Compal - Interim / Quarterly Report 2021

Stock Code:2324

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 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. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. 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
	1 2 3 4 5 6 7 8 8 8～9 9～16 16 17～55 55～57 58 58 58 58～59 59 59～60, 61～72 60, 73～78 60, 79～81 60 60

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. 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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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Review Report

To COMPAL ELECTRONICS, INC.:

Introduction

We have reviewed the accompanying consolidated balance sheets of COMPAL ELECTRONICS, INC. and its subsidiaries (the “ Group” ) as of March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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 International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standard 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain non-significant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to $16,769,935 thousand and $17,064,073 thousand, constituting 3.8% and 4.8% of consolidated total assets as of March 31, 2021 and 2020, respectively, total liabilities amounting to $2,794,096 thousand and $1,844,274 thousand, constituting both 0.8% of consolidated total liabilities as of March 31, 2021 and 2020, and the absolute value of total comprehensive income (loss) amounting to $(78,661) thousand and $(521,729) thousand, constituting 2.4% and 188.2% of consolidated total comprehensive income (loss) for the three months ended March 31, 2021 and 2020, respectively.

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.

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of COMPAL ELECTRONICS, INC. and its subsidiaries as of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’review report are Kuan-Ying Kuo and Szu-Chuan Chien.

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KPMG

Taipei, Taiwan (Republic of China) May 12, 2021

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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31, 2020, and March 31, 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)) 1135 Current financial assets for hedging (note (6)(d)) 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)(j) and (8)) 1755 Right-of-use assets (note (6)(k)) 1780 Intangible assets 1840 Deferred tax assets 1990 Other non-current assets (note (8)) Total assets	March 31, 2021 Amount % $ 84,468,219 18.9 4,497,713 1.0 7,557 - 215,797,463 48.4 70,727 - 1,856,374 0.4 91,459,586 20.5 3,435,003 0.8 401,592,642 90.0 7,905,512 1.8 222,639 - 5,100,769 1.1 23,539,019 5.3 3,598,988 0.8 1,646,307 0.4 1,550,274 0.4 984,879 0.2 44,548,387 10.0 $ 446,141,029 100.0	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	March 31, 2020 Amount % 64,247,326 18.1 3,719,795 1.1 73,688 - 154,469,155 43.5 23,392 - 1,846,080 0.5 88,009,608 24.8 3,805,860 1.1 316,194,904 89.1 7,188,657 2.0 169,579 - 4,085,776 1.2 19,934,781 5.6 3,546,682 1.0 1,624,402 0.4 1,626,586 0.5 566,290 0.2 38,742,753 10.9 354,937,657 100.0 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(l)) 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)(v)) 2170 Notes and accounts payable 2180 Notes and accounts payable to related parties (note (7)) 2200 Other payables (note (7)) 2216 Dividends payable 2230 Current tax liabilities 2250 Current provisions (note (6)(p)) 2280 Current lease liabilities (note (6)(o)) 2300 Other current liabilities 2365 Current refund liabilities 2322 Long-term borrowings, current portion (note (6)(m)) Non-Current liabilities: 2530 Bonds payable (note (6)(n)) 2540 Long-term borrowings (note (6)(m)) 2570 Deferred tax liabilities 2580 Non-current lease liabilities (note (6)(o)) 2640 Non-current net defined benefit liability 2670 Non-current liabilities, others (note (6)(g)) Total liabilities Equity: Equity attributable to owners of parent (note (6)(s)): 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	March 31, 2021	December 31, 2020	March 31, 2020 Amount % 43,900,240 12.4 8,378 - - - 705,049 0.2 140,553,785 39.6 1,641,260 0.5 17,619,794 5.0 5,866,927 1.7 4,610,173 1.3 887,359 0.3 458,232 0.1 1,864,251 0.5 1,474,556 0.3 13,877,175 3.9 233,467,179 65.8 969,905 0.3 7,709,619 2.2 944,917 0.3 1,705,134 0.4 733,459 0.2 216,210 - 12,279,244 3.4 245,746,423 69.2 44,071,466 12.4 8,338,999 2.3 53,924,166 15.2 (4,657,206) (1.3) (881,247) (0.2) 100,796,178 28.4 8,395,056 2.4 109,191,234 30.8 354,937,657 100.0
				Amount % $ 86,015,621 19.3 28,142 - - - 873,397 0.2 179,103,834 40.1 2,689,950 0.6 23,607,984 5.3 7,853,656 1.8 6,022,168 1.4 916,181 0.2 713,567 0.2 1,542,071 0.3 1,536,909 0.3 8,596,275 1.9 319,499,755 71.6 979,546 0.2 10,332,444 2.3 1,050,711 0.2 1,695,821 0.4 780,028 0.2 444,936 0.1 15,283,486 3.4 334,783,241 75.0 44,071,466 9.9 6,662,275 1.5 59,892,107 13.4 (6,954,388) (1.5) (881,247) (0.2) 102,790,213 23.1 8,567,575 1.9 111,357,788 25.0 $ 446,141,029 100.0	Amount % 92,838,733 19.9 136,617 - 2,192 - 820,016 0.2 196,837,439 42.2 2,888,624 0.6 23,397,672 5.0 11 - 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

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

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

4000 Net sales revenue (notes (6)(v) and (7)) 5000 Cost of sales (notes (6)(f),(6)(q), (7) and (12)) Gross profit Operating expenses: (notes (6)(q) 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)(x)) 7020 Other gains and losses, net (notes (6)(d), (6)(g), (6)(x) and (6)(z)) 7050 Finance costs (notes (6)(n) and (6)(o)) 7190 Other income (note (6)(x)) 7590 Miscellaneous disbursements 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)(r)) Profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 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)(r)) 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)(y)) 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)(r)) 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(u)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the three month	s ended March 31
	2021 Amount % $ 269,991,533 100.0 260,389,951 96.4 9,601,582 3.6 1,530,633 0.6 1,036,551 0.4 3,759,510 1.4 6,326,694 2.4 3,274,888 1.2 499,504 0.2 61,301 - (271,227) (0.1) 87,644 0.1 (23,395) - 39,926 - 393,753 0.2 3,668,641 1.4 760,006 0.3 2,908,635 1.1 283,512 0.1 (7,211) - 18,381 - 257,920 0.1 83,939 - 9,749 - (33,061) - (77) - 60,704 - 318,624 0.1 $ 3,227,259 1.2 $ 2,620,164 1.0 288,471 0.1 $ 2,908,635 1.1 $ 2,932,087 1.1 295,172 0.1 $ 3,227,259 1.2 $ 0.60 $ 0.59	2020
		Amount % 182,047,046 100.0 176,101,135 96.7 5,945,911 3.3 790,605 0.4 1,068,185 0.6 3,181,272 1.8 5,040,062 2.8 905,849 0.5 479,243 0.3 (53,973) - (382,778) (0.2) 68,041 - (6,893) - 79,171 - 182,811 0.1 1,088,660 0.6 317,358 0.2 771,302 0.4 (860,814) (0.5) (87,988) - (54,963) - (893,839) (0.5) 381,246 0.3 78,559 - (58,268) - 1,842 - 399,695 0.3 (494,144) (0.2) 277,158 0.2 605,011 0.3 166,291 0.1 771,302 0.4 51,428 - 225,730 0.2 277,158 0.2 0.14
		0.14

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the three months ended March 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 - - - - - - - - - - $ 44,071,466		9,159,259 - -	19,719,150 - -	7,467,831 - -		30,539,623 605,011 174 605,185 (4,407,147) - - (476) - - 26,737,185 38,049,698 2,620,164 (223) 2,619,941 (5,288,576) - (5,265) (174) - - - 35,375,624	57,726,604 605,011 174 605,185 (4,407,147) - - (476) - - 53,924,166 62,566,181 2,620,164 (223) 2,619,941 (5,288,576) - (5,265) (174) - - - 59,892,107	(3,794,980) - 316,260 316,260 - - - - - - (3,478,720) (6,888,977) - 51,088 51,088 - - - - - - - (6,837,889)		(306,763) - (893,999) (893,999) - - - - - - (1,200,762) (376,952) - 257,659 257,659 - - - 174 - - - (119,119)	(1,706) - 23,982 23,982 - - - - - - 22,276 (779) - 3,399 3,399 - - - - - - - 2,620	(4,103,449) - (553,757) (553,757) - - - - - - (4,657,206) (7,266,708) - 312,146 312,146 - - - 174 - - - (6,954,388)	(881,247) - - - - - - - - - (881,247) (881,247) - - - - - - - - - - (881,247)	105,972,633 605,011 (553,583) 51,428 (4,407,147) (881,429) 974 (302) 60,021 - 100,796,178 106,832,505 2,620,164 311,923 2,932,087 (5,288,576) (1,762,859) (4,413) 470 80,027 972 - 102,790,213	8,786,711 166,291 59,439 225,730 - - - - - (617,385) 8,395,056 9,157,145 288,471 6,701 295,172 - - - - - - (884,742) 8,567,575	114,759,344 771,302 (494,144)
		-	-	-												277,158
			- - - - - -	- - - - - -												(4,407,147) (881,429) 974 (302) 60,021 (617,385)
			19,719,150	7,467,831												109,191,234
			20,414,740 - -	4,101,743 - -												115,989,650 2,908,635 318,624
	-		-	-												3,227,259
	- - - - - - -		- - - - - - -	- - - - - - -												(5,288,576) (1,762,859) (4,413) 470 80,027 972 (884,742)
	$ 44,071,466		20,414,740	4,101,743												111,357,788

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 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 Gain on disposal of investments 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 investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of right-of-use 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 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		For the three m Marc	onths ended h 31 2020 1,088,660

			1,531,865 (1,724) 5,780 382,778 (479,243) - 22,573 (79,171) (1,088) (4,899)
			1,376,871
			(2,373,416) 37,247,762 243,717 (9,576,070) (733,199) 32,703
			24,841,497
			2,524 (2,250,732) (3,938,012) 92,182 56,602 (251,406) (125,992) (4,705)
			(6,419,539)
			18,421,958
			19,798,829
			20,887,489 454,057 - (460,387) (99,719)
			20,781,440
			(77,434) 8,306 (1,360,573) 46,905 (177,398) (323,472) 18,629
			(1,865,037)
			(17,051,604) 21,954,500 (26,116,144) (226,597) (30,262)
			(21,470,107)
			241,633
			(2,312,071) 66,559,397
			64,247,326

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 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 May 12, 2021.

(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. (“FSC”) 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 IASB but not yet endorsed by the FSC

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:

(Continued)

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

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 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”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”

(4) Summary of significant accounting policies:

(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) and the guidelines of IAS 34 Interim Financial Reporting which are endorsed by the FSC. These consolidated interim financial statements do not include all of the information required by the Regulations and by the International Financial Reporting Standards, the International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by the FSC (hereinafter referred to as the IFRS endorsed by the FSC) for a complete set of the annual financial statements.

(Continued)

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

Except as described in the following paragraph, the significant accounting policies used in the interim financial statement are consistent with the consolidated financial statement for the year ended December 31, 2020. For related information, please refer to note (4) of the consolidated financial statement for the year ended December 31, 2020.

(b) Basis of consolidation

Principles of preparation of the consolidated financial statements are consistent with the consolidated financial statement for the year ended December 31, 2020. For related information, please refer to note (4)(c) of the consolidated financial statement for the year ended December 31, 2020.

