15,987

December
31, 2020
1,000,000
(18,527)
(1,254)
-
980,219
48,667

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Interest expenses

2021 2020 $ 11,968 13,727

The effective interest rate of the first issued convertible corporate bonds was 1.3284%.

(ii) The main terms of issuing the above-mentioned convertible corporate bonds was as follows:
1) Coupon rate: 0%
2) Duration: three years (June 6, 2019~June 6, 2022)
3) Repayment

Put option and call option are excluded from the issuance of convertible corporate bonds. Except that the bondholders convert the bonds to Arcadyan’ s common shares or the bonds are repurchased and cancelled by Arcadyan from the securities firm’s business office, the bonds will be repaid in cash at par value when the bonds expired.

4) Terms of conversion
- a) The bondholder may opt to have its bonds converted into the Arcadyan’s common shares, with the approval of Taiwan Depository & Clearing Corporation through securities firms, at any time between three months after the issuance date (September 7, 2019) and the day before the maturity day (June 6, 2022), except for the following:
  - The closing period in accordance with the applicable law;
  - The period starting from the first day of the first fifteen working days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
  - The period starts from the date of record of the capital decrease and ends on the date prior to the trading of the reissuance shares after the capital decrease.
- b) Conversion price is determined as NT$98.3 per share upon issuing. Arcadyan paid cash dividends and issued new shares for cash in 2019; therefore, the conversion price has been adjusted to $93 per share. Arcadyan distributed cash dividends to common stocks shareholders with retained earnings in 2021 and 2020, thereafter, the conversion price has been adjusted to NT82.5 and $87.7 per share, respectively.
(iii) The maturity date of the above convertible corporate bonds is June 6, 2022, so it has been transferred to current liabilities from June 30, 2021.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) As of December 31, 2021, the convertible corporate bonds were converted into Arcadyan's ordinary shares with a face value of $671,500 which was converted into Arcadyan's ordinary shares with a total share capital of $81,363. The resulting capital reserve – issuance stock premium was $616,933 (including the premium of $32,680 and the unamortized amount of the discounted corporate bond payables of $5,884).

(p) Lease liabilities

The details of leases liabilities were as follows:

		December	December
		31, 2021	31, 2020
Current	$	625,292	377,161
Non-current	$	1,679,504	1,910,601
For the maturity analysis, please refer to note (6)(aa).
The amounts recognized in profit or loss were as follows:
		2021	2020
Interest on lease liabilities	$	63,701	50,534
Variable lease payments not included in the measurement of lease
liabilities	$	32,350	3,332
Expenses relating to leases of low-value assets or short-term
leases	$	303,454	131,749
The amounts recognized in the consolidated statement of cash flows	for	the Group were	as follows:

2021 Total cash outflow for leases $ 1,234,542	2020
	1,032,451

(i) Real estate leases

The Group leases land leasehold rights and buildings for its office and plant space. The leases of office space typically run for a period of 1~19 years, and of land leasehold rights for 45~50 years.

(ii) Other leases

The Group leases vehicles and equipment with lease terms of 1~5 years.

The Group also leases some equipment and vehicles with contract terms of 1~3 years. These leases are short-term or leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(q) Provisions

Balance on January 1, 2021 Provisions made during the period Provisions used during the period Provisions reversed during the period Balance on December 31, 2021 Balance on January 1, 2020 Provisions made during the period Provisions used during the period Provisions reversed during the period Balance on December 31, 2020	Warranties
	$ 870,050 476,940 (136,853) (6,022) $ 1,204,115 $ 830,757 181,789 (142,007) (489) $ 870,050

Provisions relate to sales of products are assessed based on historical experience, management’ s judgment and other known reasons. Such allowances are recognized as a deduction of sales revenue in the same period in which sales are made. The aforementioned provisions are expected to settle over the next year.

(r) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligations at present value and plan assets at fair value were as follows:

December 31, 2021 Present value of defined benefit obligations $ (1,554,902) Fair value of plan assets 732,869 Net defined benefit liabilities $ (822,033)	December 31, 2020 (1,516,219) 730,046 (786,173)

The Group makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The balance of the Group’ s labor pension reserve account in the Bank of Taiwan amounted to $739,802 (excluding the ending balance of interest receivable) as of December 31, 2021. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in the present value of the defined benefit obligations

The movements in the present value of defined benefit obligations for the Group were as follows:

Defined benefit obligations on January 1 Benefit paid by the plan Current service costs and interest Remeasurements of net benefit liabilities Defined benefit obligations on December 31	2021 $ (1,516,219) 38,959 (12,850) (64,792) $ (1,554,902)	2020 (1,486,824) 76,835 (19,238) (86,992) (1,516,219)

3) Movements of the fair value of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the Group were as follows:

Fair value of plan assets on January 1 Expected return on plan assets Remeasurements of net benefit plan assets Contributions paid by the employer Benefits paid by the plan Fair value of plan assets on December 31	2021 $ 730,046 3,675 9,626 28,481 (38,959) $ 732,869	2020 748,660 6,675 23,554 27,992 (76,835) 730,046

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss were as follows:

Current service cost Net interest on the net defined benefit liability (asset) Cost of sales Selling expenses Administrative expenses Research and development expenses	2021 $ 5,198 3,977 $ 9,175 $ 547 576 2,137 5,915 $ 9,175	2020
		5,955 6,608
		12,563
		546 679 3,024 8,314
		12,563

5) Actuarial assumptions

The following were the Group’s principal actuarial assumptions at the reporting date:

Discount rate Future salary increasing rate	December 31, 2021 December 31, 2020 0.63%~0.8% 0.50%~0.63% 3.00% 3.00%

The expected allocation payment made by the Group to the defined benefit plans for the one-year period after the reporting date is $29,915.

The weighted-average lifetime of the defined benefit plan is 9~13.42 years.

6) Sensitivity analysis

If the main actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Effects to the defined benefit obligation
	Increased 0.25% Decreased 0.25% (34,611) 35,847 34,882 (33,869) (36,336) 37,683 36,574 (35,482)

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation on the net defined benefit liabilities in the balance sheets.

The method and assumption used in the sensitivity analysis is consistent with prior period.

(ii) Defined contribution plans

The Group allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Group allocates the labor pension at a specific percentage to the Bureau of the Labor Insurance without additional legal or constructive obligations.

The Company and all subsidiaries in domestic recognized the pension costs under the defined contribution method amounting to $446,148 and $448,617 for the years ended December 31, 2021 and 2020, respectively. Payment was made to the Bureau of Labor Insurance.

Other subsidiaries recognized the pension expenses, basic endowment insurance expenses, and social welfare expenses amounting to $1,193,098 and $922,151 for the years ended December 31, 2021 and 2020, respectively.

(s) Income taxes

(i) Income tax expenses

1) The amount of income tax for the years ended December 31, 2021 and 2020, was as follows:

Current tax expense Recognized during the period 5% surtax on unappropriated earnings Tax credit of investment Deferred tax expense Recognition and reversal of temporary differences Income tax expense	2021 $ 4,240,078 14,627 (596,726) 3,657,979 69,368 69,368 $ 3,727,347	2020 2,837,554 27,073 (273,959) 2,590,668 122,536 122,536 2,713,204

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) The amount of income tax recognized in other comprehensive income for the years ended December 31, 2021 and 2020, was as follows:

Items that will not be reclassified subsequently to profit or loss: Remeasurement of the defined benefit obligation Unrealized gains (losses) on equity instruments at fair value through other comprehensive income Items that will be reclassified subsequently to profit or loss: Foreign currency translation differences of foreign operations	2021 $ (11,211) 61,401 $ 50,190 $ (17,539)	2020 (13,173) 15,805
		2,632
		(18,727)

3) The income tax expense that was reconciled between the actual income tax expense and profit before tax for the years ended December 31, 2021 and 2020, was as follows:

2021 Profit before tax $ 17,467,835 Income tax calculated based on tax rate $ 4,734,068 Estimated tax effect of tax exemption on investment income, net (171,208) Realized investment loss (65,440) Investment tax credit (596,726) Changes in temporary differences (704,260) Adjustment of estimated difference 516,286 Surtax on unappropriated earnings 14,627 $ 3,727,347	2020
	13,122,716 3,260,548 (209,192) (60,000) (273,959) (637,794) 606,528 27,073 2,713,204

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Refund liabilities Deferred tax assets: Balance on January 1, 2021 $ 134,880 Recognized in profit or loss 60,416 Recognized in other comprehensive income - Balance on December 31, 2021 $ 195,296 Balance on January 1, 2020 $ 120,603 Recognized in profit or loss 14,277 Recognized in other comprehensive income - Balance on December 31, 2020 $ 134,880 Deferred tax liabilities: Balance on January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Balance on December 31, 2021 Balance on January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance on December 31, 2020	Refund liabilities		Contract liabilities	Contract liabilities		Unrealized exchange losses, net
				49,536 40,462 -
				89,998

(iii) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Tax effect of deductible temporary differences Tax effect of loss carryforward	December 31, 2021 $ 1,028,920 $ 978,257	December 31, 2020 1,143,771 1,034,072

The Group assesses and considers that some of the income tax reduction items may be unrealized, hence they are not recognized as deferred tax assets. In addition, according to Income Tax Act, the loss carryforward are the losses incurred in past 10 years assessed by ROC tax authorities which can be deducted from the net profit of current year before levied. The items are not recognized as deferred income tax assets due to the fact that the Group may not have sufficient taxable income in the future for the losses.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

As of December 31, 2021, the tax effects on loss carryforward that have not been recognized as deferred tax assets were as follows:

Year of loss 2012 (Assessed) 2013 (Assessed) 2014 (Assessed) 2015 (Assessed) 2016 (Assessed) 2017 (Assessed) 2018 (Assessed/Filed) 2019 (Assessed/Filed) 2020 (Filed) 2020 (Filed) 2021 (Estimated) 2021 (Filed)	Expiry year Deductible amount 2022 $ 345,099 2023 228,258 2024 41,534 2025 636,827 2026 1,423,381 2027 918,085 2028 554,750 2029 377,577 2030 138,962 2025 18,527 2031 48,943 2026 124,353 $ 4,856,296

(iv) Unrecognized deferred tax assets and liabilities related to investments in subsidiaries

The temporary differences associated with investment in subsidiaries were not recognized as deferred income tax assets and liabilities as the Company has the ability to control the reversal of these temporary differences which are not expected to reverse in the foreseeable future.

As of December 31, 2021 and 2020, the aggregate deductible temporary differences relating to investments in subsidiaries not recognized as deferred tax assets amounted to $2,335,023 and $1,856,500, respectively.

As of December 31, 2021 and 2020, the aggregate taxable temporary differences relating to investments in subsidiaries not recognized as deferred tax liabilities amounted to $58,082,760 and $54,151,962, respectively.

(v) Examination and approval

The Company’s tax returns for the year through 2019 were assessed by the Taipei National Tax Administration.

The ROC tax authorities have assessed the income tax returns of Hippo Screen, Zhi-Bao, Acbel Telecom, and Shennona through 2020, of Rayonnant Technology ,UCGI, Palcom, Panpal, Gempal, Hong Ji, Hong Jin, Unicore, Raycore, Ripal, Arcadyan, Heng Hao, Mactech, GLB, RBL, Aco Healthcare and CBN through 2019, and of TTI through 2019. However, TTI’s tax returns through 2018 has not yet been approved.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(t) Capital and other equities

(i) Ordinary shares

As of December 31, 2021 and 2020, the Company’s authorized common stock consisting of 6,000,000 thousand shares with a par value of 10 New Taiwan dollar per share amounted to $60,000,000 of which 4,407,147 thousand shares, were issued. All issued shares were paid up upon issuance.

(ii) Capital surplus

The balances of capital surplus were as follows:

December 31, 2021 Additional paid-in capital $ 3,660,119 Treasury share transactions 2,621,933 Difference between consideration and carrying amount arising from acquisition or disposal of subsidiaries 36,766 Recognition of changes in ownership interests in subsidiaries 122,675 Changes in equity of associates and joint ventures accounted for using equity method 283,363 $ 6,724,856	December 31, 2020
	5,422,060 2,541,906 36,766 60,850 281,231
	8,342,813

In accordance with the ROC Company Act, realized capital reserves can only be used to increase the common stock or distributed as cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be reclassified under share capital shall not exceed 10% of the actual share capital amount.

The Company’s Board of Directors meeting respectively held on March 26, 2021 and March 30, 2020, approved to distribute cash of $1,762,859 and $881,429 (representing 0.4 and 0.2 New Taiwan Dollars per share), by using capital surplus.

The Company’s Board of Directors meeting held on March 15, 2022, approved to distribute cash of $1,762,859 (representing 0.4 New Taiwan Dollars per share), by using the capital surplus. The related information can be accessed through the Market Observation Post System website.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Retained earnings

If there is any profit after closing of books in a given year, the Company shall first defray tax due, cover accumulated losses and set aside ten percent of it as legal reserve and then set aside or reverse a special reserve in accordance with laws and regulations. The balance of earnings available for distribution is composed of the remainder of the said profit and the unappropriated retained earnings of previous years. The Board of Directors may set aside a certain amount to cope with the business operation conditions, and shall prepare the proposal for distribution of the balance amount thereof after a resolution has been adopted and then allocated by the Board of Directors. The Company authorizes the Board of Directors to distribute all or part of the dividends and bonuses, capital surplus or legal reserve in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the General shareholders’ meeting.

The lifecycle of the industry of the Company is in the growing stage. To consider the need of the Company for the future capital, capital budget, long-term financial planning, domestic and foreign competition, the need of shareholders for cash flow and other factors, if there is any profit after close of books, the dividend and bonus to be distributed to shareholders shall not be less than thirty percent of profit after tax for such year and the cash dividend allocated by the Company each year shall not be lower than ten percent of the total dividend (including cash and share dividend) for such year.

According to the law, when there is a deduction from stockholders' equity (excluding treasury stock and unearned employee benefit) during the year, an amount equal to the deduction item is set aside as a special reserve before the earnings are appropriated. A special reserve is made available for earning distribution only after the deduction of the related shareholders’ equity has been reversed.

1) Legal reverse

When a company incurs no loss, it may, in pursuant to a resolution to be adopted by the shareholders’ meeting as required, distribute its legal reserve by issuing new shares and distributing stock dividends or distributing cash to shareholders. Only the portion of the legal reserve which exceeds 25% of the paid-in capital may be distributed.

2) Special reverse

A portion of current period earnings and undistributed prior period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should equal to the current period total net reduction of other shareholders’ equity. For the year 2019 earnings distribution in 2020, the amount to be reclassified to special reserve shall be a portion of current-period earnings and undistributed priorperiod earnings. As for the year 2020 earnings distribution in 2021, the amount to be reclassified to special reserve shall be a portion of current-period earnings plus other line items in the retained earnings movements and undistributed prior-period earnings. A portion of previous unappropriated earnings shall be set aside as a special reserve, which should not be distributed, to account for cumulative changes to other equity interests pertaining to prior periods. The special reserve shall be made available for appropriation when the net deductions of other equity interests are reversed in the subsequent periods.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

3) Earnings distribution

Distribution for the earnings of 2020 and 2019 were approved in the meeting of the Board of Directors held on March 26, 2021 and March 30, 2020, respectively. The relevant information was as follows:

relevant information was as	follows:
Cash dividends distributed to common shareholders	2020 Amount per share Total amount $ 1.2 5,288,576	2019
	Amount per share $ 1.2	Amount per share 1.0	Total amount
			4,407,147

Earnings distribution for 2021 was approved by the Board of Directors held on March 15, 2022. The relevant information was as follows:

15, 2022. The relevant information was as follows:
Cash dividends distributed to common shareholders from the unappropriated earnings	2021 Amount per share Total amount $ 1.6 7,051,435
	Amount per share $ 1.6
		7,051,435

The related information of the earnings distribution for the year ended December 31, 2021, can be accessed through the Market Observation Post System website after the shareholders’ meeting.

