Compal - Interim / Quarterly Report 2021

Stock Code:2324

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 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 9～17 17 17～59 59～62 62 62 62 62 63 63～64, 66～78 64, 79～84 64, 85～87 64 64～65

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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9～17
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17～59
59～62
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63～64, 66～78
64, 79～84
64, 85～87
64
64～65

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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 June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2021 and 2020, as well as the changes in equity and cash flows for the six months ended June 30, 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 $14,468,544 thousand and $17,652,696 thousand, constituting 3.2% and 4.3% of consolidated total assets as of June 30, 2021 and 2020, respectively, total liabilities amounting to $2,509,463 thousand and $2,607,206 thousand, constituting 0.7% and 0.9% of consolidated total liabilities as of June 30, 2021 and 2020, and the absolute value of total comprehensive income (loss) amounting to $(4,789) thousand, $304,389 thousand, $(83,450) thousand and $(217,340) thousand, constituting 0.4%, 35.1%, 1.8% and 19.0% of consolidated total comprehensive income (loss) for the three months and six months ended June 30, 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 June 30, 2021 and 2020, and of its consolidated financial performance for the three months and six months ended June 30, 2021 and 2020, as well as its consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” 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) August 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 June 30, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021, December 31, 2020, and June 30, 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)) 1460 Non-current assets classified as held for sale (note (6)(g)) 1470 Other current assets (note (8)) Non-current assets: 1550 Investments accounted for using equity method (note (6)(h)) 1510 Non-current financial assets at fair value through profit or loss (note (6)(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(c)) 1600 Property, plant and equipment (notes (6)(k) and (8)) 1755 Right-of-use assets (note (6)(l)) 1780 Intangible assets 1840 Deferred tax assets 1990 Other non-current assets (note (8)) Total assets	June 30, 2021 Amount % $ 79,469,866 17.4 1,115,248 0.2 18,050 - 205,245,493 44.9 33,155 - 2,262,922 0.5 118,680,238 25.9 1,446,029 0.3 3,713,019 0.8 411,984,020 90.0 7,918,509 1.7 223,102 - 6,088,037 1.3 23,848,604 5.2 3,167,765 0.7 1,649,477 0.4 1,540,622 0.4 1,235,602 0.3 45,671,718 10.0 $ 457,655,738 100.0	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	June 30, 2020 Amount % 58,264,469 14.3 1,213,880 0.3 23,565 - 218,004,310 53.5 54,591 - 1,976,666 0.5 86,517,937 21.3 - - 2,447,062 0.6 368,502,480 90.5 7,318,246 1.8 171,246 - 4,219,210 1.0 19,552,055 4.8 3,773,702 0.9 1,530,657 0.4 1,648,319 0.4 603,567 0.2 38,817,002 9.5 407,319,482 100.0 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(m)) 2120 Current financial liabilities at fair value through profit or loss (note (6)(b)) 2125 Current financial liabilities for hedging (note (6)(d)) 2130 Current contract liabilities (note (6)(w)) 2170 Notes and accounts payable 2180 Notes and accounts payable to related parties (note (7)) 2200 Other payables (note (7)) 2216 Dividends payable 2230 Current tax liabilities 2250 Current provisions (note (6)(q)) 2280 Current lease liabilities (note (6)(p)) 2300 Other current liabilities (note (6)(g)) 2365 Current refund liabilities 2321 Bonds payable, current portion (note (6)(o)) 2322 Long-term borrowings, current portion (note (6)(n)) Non-Current liabilities: 2530 Bonds payable (note (6)(o)) 2540 Long-term borrowings (note (6)(n)) 2570 Deferred tax liabilities 2580 Non-current lease liabilities (note (6)(p)) 2640 Non-current net defined benefit liability 2670 Non-current liabilities, others (note (6)(h)) Total liabilities Equity: Equity attributable to owners of parent (note (6)(t)): 3110 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares 36XX Non-controlling interests Total equity Total liabilities and equity	June 30, 2021	December 31, 2020	June 30, 2020 Amount % 71,905,942 17.7 22,512 - - - 788,149 0.2 165,195,046 40.6 2,208,449 0.5 18,371,893 4.5 5,913,640 1.5 4,248,027 1.0 855,124 0.2 515,821 0.1 1,363,069 0.3 1,645,421 0.4 - - 9,958,715 2.4 282,991,808 69.4 973,331 0.2 9,490,325 2.4 970,492 0.2 1,914,644 0.5 729,520 0.2 213,772 0.1 14,292,084 3.6 297,283,892 73.0 44,071,466 10.8 8,339,694 2.0 55,846,071 13.7 (5,854,076) (1.4) (881,247) (0.2) 101,521,908 24.9 8,513,682 2.1 110,035,590 27.0 407,319,482 100.0
				Amount % $ 106,325,908 23.2 181,092 - - - 848,531 0.2 177,919,901 38.9 2,186,108 0.5 23,998,645 5.2 44 - 5,430,703 1.2 915,978 0.2 660,304 0.1 2,831,393 0.6 1,634,419 0.4 983,006 0.2 8,072,175 1.8 331,988,207 72.5 - - 8,938,150 2.0 1,076,527 0.2 1,683,685 0.4 775,131 0.2 445,346 0.1 12,918,839 2.9 344,907,046 75.4 44,071,466 9.6 6,666,000 1.5 62,197,820 13.6 (8,159,314) (1.8) (881,247) (0.2) 103,894,725 22.7 8,853,967 1.9 112,748,692 24.6 $ 457,655,738 100.0	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 and six months ended June 30, 2021 and 2020