The list of subsidiaries in the consolidated financial statements as follows:

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	March 31, 2021	Percentage of ownership December 31, 2020 March 31, 2020 Description 100% 100% Panpal held 31,648 thousand shares of the Company as of Mach 31, 2021, which represented 0.7% of the Company’s outstanding shares. (Note 1 and Note 2) 100% 100% Gempal held 18,369 thousand shares of the Company as of March 31, 2021, which represented 0.4% of the Company’s outstanding shares. 100% 100% 100% 100% 35% 35% The Group had the ability to control Arcadyan. 100% 100% 100% 100% 100% 100% 53% 53% 50% 50% 100% 100% (Continued)
	100% 100% 100% 100% 35% 100% 100% 100% 53% 50% 100%

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

Name of investor Name of Subsidiary Nature of Operation The Company Hippo Screen Neurotech Co., Ltd. (“Hippo Screen”) Management consulting services, rental and leasing business, wholesale and retail sale of precision instruments and international trading 〃 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 〃 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	March 31, 2021	Percentage of ownership December 31, 2020 March 31, 2020 Description 70% 70% 100% 100% 52% 52% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (Note 1 and Note 2) 100% 100% (Note 1 and Note 2) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - CGSP was established in September 2020. 100% 100% (Note 1 and Note 2)
	91% 100% 52% 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 Panpal and Gempal 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”) 〃 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”) 〃〃 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”) 〃	March 31, 2021	Percentage of ownership December 31, 2020 March 31, 2020 Description 100% 100% 100% - CEA was established in September 2020. 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% 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 CIH (HK) 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 〃 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	March 31, 2021	Percentage of ownership December 31, 2020 March 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% - CWV was established in August 2020. 100% 100% (Note 2) 100% 100% (Note 1 and Note 2) 100% 100% (Note 1 and Note 2) 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 Arcadyan 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 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”) 〃 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 AcBel Telecom Leading Images Ltd. (“Leading Images”) Investment Leading Images Astoria Networks GmbH (“Astoria GmbH”) Sales 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	March 31, 2021	Percentage of ownership December 31, 2020 March 31, 2020 Description 100% 100% (Note 1 and Note 2) 100% 100% (Note 1 and Note 2) 100% - Arcadyan RU was established in June 2020. (Note 1) 100% 100% (note 2) 61% 61% 51% 51% (Note 1 and Note 2) 100% 100% (Note 1 and Note 2) - - The subsidiary was incorporated on March 25, 2021 and the capital has not been funded. 64% 64% 100% 100% 100% 100% 100% 100% (Note 1 and Note 2) 100% 100% 100% 100% 100% 100% 100% 100% (Note 1 and Note 2) - 100% The liquidation procedures had been completed on December 7, 2020. (Note 2) - 100% The liquidation procedures had been completed on October 14, 2020. (Note 2) 100% 100% 100% 100% (Note 2) 100% 100% (Continued)
	100% 100% 100% 100% 61% 51% 100% 100% 64% 100% 100% 100% 100% 100% 100% 100% - - 100% 100% 100%

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

Name of investor Name of Subsidiary Nature of Operation Exquisite Tatung Home Appliances (Wujiang) Co., Ltd. (“THAC”) Manufacturing of household digital electronic products TTI 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 Payonnant Technology and CRH Allied Power Holding Corp. (“APH”) Investment APH Primetek Enterprises Limited (“PEL”) 〃〃 Rayonnant Technology (HK) Co., Ltd. (“Rayonnant Technology (HK)”) 〃 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 Trading Co., Ltd. 〃〃 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	March 31, 2021	Percentage of ownership December 31, 2020 March 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% The liquidation procedures had been completed on December 2020. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (Continued)
	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - 100% 100% 100% 100% 100% 100% 100%

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

Name of investor Name of Subsidiary Nature of Operation CIS 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”) 〃 GLB Rapha Bio Ltd. (“RBL”) Detector and feature Unicore Raycore Biotech Co., Ltd. (“Raycore”) Animal medication retail and wholesale	March 31, 2021	Percentage of ownership December 31, 2020 March 31, 2020 Description 100% 100% 100% 100% 99% 99% 100% 100% 51% 51%
	100% 100% 99% 100% 51%

Note 1: The financial statements of the subsidiary as of March 31, 2021 have not been reviewed by CPA. Note 2: The financial statements of the subsidiary as of March 31, 2020 have not been reviewed by CPA.

(c) Income taxes

Tax expense in the interim financial statements is measured and disclosed according to paragraph B12 of IAS 34 “Interim Financial Reporting”.

Income tax expense for the year is best estimated by multiplying pretax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the effective tax rate at the time of realization or liquidation and recognized directly in equity or other comprehensive income as tax expense.

(d) Employee benefits

Under defined benefit plans, pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

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

The preparation of the consolidated financial statements in conformity with Regulations as well as IFRSs (in accordance with IAS 34 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.

In the preparation of the consolidated interim financial statements, the major sources of significant accounting assumptions, judgments and estimation uncertainty are consistent with note (5) of the annual consolidated financial statements for the year ended December 31, 2020.

(Continued)

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

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference compared with the consolidated financial statements for the year ended December 31, 2020. Please refer to the note (6) of the consolidated financial statements for the year ended December 31, 2020 and for other related information.

(a) Cash and cash equivalents

March 31, 2021 Cash on hand $ 13,131 Checking accounts and demand deposits 26,095,586 Time deposits 58,359,502 Bonds purchased under resale agreements - $ 84,468,219	December 31, 2020 18,637 19,537,842 69,560,444 10,000 89,126,923	March 31, 2020
		14,653 12,231,341 49,785,672 2,215,660
		64,247,326

Please refer to note (6)(z) 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

March 31, 2021 Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Structured deposits $ 4,275,654 Stock unlisted in domestic markets 107,405 Fund in domestic or foreign markets 115,234 Derivative instruments not used for hedging Foreign exchange contracts 222,059 Swap contracts - Total $ 4,720,352 Current $ 4,497,713 Non-current 222,639 $ 4,720,352	December 31, 2020 2,234,184 100,190 101,419 - 11,069 2,446,862 2,245,254 201,608 2,446,862	March 31, 2020
		3,485,186 80,445 89,134 225,628 8,981
		3,889,374
		3,719,795 169,579
		3,889,374

(Continued)

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

March 31, 2021 Financial liabilities held-for-trading: Derivative instruments not used for hedging Foreign exchange contracts $ - Swap contracts 28,142 $ 28,142	December 31, 2020 130,865 5,752 136,617	March 31, 2020
		2,145 6,233
		8,378

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 :

March 31, 2021

		March 31, 2021	2021
Contract amount (in thousand) Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 32,000 Forward exchange purchased USD127,600 Derivative financial liabilities: Swap contracts: Currency swap USD 82,500 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 32,000 USD127,600 USD 82,500	Currency Maturity date EUR to USD April 14~June 29, 2021 USD to BRL May 17~August 26, 2021 USD to TWD April 13~June 18, 2021 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

Contract amount (in thousand) Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 20,000 Forward exchange sold EUR 6,000 Forward exchange purchased USD 518 Forward exchange purchased USD 64,000 Swap contracts: Currency swap USD 64,000 Derivative financial liabilities: Foreign exchange contracts: Forward exchange sold EUR 10,000 Forward exchange purchased USD 1,643 Swap contracts: Currency swap USD 47,000		March 31, 2020	March 31, 2020
		Currency EUR to USD EUR to TWD USD to MXN USD to BRL USD to TWD EUR to USD USD to MXN USD to TWD	Maturity date
			April 10~June 29, 2020 April 14~April 27, 2020 May 28, 2020 April 1~September 23, 2020 April 14~October 14, 2020 April 29~May 28, 2020 June 29, 2020 April 13~June 29, 2020

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

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

March 31, 2021 Equity investments at fair value through other comprehensive income: Stock listed in domestic markets $ 2,112,912 Stock listed in foreign markets 529,584 Stock unlisted in domestic markets 2,257,637 Stock unlisted in foreign markets 200,636 Total $ 5,100,769	December 31, 2020 1,972,849 491,243 2,152,542 200,377 4,817,011	March 31, 2020
		1,564,992 301,935 2,045,027 173,822
		4,085,776

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 fair value through other comprehensive income.

(Continued)

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

During the first quarter of 2021 and 2020, the Group did not sell any of its financial assets measured at fair value through other comprehensive income. During the period, no cumulative profits and losses had been transferred to retained earnings from other comprehensive income.

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 three months ended March 31, 2021 and 2020, will be $255,038 and $204,289, 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)(z).

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

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

March 31, 2021 Cash flow hedge: Financial assets used for hedging: Forward exchange contracts $ 7,557 Financial liabilities used for hedging: Forward exchange contracts $ -	December 31, 2020 - 2,192	March 31, 2020
		73,688
		-

(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 March 31, 2021, December 31 and March 31, 2020, the amounts related to the items designated as hedge instruments were as follows:

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

(Continued)

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

==> picture [433 x 275] intentionally omitted <==

----- Start of picture text -----

December 31, 2020
Contract amount Average
(in thousands) Currency Maturity period strike price
Derivative financial
liabilities used for
hedging
Foreign exchange
contracts:
Forward exchange EUR 6,000 EUR to USD April 29~June 29, 1.2192
sold 2021
March 31, 2020
Contract amount Average
(in thousands) Currency Maturity period strike price
Derivative financial
assets used for
hedging
Foreign exchange
contracts:
Forward exchange EUR 71,000 EUR to USD April 27~December 1.1390
sold 29, 2020
----- End of picture text -----

(iii) For the three months ended March 31, 2021 and 2020, the ineffective portion of cash flow hedge recognized in profits (losses) amounted of $0 and $(1,080), respectively, recorded as “other gains and losses, net”.
(iv) For the three months ended March 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)(y).
(e) Notes and accounts receivable

March 31, 2021 Notes receivables from operating activities $ 24,071 Accounts receivables – measured at amortized cost 186,713,089 Accounts receivables – fair value through other comprehensive income 33,064,916 219,802,076 Less: allowance for uncollectible accounts (3,933,886) $ 215,868,190 Notes and accounts receivable $ 215,797,463 Notes and accounts receivable – related parties $ 70,727	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	March 31, 2020 96,549 125,688,121 32,632,948 158,417,618 (3,925,071) 154,492,547 154,469,155 23,392

(Continued)

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

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:

March 31, 2021

Credit rating	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 198,879,859 0% 10,098,954 0.86% 3,817,340 100% $ 212,796,153 December 31, 2020	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 198,879,859 0% 10,098,954 0.86% 3,817,340 100% $ 212,796,153 December 31, 2020	Lifetime ECLs Credit- impaired - No 87,286 No 3,817,340 Yes 3,904,626
Level A Level B Level C
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 213,584,823 0% 11,779,368 0.57% 3,817,340 100% $ 229,181,531 March 31, 2020		Lifetime ECLs Credit- impaired - No 66,757 No 3,817,340 Yes 3,884,097
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable $ 138,453,261 9,816,549 3,817,340 $ 152,087,150	Weighted- average ECL rate 0% 0.71% 100%	Lifetime ECLs Credit- impaired - No 69,489 No 3,817,340 Yes 3,886,829

(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:

	March 31, 2021	March 31, 2021
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 2,632,376 0% 3,660,773 0.10% 694,186 1.00% - - 18,588 100% $ 7,005,923 December 31, 2020		Lifetime ECLs Credit- impaired - No 3,700 No 6,972 No - - 18,588 Yes 29,260
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 2,705,044 0% 3,772,573 0.10% 443,092 1.00% - - 18,586 100% $ 6,939,295 March 31, 2020		Lifetime ECLs Credit- impaired - No 3,814 No 4,431 No - - 18,586 Yes 26,831
Credit rating Level A Level B Level C Level D~E Level F	Carrying amount of notes and accounts receivable $ 2,380,312 3,416,386 504,050 - 29,720 $ 6,330,468	Weighted- average ECL rate 0% 0.10% 1% - 100%	Lifetime ECLs Credit- impaired - No 3,482 No 5,040 No - - 29,720 Yes 38,242

(Continued)

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

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

March 31, 2021 Overdue 1 to 180 days $ 2,078,211 Overdue 181 to 365 days - Overdue 365 days - $ 2,078,211	December 31, 2020 2,073,442 104,264 - 2,177,706	March 31, 2020
		1,266,648 - 85
		1,266,733

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 March 31	For the three months ended March 31, 2021 2020 $ 3,910,928 3,928,716 23,294 (2,922) (336) (723) $ 3,933,886 3,925,071	For the three months ended March 31, 2021 2020 $ 3,910,928 3,928,716 23,294 (2,922) (336) (723) $ 3,933,886 3,925,071
	2021 $ 3,910,928 23,294 (336) $ 3,933,886
		3,925,071

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 March 31, 2021, December 31 and March 31, 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 32,000 thousand, USD 1,600,000 thousand and EUR 59,700 thousand, USD 1,000,000 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 March 31, 2021, December 31 and March 31, 2020, the factored account receivable with no advance amounting $28,237, $42,550 and $22,579, respectively, is accounted for as other receivables.