(iv) Treasury stock

The subsidiaries of the Company did not sell the ordinary shares of the Company in the years ended December 31, 2021 and 2020. As of December 31, 2021, Panpal and Gempal, subsidiaries of the Company, held 50,017 thousand shares of ordinary shares of the Company, recorded as the Company’s treasury stock, with a book value of 17.6 New Taiwan dollars per share. The total cost was $881,247. The fair value of the ordinary shares of the Company was 24.20 and 20.70 New Taiwan dollars per share as of December 31, 2021 and 2020, respectively.

Pursuant to the Securities and Exchange Act, the number of treasury shares purchased cannot exceed 10% of the number of shares issued. The total purchase cost cannot exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus. The shares purchased for the purpose of transferring to employees shall be transferred within three years from the date of share repurchase. Those not transferred within the said limit shall be deemed as not issued by the Company and it should be cancelled. Furthermore, treasury stock cannot be pledged for debts, and treasury stock does not carry any shareholder rights until it is transferred.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(v) Other equity interests (net-of-taxes)

Balance on January 1, 2021 The Group Subsidiaries Associates Balance on December 31, 2021 Balance on January 1, 2020 The Group Subsidiaries Associates Balance on December 31, 2020	Exchange differences on transaction of foreign operation financial statements	Unrealized gain (loss) from financial assets at fair value through other comprehensive income (376,952) 567,871 160,972 185,939 537,830 (306,763) (100,249) 75,529 (45,469) (376,952)	Others (779) - 904 - 125 (1,706) - 927 - (779)	Total
	$ (6,888,977) (1,791,462) (38,894) (25,372) $ (8,744,705) $ (3,794,980) (3,073,441) (182,054) 161,498 $ (6,888,977)			(7,266,708) (1,223,591) 122,982 160,567
				(8,206,750)
				(4,103,449) (3,173,690) (105,598) 116,029
				(7,266,708)

(u) Share-based payment

(i) Arcadyan – employee restricted shares

At the meeting held on June 21, 2018, the Arcadyan’s Board of Directors decided to issue 4,500,000 shares of employee restricted shares to Arcadyan full-time employees who meet certain requirements. The restricted shares have been registered, with and approved by the Securities and Futures Bureau of FSC. The Board of Directors decided to issue all the restricted shares on November 6, 2018, which is also the effective date of the share issuance.

3,500,000 shares of the aforementioned restricted shares are issued without consideration. 30%, 30% and 40% of the 3,500,000 restricted shares are vested when the employees continue to provide service for at least 2 year, 3 years and 4 years, respectively, from the registration and the effective date, and at the same time, meet the performance requirement. In addition, when earnings per share in two consecutive and complete fiscal years from the registration and effective date are no less than NT$4, and at the same time, the employees with the restricted shares meet the performance requirement, the other 1,000,000 shares of the restricted shares are vested 100% at the date the shareholders approved the financial statements for the second fiscal year. If the earnings per share in two consecutive and complete fiscal years from the registration and effective date are between NT$3 to NT$4, and at the same time, the employees with the restricted shares meet the performance requirement, the restricted shares are vested 75% at the date the shareholders approved the financial statements for the second fiscal year. If the earnings per share in two consecutive and complete fiscal years from the registration and effective date are less than NT$3, the employees with restricted shares, whether or not they meet the performance requirement, no restricted shares are vested at the date the shareholders approved the financial statements for the second fiscal year. The earnings per share mentioned above are calculated based on the profit approved by the shareholders and the weighted average number of ordinary shares outstanding at the date of the restricted shares have been approved by the authority.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

After the issuance, the restricted shares are kept by a trust, which is appointed by Arcadyan, before they are vested. These restricted shares shall not be sold, transferred, pledged, gifted, disposed by any other means, to third parties during the custody period. The voting rights of these shares are executed by the custodian, and the custodian shall act based on the law and regulations. If the shares remain unvested after the vesting period, Arcadyan will redeem all the unvested shares without consideration and cancel the shares thereafter. Restricted shares could be received in cash and stock dividends, or could be used to participate in cash injection. The aforementioned new shares are not considered as restricted shares.

The information of Arcadyan’s restricted shares is as follows:

Unit: in thousands of shares

Outstanding shares on January 1 Canceled during the period The number vested in this period Outstanding shares on December 31	2021 2,306 (53) (970) 1,283	2020 4,416 (126) (1,984) 2,306

As of December 31, 2021 and 2020, the unearned employee benefit was $13,030 and $45,606.

The compensation cost related to the restricted shares amounted to $32,576 and $73,545 for the year ended December 31, 2021 and 2020.

(ii) TTI – employee stock options

The information about share-based payment of TTI in 2021 and 2020 was as follows:

Grant date Granted shares (in thousand) Contract period Recipients Vested condition	Employee stock options
	2015.10.29 1,000 7 years Employees of TTI Please refer to the issuance terms of the stock options as follows

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The issuance terms of the stock options are as follows:

1) Exercise price: NT$13.5 per share.
2) Exercisable duration: The employees who received stock options that exceed two years and meet the performance requirements can exercise a specific percentage in each period as below. The exercisable duration of the options is seven years. No transfer is allowed except for inheritance.
Exercisable Period and performance requirements to exercise options 40 ％ The share purchase right is effectively vested after the satisfaction of 2 conditions: (1) Years of service must exceed 2 years after the issuance of the right. (2) Upon vesting, the average earnings per share of TTI for the past 2 years must exceed NT$3. If the criteria for the said earnings per share are not fulfilled, then the measurement period will be extended to 3 years; under this extension, the average of the earnings per share of any 2 years within the 3-year period must exceed NT$3.
30 ％ The share purchase right is effectively vested after the satisfaction of 2 conditions: (1) Years of service must exceed 3 years after the issuance of the right. (2) Upon vesting, the performance requirements need to be met, otherwise, the earnings per share of TTI for the following year must exceed NT$3. If the criteria for the said earnings per share are not fulfilled, then the measurement period will be extended to another 1 year; the earnings per share must exceed NT$3 during the extension period.
30 ％ The share purchase right is effectively vested after the satisfaction of 2 conditions: (1) Years of service must exceed 4 years after the issuance of the right. (2) Upon vesting, the performance requirements need to be met, otherwise, the earnings per share of TTI for the following year must exceed NT$3. If the criteria for the said earnings per share are not fulfilled, then the measurement period will be extended to another 1 year; the earnings per share must exceed NT$3 during the extension period.
- The total measurement periods mentioned above may not exceed 6 years.

The earnings per share mentioned above are based on the financial statements that had been audited and certified by a certified public accountant.

3) Exercise method: TTI would issue new shares as the options are exercised.
4) Exercise procedure: In accordance with TTI’ s issuance and exercise rules. After receiving the payment for share options, the entitlement certification of share options exercised is registered as ordinary shares.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The information on total options issued was as follows:

Outstanding shares on January 1 Canceled during the period Exercisable shares on December 31	2020 Weighted- average exercise price (NT dollars) Shares (in thousands)	2020 Weighted- average exercise price (NT dollars) Shares (in thousands)
	$ 13.5 13.5 -	300 (300) -

The exercise price range of TTI’ s outstanding employee stock options and weightedaverage remaining contractual life of the outstanding options are as follows:

Exercise price range Weighted average remaining contract period	December 31, 2020
	13.5 -

The reverse related to the share-based payment amounted to $970 for the years ended December 31, 2020.

－
(iii) CBN employee stock options

At the meeting held on May 17, 2016, CBN’ s Board of Directors resolved to issue 1,500,000 units of employee stock options with an exercisable right of one share of CBN’ s ordinary shares per unit. The issuance of employee stock options and related information are as follows:

Outstanding shares on January 1 Expired during the period Exercised during the period Outstanding shares on December 31 Exercisable shares on December 31		2021 Shares Weighted- average exercise price (NT dollars)		2020 Shares Weighted- average exercise price (NT dollars)
		Shares
		3,000 $ 10 - - (3,000) 10 - - - -		87,800 $ 10 (4,500) 10 (80,300) 10 3,000 10 3,000 10

In the year ended December 31, 2020, the weighted-average remaining contractual life of the outstanding options was 0.67 years. The options under the aforesaid employee stock option plan have been exercised in 2021.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The issuance terms of the share options are as follows.

1) Exercise price: NT$10 per share.
2) Exercisable duration:

The employees who received share options being granted over five months and are still employed by CBN and meet requirements can exercise a specific percentage in each period as stated below. The exercisable duration of the options is five years. No transfer is allowed except for inheritance. After the expiration of the exercisable duration, the unexercised options will be canceled by CBN and not re-issued anymore.

	Period to exercise options	Exercisablepercentage (cumulative)
5	months after options received	100 ％

3) Exercise method: CBN would issue new shares as the options are exercised.
4) Exercise procedure: In accordance with CBN’ s issuance and exercise rules, after receiving the consideration of share options, the entitlement certification of share options exercised is registered as ordinary shares once a quarter.

The compensation cost for the years ended December 31, 2021 and 2020 were $0 and $(68), respectively.

CBN adopted the Black-Scholes model to estimate the fair value on the grant date, and the assumptions are summarized as follows:

Employee stock option plan:
Original exercise price (NT dollars)	$10
Current price (NT dollars)	24.62
Expected dividend yield rate	0％
Expected volatility	35.87％
Risk-free interest rate	0.56％
Expected life of the option	2.55 years
Weighted average fair value (NT dollars per share)	14.96

(iv) CBN- Issuance of restricted shares

On June 24, 2020, CBN issued 1,500,000 new restricted shares through shareholders' meeting. This is a gratuitous issuance, and the recipients are full-time employees of CBN who have been employed on grant day and meet specific terms. It have been approved by the Financial Supervisory Commission.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

In addition, the issuance date has been decided by the chairman of the board of directors to be December 20, 2021, and the statutory registration procedures had been completed on January 7, 2022.

If the employees who have been on the job for one year, two years and three years ,since the new restricted shares have been given, achieved the performance required by CBN, the proportion of shares with acquired conditions can be 40%, 30% and 30%, respectively. After the issuance of new shares, employees must hand over all of them to the trust agency designated by the company for safekeeping before they meet the terms. Except for inheritance, they shall not be sold, mortgaged, transferred, gifted, pledged or disposed of in other ways. Before the employees meet the terms, all matters concerning shareholders' rights and interests are entrusted to the trust agency designated by CBN to exercise on their behalf. If any of the assigned employees does not meet the acquired terms, CBN will take back their shares from the employees for free and cancel them.

The information of CBN’s restricted shares is as follows:

Unit: in thousands of shares

Outstanding shares on January 1 Shares vested in this period Outstanding shares on December 31	2021
	- 1,500
	1,500

The above-mentioned new restricted shares of CBN takes the closing price of $30.70 on the grant day, December 20, 2021, as the fair value, and capital surplus-employee restricted shares amounted to $31,050. Until December 31, 2021, the balance of unearned employees benefit was $45,219.

The compensation cost related to the restricted shares amounted to $831 for the year ended December 31, 2021.

(v) Earnings per share

The Group’s basic and diluted earnings per share are calculated as follows:

The Group’s basic and diluted earnings per share are calculated as follows:
2021 Basic earnings per share: Profit attributable to ordinary shareholders of the Company $ 12,632,667 Weighted-average number of outstanding ordinary shares (in thousands) 4,357,130	2020
	9,361,893
	4,357,130

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (after adjustment of potential diluted ordinary shares) Weighted-average number of outstanding ordinary shares of potential diluted ordinary shares Weighted-average number of outstanding ordinary shares (in thousands) Effect of potential diluted common stock Employee compensation (in thousands) Weighted-average number of ordinary shares (after adjustment of potential diluted ordinary shares) (in thousands) Revenue from contracts with customers (i) Disaggregation of revenue IT Product Segment Primary geographical markets: United states $ 477,875,378 China 158,629,441 Netherlands 86,727,156 Others 474,209,982 $ 1,197,441,957 Major products: 5C related electronics products $ 1,195,237,339 Others 2,204,618 $ 1,197,441,957	2021 $ 12,632,667 4,357,130 65,517 4,422,647 2021	2021 $ 12,632,667 4,357,130 65,517 4,422,647 2021	2021 $ 12,632,667 4,357,130 65,517 4,422,647 2021	2020
				9,361,893
				4,357,130 57,482
				4,414,612
		2021
IT Product Segment $ 477,875,378 158,629,441 86,727,156 474,209,982 $ 1,197,441,957 $ 1,195,237,339 2,204,618 $ 1,197,441,957	Strategically Integrated Product Segment 8,487,079 431,844 1,435,217 27,885,918 38,240,058 37,264,055 976,003 38,240,058			Total
				486,362,457 159,061,285 88,162,373 502,095,900
			1,235,682,015
			1,232,501,394 3,180,621
			1,235,682,015

(w) Revenue from contracts with customers

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

				2020
			Strategically
			Integrated
		IT Product		Product
		Segment		Segment	Total
Primary geographical markets:
United states	$	438,786,641		8,106,885	446,893,526
China		127,004,385		568,651	127,573,036
Netherlands		83,549,764		1,340,450	84,890,214
Others		365,823,166		23,749,309	389,572,475
	$	1,015,163,956		33,765,295	1,048,929,251
Major products:
5C related electronics products	$	1,013,091,503		33,191,331	1,046,282,834
Others		2,072,453		573,964	2,646,417
	$	1,015,163,956		33,765,295	1,048,929,251
Contract balances
		December		December	January 1,
		31, 2021		31, 2020	2020
Notes and accounts receivable (including		$ 294,057,802		236,120,826	195,665,380
related parties)
Less: allowance for impairment		(3,891,948)		(3,910,928)	(3,928,716)
Total		$ 290,165,854		232,209,898	191,736,664
Contract liabilities		$ 1,065,954		820,016	956,455

(ii) Contract balances

For the details on accounts receivable and allowance for impairment, please refer to note (6)(e).

The amount of revenue recognized for the years ended December 31, 2021 and 2020 that were included in the balance of contract liability at the beginning of the period was $820,016 and $877,822, respectively.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(x) Employees’ and directors’ compensations

Based on the Company’ s articles of incorporation, if there is any profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to deduction of compensations to employees and directors, shall be distributed to employees as compensations in an amount of not less than two percent (2%) thereof and to directors as compensations in an amount of not more than two percent (2%) of such profits. In the event that the Company has accumulated losses, the Company shall reserve an amount to offset accumulated losses. The compensations to employees as mentioned above may be distributed in the form of stock or cash. Employees entitled to receive the said stock or cash may include the employees of the Company’s subordinate companies pursuant to the Company Act.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The Company accrued and recognized its employee compensation of $1,350,062 and $974,694, and directors’ compensation of $71,390 and $51,541 for the years ended December 31, 2021 and 2020, respectively. The estimated amounts mentioned above are based on the net profit before tax without the compensations to employees and directors of each respective ending period, multiplied by the percentage of the compensation to employees and directors, which was approved by the management. The estimations are recorded under operating expenses and cost. The differences between the amounts estimated and recognized in the financial statements, if any, are accounted for as changes in accounting estimates and recognized as profit or loss in the distribution year. If the Board of Directors approve to distribute employee compensation in the form of stock, the number of the shares of the employee compensation is based on the closing price of the day before the Board of Directors' meeting, the related information can be accessed through the Market Observation Post System website. There is no differences between the amount approved in the Board of Directors' meeting and those recognized in the financial statements in 2021 and 2020.

There is no differences between the amount estimated and recognized in the financial statements in 2020. The related information can be accessed through the Market observation Post System website.