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

For the three mont	hs ended June 30	For the six month	s ended June 30
2021 Amount % $ 260,994,034 100.0 252,222,686 96.6 8,771,348 3.4 1,266,802 0.5 1,087,017 0.4 3,868,452 1.5 6,222,271 2.4 2,549,077 1.0 483,497 0.2 350,201 0.1 (223,502) (0.1) 150,970 - (12,753) - 151,060 0.1 899,473 0.3 3,448,550 1.3 728,187 0.3 2,720,363 1.0 (889) - 186,048 0.1 (2,429) - 49,298 - 133,432 0.1 (1,507,932) (0.6) 10,493 - (39,236) - (11,377) - (1,525,298) (0.6) (1,391,866) (0.5) $ 1,328,497 0.5 $ 2,466,990 0.9 253,373 0.1 $ 2,720,363 1.0 $ 1,100,905 0.4 227,592 0.1 $ 1,328,497 0.5 $ 0.57 $ 0.56	2020 Amount % 263,653,504 100.0 255,384,585 96.9 8,268,919 3.1 1,167,777 0.4 995,863 0.4 3,723,746 1.4 5,887,386 2.2 2,381,533 0.9 428,148 0.2 (168,305) (0.1) (241,610) (0.1) 182,576 0.1 (19,375) - 282,186 0.1 463,620 0.2 2,845,153 1.1 659,313 0.3 2,185,840 0.8 (1,938) - 179,039 - 27,878 - 7,794 - 197,185 - (1,352,549) (0.5) (50,123) - (119,755) - (7,577) - (1,514,850) (0.5) (1,317,665) (0.5) 868,175 0.3 1,986,712 0.7 199,128 0.1 2,185,840 0.8 724,754 0.2 143,421 0.1 868,175 0.3 0.46 0.45	2021 Amount % 530,985,567 100.0 512,612,637 96.5 18,372,930 3.5 2,797,435 0.5 2,123,568 0.4 7,627,962 1.5 12,548,965 2.4 5,823,965 1.1 983,001 0.2 411,502 0.1 (494,729) (0.1) 238,614 - (36,148) - 190,986 - 1,293,226 0.2 7,117,191 1.3 1,488,193 0.2 5,628,998 1.1 (889) - 469,560 0.1 (9,640) - 67,679 - 391,352 0.1 (1,423,993) (0.3) 20,242 - (72,297) - (11,454) - (1,464,594) (0.3) (1,073,242) (0.2) 4,555,756 0.9 5,087,154 1.0 541,844 0.1 5,628,998 1.1 4,032,992 0.8 522,764 0.1 4,555,756 0.9 1.17 1.16	2020
			Amount % 445,700,550 100.0 431,485,720 96.8 14,214,830 3.2 1,958,382 0.4 2,064,048 0.5 6,905,018 1.6 10,927,448 2.5 3,287,382 0.7 907,391 0.2 (222,278) - (624,388) (0.1) 250,617 - (26,268) - 361,357 0.1 646,431 0.2 3,933,813 0.9 976,671 0.2 2,957,142 0.7 (1,938) - (681,775) (0.2) (60,110) - (47,169) - (696,654) (0.2) (971,303) (0.2) 28,436 - (178,023) - (5,735) - (1,115,155) (0.2) (1,811,809) (0.4) 1,145,333 0.3 2,591,723 0.6 365,419 0.1 2,957,142 0.7 776,182 0.2 369,151 0.1 1,145,333 0.3 0.59
			0.59