(Continued)

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

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 March 31, 2021, December 31 and March 31, 2020, accounts receivable factored were recovered and derecognized since the conditions of derecognition were met.

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

		March 31, 2021	March 31, 2021
Purchaser Financial Institution	Accounts receivable factored (gross) $ 20,522,497	Amount advanced Unpaid Paid - 20,494,260 December	Amount recognized in other receivable 28,237 31, 2020	Collateral -	Amount derecognized Interest rate 20,522,497 0.55%~0.85%
		Unpaid -
Purchaser Financial Institution		Amount advanced Amount recognized in other Unpaid Paid receivable - 42,555,222 42,550 March 31, 2020		Collateral -	Amount derecognized Interest rate 42,597,772 0.58%~0.93%
		Unpaid -
Purchaser Financial Institution		Amount advanced Unpaid Paid - 3,079,121	Amount recognized in other receivable 22,579	Collateral -	Amount derecognized Interest rate 3,101,700 0.64%~1.23%
		Unpaid -

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

(f) Inventories

March 31, 2021 Finished goods $ 20,418,647 Work in progress 9,663,678 Raw materials 59,618,644 Raw materials in transit 1,758,617 $ 91,459,586	December 31, 2020 23,237,892 9,630,864 62,694,104 589,099 96,151,959	March 31, 2020
		18,793,296 8,330,304 59,674,691 1,211,317
		88,009,608

(Continued)

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

(i) For the three months ended March 31, 2021 and 2020, inventory cost recognized as cost of sales amounted to$260,389,951 and $176,101,135, respectively.
(ii) The loss due to the write-down of inventories to net realizable value amounted to $61,392 and $468,791 for the three months ended March 31, 2021 and 2020, respectively.
(iii) As of March 31, 2021, December 31 and March 31, 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:

March 31, 2021 Associates $ 7,991,954 Joint venture (17,075) 7,974,879 Plus: credit balance of investment in equity method (other non-current liability) 43,154 Less: unrealized profits or losses (112,521) $ 7,905,512	December 31, 2020 8,036,165 (17,106) 8,019,059 43,177 (112,311) 7,949,925	March 31, 2020
		7,281,147 (15,667
		7,265,480 42,154 (118,977
		7,188,657

(i) Associates
1) The fair value of the shares of listed company based on the closing price was as follow:

March 31, 2021 Allied Circuit Co., Ltd. (“Allied Circuit”) $ 2,153,013 Avalue Technology Inc. (“Avalue”) 829,778 $ 2,982,791	December 31, 2020 2,075,813 828,286 2,904,099	March 31, 2020
		2,636,513 899,921
		3,536,434

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

The Group’s share of the gain (loss) of associates	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 39,968	2020
		80,752

(Continued)

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

3) The Group’s financial information for investments accounted for using the equity method that are individually immaterial was as follows:

		March 31,	December 31,	December 31,	March 31,
		2021		2020	2020
Carrying amount of individually
immaterial associates	$	7,991,954		8,036,165	7,281,147
			For	the three months ended
				March	31,
				2021	2020
The Group’s share of the net income	(loss)	of associates:
Profit (loss) from continuing operations			$	39,968	80,752
Other comprehensive income				(40,272)	(146,256)
Total comprehensive income			$	(304)	(65,504)

4) For the three months ended March 31, 2020, the Group had sold parts of its shares held in Avalue, with a consideration (net of costs of disposal) amounting to $8,306. The transaction has been completed and the price has been fully received, wherein the Group recognized a gain of $3,914, 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:

March 31, 2021 The carrying amount of the Group’s interests in all individually insignificant joint ventures $ (17,075)	December 31, 2020 (17,106)	March 31, 2020 (15,667)

(Continued)

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

	For the three months ended	For the three months ended	For the three months ended
	March 31,
	2021		2020
The Group’s share of the net income (loss) of joint ventures:
Losses from continuing operations (also the total
comprehensive losses)	$	(42)	(1,581)

(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 March 31, 2021, December 31 and March 31, 2020, the Group did not provide any investments accounted for using equity method as collaterals for its loans.
(h) Changes in subsidiaries’ equity

Except for the following disclosures, there were no significant transactions for the three months ended March 31, 2021 and 2020. Please refer to note (6)(h) of the consolidated financial statement for the year ended December 31, 2020.

(i) Issuance of new shares for cash of subsidiaries

The Group purchased newly issued shares of Hippo Screen amounting to $70,000 in January 2021, resulting in an increase in the ownership of the Group in Hippo Screen by 21%.

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

Carrying amount of additional interest purchased Consideration paid Retained Earnings – changes in ownership interest in subsidiaries	2021 $ 64,735 (70,000) $ (5,265)

(i) Material non-controlling interests of subsidiaries

There were no significant transactions for the three months ended March 31, 2021 and 2020. Please refer to note (6)(j) of the consolidated financial statement for the year ended December 31, 2020.

(Continued)

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

(j) Property, plant and equipment

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

Cost: Balance on January 1, 2021 Additions Disposals and derecognitions Reclassifications Effect of movements in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Additions Disposals and derecognitions Reclassifications Effect of movements in exchange rates Balance on March 31, 2020 Depreciation and impairments loss: Balance on January 1, 2021 Depreciation for the period Disposals and derecognitions Effect of movements in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Depreciation for the period Disposals and derecognitions Effect of movements in exchange rates Balance on March 31, 2020 Carrying amounts: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
	$ 1,944,094 - - - 26 $ 1,944,120 $ 1,705,220 - - 222,769 1 $ 1,927,990 $ - - - - $ - $ - - - - $ - $ 1,944,094 $ 1,944,120 $ 1,705,220 $ 1,927,990	18,519,873 45,031 (3,050) 13,391 27,211 18,602,456 16,966,779 29,619 (4,920) 1,099 85,989 17,078,566 10,855,109 248,307 (3,050) 15,261 11,115,627 10,352,434 217,833 (4,920) (6,547) 10,558,800 7,664,764 7,486,829 6,614,345 6,519,766	28,498,191 538,489 (69,848) 467,484 (201,975) 29,232,341 27,044,641 451,933 (226,774) 175,513 142,769 27,588,082 20,571,645 629,908 (68,131) (283,064) 20,850,358 19,850,259 603,409 (181,925) 16,609 20,288,352 7,926,546 8,381,983 7,194,382 7,299,730	11,885,697 632,657 (243,789) 83,002 (77,242) 12,280,325 11,289,433 212,250 (369,942) 69,550 (17,471) 11,183,820 8,556,546 446,501 (242,964) (5,519) 8,754,564 8,141,591 363,146 (368,974) 125,679 8,261,442 3,329,151 3,525,761 3,147,842 2,922,378	1,220,785 1,532,810 - (563,877) 10,608 2,200,326 1,310,558 388,930 - (468,931) 34,360 1,264,917 - - - - - - - - - - 1,220,785 2,200,326 1,310,558 1,264,917	62,068,640 2,748,987 (316,687) - (241,372) 64,259,568 58,316,631 1,082,732 (601,636) - 245,648 59,043,375 39,983,300 1,324,716 (314,145) (273,322) 40,720,549 38,344,284 1,184,388 (555,819) 135,741 39,108,594 22,085,340 23,539,019 19,972,347 19,934,781

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

(Continued)

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

(k) 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 March 31, 2021 Balance on January 1, 2020 Additions Deductions Effect of movements in exchange rates Balance on March 31, 2020 Depreciation and impairment loss: Balance on January 1, 2021 Depreciation for the period Deductions Effect of movements in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Depreciation for the period Deductions Effect of movements in exchange rates Balance on March 31, 2020 Carrying amount: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Land $ 1,268,129 - - (9,594) $ 1,258,535 $ 1,110,813 323,472 - 10,229 $ 1,444,514 $ 54,756 6,583 - (8,997) $ 52,342 $ 31,587 22,672 - 345 $ 54,604 $ 1,213,373 $ 1,206,193 $ 1,079,226 $ 1,389,910	Buildings 3,378,467 321,243 (1,399) (15,641) 3,682,670 2,809,991 127,980 (14,127) (25,915) 2,897,929 1,175,689 199,703 - (5,958) 1,369,434 659,467 205,845 (6,215) (8,475) 850,622 2,202,778 2,313,236 2,150,524 2,047,307	Machinery 76,930 - - (231) 76,699 86,661 - (9,115) (984) 76,562 24,749 3,096 - (109) 27,736 22,270 3,107 (9,803) (267) 15,307 52,181 48,963 64,391 61,255	Vehicles and Other 74,969 7,572 (2,278) (202) 80,061 88,712 2,819 (767) (754) 90,010 46,349 5,536 (2,278) (142) 49,465 32,681 9,499 (73) (307) 41,800 28,620 30,596 56,031 48,210	Total 4,798,495 328,815 (3,677) (25,668) 5,097,965 4,096,177 454,271 (24,009) (17,424) 4,509,015 1,301,543 214,918 (2,278) (15,206) 1,498,977 746,005 241,123 (16,091) (8,704) 962,333 3,496,952 3,598,988 3,350,172 3,546,682

(l) Short-term borrowings

The details of short-term borrowings were as follows:

March 31, 2021 Unsecured bank loans $ 86,015,621 Unused credit line for short-term borrowings $ 107,187,000 Range of interest rates 0.39%~3.08%	December 31, 2020 92,838,733 95,910,000 0.25%~2.58%	March 31, 2020
		43,900,240
		137,051,000
		0.66%~5.00%

(Continued)

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

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

(m) Long-term borrowings

The details of long-term borrowings were as follows:

March 31, 2021 Unsecured bank loans $ 18,219,100 Secured bank loans 709,619 Less: current portion (8,596,275) Total $ 10,332,444 Unused credit line for long-term borrowings $ 16,306,000 Range of interest rates 0.54%~1.50%	December 31, 2020 19,105,440 228,913 (8,932,615) 10,401,738 15,327,000 0.66%~1.50%	March 31, 2020 21,300,000 286,794 (13,877,175) 7,709,619 16,363,000 0.79%~1.67%

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

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

(n) 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:

March 31, 2021 Total convertible corporate bonds issued $ 1,000,000 Unamortized discounts on corporate bonds payable (15,288) Unamortized issuance costs on corporate bonds payable (1,035) Accumulated converted amount (4,131) Balance of bonds payable of the reporting date$ 979,546 Conversion options included in equity components (classified as capital surplus and non-controlling interests) $ 48,463 Interest expenses	December 31, 2020 March 31, 2020 1,000,000 1,000,000 (18,527) (28,187) (1,254) (1,908) - - 980,219 969,905 48,667 48,667 For the three months ended March 31,	December 31, 2020 March 31, 2020 1,000,000 1,000,000 (18,527) (28,187) (1,254) (1,908) - - 980,219 969,905 48,667 48,667 For the three months ended March 31,
	2021 $ 3,457	2020 3,413

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

(Continued)

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

(ii) As of March 31, 2021, the convertible corporate bonds were converted into ordinary shares of Arcadyan for $479 with a par value of $4,200, and the capital surplus were recognized for $3,856 (including the stock option conversion premium of $204 and the unamortized discounts on corporate bonds payable of $69).
(iii) There were no significant issues, repurchases and repayments of bonds payable for the three months ended March 31, 2021 and 2020. For related information, please refer to Note (6)(o) of the annual consolidated financial statements for the year ended December 31, 2020.
(o) Lease liabilities

The details of leases liabilities were as follows:

March 31, 2021 Current $ 713,567 Non-current $ 1,695,821	December 31, 2020 377,161 1,910,601	March 31, 2020
		458,232
		1,705,134

For the maturity analysis, please refer to note (6)(z).