(y) Non-operating income and expenses
(i) Interest income

The details of interest income were as follows:

The details of interest income were as follows:
2021 Interest income from bank deposits $ 2,015,709 Other interest income 1,605 Total Interest income $ 2,017,314	2020
	1,635,953 304
	1,636,257

(ii) Other income

The other incomes for the years ended December 31, 2021 and 2020, were as follows:

2021 Dividend revenue $ 143,686 Other revenue 504,420 $ 648,106	2020
	108,996 384,924
	493,920

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Other gains and losses

The other gains and losses for the years ended December 31, 2021 and 2020, were as follows:

2021 Gains on disposal of investments $ - Gains on financial assets and liabilities at fair value through profit or loss, net 418,827 Foreign currency exchange gains (losses), net 123,742 Gains (losses) on disposal of property, plant, and equipment 1,969,560 Others (706) $ 2,511,423	2020 29,757 279,262 (73,475) 25,499 - 261,043

(z) Reclassification of the components of other comprehensive income

The details of reclassification of the components of other comprehensive income for the years ended December 31, 2021 and 2020, were as follows:

2021 Cash flow hedge: Gains (losses) from current period $ 43,006 Less: reclassification of gains (losses) included in profit or loss 40,814 Profit (loss) recognized in other comprehensive income $ 2,192	2020 (12,483) (15,162) 2,679

(aa) Financial instruments

(i) Credit risk

1) The carrying amount of financial assets represents the maximum amount exposed to credit risk

The Group’ s customers are mainly from the high-tech industry. The Group does not concentrate on a specific customer and the sales regions are widely spread, thus there should be no concern on the significant concentrations of accounts receivable credit risk. And in order to mitigate accounts receivable credit risk, the Group constantly assesses the financial status of the customers.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) Receivables and debt securities

For information of exposure to credit risk of notes and accounts receivable, please refer to note (6)(e).

Other financial assets at amortized cost include other receivables, and time deposits. These financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. (Regarding how the financial instruments are considered to have low credit risk, please refer to note (4)(g)) of the consolidated financial statements for the year ended December 31, 2021. Due to the counter parties and the performing parties of the Group’ s time deposits are financial institutions with investment grade and above, these time deposits are considered to have low credit risk.

The movements in the allowance for the years ended December 31, 2021 and 2020 were as follows:

follows:
		Other
		receivables
Balance on January 1, 2021	$	2,392
Impairment losses recognized (reversed)		581
Balance on December 31, 2021	$	2,973
Balance on January 1, 2020	$	1,012
Impairment losses recognized (reversed)		1,380
Balance on December 31, 2020	$	2,392

(ii) Liquidity risk

The following are the contractual maturities of financial liabilities. In addition to lease liabilities and bonds payable, excluding estimated interest payments.

Carrying Amount December 31, 2021 Non-derivative financial liabilities Secured borrowings $ 660,513 Unsecured borrowings 142,722,407 Lease liabilities－current and non-current 2,304,796 Notes and accounts payable 224,066,363 Other payables 29,701,088 Bonds payable 326,571 Derivative financial liabilities Forward exchange contracts: 1,589 Outflow Inflow $ 399,783,327	Contractual cash flows (660,513) (142,722,407) (2,411,332) (224,066,363) (29,701,088) (328,500) (358,893) 357,183 (399,891,913)	Within 1 year (66,481) (134,097,407) (665,378) (224,066,363) (29,701,088) (328,500) (358,893) 357,183 (388,926,927)	1~ 2 years (127,612) (6,125,000) (1,331,721) - - - - - (7,584,333)	Over 2 years (466,420) (2,500,000) (414,233) - - - - - (3,380,653)

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Carrying Amount December 31, 2020 Non-derivative financial liabilities Secured borrowings $ 228,913 Unsecured borrowings 111,944,173 Lease liabilities－current and non-current 2,287,762 Notes and accounts payable 199,726,063 Other payables 23,397,683 Bonds payable 980,219 Forward exchange contracts: 130,865 Outflow Inflow Currency swap contracts: 5,752 Outflow Inflow Forward exchange contracts used for hedging: 2,192 Outflow Inflow $ 338,703,622	Contractual cash flows (228,913) (111,944,173) (2,401,961) (199,726,063) (23,397,683) (1,000,000) (5,279,091) 5,143,059 (1,295,840) 1,285,715 (209,640) 208,331 (338,846,259)	Within 1 year (77,175) (101,694,173) (486,124) (199,726,063) (23,397,683) - (5,279,091) 5,143,059 (1,295,840) 1,285,715 (209,640) 208,331 (325,528,684)	1~ 2 years (77,175) (5,125,000) (562,952) - - (1,000,000) - - - - - - (6,765,127)	Over 2 years
				(74,563) (5,125,000) (1,352,885) - - - - - - - - - (6,552,448)

The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

(iii) Currency risk
1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

Unit: thousands of foreign currency / thousands of New Taiwan Dollars

Financial assets Monetary items USD to TWD USD to CNY EUR to TWD CNY to USD Non-monetary items THB to TWD Financial liabilities Monetary items USD to TWD USD to CNY USD to BRL EUR to NTD CNY to USD	D	ecember 31, 2021		Foreign currency 13,926,339 13,381 60,677 3,646,117 516,989 14,056,045 3,132 131,487 12,616 3,149,932	December 31, 2020
	Foreign currency $ 18,449,976 26,386 83,417 3,451,738 842,184 17,976,968 1,170 197,060 27,835 3,269,701	Exchange rate 27.68 6.378 31.32 0.1568 0.8261 27.68 6.378 5.5805 31.32 0.1568	TWD		Exchange rate TWD 28.48 396,622,135 6.5386 381,091 35.02 2,124,909 0.1529 15,877,352 0.9502 491,243 28.48 400,316,162 6.5386 89,199 5.1967 3,744,750 35.02 441,812 0.1529 13,716,669
			510,695,336 730,364 2,612,620 14,981,316 695,728 497,602,474 32,386 5,454,621 871,792 14,191,235

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable, and other payables that are denominated in foreign currency. Assuming all other variable factors remain constant, a strengthening (weakening) 5% of appreciation (depreciation) of the each major foreign currency against Group entities’ functional currency as of December 31, 2021 and 2020, would have increased (decreased) the net profit before tax as follows. The analysis is performed on the same basis for both periods.

		December 31,	December 31,
		2021	2020
USD (against the TWD)
Strengthening 5%	$	654,643	(184,701)
Weakening 5%		(654,643)	184,701
USD (against the CNY)
Strengthening 5%		34,899	14,595
Weakening 5%		(34,899)	(14,595)
USD (against the BRL)
Strengthening 5%		(272,731)	(187,238)
Weakening 5%		272,731	187,238
EUR (against the TWD)
Strengthening 5%		87,041	84,155
Weakening 5%		(87,041)	(84,155)
CNY (against the USD)
Strengthening 5%		39,504	108,034
Weakening 5%		(39,504)	(108,034)

3) Exchange gains and losses of monetary items

As the Group deals with diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2021 and 2020, the foreign exchange gains (losses), including both realized and unrealized, amounted to $123,742 and $(73,475), respectively.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) Interest rate analysis

The interest risk exposure from financial assets and liabilities has been disclosed in the note of liquidity risk management.

The following sensitivity analysis is based on the risk exposure to interest rate on the derivative and non-derivative financial instruments on the reporting date. Regarding the assets and liabilities with variable interest rates, the analysis is on the basis of the assumption that the amount of assets and liabilities outstanding at the reporting date were outstanding throughout the year. The rate of change is expressed as the interest rate increase or decrease by 0.25%, when reporting to management internally, which also represents the assessment of the Group’s management for the reasonably possible interval of interest rate change.

Assuming all other variable factors remaining constant, if the interest rate had increased or decreased by 0.25%, the impact to the net profit before tax would be as follows for the years ended December 31, 2021 and 2020, which would be mainly resulted from the bank savings and borrowings with variable interest rates.

			2021	2020
Interest increased by	0.25%	$	1,656	24,312
Interest decreased by	0.25%		(1,656)	(24,312)

(v) Fair value information

1) The categories and fair value of financial instruments

The Group’s financial assets at fair value through profit or loss, financial instruments used for hedging and financial assets at fair value through other comprehensive income were measured at fair value on a recurring basis. The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It shall not include fair value information of the financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value and investments in equity instruments which do not have any quoted price in an active market in which the fair value cannot be reasonably measured.

		December 31, 2021	December 31, 2021	December 31, 2021
Book value			Fair Value
		Level 1 - -	Level 2 123,442 277,312	Level 3 Total - 123,442 259,778 537,090
	660,532

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

		December 31, 2021	December 31, 2021	December 31, 2021
	Book value		Fair Value
		Level 1 3,350,210 695,728 - - - - - - - - - - - - - - - - - - - -	Level 2 - - - - 32,796,946 - - - - - - - 1,589 - - - - - - - - -	Level 3 Total - 3,350,210 - 695,728 1,879,166 1,879,166 309,959 309,959 - 32,796,946 - - - - - - - - - - - - - - - 1,589 - - - - - - - - - - - - - - - - - -
3,350,210 695,728 1,879,166 309,959 32,796,946 39,032,009 75,162,103 255,639,576 1,729,332 2,445,690 433,403 696,393 544,684 336,651,181 $ 376,343,722 $ 1,589 118,422,407 220,549,039 3,517,324 29,701,088 326,571 2,304,796 15,741,481 9,219,032 311,325 400,093,063 $ 400,094,652	3,350,210 695,728 1,879,166 309,959 32,796,946
	39,032,009
	75,162,103 255,639,576 1,729,332 2,445,690 433,403 696,393 544,684
	336,651,181

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Book value Financial assets at fair value through profit or loss–current and non-current Derivative financial assets for non-hedging $ 11,069 Non-derivative financial assets mandatorily measured at fair value through profit or loss 2,435,793 Subtotal 2,446,862 Financial assets at fair value through other comprehensive income Stocks listed on domestic markets 1,972,849 Stocks listed on foreign markets 491,243 Stocks unlisted on domestic markets 2,152,542 Stocks unlisted on foreign markets 200,377 Accounts receivable 38,429,954 Subtotal 43,246,965 Financial assets measured at amortized cost Cash and cash equivalents 89,126,923 Notes and accounts receivable, net 193,401,010 Notes and accounts receivable due from related parties, net 378,934 Other receivables 1,628,657 Other current assets (restricted assets) 41,090 Refundable deposits 522,213 Other non-current assets (restricted assets) 500 Subtotal 285,099,327 Total $ 330,793,154 Financial liabilities at fair value through profit or loss Derivative financial liabilities for non- hedging $ 136,617 Derivative financial liabilities for hedging 2,192 Financial liabilities measured at amortized cost Short-term borrowings 92,838,733 Notes and accounts payable 196,837,439 Notes and accounts payable to related parties 2,888,624 Other payables 23,397,683 Bonds payable 980,219 Lease liabilities－current and non-current 2,287,762 Long-term borrowings current portion 8,932,615 Long-term borrowings 10,401,738 Deposits received 285,232 Subtotal 338,850,045 Total $ 338,988,854			December 31, 2020	December 31, 2020	December 31, 2020
	Book value			Fair Value
			Level 1 - - 1,972,849 491,243 - - - - - - - - - - - - - - - - - - - - -	Level 2 11,069 2,234,184 - - - - 38,429,954 - - - - - - - 136,617 2,192 - - - - - - - - -	Level 3 Total - 11,069 201,609 2,435,793 - 1,972,849 - 491,243 2,152,542 2,152,542 200,377 200,377 - 38,429,954 - - - - - - - - - - - - - - - 136,617 - 2,192 - - - - - - - - - - - - - - - - - -

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) Fair value valuation technique of financial instruments not measured at fair value

The Group estimates financial instruments that not measured at fair value by methods and assumption as follows:

a) Financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Fair value valuation technique of financial instruments measured at fair value
a) Non-derivative financial instruments

Financial instruments trade in active markets is based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-therun bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The fair value of the listed company is determined by reference to the market quotation.

The measurements on fair value of the financial instruments without an active market are determined using the valuation technique or the quoted market price of its competitors. Fair value measured using the valuation technique can be extrapolated from similar financial instruments, discounted cash flow method, or other valuation techniques which include the model used in calculating the observable market data at the consolidated balance sheet date.

The measurement of fair value of a non-active market financial instruments held by the Group which do not have quoted market prices are based on the comparable market approach, with the use of key assumptions of price-book ratio multiple or earnings multiple of comparable listed companies as its basic measurement. These assumptions have been adjusted for the effect of discount without the marketability of the equity securities.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b) Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques that are generally accepted by the market participants. For instance, discount method or option pricing models. Fair value of forward currency exchange is usually determined by using the forward currency rate.

4) Transfer from one level to another

There was no transfer from one level to another in the years ended December 31, 2021 and 2020.

5) Changes in level 3

The change in level 3 at fair value in the years ended December 31, 2021 and 2020, were as follows:

Balance on January 1, 2021 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Proceeds from liquidation and capital reduction of investments Effect of changes in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Disposal Proceeds from capital reduction of investments Effect of changes in exchange rates Balance on December 31, 2020	Financial assets at fair value through profit or loss $ 201,609 3,170 - 54,999 - - $ 259,778 $ 115,359 9,575 - 76,675 - - - $ 201,609	Financial assets at fair value through other comprehensive income 2,352,919 - (335,469) 187,540 (12,249) (3,616) 2,189,125 2,424,053 - (34,716) 29,369 (52,105) (6,933) (6,749) 2,352,919	Total 2,554,528 3,170 (335,469) 242,539 (12,249) (3,616) 2,448,903 2,539,412 9,575 (34,716) 106,044 (52,105) (6,933) (6,749) 2,554,528

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020, total gains and losses that were included in “other gains and losses, net” and “unrealized gains and losses from equity instruments at fair value through other comprehensive income” were as follows:

2021 Total gains and losses recognized: In profit or loss before tax (as “other gains and losses”) $ 3,170 In other comprehensive income (as “unrealized gains and losses from equity instruments at fair value through other comprehensive income”) $ (331,801)	2020
	9,575
	8,834

6) The quantified information for significant unobservable inputs (level 3) used in fair value measurement

The Group’s financial instruments that use level 3 input to measure fair values include financial assets at fair value through other comprehensive income and financial assets at fair value through profit or loss, financial assets at fair value through profit or loss.

Most of fair value measurements of the Group which are categorized as equity investment into level 3 have several significant unobservable inputs. Significant unobservable inputs of equity investments without quoted price are independent of each other.

The quantified information for significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income－equity investment without an active market	Valuation technique Comparable market approach (Price-Book ratio method and Earnings multiplier method)	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value
		Price-Book ratio multiples (1.82~11.62 and 1.72~7.9 ,respectively, on December 31, 2021 and 2020) The higher the multiple is, the higher the fair value will be. Multiples of earnings (16.37~27.97 and 14.68, respectively, on December 31, 2021 and 2020) The higher the multiple is, the higher the fair value will be. Lack-of-Marketability discount rate (40%~85% and 35%~85%,respectively, on December 31, 2021 and 2020) The higher the Lack- of-Marketability discount rate is, the lower the fair value will be.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Item Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	Valuation technique Net asset value method Net asset value method	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value
		Net asset value Inapplicable Net asset value Inapplicable

7) Sensitivity analysis for fair value of financial instruments using level 3 inputs

The Group’s fair value measurement on financial instruments is reasonable. However, the measurement would be different if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters changed, the impacts on other comprehensive income or loss are as follows:

December 31, 2021 Financial assets at fair value through other comprehensive income December 31, 2020 Financial assets at fair value through other comprehensive income	Input Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate	Move up or down 5% $ 5% $ 5% $ 5% $ 5% $ 5% $	Other comprehensive income	Other comprehensive income
			Favorable change 17,810 4,882 11,767 36,119 5,734 3,942	Unfavorable change 16,250 4,738 13,470 35,448 5,801 3,942

The favorable and unfavorable changes reflect the movement of the fair value, in which the fair value is calculated by using the different unobservable inputs in the valuation technique. The table above shows the effects of one unobservable input, without considering the inter-relationships with another unobservable input for financial instrument, if there are one or more unobservable inputs.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

8) Offsetting financial assets and financial liabilities

The Group has financial instruments transactions applicable to the International Financial Reporting Standards NO. 32 Sections 42 endorsed by the FSC which requested for offsetting. Financial assets and liabilities relating to those transactions are recognized in the net amount of the balance sheets.

The following tables present the aforesaid offsetting financial assets and financial liabilities.