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 six months ended June 30, 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 2,591,723 (851) 2,590,872 (695,590) 3,366,088 (4,407,147) - (33,051) (9,173) - (22,034) - 31,329,588 38,049,698 5,087,154 (599) 5,086,555 (924,672) (3,164,965) (5,288,576) - (5,383) (18,516) - (142,441) - - 33,591,700	57,726,604 2,591,723 (851) 2,590,872 - - (4,407,147) - (33,051) (9,173) - (22,034) - 55,846,071 62,566,181 5,087,154 (599) 5,086,555 - - (5,288,576) - (5,383) (18,516) - (142,441) - - 62,197,820	(3,794,980) - (1,128,592) (1,128,592) - - - - - - - - - (4,923,572) (6,888,977) - (1,455,055) (1,455,055) - - - - - - - - - - (8,344,032)		(306,763) - (694,904) (694,904) - - - - 33,051 8,978 - 22,034 - (937,604) (376,952) - 394,434 394,434 - - - - - 18,516 - 142,441 - - 178,439	(1,706) - 8,806 8,806 - - - - - - - - - 7,100 (779) - 7,058 7,058 - - - - - - - - - - 6,279	(4,103,449) - (1,814,690) (1,814,690) - - - - 33,051 8,978 - 22,034 - (5,854,076) (7,266,708) - (1,053,563) (1,053,563) - - - - - 18,516 - 142,441 - - (8,159,314)	(881,247) - - - - - - - - - - - - (881,247) (881,247) - - - - - - - - - - - - - (881,247)	105,972,633 2,591,723 (1,815,541) 776,182 - - (4,407,147) (881,429) 804 844 60,021 - - 101,521,908 106,832,505 5,087,154 (1,054,162) 4,032,992 - - (5,288,576) (1,762,859) (1,891) 1,570 80,027 - 957 - 103,894,725	8,786,711 365,419 3,732 369,151 - - - - - - - - (642,180) 8,513,682 9,157,145 541,844 (19,080) 522,764 - - - - - - - - - (825,942) 8,853,967	114,759,344 2,957,142 (1,811,809)
		-	-	-												1,145,333
			695,590 - - - - - - - -													- - (4,407,147) (881,429) 804 844 60,021 - (642,180)
			20,414,740													110,035,590
			20,414,740 - -													115,989,650 5,628,998 (1,073,242)
	-		-													4,555,756
	- - - - - - - - - -		924,672 - - - - - - - - -													- - (5,288,576) (1,762,859) (1,891) 1,570 80,027 - 957 (825,942)
	$ 44,071,466		21,339,412													112,748,692

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 six months ended June 30, 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 financial assets at fair value through profit or loss and through other comprehensive income Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from liquidation of investments Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in receipts in advance from disposal of property 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 Cash dividends paid Change in non-controlling interests Others Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		For the six m June	onths ended 30 2020 3,933,813

			2,958,445 (2,653) 4,113 624,388 (907,391) (103,473) 44,332 (361,357) (8,489) (4,899)
			2,243,016
			132,499 (26,316,142) 216,668 (8,084,399) 625,599 107,956
			(33,317,819)
			16,658 22,957,718 (2,894,100) 263,047 24,367 (168,306) (627,174) (8,644)
			19,563,566
			(13,754,253)
			(11,511,237)
			(7,577,424) 938,906 7,427 (724,485) (1,087,351)
			(8,442,927)
			(77,434) 44,915 - 8,306 - (2,719,361) 72,250 - (222,866) (321,745) (93,902)
			(3,309,837)
			10,954,098 31,087,890 (37,387,288) (450,693) - (930) (32,063)
			4,171,014
			(713,178)
			(8,294,928) 66,559,397
			58,264,469

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

June 30, 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 August 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. which have already been adopted.