The amounts recognized in profit or loss were as follows:

The amounts recognized in profit or loss were as follows:
	For	the three months ended
		March 31,
		2021	2020
Interest on lease liabilities	$	11,669	11,565
Variable lease payments not included in the measurement of lease
liabilities	$	587	592
Expenses relating to leases of low-value assets or short-term
leases	$	36,227	24,292

The amounts recognized in the consolidated statement of cash flows for the Group were as follows:

	For the three months ended	For the three months ended
	March 31,
	2021	2020
Total cash outflow for leases	$ 254,273	263,046

(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.

(Continued)

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

(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.

(p) Provisions

There is no significant changes of provisions for the three months ended March 31, 2021 and 2020. Please refer to note (6)(q) of the consolidated financial statements for the year ended December 31, 2020 for related information.

(q) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019.

The expenses recognized in profit or loss for the Group were as follows:

	For the three months ended	For the three months ended
	March 31,
	2021	2020
Operating cost	$ 254	247
Selling expenses	159	175
Administrative expenses	561	778
Research and development expenses	1,507	2,076
Total	$ 2,481	3,276

(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 $118,846 and $109,345 for the three months ended March 31, 2021 and 2020, respectively. Payment was made to the Bureau of Labor Insurance.

(Continued)

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

Other subsidiaries recognized the pension expenses, basic endowment insurance expenses, and social welfare expenses amounting to $249,826 and $249,726 for the three months ended March 31, 2021 and 2020, respectively.

(r) Income taxes

(i) The Group entities are subject to income tax rates according to the profit before tax of interim reporting period multiply by the best estimated measurement of the expected effective tax rate by the management in all the year. The amounts of income tax were as follows:

	For the three months ended	For the three months ended
	March 31,
	2021	2020
Current tax expense	$ 760,006	317,358

(ii) The amounts of income tax recognized in other comprehensive income were as follows:

	For	the three months ended	the three months ended	the three months ended
			March 31,
		2021		2020
Items that will not be reclassified subsequently to profit or
loss:
Unrealized gains (losses) on equity instruments at fair value
through other comprehensive income	$	18,381		(54,963)
Items that will be reclassified subsequently to profit or
loss:
Foreign currency translation differences of foreign
operations	$		(77)	1,842

(iii) Examination and approval

The Company’s tax returns for the year through 2018 were assessed by the Taipei National Tax Administration.

The ROC tax authorities have assessed the income tax returns of Rayonnant Technology, Palcom, Panpal, Gempal, Hong Ji, Hong Jin, Unicore, Raycore, Hippo Screen, Ripal, Zhi-Bao, Acbel Telecom, Shennona TW, Aco Smartcare through 2019, of UCGI, CBN, Arcadyan, HengHao, Mactech, GLB, RBI through 2018, and of TTI through 2017.

(s)

Capital and other equities

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to March 31, 2021 and 2020. Please refer to note (6)(t) of the consolidated financial statements for the year ended December 31, 2020.

(Continued)

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

(i) Capital surplus

The balances of capital surplus were as follows:

The balances of capital surplus were as follows:
March 31, 2021 Additional paid-in capital $ 3,660,173 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 61,702 Changes in equity of associates and joint ventures accounted for using equity method 281,701 $ 6,662,275	December 31, 2020 5,422,060 2,541,906 36,766 60,850 281,231 8,342,813	March 31, 2020
		5,421,061 2,541,906 36,766 60,089 279,177
		8,338,999

The Company’s Board of Directors meeting held on March 30, 2020, approved to distribute the cash dividend of $881,429 (representing 0.2 New Taiwan Dollars per share), by using the additional paid-in capital. The Company’ s Board of Directors meeting held on March 26, 2021, approved to distribute the cash dividend of $1,762,859 (representing 0.4 New Taiwan Dollars per share), by using the additional paid-in capital. The related information can be accessed through the Market Observation Post System website.

(ii) Retained earnings

Based on the Company’s articles of incorporation, 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.

(Continued)

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

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.

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

Cash dividends distributed to common shareholders	2020 Amount per share Total amount $ 1.2 5,288,576	2019	2019
	Amount per share $ 1.2	Amount per share 1.0	Total amount
			4,407,147

(iii) Treasury stock

The subsidiaries of the Company did not sell the ordinary shares of the Company in the three months ended March 31, 2021 and 2020. As of March 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 26.70, 20.70 and 17.30 New Taiwan dollars per share as of March 31, 2021, December 31 and March 31, 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

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

Balance on January 1, 2021 The Group Associates Balance on March 31, 2021 Balance on January 1, 2020 The Group Associates Balance on March 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) 264,647 (6,814) (119,119) (306,763) (805,837) (88,162) (1,200,762)	Others (779) 3,399 - 2,620 (1,706) 23,982 - 22,276	Total
	$ (6,888,977) 84,149 (33,061) $ (6,837,889) $ (3,794,980) 374,528 (58,268) $ (3,478,720)			(7,266,708 352,195 (39,875
				(6,954,388
				(4,103,449 (407,327 (146,430
				(4,657,206

(t) Share-based payment

There were no significant changes in share-based payment during the three months ended March 31, 2021 and 2020. Please refer to note (6)(u) of the consolidated financial statements for the year ended December 31, 2020 for related information.

(u) Earnings per share

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

Basic earnings per share: Profit attributable to ordinary shareholders of the Company Weighted-average number of outstanding ordinary shares (in thousands) 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)	For the three months ended March 31,	For the three months ended March 31,
	2021 2,620,164 4,357,130 2,620,164 4,357,130 49,499 4,406,629	2020
		605,011
		4,357,130
		605,011
		4,357,130 45,676
		4,402,806

(Continued)

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

(v) Revenue from contracts with customers
(i) Disaggregation of revenue

For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021
IT Product Segment Strategically Integrated Product Segment Total $ 98,768,902 2,043,454 100,812,356 31,620,674 89,282 31,709,956 20,418,180 418,777 20,836,957 13,698,134 1,878,537 15,576,671 95,860,828 5,194,765 101,055,593 $ 260,366,718 9,624,815 269,991,533 $ 259,834,923 9,448,299 269,283,222 531,795 176,516 708,311 $ 260,366,718 9,624,815 269,991,533 For the three months ended March 31, 2020		Total
		100,812,356 31,709,956 20,836,957 15,576,671 101,055,593
		269,991,533
		269,283,222 708,311
		269,991,533
	Strategically Integrated Product Segment 1,749,643 68,913 177,074 787,028 4,360,357 7,143,015 7,053,623 89,392 7,143,015	Total
		66,055,086 26,621,858 21,635,563 8,080,398 59,654,141
		182,047,046
		181,384,165 662,881
		182,047,046

(Continued)

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

(ii) Contract balances

March 31, 2021 Notes and accounts receivable (including related parties) $ 219,802,076 Less: allowance for impairment (3,933,886) Total $ 215,868,190 Contract liabilities $ 873,397	December 31, 2020 236,120,826 (3,910,928) 232,209,898 820,016	March 31, 2020 158,417,618 (3,925,071) 154,492,547 705,049

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

The amount of revenue recognized for the three months ended March 31, 2021 and 2020 that were included in the balance of contract liability at the beginning of the period was $206,685 and $365,605, 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.

(w) 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.

The Company accrued and recognized its employee compensation of $282,588 and $70,890, and directors’ compensation of $14,943 and $3,787 for the three months ended March 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.

(Continued)

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

The Company accrued and recognized its employee compensation of $974,694 and $731,322, and directors’ compensation of $51,541 and $38,672 for the years ended December 31, 2020 and 2019, respectively. There is no differences between the amount approved in the Board of Directors’ meeting and those recognized in the financial statements, the related information can be accessed through the Market Observation Post System website.

(x) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

The details of interest income were as follows:
	For	the three months ended
		March 31
		2021	2020
Interest income from bank deposits	$	499,470	479,202
Other interest income		34	41
Total Interest income	$	499,504	479,243

(ii) Other income

The other incomes for the three months ended March 31, 2021 and 2020, were as follows:

	For	the three months ended	the three months ended
		March 31,
		2021	2020
Dividend revenue	$	8,199	-
Other revenue		79,445	68,041
	$	87,644	68,041

(iii) Other gains and losses

The other gains and losses for the three months ended March 31, 2021 and 2020, were as follows:

follows:
	For	the three months ended
		March 31,
		2021	2020
Gains on disposal of investments	$	-	4,899
Gains (losses) on financial assets and liabilities at fair value
through profit or loss, net		409,707	477,009
Foreign currency exchange losses, net		(350,249)	(536,969)
Gains (losses) on disposal of property, plant, and equipment,
net		1,843	1,088
	$	61,301	(53,973)

(Continued)

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

(y) Reclassification of the components of other comprehensive income

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

	For	the three months ended	the three months ended
		March 31,
		2021	2020
Cash flow hedge:
Gains (losses) from current period	$	11,975	102,544
Less: reclassification of gains and losses included in profit or loss		2,226	23,985
Profit (loss) recognized in other comprehensive income	$	9,749	78,559

(z) Financial instruments

Except for those described below, there were no significant changes on fair value, credit risk, liquidity risk and market risk of financial instruments. Please refer to note (6)(aa) of the consolidated financial statements for the year ended December 31, 2020 for related information.

(i) Credit risk

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, investments in corporate bonds 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, 2020. 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 three months ended March 31, 2021 and 2020 were as follows:

		Other
		receivables
Balance on January 1, 2021	$	2,392
Impairment losses recognized (reversed)		112
Balance on March 31, 2021	$	2,504
Balance on January 1, 2020	$	1,012
Impairment losses recognized (reversed)		1,198
Balance on March 31, 2020	$	2,210

(Continued)

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

(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 March 31, 2021 Non-derivative financial liabilities Secured borrowings $ 709,619 Unsecured borrowings 104,234,721 Lease liabilities－current and non-current 2,409,388 Notes and accounts payable 181,793,784 Other payables and dividends payable 31,461,640 Bonds payable 979,546 Derivative financial liabilities Currency swap contracts: 28,142 Outflow Inflow $ 321,616,840 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 and dividends payable 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 (709,619) (104,234,721) (2,514,107) (181,793,784) (31,461,640) (995,800) (2,352,075) 2,325,080 (321,736,666) (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) (94,534,721) (751,788) (181,793,784) (31,461,640) - (2,352,075) 2,325,080 (308,646,103) (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 (47,644) (5,900,000) (552,698) - - (995,800) - - (7,496,142) (77,175) (5,125,000) (562,952) - - (1,000,000) - - - - - - (6,765,127)	Over 2 years (584,800) (3,800,000) (1,209,621) - - - - - (5,594,421) (74,563) (5,125,000) (1,352,885) - - - - - - - - - (6,552,448)

(Continued)

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

Carrying Amount March 31, 2020 Non-derivative financial liabilities Secured borrowings $ 286,794 Unsecured borrowings 65,200,240 Lease liabilities－current and non-current 2,163,366 Notes and accounts payable 142,195,045 Other payables and dividends payable 23,486,721 Bonds payable 969,905 Derivative financial liabilities Forward exchange contracts: 2,145 Outflow Inflow Forward exchange contracts used for hedging: 6,233 Outflow Inflow $ 234,310,449	Contractual cash flows (286,794) (65,200,240) (2,267,193) (142,195,045) (23,486,721) (1,000,000) (385,672) 380,576 (1,419,635) 1,410,764 (234,449,960)	Within 1 year (77,175) (57,700,240) (492,067) (142,195,045) (23,486,721) - (385,672) 380,576 (1,419,635) 1,410,764 (223,965,215)	1~ 2 years (77,175) (2,100,000) (420,928) - - - - - - - (2,598,103)	Over 2 years (132,444) (5,400,000) (1,354,198) - - (1,000,000) - - - - (7,886,642)

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	M	arch 31, 2021			De	cember 31, 20	20	M Foreign currency 8,281,252 7,188 71,048 2,498,135 325,712 7,915,990 3,165 103,836 17,974 2,550,125	arch 31, 2020
	Foreign currency $ 12,373,071 16,822 68,127 3,524,096 579,414 12,323,409 2,465 134,667 5,424 2,871,966	Exchange rate 28.535 6.5546 33.48 0.1526 0.9140 28.535 6.5546 5.6973 33.48 0.1526	TWD		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	Exchange rate 28.48 6.5386 35.02 0.1529 0.9502 28.48 6.5386 5.1967 35.02 0.1529	TWD		Exchange rate TWD 30.225 250,300,842 7.0937 217,257 33.24 2,361,636 0.1410 10,646,364 0.9270 301,935 30.225 239,260,798 7.0937 95,662 5.1987 3,138,443 33.24 597,456 0.1410 10,867,931
			353,065,581 480,016 2,280,892 15,345,468 529,584 351,648,476 70,339 3,842,723 181,596 12,505,807				396,622,135 381,091 2,124,909 15,877,352 491,243 400,316,162 89,199 3,744,750 441,812 13,716,669

(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 March 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.