Unit: thousands of New Taiwan Dollars / thousands of US Dollars

December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -	December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -	December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -	December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -	December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -	December 31, 2021 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 360,789,950 (USD 13,034,319 ) 360,789,950 (USD 13,034,319 ) - - - -
Cash	Gross amounts of recognized financial assets (a) $ 360,789,950 (USD 13,034,319 )	Gross amounts of financial liabilities offset in the balance sheet (b) 360,789,950 (USD 13,034,319 )	Net amount of financial assets presented in the balance sheet (c)=(a)-(b) -	Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
				Financial instruments -
	$ (USD				-
		(USD

December 31, 2021

			December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021
Financial liabilities that are offset			which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 360,789,950 (USD 13,034,319 ) - - - -
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 360,789,950 (USD 13,034,319 )		Gross amounts of financial assets offset in the balance sheet (b) 360,789,950 (USD 13,034,319 )	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b) -	Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
					Financial instruments -
	$ (USD					-
		(USD	(USD

December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not offset in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Cash $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -
Cash	Gross amounts of recognized financial assets (a) $ 199,267,863 (USD 6,996,765 )	Gross amounts of financial liabilities offset in the balance sheet (b) 199,267,863 (USD 6,996,765 )	Net amount of financial assets presented in the balance sheet (c)=(a)-(b) -	Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
				Financial instruments -
	$ (USD				-
		(USD

		December 31, 2020 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 199,267,863 (USD 6,996,765 ) - - - -	December 31, 2020 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 199,267,863 (USD 6,996,765 ) - - - -
Financial liabilities that are offset
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 199,267,863 (USD 6,996,765 )	Gross amounts of financial assets offset in the balance sheet (b) 199,267,863 (USD 6,996,765 )	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b) -	Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
				Financial instruments -
					-
		(USD

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ab) Financial risk management
(i) Overview

The Group is exposed to the following risks arising from financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

In this note expressed the information on risk exposure and objectives, policies and procedures of risk measurement and management of the Group. For detailed information, please refer to the related notes of each risk.

(ii)Structure of risk management

The Group’ s finance management department provides business services for the overall internal department. It sets the objectives, policies and processes for managing the risk and the methods used to measure the risk arising from both the domestic and international financial market operations.

The Group minimizes the risk exposure through derivative financial instruments. The Board of Directors regulated the use of derivative financial instruments in accordance with the Group’s policy about risks arising from financial instruments such as currency risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investments of excess liquidity. The internal auditors of the Group continue with the review of the amount of the risk exposure in accordance with the Group’s policies and the risk management policies and procedures. The Group has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.

1) Accounts receivable and other receivables

The Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’ s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, and these limits are reviewed periodically.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

2) Investments

The credit risks exposure in the bank deposits, investments with fixed income and other financial instruments are measured and monitored by the Group’s finance department. Since the Group’ s transaction counterparties and the contractually obligated counterparties are banks, financial institutes and corporate organizations with good credits, there are no compliance issues, and therefore, no significant credit risk.

3) Guarantees

Pursuant to the Group’s policies, it is only permissible to provide financial guarantees to subsidiaries and companies that the Group has business with. As of December 31, 2021 and 2020, the Group did not provide any guarantees to other companies besides its subsidiaries.

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities which be settled by delivering cash or another financial asset.

The Group manages and maintains sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’s management supervises the banking facilities and ensures in compliance with the terms of the loan agreements. Please refer to notes (6)(m) and (6)(n) for unused credit lines of short-term and long-term borrowings as of December 31, 2021 and 2020.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currencies of the Group. The currencies used in these transactions are primarily denominated in TWD, USD, EUR and CNY.

As for other monetary assets and liabilities denominated in other foreign currencies, when short-term imbalance takes place, the Group buys or sells foreign currencies at spot rate to ensure that the net exposure is kept on an acceptable level.

2)

Interest rate risk

The Group borrows funds on fixed and variable interest rates, which has a risk exposure to changes in fair value and cash flow. Therefore, the Group manages the interest rates risk by maintaining an adequate combination of fixed and variable interest rates.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

3) Other price risk

The Group is exposed to equity price risk arising from investments in listed equity securities.

(ac) Capital management

The policy of capital management made by the Board of Directors is to maintain a strong capital base so as to stabilize the confidence of the investors, creditors and the public market and to sustain future development of the business. Capital consists of ordinary shares, capital surplus, retained earnings and non-controlling interests. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Group monitors the capital structure by way of periodical review the debt ratio. As of December 31, 2021 and 2020, the debt ratio was as follows:

December 31, 2021 Total liabilities $ 415,555,537 Total assets $ 537,095,340 Debt ratio 77 %	December 31, 2020
	350,936,048
	466,925,698
	75 %

The Group could purchase its own shares in the public market in accordance with the corresponding rules and regulations. The timing of the purchases depends on market prices.

As of December 31, 2021, there were no changes in the Group’s approach of capital management.

(ad) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2021 and 2020 were acquisition of right-of-use assets by leasing, please refer to note (6)(l).

Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Proceeds from issuance of convertible bonds Long-term borrowings Lease liabilities Deposits received and others Total liabilities from financing activities	January 1, 2021 $ 92,838,733 980,219 19,334,353 2,287,762 340,131 $ 115,781,198	Cash flow 25,424,931 - 5,626,160 (835,037) 26,093 30,242,147	Other non-cash changes 158,743 (653,648) - 852,071 (156) 357,010	December 31, 2021 118,422,407 326,571 24,960,513 2,304,796 366,068
				146,380,355

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Short-term borrowings Proceeds from issuance of convertible bonds Long-term borrowings Lease liabilities Deposits received and others Total liabilities from financing activities	January 1, 2020 $ 60,951,844 966,492 25,748,438 2,267,088 246,038 $ 90,179,900	Cash flow 31,886,889 - (6,414,085) (846,836) 92,634 24,718,602	Other non-cash changes - 13,727 - 867,510 1,459 882,696	December 31, 2020 92,838,733 980,219 19,334,353 2,287,762 340,131
				115,781,198

(7) Related-party transactions:

(a) Name and relationship with related parties

The followings are the entities that have had transactions with the Group during the periods covered in the financial statement.

Name of related party	Relationship with the Group
Compal Precision Module (Jiangsu) Co., Ltd. (“CPM”)	An associate
Changbao Electronic Technology (Chongqing) Co.,	An associate
Ltd. (“Changbao”)
Avalue	An associate
Crownpo Technology Inc. (“Crownpo”)	An associate
Allied Circuit	An associate
LIZ Electronics (Kunshan) Co., Ltd.	An associate
LIZ Electronics (Nantong) Co., Ltd.	An associate
ARCE Therapeutics Co., Ltd. (“ARCE”)	An associate
Raypal Biomedical Co., Ltd. (“Raypal”)	An associate
Hong Ya Technology Co., Ltd. (“Hong Ya”)	An associate
Kinpo Group Management Service Company	An associate
(“Kinpo Group Management Service”)
Acbel Polytech Inc. and its subsidiaries (“Acbel”)	The Chairman of the Board is the first

The Chairman of the Board is the first degree of kinship of the Chairman of the Company

Cal-Comp Electronics (USA) Co., Ltd. (“CCUS”)

The same Chairman of the Ultimate parent company with the Company

Cal-Comp Electronics (Thailand) Public Company Limited (“Cal-Comp”)

The same Chairman of the Board with the Company

Kinpo Electronics, Inc.(“Kinpo”)

The same Chairman of the Board with the Company

Jipo Investment Inc. (“Jipo Investment”)

The same Chairman of the Board with the Company

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Transactions with key management personnel

Key management personnel remunerations comprised:

Key management personnel remunerations comprised:
2021 Short-term employee benefits $ 803,552 Post-employment benefits 7,854 Share-based payments 6,110 $ 817,516	2020
	724,350 8,267 19,033
	751,650

There are no termination benefits and other long-term benefits. Please refer to note (6)(u) for explanations related to share-based payments.

(c) Significant related-party transactions
(i) Sale of goods to related parties

The amounts of significant sales transactions between the Group and related parties were as follows:

The amounts of significant sales transactions between theGroupand related follows:	parties were as
2021 Associates $ 220,127 Other related parties 34,059 Joint ventures - $ 254,186	2020
	240,161 610,517 222
	850,900

Sales prices for related parties were similar to those of the third-party customers. The collection period was 60~120 days for related parties.

(ii) Purchase of goods from related parties

The amounts of significant purchase transactions between the Group and related parties were as follows:

2021 Associates $ 6,346,763 Other related parties 4,115,321 $ 10,462,084	2020
	4,596,352 2,956,322
	7,552,674

Purchase prices and payment period from related parties were similar to those from third-party suppliers. The payment period was 60~165 days for related parties.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Receivables due from relate parties

The receivables arising from the transactions mentioned above and others on behalf of related parties were as follows:

Account	Related party categories December 31, 2021 Associates $ 31,640 Other related parties 1,697,692 Associates 2,463 Other related parties 45 $ 1,731,840	December 31, 2020
Notes and accounts receivable Notes and accounts receivable Other receivables Other receivables		29,643 349,291 908 64
		379,906

(iv) Payables to related parties

The payables arising from the transactions mentioned above and rendering of services from other related parties were as follows:

Account Related party categories December 31, 2021 December 31, 2020 Notes and accounts payable Associates $ 1,992,718 1,632,862 Notes and accounts payable Other related parties 1,524,606 1,255,762 Other payables Associates 35 600 Other payables Other related parties 19,542 - $ 3,536,901 2,889,224 Property transactions For the years ended December 31, 2021 Relationship Item Number of shares Object Acquisition price Other related party-Jipo Investment Acquisition of financial assets at fair value through other comprehensive income 46,197 thousand shares Common stocks of Kinpo 616,864 Other related party-CCUS Acquisition of the subsidiary 1 thousand shares Common stocks of CIN 226,421 Associates-RayPal Biomedical Acquisition of minority shares 588 thousand shares Common stocks of Raycore Biotech 15,129	Account Related party categories December 31, 2021 December 31, 2020 Notes and accounts payable Associates $ 1,992,718 1,632,862 Notes and accounts payable Other related parties 1,524,606 1,255,762 Other payables Associates 35 600 Other payables Other related parties 19,542 - $ 3,536,901 2,889,224 Property transactions For the years ended December 31, 2021 Relationship Item Number of shares Object Acquisition price Other related party-Jipo Investment Acquisition of financial assets at fair value through other comprehensive income 46,197 thousand shares Common stocks of Kinpo 616,864 Other related party-CCUS Acquisition of the subsidiary 1 thousand shares Common stocks of CIN 226,421 Associates-RayPal Biomedical Acquisition of minority shares 588 thousand shares Common stocks of Raycore Biotech 15,129	Account Related party categories December 31, 2021 December 31, 2020 Notes and accounts payable Associates $ 1,992,718 1,632,862 Notes and accounts payable Other related parties 1,524,606 1,255,762 Other payables Associates 35 600 Other payables Other related parties 19,542 - $ 3,536,901 2,889,224 Property transactions For the years ended December 31, 2021 Relationship Item Number of shares Object Acquisition price Other related party-Jipo Investment Acquisition of financial assets at fair value through other comprehensive income 46,197 thousand shares Common stocks of Kinpo 616,864 Other related party-CCUS Acquisition of the subsidiary 1 thousand shares Common stocks of CIN 226,421 Associates-RayPal Biomedical Acquisition of minority shares 588 thousand shares Common stocks of Raycore Biotech 15,129
	Number of shares	Object Acquisition price Common stocks of Kinpo 616,864 Common stocks of CIN 226,421 Common stocks of Raycore Biotech 15,129
	46,197 thousand shares 1 thousand shares 588 thousand shares

(v) Property transactions

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged Assets	Subject December 31, 2021 Bail for court mandatory execution $ - Customs deposit 336,523 Pledge deposit 96,880 Long-term borrowings (including current portion) 466,320 Customs deposit 500 Pledge deposit 544,184 $ 1,444,407	December 31, 2020
Other current assets Other current assets Other current assets PPE Other non-current assets Other non-current assets		41,090 - - 486,581 500 -
		528,171

(9) Commitments and contingencies:

The details of commitments and contingencies were as follows:

(a) In August 2019, Inventec Corporation filed a lawsuit to the Taiwan Taipei District Prosecutor Office against the Group concerning its former employees who join the Group. This is deemed as an act of violation according to the Trade Secret Law and Copyright Law. The Group engaged lawyers to defend its right on this matter immediately. Currently, the case is still in progress in Taipei District Court; therefore, the Group cannot make any reasonable estimation regarding the possible impact on its business operation.
(b) The Group entered into various patent license agreements with third parties, and was required to make royalty payments of a predetermined amount periodically.
(c) As of December 31, 2021 and 2020, the Group’s signed commitments to purchase property, plant and equipment amounted to $290,063 and $473,370, respectively.

(10) Losses due to major disasters: None

(11) Subsequent events:

In response to the industry development trend and the future strategic development of the Group and for the purpose to integrate resources, provide more comprehensive products and services, increase R&D capabilities, improve efficiency, and increase competitiveness, the Company plans to acquire 51%~65% of shares of Poindus Systems Corp, Ltd. (“Poindus Systems”) under the public acquisition as a tender offer after the resolution of the Board of Directors (hereinafter referred to as the Public Acquisition). The price of the Public Acquisition is 30 New Taiwan Dollars per share. The aforementioned Public Acquisition as a tender offer had been completed on March 7, 2022, with a total acquisition of 56.04% of Poindus Systems' ordinary shares and the total acquisition consideration is $353,046. The settlement was completed on March 11, 2022.

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(12) Other:

(a) The employee benefits, depreciation and amortization expenses by categorized function are summarized as follows:

By function By item	2021	2021		2020	2020	2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	15,289,343 1,016,912 1,077,976 2,689,676 5,238,351 78,684	14,136,585 962,630 570,445 631,048 1,090,392 495,684	29,425,928 1,979,542 1,648,421 3,320,724 6,328,743 574,368	17,777,589 841,733 883,287 2,216,080 4,684,438 47,195	12,789,968 835,965 500,044 599,320 1,032,002 429,350	30,567,557 1,677,698 1,383,331 2,815,400 5,716,440 476,545

(13) Other disclosures:

(a) Information on significant transactions

The following were the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year ended December 31, 2021:

(i) Loans to other parties: Please refer to Table 1
(ii) Guarantees and endorsements for other parties: Please refer to Table 2
(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures): Please refer to Table 3
(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 4
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 5
(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 6
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 7
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 8
(ix) Trading in derivative instruments: Please refer to notes (6)(b) and (6)(d)
(x) Business relationships and significant intercompany transactions: Please refer to Table 9

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Information on investees: Please refer to Table 10
(c) Information on investment in mainland China: Please refer to Table 11
(d) Major shareholders: There were no shareholders holding more than 5% shares.

(14) Segment information:

(a) General information

The Group’ s information technology product segment is primarily engaged in the development, manufacture and sale of information technology products and mobile communication products. The strategy integrate product segment is primarily engaged in the research, development, manufacture and sale of networking products.

(b) Reportable segments and operating segment information

Accounting policies for the operating segments correspond to those stated in note 4. The profit and loss of the operating segment of the Group is measured by earnings before taxes and as the basis for performance measurement. The amount of the Group's reportable segments consistent with the report that the operating decision maker used, and the Group does not allocate assets and liabilities to the reportable segments for the purpose of operating decisions to measure assets and liabilities of segments.

The operating segment information was as follows:

For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021
Information technology product segment	Strategy integrated product segment 38,240,058 66,537 38,306,595 37,347 567,822 - - 2,266,095	Adjustment and elimination Total - 1,235,682,015 - 2,017,314 - 1,237,699,329 - 1,049,137 - 6,903,111 - 448,562 - 404,513 - 17,467,835 $ 537,095,340 $ 415,555,537	Total
$ 1,197,441,957 1,950,777 $ 1,199,392,734 $ 1,011,790 6,335,289 448,562 404,513 $ 15,201,740			1,235,682,015 2,017,314
			1,237,699,329
			1,049,137 6,903,111 448,562 404,513 17,467,835

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the year ended	For the year ended	December 31, 2020	December 31, 2020
Information technology product segment	Strategy integrated product segment 33,765,295 45,614 33,810,909 46,410 517,979 - - 2,328,799	Adjustment and elimination Total - 1,048,929,251 - 1,636,257 - 1,050,565,508 - 1,149,215 - 6,192,985 - 435,657 - - - 13,122,716 $ 466,925,698 $ 350,936,048	Total
$ 1,015,163,956 1,590,643 $ 1,016,754,599 $ 1,102,805 5,675,006 435,657 - $ 10,793,917			1,048,929,251 1,636,257
			1,050,565,508
			1,149,215 6,192,985 435,657 - 13,122,716

The information of revenue from external customers:

Products and services 5C related electronic products Others	2021 $ 1,232,501,394 3,180,621 $ 1,235,682,015	2020
		1,046,282,834 2,646,417
		1,048,929,251

(Continued)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Geographic information

Stated below are the geographic information on the Group’s sales presented by destination of sales and non-current assets presented by location.