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

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

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

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

(Continued)

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

(c) 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:

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

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

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

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

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

(4) Summary of significant accounting policies:

(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	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 2020 Description 100% 100% Panpal held 31,648 thousand shares of the Company as of June 30, 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 June 30, 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	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 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 Eletronics Co., Ltd. (“BT”) 〃	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 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	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 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”) 〃 The Company and CBN Starmems Semiconductor Corp. (“Starmems”) R&D of MEMS technology of manufacturing process of semiconductor and manufacturing of electronic components Arcadyan Holding Sinoprime Global Inc. (“Sinoprime”) Investment 〃 Arcadyan Technology (Shanghai) Corp. (“SVA Arcadyan”) R&D and sales of wireless network products 〃 Arch Holding (BVI) Corp. (“Arch Holding”) Investment Arch Holding Compal Networking (Kunshan) Co., Ltd. (“CNC”) Manufacturing of wireless network products Sinoprime Arcadyan Technology (Vietnam) Co., Ltd. (“Arcadyan Vietnam”) Manufacturing of wireless network products 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	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 2020 Description 100% 100% (Note 1 and Note 2) 100% 100% (Note 1 and Note 2) 100% 100 Arcadyan RU was established in June 2020. (Note 1 and Note 2) 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. 64% 64% 100% 100% 100% 100% - - The subsidiary was incorporated in April 2021 and the Group has substantial control over it. 100% 100% (Note 2) 100% 100% 100% 100% 100% 100% 100% 100% (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% 100% 100% 61% 51% 100% 100% 64% 100% 100% 45% 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 TTI Tatung Technology of Japan Co., Ltd. (“TTJC”) Sales of household digital electronic products Quest Exquisite Electronic Co., Ltd. (“Exquisite”) Investment Exquisite Tatung Home Appliances (Wujiang) Co., Ltd. (“THAC”) Manufacturing of household digital electronic products HSI Intelligent Universal Enterprise Ltd. (“IUE”) Investment 〃 Goal Reach Enterprises Ltd. (“Goal”) 〃 IUE Compal (Vietnam) Co., Ltd. (“CVC”) R&D, manufacturing, sales, and maintenance of notebook PCs, computer monitors, LCD TVs and electronic components Goal Compal Development & Management (“Vietnam”) Co., Ltd. (“CDM”) Construction of and investment in infrastructure in Ba-Thien industrial district of Vietnam 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	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 2020 Description 100% 100% (Note 2) 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% The liquidation procedures had been completed on December 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%

(Continued)

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

Name of investor Name of Subsidiary Nature of Operation CIS Compal Electronics (Chengdu) Co., Ltd. (“CEC”) R&D and manufacturing of notebook PCs, tablet PCs, digital products, network switches, wireless AP, and automobile electronic products 〃 Compal Management (Chengdu) Co., Ltd. (“CMC”) Corporate management consulting, training and education, business information consulting, financial and tax consulting, investment consulting, and investment management services CORE Billion Sea Holdings Limited (“BSH”) Investment BSH Mithera Capital Io LP (“Mithera”) 〃 GLB Rapha Bio Ltd. (“RBL”) Detector and feature Unicore Raycore Biotech Co., Ltd. (“Raycore”) Animal medication retail and wholesale	June 30, 2021	Percentage of ownership December 31, 2020 June 30, 2020 Description 100% 100% 100% 100% 100% 100% 99% 99% 100% 100% 51% 51%
	100% 100% 100% 99% 100% 51%

Note 1: The financial statements of the subsidiary as of June 30, 2021 have not been reviewed by CPA. Note 2: The financial statements of the subsidiary as of June 30, 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.

(Continued)

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

(e) Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to assets not within the scope of IAS 36 – Impairment of Assets. Such assets will continue to be measured in accordance with the Group’s accounting policies.

Impairment losses on assets initially classified as held for sale and any subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of the cumulative impairment loss that has been recognized.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

(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.