	March	31, 2021	March 31, 2020
USD (against the TWD)
Strengthening 5%	$	70,855	552,007
Weakening 5%		(70,855)	(552,007)
USD (against the CNY)
Strengthening 5%		20,484	6,080
Weakening 5%		(20,484)	(6,080)
USD (against the BRL)
Strengthening 5%		(192,136)	(156,922)
Weakening 5%		192,136	156,922
EUR (against the TWD)
Strengthening 5%		104,965	88,209
Weakening 5%		(104,965)	(88,209)
CNY (against the USD)
Strengthening 5%		141,983	(11,078)
Weakening 5%		(141,983)	11,078

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 three months ended March 31, 2021 and 2020, the foreign exchange gains (losses), including both realized and unrealized, amounted to $350,249 and $536,969, 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 three months ended March 31, 2021 and 2020, which would be mainly resulted from the bank savings and borrowings with variable interest rates.

		For	the three months ended	the three months ended
			March 31,
			2021	2020
Interest increased by	0.25%	$	9,821	(5,427)
Interest decreased by	0.25%		(9,821)	5,427

(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.

		March 31, 2021	March 31, 2021	March 31, 2021
Book value			Fair Value
		Level 1 - -	Level 2 222,059 4,275,654	Level 3 Total - 222,059 222,639 4,498,293
	4,720,352

(Continued)

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

		March 31, 2021	March 31, 2021	March 31, 2021
	Book value		Fair Value
		Level 1 - 2,112,912 529,584 - - - - - - - - - - - - - - - - - -	Level 2 7,557 - - - - 33,064,916 - - - - - 28,142 - - - - - - - - -	Level 3 Total - 7,557 - 2,112,912 - 529,584 2,257,637 2,257,637 200,636 200,636 - 33,064,916 - - - - - - - - - - - 28,142 - - - - - - - - - - - - - - - - - -
7,557 2,112,912 529,584 2,257,637 200,636 33,064,916 38,165,685 84,468,219 182,732,547 70,727 1,856,374 603,132 269,730,999 $ 312,624,593 $ 28,142 86,015,621 179,103,834 2,689,950 31,461,640 979,546 2,409,388 8,596,275 10,332,444 390,060 321,978,758 $ 322,006,900	7,557
	2,112,912 529,584 2,257,637 200,636 33,064,916
	38,165,685
	84,468,219 182,732,547 70,727 1,856,374 603,132
	269,730,999

(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 Refundable deposits 522,213 Subtotal 285,057,737 Total $ 330,751,564 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 and dividends payable 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

Book value Financial assets at fair value through profit or loss–current and non-current Derivative financial assets for non-hedging $ 234,609 Non-derivative financial assets mandatorily measured at fair value through profit or loss 3,654,765 Subtotal 3,889,374 Derivative financial assets for hedging 73,688 Financial assets at fair value through other comprehensive income Stocks listed on domestic markets 1,564,992 Stocks listed on foreign markets 301,935 Stocks unlisted on domestic markets 2,045,027 Stocks unlisted on foreign markets 173,822 Accounts receivable 32,632,948 Subtotal 36,718,724 Financial assets measured at amortized cost Cash and cash equivalents 64,247,326 Notes and accounts receivable, net 121,836,207 Notes and accounts receivable due from related parties, net 23,392 Other receivables 1,846,080 Refundable deposits 317,269 Subtotal 188,270,274 Total $ 228,952,060 Financial liabilities at fair value through profit or loss Derivative financial liabilities for non- hedging $ 8,378 Financial liabilities measured at amortized cost Short-term borrowings 43,900,240 Notes and accounts payable 140,553,785 Notes and accounts payable to related parties 1,641,260 Other payables and dividends payable 23,486,721 Bonds payable 969,905 Lease liabilities－current and non-current 2,163,366 Long-term borrowings current portion 13,877,175 Long-term borrowings 7,709,619 Deposits received 158,725 Subtotal 234,460,796 Total $ 234,469,174			March 31, 2020	March 31, 2020	March 31, 2020
	Book value			Fair Value
			Level 1 - - - 1,564,992 301,935 - - - - - - - - - - - - - - - - - -	Level 2 234,609 3,485,186 73,688 - - - - 32,632,948 - - - - - 8,378 - - - - - - - - -	Level 3 Total - 234,609 169,579 3,654,765 - 73,688 - 1,564,992 - 301,935 2,045,027 2,045,027 173,822 173,822 - 32,632,948 - - - - - - - - - - - 8,378 - - - - - - - - - - - - - - - - - -

(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 three months ended March 31, 2021 and 2020.

5) Changes in level 3

The change in level 3 at fair value in the three months ended March 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 Effect of changes in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Effect of changes in exchange rates Balance on March 31, 2020	Financial assets at fair value through profit or loss $ 201,609 6,180 - 14,850 - $ 222,639 $ 115,359 (5,780) - 60,000 - $ 169,579	Financial assets at fair value through other comprehensive income 2,352,919 - 105,110 - 244 2,458,273 2,424,053 - (223,742) 17,434 1,104 2,218,849	Total 2,554,528 6,180 105,110 14,850 244 2,680,912 2,539,412 (5,780) (223,742) 77,434 1,104 2,388,428

For the three months ended March 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:

	For	the three months ended	the three months ended
		March 31,
		2021	2020
Total gains and losses recognized:
In profit or loss before tax (as “other gains and
losses”)	$	6,180	(5,780)
In other comprehensive income (as “unrealized gains
and losses from equity instruments at fair value
through other comprehensive income”)	$	105,110	(223,742)

(Continued)

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

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 Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	Valuation technique Comparable market approach (Price-Book ratio method and Earnings multiplier method) Net asset value method Net asset value method	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value Price-Book ratio multiples (1.62~8.15, 1.72~7.9 and 1.18~5.98, respectively, on March 31, 2021, December 31 and March 31, 2020) The higher the multiple is, the higher the fair value will be. Multiples of earnings (3.08~14.69, 14.68 and 2.86~16.85, respectively, on March 31, 2021, December 31 and March 31, 2020) The higher the multiple is, the higher the fair value will be. Lack-of-Marketability discount rate (35%~85%, on March 31, 2021, December 31 and March 31, 2020) The higher the Lack- of-Marketability discount rate is, the lower the fair value will be. Net asset value Inapplicable Net asset value Inapplicable

(Continued)

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

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:

March 31, 2021 Financial assets at fair value through other comprehensive income December 31, 2020 Financial assets at fair value through other comprehensive income March 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 Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate	Move up or down 5% $ 5% $ 5% $ 5% $ 5% $ 5% $ 5% $ 5% $ 5% $	Other comprehensive income	Other comprehensive income
			Favorable change 38,088 5,743 6,439 36,119 5,734 3,942 22,234 17,536 13,992	Unfavorable change 37,892 6,018 6,518 35,448 5,801 3,942 22,337 18,492 14,065

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.

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.

(Continued)

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

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

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

March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -	March 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) Other current assets $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - - March 31, 2021 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 290,010,034 (USD 10,163,474 ) 290,010,034 (USD 10,163,474 ) - - - -
Other current assets	Gross amounts of recognized financial assets (a) $ 290,010,034 (USD 10,163,474 )		Gross amounts of financial liabilities offset Net amount of financial assets presented in in the balance sheet (b) the balance sheet (c)=(a)-(b) 290,010,034 (USD 10,163,474 ) - March 31, 2021		Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
					Financial instruments -
	$ (USD
			(USD
Financial liabilities that are offset			which have an exercisable master netting arrangement
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 290,010,034 (USD 10,163,474 )		Gross amounts of financial assets offset in the balance sheet (b) 290,010,034 (USD 10,163,474 )	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) Other current assets $ 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) Other current assets $ 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) Other current assets $ 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) Other current assets $ 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) Other current assets $ 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) Other current assets $ 199,267,863 (USD 6,996,765 ) 199,267,863 (USD 6,996,765 ) - - - -
Other current assets	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

March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -	March 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) Other current assets $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - - March 31, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 160,776,629 (USD 5,319,326 ) 160,776,629 (USD 5,319,326 ) - - - -
Other current assets	Gross amounts of recognized financial assets (a) $ 160,776,629 (USD 5,319,326 )		Gross amounts of financial liabilities offset Net amount of financial assets presented in in the balance sheet (b) the balance sheet (c)=(a)-(b) 160,776,629 (USD 5,319,326 ) - March 31, 2020		Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
					Financial instruments -
	$ (USD
			(USD
Financial liabilities that are offset			which have an exercisable master netting arrangement
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 160,776,629 (USD 5,319,326 )		Gross amounts of financial assets offset in the balance sheet (b) 160,776,629 (USD 5,319,326 )	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

(aa) Financial risk management

The Group’ s objectives and policies for managing the financial risk are consistent with those disclosed in the note (6)(ab) of the consolidated financial statements for the year ended December 31, 2020.

(ab) Capital management

The Group’ s objectives, policies and processes of capital management are the same as those disclosed in the consolidated financial statements for the year ended December 31, 2020. There were no significant changes of quantitative data of capital management compared to the consolidated financial statements for the year ended December 31, 2020. Please refer to note (6)(ac) of the consolidated financial statements for the year ended December 31, 2020.

(ac) 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 three months ended March 31, 2021 and 2020 were acquisition of right-of-use assets by leasing, please refer to note (6)(k).

(Continued)

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

Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Proceeds from issuance of convertible bonds Long-term borrowings Lease liabilities Guarantee deposits and others Total liabilities from financing activities Short-term borrowings Proceeds from issuance of convertible bonds Long-term borrowings Lease liabilities Guarantee deposits 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 January 1, 2020 $ 60,951,844 966,492 25,748,438 2,267,088 246,038 $ 90,179,900	Cash flow (6,823,112) - (405,634) (205,790) 104,828 (7,329,708) Cash flow (17,051,604) - (4,161,644) (226,597) (30,262) (21,470,107)	Other non-cash changes - (673) - 327,416 (23) 326,720 Other non-cash changes - 3,413 - 122,875 434 126,722	March 31, 2021 86,015,621 979,546 18,928,719 2,409,388 444,936
				108,778,210
				March 31, 2020 43,900,240 969,905 21,586,794 2,163,366 216,210
				68,836,515

(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
Kinpo Group Management Consultant Company	An associate
(“Kinpo Group Management”)
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

(Continued)

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

Name of related party	Relationship with the Group
Compal Connector Manufacture Ltd. (“CCM”)	A joint venture company
Acbel Polytech Inc. (“Acbel”) and its subsidiaries	The same Chairman of the Board with the
	Company
Cal-Comp Electronics & Communications Company	The same Chairman of the Board with the
Limited	Company

(b) Transactions with key management personnel

Key management personnel remunerations comprised:

	For	the three months ended	the three months ended
		March 31,
		2021	2020
Short-term employee benefits	$	177,981	135,052
Post-employment benefits		2,005	2,106
Share-based payments		1,443	7,569
	$	181,429	144,727

There are no termination benefits and other long-term benefits. Please refer to note (6)(t) 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:

	For the three months ended	For the three months ended
	March 31,
	2021	2020
Associates	44,356	50,831
Other related parties	31,480	19
	$ 75,836	50,850

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

(Continued)

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

(ii) Purchase of goods from related parties

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

	For	the three months ended	the three months ended
		March 31,
		2021	2020
Associates	$	1,211,455	762,802
Other related parties		934,046	423,233
	$	2,145,501	1,186,035

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.