(i) Revenue from external customers:

Country United States China Netherlands Others	2021 $ 486,362,457 159,061,285 88,162,373 502,095,900 $ 1,235,682,015	2020
		446,893,526 127,573,036 84,890,214 389,572,475
		1,048,929,251

(ii)	Non-current assets: Country China Taiwan Vietnam Others	2021 $ 14,411,598 9,837,851 8,708,075 511,749 $ 33,469,273	2020
			14,963,036 9,373,521 3,377,464 268,290
			27,982,311

Non-current assets include plant, property, and equipment, intangible assets, and other assets, excluding deferred tax assets.

(e) The details of sales revenue from external customers more than 10% of the amount of consolidated statement of comprehensive income are as follows:

D Company F Company A Company E Company	2021 $ 534,800,186 223,256,380 144,069,158 116,116,250 $ 1,018,241,974	2020
		431,621,595 240,039,272 120,376,434 75,903,386
		867,940,687

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 1 Loans to other parties:

(December 31, 2021)

Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)	Table 1 Loans to other parties: (December 31, 2021)
													(In Thousands of New Taiwan Dollars)
No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short- term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Value
0 0 0 0 1 2 2 3 3 3 4 4 5 6 7 7 8 9 9 9 9 9 9 9 10 10 11	The Company The Company The Company The Company CIH CPC CPC CIT CIT CIT CPO CPO CET CIC Panpal Panpal BSH Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Holding Arcadyan Holding SVA	UCGI HengHao CEB CEA CEP CDE CIC CCI Nanjing Rayonnant (Taicang) HengHao Kunshan HengHao Kunshan CIT BT HengHao Kunshan HengHao Ray-Kwong Medical CIN Acradyan Brasil Acradyan Brasil Arcadyan UK Arcadyan Vietnam Arcadyan Vietnam Arcadyan Russia Arcadyan Russia CNC CNC CNC	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y	475,325 400,000 1,985,950 838,800 57,070 1,315,200 438,400 1,997,450 137,098 856,050 998,725 657,600 524,640 570,700 1,200,000 10,000 278,100 57,020 55,620 285,100 285,100 255,510 57,020 27,800 484,670 470,560 153,440	224,560 200,000 553,600 830,400 55,360 - 434,400 1,937,600 69,200 830,400 968,800 651,600 260,640 553,600 600,000 10,000 276,800 35,984 55,360 - 276,800 - - 27,800 - 470,560 -	224,560 200,000 553,600 830,400 55,360 - 434,400 1,561,152 - 830,400 968,800 651,600 173,760 553,600 600,000 10,000 207,600 35,984 - - - - - 6,705 - 470,560 -	1.02%~1.08% 1.08% 1.02%~2.05% 1.02% 3.50% 2.20% 2.20% 2.00% 1.30%~4.35% 1.30% 1.30% 2.20% 2.00%~2.20% 1.30% 1.08% 1.10% 1.02% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 3.85%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Transaction for business between two parties Transaction for business between two parties Transaction for business between two parties Transaction for business between two parties Transaction for business between two parties Short-term financing Short-term financing Short-term financing	- - - - - - - - - - - - - - - - - - - 4,349,995 4,345,760 5,375,096 165,990 377,472 - - -	Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating financing Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating financing Operating financing - - - - - Operating financing Operating financing Operating financing	- - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - -	22,272,053 22,272,053 22,272,053 22,272,053 37,397,344 2,613,831 2,613,831 22,323,113 22,323,113 22,323,113 2,838,191 2,838,191 4,787,996 8,676,307 2,344,758 1,172,379 6,580,283 2,531,220 2,531,220 2,531,220 2,531,220 2,531,220 132,792 301,977 2,416,212 2,416,212 28,344	44,544,106 44,544,106 44,544,106 44,544,106 37,397,344 2,613,831 2,613,831 22,323,113 22,323,113 22,323,113 2,838,191 2,838,191 4,787,996 8,676,307 2,344,758 2,344,758 6,580,283 5,062,440 5,062,440 5,062,440 5,062,440 5,062,440 5,062,440 5,062,440 2,416,212 2,416,212 28,344	(Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 3) (Note 3) (Note 4) (Note 4) (Note 4) (Note 5) (Note 5) (Note 6) (Note 7) (Note 8) (Note 8) (Note 9) (Note 10) (Note 10) (Note 10) (Note 10) (Note 10) (Note 10) (Note 10) (Note 11) (Note 11) (Note 12)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 1 Loans to other parties:	Table 1 Loans to other parties:
(December	31, 2021)
Note 1:	According to the Company’ s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of the Company. When a short-term financing facility
	with the Company is necessary, the total amount for lending to any company shall not exceed 80% of the borrower’s net worth, nor shall it be more than 50% of the Company’s lendable amount limit, and shall
	be combined with the company’s endorsements/guarantees for calculation. In addition, the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company is unrestricted by the
	aforesaid restriction of 80%, but the maximum amount shall not exceed 50% of the Company’s lendable limit, and shall be combined with the company’s amount of loans to others when calculating.
Note 2:	According to CIH’s Procedures for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of CIH. When a short-term financing facility with CIH is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIH’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited
	by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIH, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 3:	According to CPC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPC. When a short-term financing facility with CPC is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPC’s total amount of capital lent, and shall be combined with the company’s
	endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two
	aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPC, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 4:	According to CIT’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIT. When a short-term financing facility with CIT is necessary,
	the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIT’s total amount of capital lent, and shall be combined with the company’s
	endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two
	aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIT, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 5:	According to CPO’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPO. When a short-term financing facility with CPO is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPO’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited
	by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPO, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 6:	According to CET’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CET. When a short-term financing facility with CET is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CET’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited
	by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CET, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 7:	According to CIC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIC. When a short-term financing facility with CIC is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIC’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited
	by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIC, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 8:	According to Panpal’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Panpal. When a short-term financing facility with Panpal is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of Panpal’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company, or the ultimate parent company’s
	100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two aforesaid restrictions of 80%, but the maximum amount shall not exceed Panpal’s total amount of
	lendable capital, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 9:	According to BSH’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of BSH. When a short-term financing facility with BSH is
	necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of BSH’s total amount of lendable capital, and shall be combined with the
	company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited
	by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of BSH, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note 10:	According to Arcadyan’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Arcadyan. To borrowers having business relationship with
	Arcadyan, the total amount for lending the borrower shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the net worth
	of Arcadyan. Also, the amount shall be combined with the Arcadyan’ s endorsements/guarantees for the borrower when calculating. When a short-term financing facility is necessary, the borrower should be
	Arcadyan’s investee. The total amount for lending the borrower shall not exceed 80% of the net worth of the borrower, nor shall it exceed 20% of the net worth of Arcadyan, and shall be combined with the
	Arcadyan’s endorsements/guarantees for the borrower when calculating.
Note 11:	According to Arcadyan Holding’s Procedures of Lending Funds to Other Parties, the total amount of loans to others shall not exceed the net worth of Arcadyan Holding. When a short-term financing facility is
	necessary, the borrower should be Arcadyan Holding’s investee. The total amount for lending the borrower shall not exceed the net worth of Arcadyan Holding, and shall be combined with the Arcadyan
	Holding’s endorsements/ guarantees for the borrower when calculating.
Note 12:	According to SVA's Procedure for Lending Funds to Other Parties, the total amount of loans to others shall not exceed 40% of the net worth of SVA. To borrowers having business relationship with SVA, the
	total amount for lending the borrower shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount for the current year, nor shall it exceed 20% of the net worth of SVA. Also,
	the amount shall be combined with the SVA's endorsements/guarantees for the borrower when calculating. When a short-term financing facility is necessary, the borrower should be the investee of the parent
	company. The total amount for lending the borrower shall not exceed 20%of the net worth of SVA and shall be combined with SVA's endorsements/guarantees for the borrower when calculating. In addition,
	when lending to the parent company or its 100% directly and indirectly owned subsidiaries, the total amount or individual amount shall not exceed the net worth of the latest financial statements of SVA.
Note 13:	The transactions had been eliminated in the consolidated financial statements.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 2 Guarantees and endorsements for other parties:

(December 31, 2021)

		(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period		Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 1�2)	Parent company endorsements /guarantees to third parties on behalf of subsidiary	Subsidiary endorsements /guarantees to third parties on behalf of parent company	Endorsements / guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 0 0 0 1	The Company The Company The Company The Company Arcadyan	CEB CEA CEP HengHao Kunshan Arcadyan AU	(Note 4) (Note 4) (Note 3) (note 4) (Note 4)	27,840,066 27,840,066 27,840,066 27,840,066 1,687,480	115,450 177,786 151,129 26,160 209,700	113,488 174,384 99,845 26,064 207,600	1 1	13,488 74,384 99,845 26,064 ~~-~~	~~-~~ ~~-~~ ~~-~~ - ~~-~~	0.10% 0.16% 0.09% 0.02% 1.64%	55,680,132 55,680,132 55,680,132 55,680,132 5,062,440	Y Y Y Y Y	- - - - -	- - - Y -

Note 1: According to the Company’s Procedures for Endorsement and Guarantee, the total amount of endorsements/ guarantees the Company or the Group is permitted to make shall not exceed 50% of the Company’s net worth. Endorsements/ guarantees the Company and the Group are permitted to make for a single company shall not exceed 25% of the Company’s net worth. For entities having business relationship with the Company, the amount of endorsements/ guarantees for a single company shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount of the current year, and shall be combined with the amount lend to others when calculating. The amount of endorsements/ guarantees permitted to make between subsidiaries whose over 90% of its voting shares are owned, directly or indirectly, by the Company shall be no more than 10% of the net worth of the Company. The amount of endorsements/ guarantees permitted to make between directly or indirectly wholly owned subsidiaries is not limited by the aforementioned restriction, only the maximum amount shall be no more than 25% of the net worth of the Company. Note 2: According to Arcadyan's Procedures for Endorsement and Guarantee, the total amount of endorsements/guarantees Arcadyan and its subsidiaries are permitted to make shall not exceed 40% of the Arcadyan's net worth. Endorsements/guarantees Arcadyan and its subsidiaries are permitted to make for a single company shall not exceed 1/3 of the aforementioned total amount. Note 3: Subsidiary whose over 50% common stock is directly owned.

Note 4: Subsidiary whose over 50% common stock is indirectly owned.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 3 Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
					(In Thousands of shares/ units)
Name of holder	Category and name of security	Relationship with security issuer	Account name		Ending balance The highest holdings in the period					Note
				Shares/Units (thousands)	Carrying value	Holding percentage (%)	Fair value	Shares/Units (thousands)	Holding percentage (%)
The Company Panpal Gempal	Taiwan Star Kinpo Cal-Comp HWA VI Venture Capital Corp. HWA Chi Venture Capital Corp. mProbe Ltd. Chen Feng Optoelectronics TOP Taiwan VI Venture Capital Co., Ltd. IIH Biomedical Venture Fund Phoenix Innovation Investment Corporation. Others Total Compal Electronics, Inc. Kinpo CDIB Partners Investment Holding Corp. AcBel Taiwan Biotech Co., Ltd. Others Total Compal Electronics, Inc. Lian Hong Art. Co., Ltd. Others Total	� The same chairman of the Company The same chairman of the Company � � � � � � � The parent company The same chairman of the Company � The Chairman of the Board is the first degree of kinship of the Chairman of the Company � The parent company �	Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through profit or loss-non current Financial assets at fair value through profit or loss-non current Financial assets at fair value through profit or loss and other comprehensive income Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current	98,046 124,044 259,600 290 632 4,000 6,685 402 5,000 6,000 31,648 69,370 54,000 5,677 6,995 18,369 2,140	441,993 2,003,307 695,728 18,722 13,342 26,600 101,676 4,233 48,800 88,740 287,259 __ 3,730,400 765,884 1,120,320 880,740 207,766 116,883 126,498 __ 3,218,091 444,538 108,551 2,139 _____ 555,228	2% 9% 5% 10% 11% 3% 10% 2% 8% 19% 1% 5% 5% 1% 3% - 6%	441,993 2,003,307 695,728 18,722 13,342 26,600 101,676 4,233 48,800 88,740 765,884 1,120,320 880,740 207,766 116,883 444,538 108,551	98,046 124,044 259,600 290 632 4,000 6,685 663 5,000 6,000 31,648 69,370 54,000 5,677 6,995 18,369 2,140	3% 9% 5% 10% 11% 3% 13% 3% 8% 19% 1% 5% 5% 1% 3% - 8%	(Note 1) (Note 1)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 3 Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
					(In Thousands of shares/ units)
Name of holder	Category and name of security	Relationship with security issuer	Account name		Ending balance The highest holdings in the period					Note
				Shares/Units (thousands)	Carrying value	Holding percentage (%)	Fair value	Shares/Units (thousands)	Holding percentage (%)
Arcadyan Mactech HHB Mithera BT BSH Hong Ji Hong Jin	SUYIN Optronics Co., Ltd. (“SUYIN Optronics”) SUYIN Optronics GeoThings Inc. AirHop Communication Inc. Adant Technologies Inc. IOT EYE, Inc. TIEF FUND L.P. Chimei Motor Electronics Co., LTD Golden Smarthome Technology Corp. Total Taichung International Golf Country Club HWALLAR OPTRONICS (Fuzhou) CO., LTD. Beyond Limits, Inc. Suzhou Genki Fuhong Health Management Co., Ltd. CitiBank RED ARC TERMLIQUIDITY FUND	� � � � � � � � � � � � �	Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through profit or loss-non- current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through profit or loss-current	380 332 200 1,152 349 60 - 1,650 1,229 - - 873 -	-	1% 1% 7% 5% 5% 14% 7% 7% 6% - 19% - 17% -	- - - - - - 37,475 26,169 - 9,000 - 124,560 4,340 277,312	380 332 200 1,152 349 60 - 1,650 1,229 - 873 -	1% 1% 7% 5% 5% 14% 7% 7% 6% - 19% - 17%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)
					-
					- - - - 37,475 26,169 - _____ 63,644 9,000 -
					124,560 4,340 277,312

Note 1:The carrying value is the remaining amount after deducting accumulated impairment.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 4 Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

(For the year ended December 31, 2021)