(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

June 30, 2021 Cash on hand $ 13,657 Checking accounts and demand deposits 19,549,915 Time deposits 59,906,294 Bonds purchased under resale agreements - $ 79,469,866	December 31, 2020 18,637 19,537,842 69,560,444 10,000 89,126,923	June 30, 2020
		15,683 11,854,112 46,094,641 300,033
		58,264,469

(Continued)

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

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

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

June 30, 2021 Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Structured deposits $ 1,092,417 Stock unlisted in domestic markets 109,215 Fund in domestic or foreign markets 113,887 Derivative instruments not used for hedging Foreign exchange contracts 15,143 Swap contracts 7,688 Total $ 1,338,350 Current $ 1,115,248 Non-current 223,102 $ 1,338,350 June 30, 2021 Financial liabilities held-for-trading: Derivative instruments not used for hedging Foreign exchange contracts $ 178,483 Swap contracts 2,609 $ 181,092	December 31, 2020		June 30, 2020
	2,234,184 100,190 101,419 - 11,069 2,446,862 2,245,254 201,608 2,446,862 December 31, 2020 130,865 5,752 136,617		1,139,451 87,550 83,696 56,682 17,747
			1,385,126
			1,213,880 171,246
			1,385,126
			June 30, 2020 22,190 322 22,512

(Continued)

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

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

Contract amount (in thousand) Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 31,000 Forward exchange sold EUR 1,000 Forward exchange purchased USD 3,000 Swap contracts: Currency Swap USD 37,000 Derivative financial liabilities: Forward exchange purchased USD129,200 Forward exchange purchased EUR 297 Forward exchange purchased USD 23,000 Swap contracts: Currency swap USD 23,500 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 31,000 EUR 1,000 USD 3,000 USD 37,000 USD129,200 EUR 297 USD 23,000 USD 23,500		June 30, 2021	June 30, 2021
			Currency Maturity date EUR to USD July 9~September 14, 2021 EUR to TWD August 5, 2021 USD to CNY September 14, 2021 USD to TWD July 13~August 30, 2021 USD to BRL July 8, 2021~June 21, 2022 USD to RUB August 30, 2021 USD to CNY July 14 ~August 13, 2021 USD to TWD July 29~ September 15, 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 9,000 Forward exchange purchased USD 330 Forward exchange purchased USD 105,000 Swap contracts: Currency swap USD 48,000 Derivative financial liabilities: Foreign exchange contracts: Forward exchange sold EUR 29,000 Forward exchange purchased USD 30,000 Swap contracts: Currency swap USD 12,000		June 30, 2020	June 30, 2020
		Currency EUR to USD USD to RUB USD to BRL USD to TWD EUR to USD USD to TWD USD to TWD	Maturity date
			August 25~November 27, 2020 September 29, 2020 July 2, 2020~June 24, 2021 July 13~October 14, 2020 July 10~December 14, 2020 July 10, 2020 September 18~September 29, 2020

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

As of June 30, 2021, December 31 and June 30, 2020, the Group did not provide any aforementioned financial assets as collaterals for its loans.

June 30, 2021 Equity investments at fair value through other comprehensive income: Stock listed in domestic markets $ 2,671,532 Stock listed in foreign markets 778,800 Stock unlisted in domestic markets 2,285,218 Stock unlisted in foreign markets 352,487 Total $ 6,088,037	December 31, 2020 1,972,849 491,243 2,152,542 200,377 4,817,011	June 30, 2020
		1,729,551 337,880 1,976,919 174,860
		4,219,210

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

(Continued)

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

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

The liquidation procedures of Horizon Ventures Fund I, LP, measured at fair value through other comprehensive income by the Group, had been completed in January 2021. The proceed from the liquidation was $104, resulting in a cumulative valuation loss of $142,441, which was reclassified from other comprehensive income to retained earnings.

During the first two quarter of 2020, the Group has sold all of its shareholdings, measured at fair value through other comprehensive income, in Global BioPharma, Inc. The fair value of the shares upon disposal amounted to $44,915, resulting in a cumulative loss of $55,085, which was reclassified from other comprehensive income to retained earnings.

If there is an increase (decrease) in the market price by 5% on the reporting date of the equity securities hold by the Group, the increase (decrease) in other comprehensive income (pre-tax) for the six months ended June 30, 2021 and 2020, will be $304,402 and $210,961, respectively. These analyses are performed on the same basis for the period and assume that all other variables remain the same.