(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 March 31, 2021 Associates $ 25,496 Other related parties 45,231 Other related parties 65 Associates 846 $ 71,638	December 31, 2020 29,643 349,291 64 908 379,906	March 31, 2020
Notes and accounts receivable Notes and accounts receivable Other receivables Other receivables			23,392 - 62 -
			23,454

(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 Notes and accounts payable Notes and accounts payable Other payables	Related party categories March 31, 2021 Associates $ 1,384,692 Other related parties 1,305,258 Associates 142 $ 2,690,092	December 31, 2020	March 31, 2020 917,189 724,071 - 1,641,260
		1,632,862 1,255,762 600 2,889,224

(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 March 31, 2021 Bail for court mandatory execution $ 41,090 Long-term borrowings (including current portion) 481,515 Guarantee of post-release duty payment to the customs and guarantee of the customs 500 $ 523,105	March 31, 2021	December 31, 2020 41,090 486,581 500 528,171	March 31, 2020
Other current assets Property, plant and equipment Other non-current assets				41,090 501,505 500
				543,095

(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. After accepting the case, the Taipei District Court declared that the judgement whether the Group violates the Trade Secret Law should depend on whether the employee actually had violated the Trade Secret Law and Copyright Law. Therefore, the case is determined to be paused until the judgements of the criminal cases of the employee are made at the beginning of the year. 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 March 31, 2021, December 31 and March 31, 2020, the Group’ s signed commitments to purchase property, plant and equipment amounted to $331,973, $473,370 and $322,301, respectively.

(10) Losses due to major disasters: None

(11) Subsequent events:

－
(a) To activate its assets, CDE signed an agreement regarding the disposal of the right-of-use assets land and building on May 7, 2021, with a non-related party, Kunshan Xingcheng Construction and －
Development Co., Ltd. CDE will sell the right-of-use assets land and building located in Bacheng Town, Kunshan City with a total amount of RMB 956,012 thousands, and the estimated gain on disposal would be amounting to RMB 465,692 thousands. The related information can be accessed through the Market Observation Post System website.

(Continued)

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

(b) For the demand of business development, the chairman of Arcadyan was authorized to purchase land with a price not exceeding $500,000 by a resolution of the Board of Directors on March 17, 2021. In addition, Arcadyan had signed an agreement with a non-related party on April 7, 2021 to purchase a land located in Guangfu Section of Hsinchu City, amounting to $415,480. The related information can be accessed through the Market Observation Post System website.

(12) Other:

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

By function By item	Three months ended March 31, 2021	Three months ended March 31, 2021	Three months ended March 31, 2021	Three months ended March 31, 2020	Three months ended March 31, 2020	Three months ended March 31, 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	4,088,426 238,202 232,351 562,230 1,241,959 11,598	3,289,601 235,101 138,802 146,956 297,675 123,411	7,378,027 473,303 371,153 709,186 1,539,634 135,009	3,617,095 210,013 235,044 687,225 1,176,248 9,741	2,865,141 213,433 127,303 161,365 249,263 96,613	6,482,236 423,446 362,347 848,590 1,425,511 106,354

(b) Seasonality of operations

The Group’s operations were not affected by seasonality or cyclicality factors.

(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 three months ended March 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 March 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: None

(Continued)

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

(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(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 5
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 6
(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 7
(b) Information on investees: Please refer to Table 8
(c) Information on investment in mainland China: Please refer to Table 9
(d) Major shareholders: There were no shareholders holding more than 5% shares.

(14) Segment information:

Three months ended March 31, 2021	Three months ended March 31, 2021	Three months ended March 31, 2021	Three months ended March 31, 2021
Information technology product segment			Total
			269,991,533
			3,668,641
	Information technology product segment	Strategically integrated product segment 7,143,015 456,159	Total
$ 174,904,031 $ 632,501			182,047,046
			1,088,660

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Table 1 Loans to other parties:

(March 31, 2021)

Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 31, 2021)	Table 1 Loans to other parties: (March 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 1 2 2 3 3 3 4 4 5 6 7 8 8 8 8 8 9 10	The Company The Company The Company CIH CPC CPC CIT CIT CIT CPO CPO CET CIC Panpal Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan Holding SVA	UCGI HengHao CEB CEP CDE CIC CCI Nanjing Rayonnant (Taicang) HengHao Kunshan HengHao Kunshan CIT BT HengHao Kunshan HengHao Acradyan Brasil Arcadyan UK Arcadyan Vietnam Arcadyan Vietnam Arcadyan Russia 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	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y	250,000 200,000 1,426,750 57,070 1,315,200 438,400 1,997,450 137,098 856,050 998,725 657,600 523,680 570,700 600,000 57,020 285,100 285,100 255,510 57,020 484,670 153,440	250,000 200,000 1,426,750 57,070 1,303,200 434,400 1,997,450 71,338 856,050 998,725 651,600 521,280 570,700 600,000 57,020 285,100 285,100 - 57,020 484,670 -	220,000 200,000 1,426,750 57,070 1,303,200 - 1,609,374 - 428,025 998,725 - 65,160 570,700 600,000 37,063 - - - 6,770 484,670 -	1.08% 1.08% 2.05% 3.50% 2.20% 2.20% 2.00% 1.30%~4.35% 1.30% 2.00% 2.20% 2.00%~2.20% 2.00% 1.08% 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 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	- - - - - - - - - - - - - - - 4,480,432 4,476,070 5,536,271 170,967 - -	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 financing - - - - Operating financing Operating financing	- - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - -	20,558,042 20,558,042 20,558,042 35,228,322 1,987,846 1,987,846 20,913,770 20,913,770 20,913,770 2,810,936 2,810,936 4,761,295 8,030,522 2,222,153 2,146,361 2,146,361 2,146,361 2,146,361 136,774 2,300,270 166,356	41,116,085 41,116,085 41,116,085 35,228,322 1,987,846 1,987,846 20,913,770 20,913,770 20,913,770 2,810,936 2,810,936 4,761,295 8,030,522 2,222,153 4,292,723 4,292,723 4,292,723 4,292,723 4,292,723 2,300,270 166,356	(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 9) (Note 9) (Note 9) (Note 9) (Note 9) (Note 10) (Note 11)

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.

(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:
(March 31,	2021)
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 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 10:	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 11:	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 12:	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:

(March 31, 2021)

(March 31, 2021)	(March 31, 2021)
		(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)	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	The Company The Company The Company	CEB CEA CEP	(Note 3) (Note 3) (Note 2)	25,697,553 25,697,553 25,697,553	57,070 102,726 151,129	57,070 102,726 139,855	57,070 102,726 139,855	- -	0.06% 0.10% 0.14%	51,395,106 51,395,106 51,395,106	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: Subsidiary whose over 50% common stock is directly owned.

Note 3: 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 March 31, 2021 (excluding investment in subsidiaries, associates and joint ventures): (March 31, 2021)

(In Thousands of shares/ units)

Name of holder	Category and name of security	Relationship with security issuer	Account name			Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)		Carrying value	Holding percentage (%)	Fair value
The Company Panpal Gempal	Taiwan Star Kinpo Electronics, Inc. (“Kinpo”) Cal-Comp Electronics (Thailand) Public Co., Ltd. HWA VI Venture Capital Corp. HWA Chi Venture Capital Corp. mProbe Ltd. Chen Feng Optoelectronics PrimeSensor Technology Inc. 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.	� The same chairman of the Company The same chairman of the Company � � � � � � � The parent company The same chairman of the Company � The same 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	98,046 124,044 239,631 290 632 4,000 6,685 663 2,500 6,000 31,648 23,172 54,000 5,677 5,769 18,369 2,140		724,563 1,624,973 529,584 24,687 19,648 60,680 36,432 7,391 23,225 84,180 119,929 3,255,292 845,004 303,560 881,280 164,340 93,398 216,107 2,503,689 490,462 192,709	2% 9% 5% 10% 11% 3% 10% 3% 8% 19% 1% 2% 5% 1% 3% - 6%	724,563 1,624,973 529,584 24,687 19,648 60,680 36,432 7,391 23,225 84,180 845,004 303,560 881,280 164,340 93,398 490,462 192,709	(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 March 31, 2021 (excluding investment in subsidiaries, associates and joint ventures): (March 31, 2021)

(In Thousands of shares/ units)

Name of holder	Category and name of security	Relationship with security issuer	Account name		Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Holding percentage (%)	Fair value
Gempal Arcadyan Mactech HHB Mithera BT CPC CIT CIT CEC CPO CPO Hong Ji Hong Jin	Others Total 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. Structured deposits–Industrial and Commercial Bank of China RMB Structured Deposits Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits–Industrial and Commercial Bank of China RMB Structured Deposits Structured deposits–Win-win Exchange Rate Structure RMB Structural Deposits Structured deposits–Industrial and Commercial Bank of China RMB Structured Deposits Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit	� � � � � � � � � � � � � � � � � � �	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-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 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	380 332 200 1,152 349 60 - 1,650 1,229 - - 873 - - - - - - -	2,200 685,371 -	1% 1% 7% 5% 5% 14% 7% 7% 8% - 19% - 17% - - - - - -	- - - - - - 41,879 31,663 - 8,220 - 128,407 4,353 263,382 598,702 877,783 547,653 526,670 263,031	(Note 2)
					-
					- - - - 41,879 31,663 - 73,542 8,220 -
					128,407 4,353 263,382 598,702 877,783 547,653 526,670 263,031

(Continued)

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

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

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
					(In Thousands of shares/ units)
Name of holder	Category and name of security	Relationship with security issuer	Account name		Ending balance			Note
				Shares/Units (thousands)	Carrying value	Holding percentage (%)	Fair value
CIC CIC CET CET CNC	Structured deposits–Industrial and Commercial Bank of China RMB Structured Deposits Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits–Industrial and Commercial Bank of China RMB Structured Deposits Structured deposits - SPD Bank Yield Plus 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	- - - - -	263,382 235,110 174,174 395,074 130,693	- - - - -	263,382 235,110 174,174 395,074 130,693

Note 1:The transaction had been eliminated in the consolidated financial statements.