					(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -	(In Thousands of New Taiwan D Shares/ Units Amount Shares/ Units Amount Shares/ Units Price Cost Gain (loss) on disposal Shares/ Units Amount Shares/ Units Amount 23,172 281,546 46,197 616,864 - - - - - 221,910 69,369 1,120,320 (Note 1) 1,470,031 - 1,660,937 - 3,156,037 3,130,968 25,069 - - (Note 2) - - 781,618 - 791,505 781,618 9,887 - - (Note 2) - - - 434,232 - 439,453 434,232 5,221 (Note 2) - - - - 868,464 877,521 868,464 9,057 (Note 2) - - - - - - 542,790 - 546,782 542,790 3,992 - - (Note 2) - - 521,078 - 526,513 521,078 5,435 - - (Note 2) - - 521,078 - 525,696 521,078 4,618 - - (Note 2) 261,366 - 495,024 - 761,903 756,390 5,513 - - (Note 2) - - - 521,078 528,433 521,078 7,355 (Note 2) - - - - 241,113 - 238,828 - 484,885 479,941 4,944 - - (Note 2) - - 390,809 - 395,872 390,809 5,063 - - - (Note 2) - - - 390,513 - 393,959 390,513 3,446 (Note 2) - - - - - 130,799 - 260,342 - 393,905 390,513 3,392 (Note 2) - (628) (Note 1) - - - - - 1,400,550 - 1,121,474 1,120,440 1,034 (Note 2) - (2,798) (Note 1) - 277,312 - - - - - - Beginning Balance Purchases Sales Others Ending Balance - - - - - - - - - - - - - - - - -
Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance		Purchases		Sales				Others		Ending Balance
					Shares/ Units	Amount	Shares/ Units	Amount	Shares/ Units	Price	Cost	Gain (loss) on disposal	Shares/ Units	Amount	Shares/ Units	Amount
CIT CIT CIT CIT CEC CPO CIC CET CNC CNC BSH Panpal CPO CET CIC	Stock : Structured deposits : Yuntong Wealth Time-type structured deposit products Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Structured deposits- Win-win Interest Rate Structure RMB Structural Deposits Structured deposits- Kunshan Rural Commercial Bank Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit Fund RED ARC TERM LIQUIDITY FUND Structured deposits– Bank of China RMB Strcutured Deposit Kinpo Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Structured deposits- Win-win Interest Rate Structure RMB Structural Deposits Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit	Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income-non- current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current	Bank of Communications Industrial and Commercial Bank of China Bank of China Kunshan Rural Commercial Bank Agricultural Bank of China Citibank Bank of China Jipo Investment Industrial and Commercial Bank of China China CITIC Bank Industrial and Commercial Bank of China Agricultural Bank of China Agricultural Bank of China Agricultural Bank of China Agricultural Bank of China	- - - - - - Related party - - - - - - -	23,172 - - - - - - - - - - - - -	281,546 1,470,031 - - - - - 261,366 - 241,113 - - 130,799 -	46,197 - - - - - - - - - - - - -	616,864 1,660,937 781,618 434,232 868,464 542,790 521,078 521,078 495,024 521,078 238,828 390,809 390,513 260,342 1,400,550	- - - - - - - - - - - - -	- 3,156,037 791,505 439,453 877,521 546,782 526,513 525,696 761,903 528,433 484,885 395,872 393,959 393,905 1,121,474	- 3,130,968 781,618 434,232 868,464 542,790 521,078 521,078 756,390 521,078 479,941 390,809 390,513 390,513 1,120,440	- 25,069 (Note 2) 9,887 (Note 2) 5,221 (Note 2) 9,057 (Note 2) 3,992 (Note 2) 5,435 (Note 2) 4,618 (Note 2) 5,513 (Note 2) 7,355 (Note 2) 4,944 (Note 2) 5,063 (Note 2) 3,446 (Note 2) 3,392 (Note 2) 1,034 (Note 2)	- - - - - - - - - - - - - - -	221,910 (Note 1) - - - - - - - - - - - - (628) (Note 1) (2,798) (Note 1)	69,369 - - - - - - - - - - - - - -	1,120,320 - - - - - - - - - - - - - 277,312

Note 1:Others were valuation gains and losses and foreign exchange gains and losses. Note 2:Including gains and losses on disposal and foreign exchange gains and losses.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 5 Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
							(In Thousands of New Taiwan Dollars)
Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter- party	Relationship with the Company	If the counter-party is a related party, disclose theprevious transfer information				References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
Arcadyan	Land located at Guangfu Road, Hsinchu City	March 17, 2021 (Note 1)	415,480	Paid	Natural person	Non-related party	Not applicable	Not applicable	Not applicable	Not applicable	Appraisal and price negotiation	Operational use	None

Note 1 � In response to business operation, the Group authorized the chairman to purchase land within $500,000 by a resolution of the Board of Directors on March 17, 2021. In addition, the Group has signed an agreement with non-related parties on April 7, 2021 to purchase land.

Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

(December 31, 2021)

Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (December 31, 2021)
(In Thousands of New Taiwan Dollars)
Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Status of payment	Gain (losses) on disposal	Counter- party	Relationship with the company	Purpose of disposal	~~References~~ for determine price	Others
CDE	Right-of-use assets�land and building	May 7, 2021 (Note 1)	2011~2016	1,446,029	4,147,946 (CNY 956,012 thousand)	The payment has been received.	1,961,419	Kunshan XinCheng Construction and Development Co., Ltd.	Non-related party	Activating the assets	Appraisal and price negotiation	None

Note 1: The board of directors resolved to activate assets on May 7, 2021, the Group signed an agreement with a non-related party regarding the disposal of property

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the year ended December 31, 2021)

(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)
			(In Thousands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
Just and its subsidiaries CIH and its subsidiaries The Company	UCGI CBN CEP CIH and its subsidiaries Just and its subsidiaries HSI and its subsidiaries BCI and its subsidiaries Etrade and its subsidiaries Kinpo Electronic, Inc. Compal Electronic, Inc. CIH and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. CEA CEB BCI and its subsidiaries	Subsidiaries wholly owned by the Company The Company's subsidiaries Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company With the same chairman Parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale	(749,825) (803,662) 218,938 149,835,609 178,478,231 28,688,394 42,665,925 17,101,460 527,883 (179,037,498) (102,464) 206,180 (150,179,442) (428,856) (390,795) (3,491,406)	(0.1)% (0.1)% - 13.1% 15.6% 2.5% 3.7% 1.5% - (99.9)% (0.1)% 0.1% (93.5)% (0.3)% (0.2)% (2.2)%	120 days Net 90 days from sale 120 days 120 days 120 days 120 days 120 days Net 60 days from purchase 35 days from the 1st of the following month 120 days 120 days 120 days 120 days 120 days 120 days 120 days	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Markup based on BCI and its subsidiaries' cost Markup based on Etrade and its subsidiaries' cost Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties	There is no significant difference There is no significant difference There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference There is no significant difference, and adjustments will be made based on demand for funding if necessary Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary	220,379 540,542 - (62,366,178) (4,188,862) (3,086,146) (16,612,130) (2,631,399) (527,418) 4,188,862 - (57,375) 62,366,178 207,124 261,497 1,580,332	0.1% 0.2% - (29.6)% (2.0)% (1.5)% (7.9)% (1.2)% (0.2)% 99.9% - (0.1)% 96.5% 0.2% 0.2% 1.1%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the year ended December 31, 2021)

(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)
			(In Thousands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
CIH and its subsidiaries CBN BCI and its subsidiaries CEB CEA Etrade and its subsidiaries	HSI and its subsidiaries Henghao HSI and its subsidiaries Just and its subsidiaries CPM Changbao Acbel and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. HSI and its subsidiaries CEB CEA CIH and its subsidiaries CPM Acbel and its subsidiaries CEA CIH and its subsidiaries BCI and its subsidiaries CEA Cal-Comp CEB CIH and its subsidiaries BCI and its subsidiaries CEB Compal Electronic, Inc. HSI and its subsidiaries	With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company An associate An associate The Chairman of the Board is the first degree of kinship of the Chairman of the Company Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company An associate The Chairman of the Board is the first degree of kinship of the Chairman of the Company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company The same chairman of the Company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company	Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Sale Sale Purchase Purchase Purchase Sale Purchase Purchase Purchase Purchase Sale Purchase Purchase Purchase Sale Purchase	(5,042,538) 245,113 712,378 102,536 4,602,669 1,109,808 1,200,858 803,108 (42,863,233) (135,499) (590,887) (783,053) 3,488,526 475,357 608,220 (108,252) 392,098 590,436 473,416 1,468,381 (473,416) 429,390 783,338 108,252 (17,096,471) 1,639,840	(3.1)% 0.2% 0.5% 0.1% 3.1% 0.7% 0.8% 30.0% (88.6)% (5.6)% (1.2)% (1.6)% (7.3)% (1.0)% 1.3% (1.9)% 6.6% 9.9% 8.0% 24.7% (9.7)% 32.4% 59.2% 1.8% (99.5)% 14.2%	120 days 120 days 120 days 120 days 120 days 120 days 120 days Net 90 days from delivery 120 days 120 days 120 days 120 days 120 days 120 days 120 days 45 days 120 days 120 days 45 days 120 days 45 days 120 days 120 days 45 days Net 60 days from delivery Net 60 days from purchase	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties - Markup based on BCI and its subsidiaries' cost According to markup pricing According to markup pricing According to markup pricing According to markup pricing Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties According to markup pricing Similar to non- related parties	There is no significant difference, and adjustments will be made based on demand for funding if necessary Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference There is no significant difference Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding	2,304,731 (61,174) (170,879) - (1,382,777) (383,101) (552,945) (540,542) 16,612,130 1,993,166 1,269,252 507,450 (1,580,332) (178,927) (284,359) 1,537 (261,497) (1,269,252) (376,304) (31,855) 376,304 (207,124) (507,450) (1,537) 2,631,399 (246,217)	1.6% (0.1)% (0.1)% - (1.1)% (0.3)% (0.4)% (43.0)% 94.0% 2.7% 1.4% 0.6% 1.7% 0.2% (0.3)% (0.2)% (15.4)% (31.9)% (22.1)% (1.9)% (17.4)% (16.0)% (39.3)% (0.1)% 98.2% (10.0)%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1�2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the year ended December 31, 2021)

								(In Tho	(In Tho	usands of New Taiwan Dollars)	usands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship		Transaction deta		ils	Transactio different	ns with terms from others	Notes/Accoun (paya	ts receivable ble)	Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
Forever and its subsidiaries UCGI HengHao CEP HSI and its subsidiaries Arcadyan CNC Acradyan Vietnam Acradyan Germany Acradyan USA	HSI and its subsidiaries Avalue and its subsidiaries Compal Electronic, Inc. CIH and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. Just and its subsidiaries Etrade and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries Forever and its subsidiaries Acbel and its subsidiaries Acradyan Germany Acradyan USA Acradyan AU CNC Acradyan Vietnam Arcadyan Arcadyan Arcadyan Arcadyan	With the same ultimate parent company An affiliate of the ultimate parent company Parent company With the same ultimate parent company Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company The Chairman of the Board is the first degree of kinship of the Chairman of the Company ultimate parent company Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company	Sale Sale Purchase Sale Sale Sale Sale Sale Sale Purchase Purchase Purchase Purchase Sale Sale Sale Purchase Purchase Sale Sale Purchase Purchase	(242,089) (166,677) 757,372 (245,484) (220,757) (28,700,918) (207,079) (1,639,069) (712,526) 4,867,677 98,879 242,089 168,952 (1,226,052) (7,323,420) (505,287) 12,985,802 1,091,354 (12,985,802) (1,091,354) 1,226,052 7,323,420	100.0% 16.5% 92.3% (2.1)% (99.8)% (84.9)% (0.6)% (4.9)% (2.1)% 16.2% 8.8% 0.8% 0.6% (3.0)% (20.0)% (1.0)% 26.0% 2.0% (100.0)% (100.0)% 100.0% 100.0%	Net 60 days from purchase 45 days after the month ended 120 days 120 days 120 days 120 days 120 days Net 60 days from delivery 120 days 120 days 120 days 60 days after the delivery 120 days Net 150 days from delivery Net 120 days from delivery Net 60 days from the end of the month of delivery Net 120 days from delivery Net 180 days from the end of the month of delivery Net 120 days from delivery Net 180 days from the end of the month of delivery Net 150 days from delivery Net 120 days from delivery	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties - - - According to markup pricing According to markup pricing According to markup pricing According to markup pricing - -	There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference There is no significant difference - - - - - - - - -	46,437 23,533 (220,379) 61,174 - 3,086,146 57,375 246,217 170,879 (2,304,731) (1,993,166) (46,437) (79,867) 266,118 2,020,989 23,439 (2,028,930) (Note 3) 2,028,930 (Note 3) (266,118) (2,020,989)	(100.0)% (11.7)% (94.1)% 1.7% - 86.8% 0.8% 3.2% 2.3% (13.0)% (15.1)% (0.3)% (0.5)% 4.0% 29.0% - % (27.0)% - % - % - % (100.0)% (100.0)%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1�2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1�2) (Note 1�2) (Note 1�2) (Note 1�2) (Note 2) (Note 2)

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the year ended December 31, 2021)

(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)
			(In Thousands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
Acradyan AU	Arcadyan	With the same ultimate parent company	Purchase	505,287	100.0%	Net 60 days from the end of the month of delivery	-	-	(23,439)	100%	(Note 2)

Note 1: The remaining balance is the net value of commissioned processing and sales of raw material.

Note 2: The transactions had been eliminated in the consolidated financial statements.

Note 3: The amount of other receivables on December 31, 2021 is 1,276,111 thousand dollars.

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 8 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
					(In Thousands of New Taiwan Dollars)
Name of Company	Counter-party	Nature of relationship	Ending Balance	Turnover rate	Overdue		Amounts received in subsequentperiod		Allowance for bad debts
					Amount	Action taken
The Company The Company The Company Just and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries CEA Etrade and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan CNC CBN	CBN UCGI Cal-Comp Compal Electronic, Inc. Compal Electronic, Inc. CEA CEB BCI and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. HSI and its subsidiaries CEB CEA CEB Compal Electronic, Inc. Compal Electronic, Inc. Etrade and its subsidiaries CIH and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan Vietnam Arcadyan Just and its subsidiaries	The Company's subsidiary The Company's subsidiary The same chairman of the Company Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company Parent company With the same ultimate parent company With the same ultimate parent Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary With the same With the same ultimate parent ~~company~~	540,542 220,379 1,697,598 4,188,862 62,366,178 207,124 261,497 1,580,332 2,304,731 16,612,130 1,993,166 1,269,252 507,450 376,304 2,631,399 3,086,146 246,217 170,879 266,118 2,020,989 1,276,111 (Note 4) 2,028,930 (Note 5) 182,739 (Note 6)	1.93 3.04 - 33.34 2.63 4.14 2.36 2.23 2.08 3.16 0.06 0.45 3.09 2.52 5.34 3.54 6.14 8.32 4.82 4.79 (Note 4) 4.78 -	- - - - - - - - - - - - - - - - - - - - - - 12,530	- - - - - - - - - - - - - - - - - - - - - - Enhanced the collection	297,600 88,156 1,697,598 - 62,366,178 161,410 134,253 - - 16,612,130 - 135,132 448,708 366,319 1,843,015 2,302,953 - - 94,823 1,360,434 - 1,854,400 175,468	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 3)	- - - - - - - - - - - - - - - - - - -

Note 1:Balance as of Mrach 4, 2022.

Note 2:Balance as of Mrach 1, 2022.

Note 3:Balance as of Mrach 9, 2022.

Note 4:Other receivables due to purchasing on behalf of related parties.

Note 5:Accounts receivables due to processing raw material.

Note 6:Other receivables due to processing and sales of raw material.