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

As of June 30, 2021, December 31 and June 30, 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:

(i) Financial instruments used for hedging were as follows:
June 30, 2021 Cash flow hedge: Financial assets used for hedging: Forward exchange contracts $ 18,050 Financial liabilities used for hedging: Forward exchange contracts $ - (ii) Cash flow hedge	December 31, 2020 - 2,192	June 30, 2020
		23,565
		-

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

(Continued)

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

As of June 30, 2021, December 31 and June 30, 2020, the amounts related to the items designated as hedge instruments were as follows:

June 30, 2021

		June 30, 2021	June 30, 2021
Derivative financial assets used for hedging Foreign exchange contracts: Forward exchange sold Derivative financial liabilities used for hedging Foreign exchange contracts: Forward exchange sold Derivative financial assets used for hedging Foreign exchange contracts: Forward exchange sold	Contract amount (in thousands)	Currency Maturity period EUR to USD July 29~December 29, 2021 December 31, 2020		Average strike price
	EUR 28,000			1.2149
	Contract amount (in thousands)	Currency EUR to USD June	Maturity period April 29~June 29, 2021 30, 2020	Average strike price
	EUR 6,000			1.2192
	Contract amount (in thousands)	Currency EUR to USD	Maturity period July 27~December 29, 2020	Average strike price
	EUR 49,000			1.1407

(iii) For the three months and six months ended June 30, 2021 and 2020, the ineffective portion of cash flow hedge recognized in profits (losses) amounted of $0, $5,335, $0 and $4,255, respectively, recorded as “other gains and losses, net”.
(iv) For the three months and six months ended June 30, 2021 and 2020, the profits (losses) of changes in fair value of derivative financial instruments used for hedging reclassified from other equity to profit or loss is recognized as revenue in the statement of comprehensive income. Please refer to note (6)(z).

(Continued)

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

(e) Notes and accounts receivable

June 30, 2021 Notes receivables from operating activities $ 103,092 Accounts receivables – measured at amortized cost 179,265,256 Accounts receivables – fair value through other comprehensive income 29,823,608 209,191,956 Less: allowance for uncollectible accounts (3,913,308) $ 205,278,648 Notes and accounts receivable $ 205,245,493 Notes and accounts receivable – related parties $ 33,155	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	June 30, 2020 15,792 186,592,671 35,373,059 221,981,522 (3,922,621) 218,058,901 218,004,310 54,591

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:

	June 30, 2021	June 30, 2021
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 186,981,152 0% 10,905,635 0.63% 3,817,340 100% $ 201,704,127 December 31, 2020		Lifetime ECLs Credit- impaired - No 68,675 No 3,817,340 Yes 3,886,015
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable $ 213,584,823 11,779,368 3,817,340 $ 229,181,531	Weighted- average ECL rate 0% 0.57% 100%	Lifetime ECLs Credit- impaired - No 66,757 No 3,817,340 Yes 3,884,097

(Continued)

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

	June 30, 2020	June 30, 2020
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable $ 202,139,528 9,747,856 3,817,340 $ 215,704,724	Weighted- average ECL rate 0% 0.701% 100%	Lifetime ECLs Credit- impaired - No 68,331 No 3,817,340 Yes 3,885,671

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

	June 30, 2021	June 30, 2021
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 3,001,838 0% 3,956,998 0.10% 510,806 1.00% - - 18,187 100% $ 7,487,829 December 31, 2020		Lifetime ECLs Credit- impaired - No 3,998 No 5,108 No - - 18,187 Yes 27,293
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable $ 2,705,044 3,772,573 443,092 - 18,586 $ 6,939,295	Weighted- average ECL rate 0% 0.10% 1.00% - 100%	Lifetime ECLs Credit- impaired - No 3,814 No 4,431 No - - 18,586 Yes 26,831

(Continued)

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

	June 30, 2020	June 30, 2020
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable $ 2,584,760 3,016,539 648,083 - 27,416 $ 6,276,798	Weighted- average ECL rate 0% 0.1% 1% - 100%	Lifetime ECLs Credit- impaired - No 3,053 No 6,481 No - - 27,416 Yes 36,950

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

June 30, 2021 Overdue 1 to 180 days $ 994,597 Overdue 181 to 365 days - $ 994,597	December 31, 2020 2,073,442 104,264 2,177,706	June 30, 2020 1,311,212 30,700
		1,341,912

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 June 30	For the six months ended June 30, 2021 2020 $ 3,910,928 3,928,716 3,475 (4,082) (1,095) (2,013) $ 3,913,308 3,922,621
	2021 $ 3,910,928 3,475 (1,095) $ 3,913,308

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.