Note 2: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 three months ended March 31, 2021)

(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)
					(In Thousands of New Taiwan Dollars)
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 (thousands)	Amount	Shares/ Units (thousands)	Amount	Shares/ Units (thousands)	Price	Cost	Gain (loss) on disposal	Shares/ Units (thousands)	Amount	Shares/ Units (thousands)	Amount
CIT CIT CEC CET CPO	Structured deposits- Agricultural Bank of China "HuiLiFeng" customization RMB structured deposit Structured deposits - Industrial and Commercial Bank of China RMB Structured Deposit Structured deposits - Industrial and Commercial Bank of China RMB Structured Deposit Structured deposits- Win-win Exchange Rate Structure RMB Structural Deposits Structured deposits - Industrial and Commercial Bank of China 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	Agricultural Bank of China Industrial and Commercial Bank of China Industrial and Commercial Bank of China China CITIC Bank Co.,Ltd. Industrial and Commercial Bank of China	- - - - -	- - - - -	1,470,031 - - - -	- - - - -	601,926 875,529 547,205 525,317 393,988	- - - - -	1,489,033 - - - -	1,470,031 - - - -	19,002 (Note 2) -	- - - - -	(3,224) (Note 1) 2,254 (Note 1) 448 (Note 1) 1,353 (Note 1) 1,086 (Note 1)	- - - - -	598,702 877,783 547,653 526,670 395,074

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

(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)	(For the three months ended March 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 CBN BCI and its subsidiaries The Company	UCGI CBN CIH and its subsidiaries Just and its subsidiaries HSI and its subsidiaries BCI and its subsidiaries Etrade and its subsidiaries Compal Electronic, Inc. CIH and its subsidiaries Compal Electronic, Inc. BCI and its subsidiaries Just and its subsidiaries HSI and its subsidiaries CPM Changbao Acbel and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. CIH and its subsidiaries HSI and its subsidiaries CEB	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 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 An associate An associate With the same chairman 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 Sale Sale Sale Sale Purchase Sale Purchase Purchase Purchase Purchase Sale Purchase Sale Sale	(169,099) (150,612) 32,705,131 43,109,572 6,284,623 8,129,794 4,792,959 (43,179,660) (103,260) (32,808,015) (755,575) 103,055 (707,885) 826,322 237,087 266,902 150,510 (8,146,430) 755,153 (209,043) (135,686)	(0.1)% (0.1)% 14.0% 18.5% 2.7% 3.5% 2.1% (99.7)% (0.2)% (94.7)% (2.2)% 0.1% (2.0)% 0.7% 0.2% 0.2% 23.0% (94.6)% 2.4% (2.4)% (1.6)%	120 days 90 days 120 days 120 days 120 days 120 days Net 60 days from purchase 120 days 120 days 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	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 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	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 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 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 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 Adjustments will be made based on demand for funding There is no significant difference	255,525 298,649 (39,907,904) (1,993,309) (2,057,748) (10,697,104) (2,718,669) 1,993,309 145,581 39,907,904 2,310,660 (145,581) 2,971,114 (978,037) (238,186) (553,682) (298,649) 10,697,104 (2,310,660) 2,574,915 1,318,525	0.1% 0.1% (25.2)% (1.3)% (1.3)% (6.8)% (1.7)% 99.6% 0.3% 92.7% 2.9% (0.2)% 3.7% (1.2)% (0.3)% (0.7)% (32.0)% 86.8% (7.7)% 8.2% 4.2%	(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 5 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the three months ended March 31, 2021)

(For the three months ended March 31, 2021)	(For the three months ended March 31, 2021)	(For the three months ended March 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)
BCI and its subsidiaries CEB Etrade and its subsidiaries UCGI HSI and its subsidiaries Arcadyan CNC Acradyan Vietnam Acradyan Germany Acradyan USA	CPM Acbel and its subsidiaries BCI and its subsidiaries Cal-Comp Compal Electronic, Inc. HSI and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. CIH and its subsidiaries BCI and its subsidiaries Etrade and its subsidiaries Acradyan Germany Acradyan USA CNC Acradyan Vietnam Arcadyan Arcadyan Arcadyan Arcadyan	An associate With the same chairman With the same ultimate parent company With the samechairman 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 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	Purchase Purchase Purchase Purchase Sale Purchase Purchase Sale Purchase Purchase Sale Sale Sale Purchase Purchase Sale Sale Purchase Purchase	106,538 124,925 135,737 474,264 (4,792,825) 386,442 168,679 (6,287,630) 715,801 210,538 (384,744) (318,115) (1,847,718) 3,028,219 220,107 (3,028,219) (220,107) 318,115 1,847,718	0.3% 0.4% 6.0% 21.0% (98.6)% 10.8% 98.0% (93.2)% 10.8% 3.2% (5.7)% (3.0)% (20.0)% 25.0% 2.0% (100.0)% (100.0)% 100.0% 100.0%	120 days 120 days 120 days 120 days Net 60 days from delivery Net 60 days from purchase 120 days 120 days 120 days 120 days 120 days Net 150 days from delivery Net 120 days from delivery Net 120 days from delivery Net 180 days from the end of the month Net 120 days from delivery Net 180 days from the end of the month 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 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 - - 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 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, 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 - - - - - - - -	(107,313) (210,550) (1,318,525) (304,633) 2,718,669 (350,115) (255,525) 2,057,748 (2,971,114) (2,574,915) 350,115 269,746 1,154,435 (2,910,230) (Note 3) 2,910,230 (Note 3) (269,746) (1,154,435)	(0.4)% (0.7)% (48.1)% (25.7)% 96.7% (9.2)% (100.0)% 96.1% (14.9)% (13.0)% 3.3% 4.0% 18.0% (21.0)% - 100.0% - (100.0)% (100.0)%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 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)

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 March 31, 2021 is 1,049,563 thousand dollars.

(Continued)

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

Table 6 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 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 Just and its subsidiaries Just 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 Etrade and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan CNC CBN	CBN UCGI Compal Electronic, Inc. CIH and its subsidiaries Compal Electronic, Inc. BCI and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. HSI and its subsidiaries CEB Compal Electronic, Inc. Compal Electronic, Inc. Etrade and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan Vietnam Arcadyan Just and its subsidiaries	The Company's subsidiary The Company's subsidiary Parent company With the same ultimate parent company 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 Parent company Parent company With the same ultimate parent company Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary With the same ultimate parent company With the same ultimate parent company	298,649 255,525 1,993,309 145,581 39,907,904 2,310,660 2,971,114 10,697,104 2,574,915 1,318,525 2,718,669 2,057,748 350,115 269,746 1,154,435 1,049,563 (Note 4) 2,910,230 (Note 5) 125,161 (Note 6)	2.04 2.56 40.43 0.64 2.87 1.57 1.03 3.07 0.34 0.40 5.91 3.31 4.83 4.96 6.74 (Note 4) 3.83 -	- - - - - - - - - - - - - - - - - 5,348	- - - - - - - - - - - - - - - - - Enhancement on the collection	- - - - 37,841,999 - - 10,697,104 - 73,141 - - 147,771 39,583 756,778 - 1,788,881 50,429	(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 May 4, 2021. Note 2:Balance as of April 29, 2021.

Note 3:Balance as of May 5, 2021.

Note 3:Other receivables due to purchasing on behalf of related parties.

Note 4:Accounts receivables due to processing raw material.

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

(Continued)

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

Table 7 Business relationships and significant intercompany transactions: (For the three months ended March 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 3 3 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 BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries	CBN UCGI The Company CIH and its subsidiaries The Company BCI and its subsidiaries HSI and its subsidiaries The Company HSI and its subsidiaries CEB	1 1 2 3 2 3 3 2 3 3	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	150,612 298,649 169,099 255,525 43,179,660 1,993,309 103,260 145,581 32,808,015 39,907,904 755,575 2,310,660 707,885 2,971,114 8,146,430 10,697,104 209,043 2,574,915 135,686 1,318,525	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 from delivery, 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. � 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. �	0.1% 0.1% 0.1% 0.1% 16.0% 0.4% - - 12.2% 8.9% 0.3% 0.5% 0.3% 0.7% 3.0% 2.4% 0.1% 0.6% 0.1% 0.3%

(Continued)

��

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

Table 7 Business relationships and significant intercompany transactions:

(For the three months ended March 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
4 5 5 6 6 6 7 8	Etrade and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan CNC Arcadyan Vietnam	The Company The Company Etrade and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan Vietnam Arcadyan Arcadyan	2 2 3 3 3 3 3 3	Sales Revenue 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	4,792,825 2,718,669 6,287,630 2,057,748 384,744 350,115 318,115 269,746 1,847,718 1,154,435 1,049,563 3,028,219 2,910,230 220,107	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 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 90 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. � The credit period is net 180 days from the end of the month 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 and depended on funding demand.	1.8% 0.6% 2.3% 0.5% 0.1% 0.1% 0.1% 0.1% 0.7% 0.3% 0.2% 1.1% 0.7% 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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
				(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
The Company	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 Crownpo Hong Ji Hong Jin Mactech Auscom Arcadyan FGH Shennona HSI CEP	Milpitas, 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 Taipei City Taipei City Taipei City Taichung City Austin, TX USA Hsinchu City British Virgin Islands Delaware, USA British Virgin Islands Poland	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 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	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 - 90,000 489,450 197,463 149,547 1,000,000 295,000 219,601 101,747 1,325,132 2,754,741 32,665 1,346,814 90,156	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	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 3,739 100,000 29,500 21,756 3,000 41,305 89,755 2,600 42,700 136	100% 100% 100% 100% 100% 38% 100% 100% 42% 100% 100% 20% - 52% 49% 100% 33% 100% 100% 53% 100% 20% 100% 100% 54% 100%	429,219 7,985,912 35,621,096 4,979,350 (Note 1) 1,800,966 (Note 1) 4,773 89,881 120,857 - 3,363,041 2,758 409,341 - 65,325 621,240 790,302 62,662 1,164,269 361,610 235,397 125,160 2,210,605 4,723,946 1,212 115,659 6,846	(7,191) 242,886 310,068 32,423 56,342 280 6,400 (4,425) - - (14) 92,544 - (15,833) 101,099 517 14,317 22,232 10,004 (560) 91 454,417 (41,148) (13) (241,249) (8,283)	(3,429) 242,886 310,068 (18,214) 26,951 114 6,400 (4,425) - - (14) 18,893 - (8,239) 49,538 517 4,758 22,232 10,004 (296) 91 90,061 (41,148) (13) (241,249) (8,283)	(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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
								(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balan		ce	Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
The Company Panpal Gempal	Hippo Screen Infinno Technology Corporation (“Infinno”) HengHao BCI CBN Rayonnant CRH Acendant Private Equity Investment Ltd. (“APE”) Etrade Webtek Forever UCGI Palcom Avalue Technology, Inc. CORE GLB CGSP ARCE Raypal Biomedical Co.,Ltd. Arcadyan Allied Circuit Others Arcadyan	Taipei City Hsinchu County Taipei City British Virgin Islands Hsinchu County 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	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 communication products 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 equipments 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 equipments and materials import and manufacturing	112,000 109,837 5,529,757 2,636,051 284,827 295,000 377,328 943,922 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	42,000 109,837 5,529,757 2,636,051 284,827 295,000 377,328 943,922 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	9,100 5,650 20,015 90,820 29,060 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	91% 27% 100% 100% 43% 100% 100% 35% 65% 100% 100% 100% 100% 21% 100% 50% 100% 33% 30% 4% 6% 4%	77,711 13,256 (295,202) 6,797,191 711,606 134,142 203,235 984,458 (594,106) 587,982 1,325,573 (362,814) 111,238 592,159 7,378,295 320,297 (58) 56,653 150,794 83,483,837 483,209 117,955 230,526 572,335	(4,705) 877 (25,274) 320,302 (3,490) 8,531 11,777 (16,362) 41,602 14,670 (6,076) 18,413 (1,186) 19,086 7,373 4,303 (58) (9,598) (856) 454,417 92,544 454,417	(3,974) 239 (25,274) 320,302 (1,515) 8,531 11,777 (5,681) 127,488 14,670 (6,076) 18,413 (1,186) 5,806 7,373 2,278 (58) (3,199) (257) 926,860 Investment gain(losses) recognized by Panpal Investment gain(losses) recognized by Panpal Investment gain(losses) recognized by Gempal	(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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
				(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
Gempal Hong Ji Hong Jin Just CII CIH HSI	Allied Circuit Others Arcadyan Allied Circuit Arcadyan CDH (HK) CII CPI Smart AEI MEL MTL CIH (HK) Jenpal PFG FWT CCM IUE	Taoyuan City Hsinchu City Taoyuan City Hsinchu City Hong Kong British Virgin Islands British Virgin Islands 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	Production and selling of PCB boards Telecommunication equipment and apparatus manufacturing, electronic parts and components manufacturing, restrained telecom radio frequency equipments 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 equipments and materials import and manufacturing Investment Investment Investment Investment Sales and maintenance of LCD TVs Investment Investment Investment Investment Investment Investment Investment Investment	53,645 306,655 10,389 131,942 1,777,659 263,806 14,268 29 28,535 234,957 29 2,134,489 209,732 29 425,172 145,529 1,911,845	53,645 306,655 10,389 131,942 1,777,659 263,806 14,268 29 28,535 234,957 29 2,134,489 209,732 29 425,172 145,529 1,944,845	3,220 9,279 851 4,609 62,298 9,245 500 1 1,000 - - 74,803 7,350 1 14,900 5,100 67,000	6% 4% 2% 2% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51% 100%	129,751 705 572,335 29,420 269,288 5,679,384 240,266 855,034 362 45,204 194,709 29 34,296,303 101,466 438,195 425,649 26,079 869,751	92,544 454,417 92,544 454,417 240,009 7 814 (2) - 9 - 461,889 100 2,476 - (83) (242,046)	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 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	(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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
				(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
HSI IUE Goal BCI CORE BSH Forever Webtek Unicore Arcadyan	Goal CVC CDM CMI PRI BSH Mithera HSI GIA CWV Etrade Raycore Arcadyan Holding Arcadyan USA Arcadyan Germany Arcadyan Korea Zhi-�ao TTI AcBel Telecom	British Virgin Islands Vietnam Vietnam British Virgin Islands British Virgin Islands British Virgin Islands Cayman Islands British Virgin Islands British Virgin Islands Vietnam British Virgin Islands Taipei City British Virgin Islands U.S.A Germany Korea Taipei City Taipei City Taipei City	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 Selling of mobile phones R&D, manufacturing, sales, and maintenance of notebook PCs, computer monitors, LCD TVs and electronic components 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	362,395 1,911,845 362,395 2,306,199 285,350 4,194,645 142,675 1,055,795 - 57,070 713,375 25,500 2,359,732 23,055 1,125 2,879 48,000 308,726 23,000	362,395 1,911,845 362,395 2,306,199 285,350 4,194,645 142,675 1,055,795 - 57,070 713,375 25,500 2,359,732 23,055 1,125 2,879 48,000 308,726 23,000	12,700 67,000 12,700 80,820 10,000 147,000 - 37,000 - - 25,000 1,275 69,780 1 0.5 20 34,980 25,028 4,494	100% 100% 100% 100% 100% 100% 99% 46% 100% 100% 35% 51% 100% 100% 100% 100% 100% 61% 51%	301,703 869,751 303,234 4,162,035 2,635,155 7,378,295 135,708 1,055,795 - (2,464) (111,297) 12,506 2,253,076 78,088 68,827 18,702 423,195 518,050 32,716	797 (242,046) 797 108,357 211,945 7,373 (823) (241,249) - (5,655) 41,602 (1,918) 10,907 20,432 (4,897) 5,493 (605) 2,554 31	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 Forever Investment gain(losses) recognized by Forever 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	(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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
				(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
Arcadyan Arcadyan and Zhi-bao Arcadyan Holding TTI Quest Sinoprime Zhi-bao Rayonnant CRH APH HHT	Arcadyan UK Arcadyan AU CBN Arcadyan RU Arcadyan Brasil Arcadyan India Sinoprime Arch Holding Quest TTJC Exquisite Arcadyan Vietnam CBN APH Forming Co., Ltd. APH PEL Rayonnant(HK) HHA	UK Australia Hsinchu County Russia Brazil India British Virgin Islands British Virgin Islands Samoa Japan Samoa Vietnam Hsinchu County British Virgin Islands Taoyuan City British Virgin Islands British Virgin Islands Hong Kong British Virgin Islands	Technical support 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 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 R&D and manufacturing of electronic materials Investment Investment Investment Investment	1,988 1,161 11,925 7,672 81,593 - 543,116 313,924 34,212 9,626 33,357 541,690 36,272 257,454 27,300 356,688 89,914 513,630 1,429,235	1,988 1,161 11,925 2,492 81,593 - 543,116 313,924 34,212 9,626 33,357 541,690 36,272 257,454 27,300 356,688 89,914 513,630 1,429,235	50 50 533 - 968 - 19,050 35 1,200 0.7 1,170 - 13,140 8,651 1,820 12,500 3,151 18,000 46,882	100% 100% 1% 100% 100% 100% 100% 100% 100% 100% 100% 100% 20% 41% 21% 59% 100% 100% 100%	3,818 47,235 13,169 7,379 (19,170) - 464,086 885,064 16,619 4,974 4,105 459,895 324,504 135,059 - 203,235 39,880 290,838 (237,908)	199 1,224 (3,490) 549 (4,744) - 10,013 (2,525) (15,761) (630) (15,771) 10,013 (3,490) 19,928 - 19,928 1,713 18,214 (53,928)	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 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	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 3) (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