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 9 Business relationships and significant intercompany transactions: (For the year ended December 31, 2021)

(In Thousands of New Taiwan Dollars)

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Intercompany transactions
				Accounts name	Amount	Terms	Percentage of the consolidated net revenue or total assets
0 0 1 1 2 2 2 2 2 3	The Company The Company JUST and its subsidiaries JUST and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries	CBN UCGI The Company CIH and its subsidiaries The Company CEA CEB BCI and its subsidiaries HSI and its subsidiaries The Company	1 1 2 3 2 3 3 3 3 2	Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable	803,662 540,542 749,825 220,379 179,037,498 4,188,862 102,464 - 150,179,442 62,366,178 428,856 207,124 390,795 261,497 3,491,406 1,580,332 5,042,538 2,304,731 42,863,233 16,612,130	There is no significant difference of price to non-related parties. The credit period is net 90 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � The price is based on BCI and its subsidiaries's operating cost. The credit period is net 120 days, and will be adjusted if necessary. �	0.1% 0.1% 0.1% - 14.5% 0.8% - - 12.2% 11.6% - - - - 0.3% 0.3% 0.4% 0.4% 3.5% 3.1%

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 9 Business relationships and significant intercompany transactions:

(For the year ended December 31, 2021)

(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)
				(In Thousands of New Taiwan Dollars)
No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Intercompany transactions
				Accounts name	Amount	Terms	Percentage of the consolidated net revenue or total assets
3 3 3 4 5 6 7 8 9 10 10 10	BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries CEB CEA Etrade and its subsidiaries Forever and its subsidiaries HHT CEP HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries	HSI and its subsidiaries CEB CEA CEA CEB The Company HSI and its subsidiaries CIH and its subsidiaries The Company The Company Just and its subsidiaries Etrade and its subsidiaries	3 3 3 3 3 2 3 2 2 2 3 3	Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue Accounts Receivable Sale Revenue Accounts Receivable Sale Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue	135,499 1,993,166 590,887 1,269,252 783,053 507,450 108,252 1,537 473,416 376,304 17,096,471 2,631,399 242,089 46,437 245,484 61,174 220,757 - 28,700,918 3,086,146 207,079 57,375 1,639,069	The price is based on the operating cost. The credit period is net 120 days, and will be adjusted if necessary. � The price is based on the operating cost. The credit period is net 120 days. � The price is based on the operating cost. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 45 days. � There is no significant difference of price to non-related parties. The credit period is net 45 days. � The price is based on the operating cost. The credit period is net 60 days from delivery, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 60 days after the delivery. � There is no significant difference of price to non-related parties. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 60 days, and will be adjusted if necessary.	- 0.4% - 0.2% - - - - - 0.1% 1.4% 0.5% - - - - - - 2.3% 0.6% - - 0.1%

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 9 Business relationships and significant intercompany transactions:

(For the year ended December 31, 2021)

(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)	(For the year ended December 31, 2021)
				(In Thousands of New Taiwan Dollars)
No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Intercompany transactions
				Accounts name	Amount	Terms	Percentage of the consolidated net revenue or total assets
10 11 11 11 11 12 13	HSI and its subsidiaries Arcadyan Arcadyan Arcadyan Arcadyan CNC Arcadyan Vietnam	CIH and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan AU Arcadyan Vietnam Arcadyan Arcadyan	3 3 3 3 3 3 3	Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Other Receivable Processing Revenue Accounts Receivable Processing Revenue	246,217 712,526 170,879 1,226,052 266,118 7,323,420 2,020,989 505,287 23,439 1,276,111 12,985,802 2,028,930 1,091,354	� There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 150 days from delivery. � There is no significant difference of price to non-related parties. The credit period is net 120 days from delivery. � There is no significant difference of price to non-related parties. The credit period is net 60 days from the end of the month of delivery. � The credit period is net 180 days from the end of the month of delivery and depended on funding demand. The price is based on the operating cost. The credit period is net 120 days from delivery and depended on funding demand. � The credit period is net 180 days from the end of the month of delivery and depended on funding demand.	- 0.1% - 0.1% - 0.6% 0.4% - - 0.2% 1.1% 0.4% 0.1%

Note 1: The numbers filled in as follows:

1.0 represents the Company.

Subsidiaries are sorted in a numerical order starting from 1.

Note 2: Transactions labeled as follows:

represents transactions between the parent company and its subsidiaries.
represents transactions between the subsidiaries and the parent company.
represents transactions between subsidiaries.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 10 The information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China): (December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
				(In Thousands of NewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount Ending Balance					The highest holdings in theperiod		Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	Shares	Percentage of Ownership
The Company	Kinpo&Compal Group Assets Development Corporation Bizcom Just CIH Panpal Gempal Kinpo Group management Ripal Unicore Lead-Honor Optronics. Co., Ltd. (“Lead-Honor”) CEH Shennona Taiwan Allied Circuit Maxima Ventures I, Inc. (“Maxima”) Aco Smartcare Lipo Holding Co., Ltd.(“Lipo”) CPE Starmems Crownpo Technology Inc. (“Crownpo”) Hong Ji Hong Jin Mactech Auscom Arcadyan FGH Shennona HSI CEP Hippo Screen Neurotech Co., Ltd. Infinno Technology Corporation (“Infinno”) HengHao BCI CBN	Taipei City Houston, USA British Virgin Islands British Virgin Islands Taipei City Taipei City Taipei City Tainan City Taipei City Taoyuan City British Virgin Islands Taipei City Taoyuan City Taipei City Hsinchu City Cayman Islands The Netherlands Hsinchu County Taipei City Taipei City Taipei City Taichung City Austin, TX USA Hsinchu City British Virgin Islands Delaware, USA British Virgin Islands Poland Taipei City Hsinchu County Taipei City British Virgin Islands Hsinchu County	Real estate development leasing and related management business Warranty services and marketing of LCD TVs and notebook PCs Investment Investment Investment Investment Consultation, training services, etc. Manufacturing of electric appliance and audiovisual electric products Management&Consultant, rental and leasing business and wholesale and retail of medical equipments Manufacturing of electric appliance and audiovisual electric products Investment Management & Consultant, rental and leasing business, wholesale and retail sale of precision instruments and International Trade Production and sales of PCB boards Investment Wholesale and retail sale of computer software, software design services, data processing services, wholesale and retail sale of electronic materials, wholesale and retail sale of precision instruments, and biotechnology services Investment Investment R&D of MEMS microphone related products Manufacturing, processing, and selling resistor chips, networking chips, diodes, multilayer ceramic capacitors, semiconductor devices, and selling electronic products Investment Investment Manufacturing of equipment and lighting, retailing of equipment and international trading R&D of notebook PC related products and components R&D, manufacturing and sales of wireless network, integrated household electronics, and mobile office products Investment Medical care IOT business Investment Maintenance and warranty services of notebook PCs Management & Consultant, Rental and Leasing Business, wholesale and retail sale of precision instruments and International Trade Manufacturing of electronic components, wholesale and retail sale of precision instruments and electronic materials Manufacturing of PCs, computer periphery devices, and electronic components Investment R&D and sales of cable modem, digital setup box, and other communicationproducts	525,000 36,369 1,480,509 1,787,680 5,171,837 900,036 3,000 60,000 200,000 42,000 34 6,000 395,388 - 90,000 489,450 197,463 35,000 149,547 1,000,000 295,000 219,601 101,747 1,325,132 2,754,741 32,665 1,346,814 90,156 112,000 127,026 5,729,757 2,636,051 284,827	- 36,369 1,480,509 1,787,680 5,171,837 900,036 3,000 60,000 200,000 42,000 34 6,000 395,388 1,260 90,000 489,450 197,463 - 149,547 1,000,000 295,000 219,601 101,747 1,325,132 2,754,741 32,665 1,346,814 90,156 42,000 109,837 5,529,757 2,636,051 284,827	52,500 100 48,010 53,001 500,000 90,000 300 6,000 20,000 2,772 1 600 10,158 - 100,000 98 6,427 3,500 3,739 100,000 29,500 21,756 3,000 41,305 89,755 2,600 42,700 136 9,100 4,648 20,015 90,820 29,060	70% 100% 100% 100% 100% 100% 38% 100% 100% 42% 100% 100% 20% - 52% 49% 100% 35% 33% 100% 100% 53% 100% 19% 100% 100% 54% 100% 91% 28% 100% 100% 43%	525,085 404,559 9,577,912 37,410,192 5,120,741 (Note 1) 1,716,614 (Note 1) 4,776 102,074 101,881 - 3,262,334 3,120 398,995 - 57,303 711,499 767,803 33,971 71,758 1,136,788 359,218 252,821 125,347 2,493,682 4,752,330 1,098 57,547 (3,097) 58,858 37,824 (484,153) 7,179,197 682,558	52,500 100 48,010 53,001 500,000 90,000 300 6,000 20,000 2,772 1 600 10,158 126 100,000 98 6,427 3,500 3,739 100,000 29,500 21,756 3,000 41,305 89,755 2,600 42,700 136 9,100 5,650 20,015 90,820 29,060	1 100% 100% 100% 100% 100% 38% 100% 100% 42% 100% 100% 20% 23% 52% 49% 100% 35% 33% 100% 100% 53% 100% 20% 100% 100% 54% 100% 91% 28% 100% 100% 43%	120 (19,042) 2,038,308 3,196,352 19,461 145,081 288 21,471 (21,226) - - 382 390,431 - (31,249) 284,726 1,706 (2,940) 41,617 89,224 39,395 41,445 4,074 1,787,544 (62,830) (92) (856,715) (20,160) (25,053) 28,574 (425,641) 908,947 32,744	85 (15,326) 2,038,308 3,196,352 (31,176) 115,690 117 18,593 (23,402) - - 347 79,707 - (16,261) 139,516 1,706 (1,029) 13,830 89,224 39,395 22,068 4,074 351,746 (62,830) (92) (300,169) (18,034) (22,724) 7,873 (425,641) 908,947 14,204	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 10 The information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
											(In Thousands of NewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount Ending Bala				nce	The highest holdings in theperiod		Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	Shares	Percentage of Ownership
The Company Panpal Gempal Hong Ji Hong Jin Just	Rayonnant CRH Acendant Private Equity Investment Ltd. (“APE”) Etrade Webtek Forever UCGI Palcom Avalue CORE GLB CGSP ARCE Raypal Arcadyan Allied Circuit Others Arcadyan Allied Circuit Others Arcadyan Allied Circuit Arcadyan CDH (HK) CII CPI	Taipei City British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands Taipei City Taipei City New Taipei City British Virgin Islands New Taipei City Poland Taipei City Taipei City Hsinchu City Taoyuan City Hsinchu City Taoyuan City Hsinchu City Taoyuan City Hsinchu City Hong Kong British Virgin Islands British Virgin Islands	Manufacturing and sales of PCs, computer periphery devices, and electronic components Investment Investment Investment Investment Investment Manufacturing and retail sale of computers and electronic components Selling of mobile phones Manufacturing, processing, and import and export business of industrial motherboards Investment Manufacturing and wholesale of medical equipment Maintenance and warranty services of notebook PCs Biotechnology services, research & development services, intellectual property rights, wholesale of animal medication, retail sale and management advisory Cancerous immunocyte therapy and regenerative medicine Telecommunication equipment and apparatus manufacturing, electronic parts and components manufacturing, restrained telecom radio frequency equipment and materials import and manufacturing Production and selling of PCB boards Telecommunication equipment and apparatus manufacturing, electronic parts and components manufacturing, restrained telecom radio frequency equipment and materials import and manufacturing Production and selling of PCB boards Telecommunication equipment and apparatus manufacturing, electronic parts and components manufacturing, restrained telecom radio frequency equipment and materials import and manufacturing Production and selling of PCB boards Telecommunication equipment and apparatus manufacturing, electronic parts and components manufacturing, restrained telecom radio frequency equipment and materials import and manufacturing Investment Investment Investment	295,000 377,328 943,922 1,532,029 3,340 1,575 489,998 100,000 547,595 4,318,860 246,860 89,669 60,000 155,076 279,202 148,263 306,655 53,645 306,655 10,389 131,942 1,724,395 255,902 13,840	295,000 377,328 943,922 1,532,029 3,340 1,575 199,999 100,000 547,595 4,318,860 246,860 37 60,000 155,076 279,202 148,263 306,655 53,645 306,655 10,389 131,942 1,724,395 255,902 13,840	29,500 12,500 31,253 46,900 100 50 10,000 10,000 14,924 147,000 15,000 - 20,000 3,446 8,192 2,927 9,279 3,220 9,279 851 4,609 62,298 9,245 500	100% 100% 35% 65% 100% 100% 100% 100% 21% 100% 50% 100% 33% 30% 4% 6% 4% 6% 4% 2% 2% 100% 100% 100%	150,785 228,858 1,305,068 (184,795) 679,564 1,304,552 (37,303) 113,123 626,851 6,580,283 330,604 86,855 44,309 144,270 ____ 88,293,659 539,351 114,974 75,937 635,925 126,471 175 635,925 28,554 300,876 7,336,510 232,596 831,308	29,500 12,500 31,253 46,900 100 50 10,000 10,000 14,924 147,000 15,000 - 20,000 3,446 8,192 2,927 9,279 3,220 9,279 851 4,609 62,298 9,245 500	100% 100% 35% 65% 100% 100% 100% 100% 21% 100% 50% 100% 33% 30% 4% 6% 4% 6% 4% 2% 2% 100% 100% 100%	35,093 43,721 603,543 632,364 116,378 12,658 53,840 4,426 196,505 (569,898) 24,917 (1,700) (46,608) (22,602) 1,787,544 390,431 1,787,544 390,431 1,787,544 390,431 1,787,544 2,033,586 (469) 2,720	29,295 43,721 209,561 516,481 116,378 12,658 53,926 3,976 43,341 (569,898) 12,585 (1,741) (15,543) (6,781) ____ 6,573,057 Investment gain(losses) recognized by Panpal Investment gain(losses) recognized by Panpal Investment gain(losses) recognized by Gempal Investment gain(losses) recognized by Gempal Investment gain(losses) recognized by Hong Ji Investment gain(losses) recognized by Hong Ji Investment gain(losses) recognized by Hong Jin Investment gain(losses) recognized by Just Investment gain(losses) recognized by Just Investment gain(losses) recognized by Just	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

��

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 10 The information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
											(In Thousands of NewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount Ending Balance					The highest holdings in theperiod		Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	Shares	Percentage of Ownership
CII CIH HSI IUE Goal BCI CORE BSH Forever	Smart AEI MEL MTL CIH (HK) Jenpal PFG FWT CCM IUE Goal CVC CDM CMI PRI BSH Mithera HSI CIN GIA CWV	British Virgin Islands U.S.A U.S.A U.S.A Hong Kong British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands British Virgin Islands Vietnam Vietnam British Virgin Islands British Virgin Islands British Virgin Islands Cayman Islands British Virgin Islands U.S.A British Virgin Islands Vietnam	Investment Sales and maintenance of LCD TVs Investment Investment Investment Investment Investment Investment Investment Investment Investment R&D, manufacturing, sales, and maintenance of notebook PCs, computer monitors, LCD TVs and electronic components Construction of and investment in infrastructure in Ba-Thien industrial district of Vietnam Investment Investment Investment Investment Investment Manufaturing Selling of mobile phones R&D, manufacturing, sales, and maintenance of notebook PCs, computer monitors, LCD TVs and electronic components	28 27,680 227,917 28 2,070,533 203,448 28 412,432 141,168 1,854,560 351,536 1,854,560 351,536 2,237,098 276,800 4,068,960 138,400 1,024,160 226,421 - 55,360	28 27,680 227,917 28 2,070,533 203,448 28 412,432 141,168 1,854,560 351,536 1,854,560 351,536 2,237,098 276,800 4,068,960 138,400 1,024,160 - - 55,360	1 1,000 - - 74,803 7,350 1 14,900 5,100 67,000 12,700 67,000 12,700 80,820 10,000 147,000 - 37,000 1 - -	100% 100% 100% 100% 100% 100% 100% 100% 51% 100% 100% 100% 100% 100% 100% 100% 99% 46% 100% 100% 100%	350 43,364 188,891 28 36,259,088 98,697 430,130 412,895 25,433 221,043 304,117 221,043 305,603 4,503,395 2,675,803 6,580,283 129,444 467,614 190,352 - 16,398	1 1,000 - - 74,803 7,350 1 14,900 5,100 67,000 12,700 67,000 12,700 80,820 10,000 147,000 - 37,000 1 - -	100% 100% 100% 100% 100% 100% 100% 100% 51% 100% 100% 100% 100% 100% 100% 100% 99% 46% 100% 100% 100%	(3) (491) 25 - 3,482,248 373 7,570 - 187 (869,094) 12,379 (869,094) 12,379 578,634 330,312 (569,898) (3,059) (856,715) (35,101) - 13,289	Investment gain(losses) recognized by CII Investment gain(losses) recognized by CII Investment gain(losses) recognized by CII Investment gain(losses) recognized by CII Investment gain(losses) recognized by CIH Investment gain(losses) recognized by CIH Investment gain(losses) recognized by CIH Investment gain(losses) recognized by CIH Investment gain(losses) recognized by CIH Investment gain(losses) recognized by HSI Investment gain(losses) recognized by HSI Investment gain(losses) recognized by IUE Investment gain(losses) recognized by Goal Investment gain(losses) recognized by BCI Investment gain(losses) recognized by BCI Investment gain(losses) recognized by CORE Investment gain(losses) recognized by BSH Investment gain(losses) recognized by BSH Investment gain(losses) recognized by BSH Investment gain(losses) recognized by Forever Investment gain(losses) recognized by Forever	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 10 The information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
											(In Thousands of NewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount Ending Balance					The highest holdings in theperiod		Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	Shares	Percentage of Ownership
Webtek Unicore Arcadyan Arcadyan and Zhi-Bao Arcadyan Holding TTI Quest Sinoprime Zhi-Bao Rayonnant	Etrade Raycore Arcadyan Holding Arcadyan USA Arcadyan Germany Arcadyan Korea Zhi-Bao TTI AcBel Telecom Arcadyan UK Arcadyan AU Arcadyan RU CBN Arcadyan Brasil Arcadyan India Sinoprime Arch Holding Quest TTJC Exquisite Arcadyan Vietnam CBN APH	British Virgin Islands Taipei City British Virgin Islands U.S.A Germany Korea Taipei City Taipei City Taipei City UK Australia Russia Hsinchu County Brazil India British Virgin Islands British Virgin Islands Samoa Japan Samoa Vietnam Hsinchu County British Virgin Islands	Investment Animal medication retail and wholesale Investment Sales of wireless network products Technology support and sales of wireless network products Sales of wireless network products Investment R&D and sales of household digital products Investment Technical support of wireless network products Sales of wireless network products Sales of wireless network products Sales of communication and electronic components Sales of wireless network products Sales of wireless network products Investment Investment Investment Sales of household digital electronic products Investment Manufacturing of wireless network products Produces and sales of communication and electronic components Investment	692,000 40,692 2,219,782 23,055 1,125 2,879 48,000 308,726 23,000 1,988 1,161 7,672 11,925 81,593 13,507 804,104 304,784 33,216 9,626 32,386 802,720 36,272 257,454	692,000 25,500 2,359,732 23,055 1,125 2,879 48,000 308,726 23,000 1,988 1,161 2,492 11,925 81,593 - 527,304 304,784 33,216 9,626 32,386 525,920 36,272 257,454	25,000 588 64,780 1 0.5 20 34,980 25,028 4,494 50 50 - 533 968 3,500 29,050 35 1,200 0.7 1,170 - 13,140 8,651	35% 100% 100% 100% 100% 100% 100% 61% 51% 100% 100% 100% 1% 100% 100% 100% 100% 100% 100% 100% 100% 19% 41%	(54,057) 29,252 2,323,746 162,359 76,914 11,899 415,117 371,174 32,638 4,206 41,705 5,856 12,642 (14,827) 11,389 854,011 1,045,972 (64,119) 3,945 (76,480) 849,942 311,536 152,994	25,000 1,275 64,780 1 0.5 20 34,980 25,028 4,494 50 50 - 533 968 3,500 29,050 35 1,200 1 1,170 - 13,140 8,651	35% 100% 100% 100% 100% 100% 100% 61% 51% 100% 100% 100% 1% 100% 100% 100% 100% 100% 100% 100% 100% 20% 41%	632,364 (1,629) 335,159 83,123 8,474 (436) 6,825 (219,951) (121) 793 3,213 (1,361) 32,744 (148) (1,448) 138,028 186,372 (96,963) (1,325) (96,967) 138,028 32,744 76,203	Investment gain(losses) recognized by Webtek Investment gain(losses) recognized by Unicore Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Investment gain(losses) recognized by Arcadyan Holding Investment gain(losses) recognized by Arcadyan Holding Investment gain(losses) recognized by TTI Investment gain(losses) recognized by TTI Investment gain(losses) recognized by Quest Investment gain(losses) recognized by Sinoprime Investment gain(losses) recognized by Zhi-Bao Investment gain(losses) recognized by Rayonnant	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2�3) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 10 The information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China):