(Continued)

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

The Group entered into accounts receivable factoring agreements with banks. As of June 30, 2021, December 31 and June 30, 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 June 30, 2021, December 31 and June 30, 2020, the factored account receivable with no advance amounting $32,538, $42,550 and $16,697, respectively, is accounted for as other receivables.

The Group, customers and banks signed the three-party contracts in which the banks purchase accounts receivable from the Group. The total amount of the accounts receivable should not exceed the facility limit provided by the banks to the Group’s customers. Based on the contracts, the banks have no right to request the Company to repurchase the accounts receivable. Thus, this is a nonrecourse accounts receivable transfer. As of June 30, 2021, December 31 and June 30, 2020, accounts receivable factored were recovered and derecognized since the conditions of derecognition were met.

As of June 30, 2021, December 31 and June 30, 2020, the details of the factored accounts receivable but unsettled were as follows:

		June 30, 2021	June 30, 2021
Purchaser Financial Institution	Accounts receivable factored (gross) $ 22,439,663	Amount advanced Unpaid Paid - 22,407,125 December	Amount recognized in other receivable 32,538 31, 2020	Collateral -	Amount derecognized Interest rate 22,439,663 0.45%~0.85%
		Unpaid -
Purchaser Financial Institution		Amount advanced Amount recognized in other Unpaid Paid receivable - 42,555,222 42,550 June 30, 2020		Collateral -	Amount derecognized Interest rate 42,597,772 0.58%~0.93%
		Unpaid -
Purchaser Financial Institution		Amount advanced Unpaid Paid - 23,889,782	Amount recognized in other receivable 16,697	Collateral -	Amount derecognized Interest rate 23,906,479 0.64%~0.73%
		Unpaid -

(Continued)

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

As of June 30, 2021, December 31 and June 30, 2020, the Group did not provide any aforementioned notes and accounts receivable as collaterals.

(f) Inventories

June 30, 2021 Finished goods $ 24,696,670 Work in progress 9,405,000 Raw materials 83,533,708 Raw materials in transit 1,044,860 $ 118,680,238	December 31, 2020 23,237,892 9,630,864 62,694,104 589,099 96,151,959	June 30, 2020
		22,912,036 7,990,853 54,635,803 979,245
		86,517,937

(i) For the three months and six months ended June 30, 2021 and 2020, inventory cost recognized as cost of sales amounted to $252,222,686, $255,384,585, $512,612,637 and $431,485,720, respectively.
(ii) The loss due to the write-down of inventories to net realizable value amounted $614,603 for the three months ended June 30, 2021 and amounted to $675,995 and $292,252, for the six months ended June 30, 2021 and 2020, respectively. The Group reversed its allowance for inventory valuation loss amounted to $176,539 due to the sale and disposal of its obsolete inventories for the three months ended June 30, 2020.
(iii) As of June 30, 2021, December 31 and June 30, 2020, the Group did not provide any inventories as collaterals for its loans.
(g) Non-current assets held for sale

To activate its assets, the Group signed an agreement regarding the disposal of property on May 7, 2021, with a non-related party Kunshan Xingcheng Construction and Development Co., Ltd., with a total amount of CNY 956,012 thousand. As of June 30, 2021, the Group had received the prepayment of CNY 286,800, which was reported under other current liabilities.

The Group expects to complete the above-mentioned transactions and recognizes the gains on disposal in the third quarter of 2021, and accordingly recognizes the related assets as non-current assets held for sale.

As of June 30, 2021, the disposal group comprised the following assets:

Right-of-use-assets-Land Buildings and building improvement Other equipment	June 30, 2021
	$ 324,991 1,118,454 2,584 $ 1,446,029

(Continued)

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

The above assets did not have any impairment loss after measuring at the lower of other carrying amount and fair value less costs to sell.