�� (March 31, 2021)

(March 31, 2021)	(March 31, 2021)	(March 31, 2021)	(March 31, 2021)
				(In Thousands ofNewTaiwan Dollars/ shares)
Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		Ending Balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value
HHA CBN FGH GLB Mactech	HHB CBNB CBNN Wah Yuen Technology Holding Ltd.and its subsidiaries Rapha Taiwan Intelligent Robotics Company, LTD.	British Virgin Islands Belgium The Netherlands Mauritius New Taipei City Taipei City	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 Investment Detectors and test strip Manufacturing of equipment	1,337,779 6,842 7,016 2,561,173 6,500 43,200	1,337,779 6,842 7,016 2,561,173 6,500 43,200	46,882 20 20 95,862 1,275 2,160	100% 100% 100% 37% 100% 17%	(237,848) 5,989 6,539 4,789,346 (36) 25,666	(53,928) (66) (20) (112,392) - (7,896)	Investment gain(losses) recognized by HHA 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 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, and the capital has not been funded.

(Continued)

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

Table 9 Information on investment in Mainland China:

(March 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 March 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
Zheng Ying Electronics (Chongqing) Co., Ltd. BT CGS LIZ Electronics (Kunshan) Co., Ltd. LIZ Electronics (Nantong) Co., Ltd. CIC CPO CIT CPC CDT CET CSD	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 Maintenance and warranty service of notebook PCs Production and processing chipresistors, 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 Research, manufacture and sales of communication devices, mobile phones, electronic computer, smart watch, and provide related technology service Manufacturing of notebook PCs Manufacturing and sales of LCD TVs Manufacturing of notebook PCs Manufacturing and sales of notebook PCs, mobile phones, and Digital products Manufacturing of notebook PCs	1,055,795 570,700 342,420 261,206 68,680 28,535 8,707 913,120 570,700 342,420 345,274 684,840	(Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1) (Note 1) (Note 2) (Note 1) (Note 2)	1,055,795 570,700 342,420 (Note 3) (Note 3) 28,535 (Note 3) 380,372 41,946 342,420 345,274 684,840	- - - - - - - - - - - -	- - - - - - - - - - - -	1,055,795 570,700 342,420 - - 28,535 - 380,372 41,946 342,420 345,274 684,840	231,208 (11,046) 23,148 49,398 - 10,693 (12,773) 90,782 61,232 96,854 15,265 344,369	100% 100% 100% 100% 51% 100% 100% 43% 48% 100% 100% 100%	231,208 (11,046) 23,148 49,398 - 10,693 (12,773) 39,200 29,146 96,854 15,265 344,369	2,232,147 91,752 4,801,316 62,483 (43,154) (180,570) (38,275) 465,720 489,118 8,143,455 2,824,635 21,300,554	- - - - - - - - - - - -

(Continued)

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

Table 9 Information on investment in Mainland China:

(March 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 March 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
CWCN CIJ CDE CIS CEC CMC CEQ CPM Changbao Rayonnant (Taicang) CCI Nanjing CDCN Sheng Bao Precision Electronics (Taicang) Co., Ltd. CST	International trade and distribution of computers and electronic components 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	39,949 285,350 445,146 428,025 2,306,199 2,282,800 22,828 285,350 11,984,700 1,712,100 513,630 770,445 165,503 1,398,215	(Note 2) (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)	39,949 145,529 445,146 (Note 3) 2,306,199 (Note 3) (Note 3) 285,350 2,357,761 326,897 356,688 627,770 165,503 542,165	- - - - - - - - - - - - - -	- - - - - - - - - - - - - -	39,949 145,529 445,146 - 2,306,199 - - 285,350 2,357,761 326,897 356,688 627,770 165,503 542,165	139 (83) (8,731) (8,732) 108,357 108,413 (51) 211,945 27,930 (35,111) 18,214 (10,014) 709 50,807	100% 51% 100% 100% 100% 100% 100% 100% 37% 37% 100% 100% 100% 100%	139 (42) (8,731) (8,732) 108,357 108,413 (51) 211,945 10,228 (12,858) 18,214 (10,014) 709 50,807	48,298 29,913 570,749 537,538 4,162,035 4,133,126 22,836 2,635,155 5,396,264 797,491 291,396 (949,616) 87,089 512,032	- - - - - - - - - - - - - -

(Continued)

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

Table 9 Information on investment in Mainland China:

(March 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 March 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
Hanhelt Arcadyan SVA Arcadyan CNC THAC HengHao HengHao Optoelectronic Technology (Kunshan) Co., Ltd. (“HengHao Kunshan”) Lucom Display Technology (Kunshan) Limited(“Lucom”)		R&D and manufacturing of electronic communication equipment Manufacturing of household electronics products Production of touch panels and related components R&D and sales of wireless network products Manufacturing and wireless network products Manufacturing of notebook PCs and related modules	57,070 373,481 354,950 95,509 1,141,400 428,025	(Note 1) (Note 1) (Note 1) (Note 1� 10) (Note 1) (Note 2)	57,070 525,154 (Note 7) 313,924 (Note 8) 32,787 1,135,779 185,450 (Note 12)	- - - - - -	- - - - - -	57,070 525,154 313,924 32,787 1,135,779 185,450	(57) 1,901 (2,525) (15,771) (54,155) 227	100% 100% 100% 100% 100% 100%	(57) 1,901 (2,525) (15,771) (54,155) 227	2,796 166,356 885,064 3,621 (366,760) 128,664	- - - - - -

(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 March 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
Arcadyan HengHao The Company	15,481,293 871,864 1,337,493 (Note 5) (US$30,581) (US$46,872) (US$542,537)	871,864 (US$30,581) 1,337,493 (US$46,872) 21,591,065 (US$756,652)	6,439,085 (Note 13) (Note 6)

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), except for Compal Precision Module (Jiangsu) Co., Ltd., was determined based on the financial report reviewed 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 thousands and acquired 100% shares of SVA Arcadyan from Accton Asia through Arcadyan Holding in 2010.
Note 8: Arcadyan paid US$8,561 thousands 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 thousands to offset accumulated losses in March 2009. Note 10: Arcadyan’s subsidiary, TTI, obtained the control over THAC with US$1,150 thousands 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 thousands in the previous years. In the first half of 2014, HengHao paid the Company and LG US$3,184 thousands and US$3,315 thousands, respectively, for organization restructure, to obtain 100% ownership of Lucom. Note 13: The net equity of HengHao is negative at March 31, 2021.

(iii) Significant transactions:

For the three months ended March 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 — Interim / Quarterly Report 2021

52007_rns_2021-11-15_a0c890a3-1e06-4f10-93fa-1ad5cd5e2cb8.pdf

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notes to Readers

Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31, 2020, and March 31, 2020

Reviewed only, not audited in accordance with generally accepted auditing standards

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

Reviewed only, not audited in accordance with generally accepted auditing standards COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the three months ended March 31, 2021 and 2020

Reviewed only, not audited in accordance with generally accepted auditing standards

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2021 and 2020

Reviewed only, not audited in accordance with generally accepted auditing standards COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 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:

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

(b) Basis of consolidation

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

(c) Income taxes

(d) Employee benefits

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

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

(6) Explanation of significant accounts:

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

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

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

(f) Inventories

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

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

(ii) Joint venture

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

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

(j) Property, plant and equipment

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

(k) Right-of-use assets

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

(m) Long-term borrowings

(n) Unsecured convertible corporate bonds

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

(i) Real estate leases

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

(ii) Other leases

(p) Provisions

(q) Employee benefits

(i) Defined benefit plans

(ii) Defined contribution plans

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

(r) Income taxes

(s)

Capital and other equities

Compal Interim / Quarterly Report 2021