(December 31, 2021)

(December 31, 2021)	(December 31, 2021)	(December 31, 2021)	(December 31, 2021)
											(In Thousands of NewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount Ending Balance					The highest holdings in theperiod		Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	Shares	Percentage of Ownership
Rayonnant CRH APH HHT HHA CBN FGH GLB Mactech	Forming Co., Ltd. APH PEL Rayonnant(HK) HHA HHB CBNB CBNN Starmems Wah Yuen Technology Holding Ltd. and its subsidiaries RBL Taiwan Intelligent Robotics Company, LTD.	Taoyuan City British Virgin Islands British Virgin Islands Hong Kong British Virgin Islands British Virgin Islands Belgium The Netherlands Hsinchu County Mauritius New Taipei City Taipei City	R&D and manufacturing of electronic materials Investment Investment Investment Investment Investment The import and export business of broad band network products and related components, as well as technical support and advisory services The import and export business of broad band network products and related components, as well as technical support and advisory services R&D of MEMS microphone related products Investment Detectors and test strip Manufacturing of equipment	27,300 346,000 87,220 498,240 1,429,235 1,297,695 6,842 7,016 10,000 2,484,432 - 43,200	27,300 346,000 87,220 498,240 1,429,235 1,297,695 6,842 7,016 - 2,484,432 6,500 43,200	1,820 12,500 3,151 18,000 46,882 46,882 20 20 1,000 95,862 - 2,160	21% 59% 100% 100% 100% 100% 100% 100% 10% 37% 0% 17%	- 228,858 39,230 335,238 (648,644) (648,584) 5,410 6,022 9,706 4,815,888 - 16,763	1,820 12,500 3,151 18,000 46,882 46,882 20 20 1,000 95,862 1,275 2,160	21% 59% 100% 100% 100% 100% 100% 100% 10% 37% 100% 20%	- 76,203 2,243 73,960 (476,081) (476,081) (271) (124) (2,940) (62,723) (334) (17,477)	Investment gain(losses) recognized by Rayonnant Investment gain(losses) recognized by CRH Investment gain(losses) recognized by APH Investment gain(losses) recognized by APH Investment gain(losses) recognized by HHT Investment gain(losses) recognized by HHA Investment gain(losses) recognized by CBN Investment gain(losses) recognized by CBN Investment gain(losses) recognized by CBN Investment gain(losses) recognized by FGH Investment gain(losses) recognized by GLB Investment gain(losses) recognized by Mactech	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

Note 1: The carrying value had been deducted $559,812 and $321,435 of the Company’s stock held by Panpal and Gempal, respectively.

Note 2: The transactions had been eliminated in the consolidated financial statements.

Note 3: The subsidiary was incorporated on March 25, 2021.

Note 4: Liquidation was completed in July, 2021.

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 11 Information on investment in Mainland China:

(December 31, 2021)

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	information:	information:	information:	information:	information:	information:	information:	information:
					(In Thousands of New Taiwan Dollars/ shares)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 4)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
CPC CDT CET CSD Zheng Ying Electronics (Chongqing) Co., Ltd. BT CGS LIZ Electronics (Kunshan) Co., Ltd. LIZ Electronics (Nantong) Co., Ltd. CIC CPO CIT CST	Manufacturing and sales of monitors Manufacturing of notebook PCs Research & development, and manufacturing latest electronic components, precision cavity mold, design and manufacturing for standard parts for molds, and selling self -produced products Manufacturing of notebook PCs Maintenance and warranty service of notebook PCs Production and processing chip resistors, ceramic capacitors, diodes, and other latest electronic components and related precision electronic equipment; selling self-produced products Research & development, and manufacturing chip components( chip resistors, ceramic chip diode�selling self- produced products and providing after-sales service. Performing wholesale and trading business of electronic components, semiconductors, special materials for electronic components, and spare parts Manufacturing of notebook PCs Manufacturing and sales of LCD TVs Manufacturing of notebook PCs International trade and distribution of computers and electronic components Manufacturing and sales of notebook PCs, mobile phones, and Digital products Research, manufacture and sales of communication devices, mobile phones, electronic computer, smart watch, and provide related technology service	1,024,160 553,600 332,160 260,395 68,467 27,680 8,680 885,760 553,600 332,160 334,928 664,320 38,752	(Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1) (Note 1) (Note 2) (Note 1) (Note 2) (Note 2)	1,024,160 553,600 332,160 (Note 3) (Note 3) 27,680 (Note 3) 368,974 40,690 332,160 334,928 664,320 38,752	- - - - - - - - - - - - -	- - - - - - - - - - - - -	1,024,160 553,600 332,160 - - 27,680 - 368,974 40,690 332,160 334,928 664,320 38,752	689,977 (22,978) 162,364 555,435 - 27,737 (19,533) 256,101 175,713 881,782 61,872 2,020,686 1,442	100% 100% 100% 100% 51% 100% 100% 43% 48% 100% 100% 100% 100%	689,977 (22,978) 162,364 555,435 - 27,737 (19,533) 110,585 83,640 881,782 61,872 2,020,686 1,442	2,621,488 77,074 4,795,313 568,446 (43,020) (158,184) (45,016) 535,940 542,279 8,676,307 2,838,177 22,323,113 48,140	- - - - - - - - - - - - -

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 11 Information on investment in Mainland China:

(December 31, 2021)

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	(i) The names of investees in Mainland China, the main businesses and products, and other	information:	information:	information:	information:	information:	information:	information:	information:
					(In Thousands of New Taiwan Dollars/ shares)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 4)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Sheng Bao Precision Electronics (Taicang) Co., Ltd. CWCN CIJ CDE CIS CEC CMC CEQ Compal Precision Module (Jiangsu) Co., Ltd. Changbao Electronic Technology (Chongqing) Co., Ltd. Rayonnant (Taicang) CCI Nanjing CDCN Hanhelt Arcadyan SVA Arcadyan	Research & development, and manufacturing latest electronic components, precision cavity mold, design and manufacturing for standard parts for molds, and selling self- produced products Investment and consulting services Manufacturing and sales of LCD TVs Outward investment and consulting services R&D and manufacturing of notebook PCs, tablet PCs, digital products, network switches, wireless AP, and automobile electronic products Corporate management consulting, financial and tax consulting, investment consulting, and investment management consulting services R&D, manufacturing and sales of notebook PCs and related components. Also provides related maintenance and warranty services Manufacturing and selling of magnesium alloy injection molding Production and marketing of magnesium alloy molding Manufacturing and sales of aluminum alloy and magnesium alloy products Manufacturing and processing of mobile phones and tablet PCs Manufacturing and processing of mobile phones and tablet PCs Manufacturing and processing of mobile phones and tablet PCs R&D and manufacturing of electronic communication equipment R&D and sales of wireless network products	276,800 431,808 415,200 2,237,098 2,214,400 22,144 276,800 11,625,600 1,660,800 498,240 747,360 160,544 1,356,320 55,360 224,208	(Note 2) (Note 2) (Note 2) (Note 1) (Note 2) (Note 2) (Note 1) (Note 2) (Note 2) (Note 2) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)	141,168 431,808 (Note 3) 2,237,098 (Note 3) (Note 3) 276,800 2,287,115 317,102 346,000 608,960 160,544 525,920 55,360 509,866 (Note 7)	- - - - - - - - - - - - - - -	- - - - - - - - - - - - - - 138,400 (Note 9)	141,168 431,808 - 2,237,098 - - 276,800 2,287,115 317,102 346,000 608,960 160,544 525,920 55,360 371,466	187 1,692,951 1,692,304 578,634 578,669 (51) 330,312 218,835 (222,019) 73,960 (40,952) 1,737 373,471 (476) 6,442	51% 100% 100% 100% 100% 100% 100% 37% 37% 100% 100% 100% 100% 100% 100%	96 1,692,951 1,692,304 578,634 578,669 (51) 330,312 80,137 (81,303) 73,960 (40,952) 1,737 373,471 (476) 6,442	57,161 2,235,113 2,202,258 4,503,395 4,475,331 22,152 2,675,803 5,443,063 726,504 335,779 (930,657) 87,829 816,200 2,380 28,344	- - - - - - - - - - - - - - -

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Table 11 Information on investment in Mainland China:

(December 31, 2021)

(i) The names of investees in Mainland China, the main businesses and products, and other information:

						(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)	(In Thousands of New Taiwan Dollars/ shares)
	Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 4)	Book value	Accumulated remittance of earnings in current period
						Outflow	Inflow
CNC THAC HengHao HengHao Optoelectronic Technology (Kunshan) Co., Ltd. (“HengHao Kunshan”) Lucom Display Technology (Kunshan) Limited(“Lucom”)		Manufacturing of household electronics products Production of touch panels and related components Manufacturing and wireless network products Manufacturing of notebook PCs and related modules	344,616 92,728 1,107,200 415,200	(Note 1) (Note 1� 10) (Note 1) (Note 2)	304,784 (Note 8) 31,832 1,101,747 179,893 (Note 12)	- - - -	- - -	304,784 31,832 1,101,747 179,893	186,372 (96,967) (477,802) 1,687	100% 100% 100% 100%	186,372 (96,967) (477,802) 1,687	1,045,972 (76,950) (775,079) 126,264	- - - -

(ii) Limitation on investment in Mainland China:

(In Thousands of USD)

			(In Thousands of USD)
Names of Company	Accumulated Investment in Mainland China as of December 31, 2021	Investment Amounts Authorized by Investment Commission of Ministry of Economic Affairs	Limitation on investment in Mainland China by Investment Commission of Ministry of Economic Affairs
The Company Arcadyan HengHao	15,017,424 708,082 1,297,417 (US$542,537) (Note 5) (US$25,581) (US$46,872)	21,254,309 (US$767,858) 708,082 (US$25,581) 1,297,417 (US$46,872)	(Note 6) 7,593,661 (Note 13)

Note 1: Indirectly investment in Mainland China through companies registered in the third region.

Note 2: Indirectly investment in Mainland China through an existing company registered in the third region. Note 3: Investees held by Kunshan Botai Electronics Co., Ltd. (“BT”), Compal Investment (Jiansu) Co., Ltd. (“CIJ”), Compal Electronic (Sichuan) Co., Ltd. (“CIS”), and Compal Electronics (China) Co., Ltd. (“CPC”) through their own funds.

Note 4: The investment income (loss) was determined based on the financial report audited by the CPAs.

Note 5: Including the investment amount of sold or dissolved companies, including Beijing Compower Xuntong Electronic Technology Co., Ltd., VAP Optoelectronics (NanJing) Corp., Flextronics Technology (Shanghai) Ltd., Lucom, LCFC (HeFei) Electronics Technology Co., Ltd. and the increased investment amount form merging with Compal Communication Co., Ltd.

Note 6: As the Company has obtained the certificate of being qualified for operating headquarters, issued by Industrial Development Bureau, MOEA, the upper limit on investment in mainland China is not applicable.

Note 7: Arcadyan paid US$18,420 thousand and acquired 100% shares of SVA Arcadyan from Accton Asia through Arcadyan Holding in 2010. Note 8: Arcadyan paid US$8,561 thousand and acquired 100% shares of CNC from Just through Arcadyan Holding in 2007. Note 9: SVA Arcadyan decreased its capital amounting to US$15,000 thousand to offset accumulated losses in March 2009, and returned its capital amounting to US$5,000 thousand on April 7, 2021.

Note 10: Arcadyan’s subsidiary, TTI, obtained the control over THAC with US$1,150 thousand on February 28, 2013 (the date of stock transferring). Note 11: The amounts in New Taiwan Dollars were translated at the exchange rates at the balance sheet date or the average exchange rate. Note 12: The Company had an accumulated investment amounting to US$7,350 thousand in the previous years. In the first half of 2014, HengHao paid the Company and LG US$3,184 thousand and US$3,315 thousand, respectively, for organization restructure, to obtain 100% ownership of Lucom.

Note 13: The net equity of HengHao is negative at December 31, 2021.

(iii) Significant transactions:

For the year ended December 31, 2021, the significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions” and “Business relationships and significant intercompany transactions”.

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Compal — Annual Report 2021

52007_rns_2021-11-15_c9913ccb-6a18-433f-bec0-6fb535599947.pdf

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Representation Letter

KPMG

Independent Auditor’s Report

Opinion

Basis for Opinion

Key Audit Matters

Inventory valuation

Description of key audit matters:

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Notes to Readers

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

(2) Approval date and procedures of the consolidated financial statements:

(3) New standards, amendments and interpretations adopted:

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Basis of preparation

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Foreign currency

(ii) Foreign operations

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

4) Derecognition of financial liabilities

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Derivative financial instruments and hedge accounting

Cash flow hedges

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(h) Inventories

(i) Investment in associates

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(j) Joint venture

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(k) Property, plant and equipment

(i) Recognition and measurement

(ii) Subsequent cost

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(l) Leases

(ii) As a lessee

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(m) Intangible assets

(i) Goodwill

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(o) Provisions

(p) Treasury stock

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(q) Recognition of Revenue

Compal Annual Report 2021