(h) 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:

June 30, 2021 Associates $ 8,002,516 Joint venture (16,811) 7,985,705 Plus: credit balance of investment in equity method (other non-current liability) 42,746 Less: unrealized profits or losses (109,942) $ 7,918,509	December 31, 2020 8,036,165 (17,106) 8,019,059 43,177 (112,311) 7,949,925	June 30, 2020
		7,409,141 (15,707
		7,393,434 41,516 (116,704
		7,318,246

(i) Associates

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

June 30, 2021 Allied Circuit Co., Ltd. (“Allied Circuit”) $ 2,024,346 Avalue Technology Inc. (“Avalue”) 782,021 $ 2,806,367	December 31, 2020 2,075,813 828,286 2,904,099	June 30, 2020
		2,497,749 1,004,390
		3,502,139

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 June 30,	For the three months ended June 30,		For the six months ended June 30,	For the six months ended June 30,
	2021 $ 150,582	2020		2021 190,550	2020
		282,535			363,287

(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:

June 30, 2021 Carrying amount of individually immaterial associates $ 8,002,516 For the three months ended June 30, 2021 2020 The Group’s share of the net income (loss) of associates: Profit (loss) from continuing operations $ 150,582 282,535 Other comprehensive income (41,665) (91,877) Total comprehensive income $ 108,917 190,658	December 31, 2020 June 30, 2020 8,036,165 7,409,141 For the six months ended June 30, 2021 2020 190,550 363,287 (81,937) (238,133) 108,613 125,154
	2021 190,550 (81,937) 108,613

4) For the six months ended June 30, 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:

June 30, 2021 The carrying amount of the Group’s interests in all individually insignificant joint ventures $ (16,811)	December 31, 2020 (17,106)	June 30, 2020 (15,707)

(Continued)

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

The Group’s share of the net income (loss) of joint ventures: Losses from continuing operations (also the total comprehensive losses)	For the three months ended June 30, 2021 2020 $ 478 (349)	For the six months ended June 30, 2021 2020 436 (1,930)
	2021 $ 478	2021 436

(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 June 30, 2021, December 31 and June 30, 2020, the Group did not provide any investments accounted for using equity method as collaterals for its loans.
(i) Changes in subsidiaries’ equity

Except for the following disclosures, there were no significant transactions for the six months ended June 30, 2021 and 2020. Please refer to note (6)(h) of the consolidated financial statement for the year ended December 31, 2020.

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 (j) Material non-controlling interests of subsidiaries	2021 $ 64,617 (70,000) $ (5,383)

There were no significant transactions for the six months ended June 30, 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

(k) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the six months ended June 30, 2021 and 2020, were as follows:

Cost: Balance on January 1, 2021 Additions Disposals and derecognitions Transferred to non-current assets held for sale Reclassifications Effect of movements in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Additions Disposals and derecognitions Reclassifications Effect of movements in exchange rates Balance on June 30, 2020 Depreciation and impairments loss: Balance on January 1, 2021 Depreciation for the period Disposals and derecognitions Transferred to non-current assets held for sale Effect of movements in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Depreciation for the period Disposals and derecognitions Effect of movements in exchange rates Balance on June 30, 2020 Carrying amounts: Balance on January 1, 2021 Balance on June 30, 2021 Balance on January 1, 2020 Balance on June 30, 2020	Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
	$ 1,944,094 479,748 - - - (960) $ 2,422,882 $ 1,705,220 4,611 - 222,770 1 $ 1,932,602 $ - - - - - $ - $ - - - - $ - $ 1,944,094 $ 2,422,882 $ 1,705,220 $ 1,932,602	18,519,873 163,478 (3,007) (1,640,219) 53,360 (261,195) 16,832,290 16,966,779 45,718 (26,886) 427,699 (172,086) 17,241,224 10,855,109 490,470 (3,007) (521,765) (28,073) 10,792,734 10,352,434 424,439 (26,886) (107,257) 10,642,730 7,664,764 6,039,556 6,614,345 6,598,494	28,498,191 1,119,993 (594,431) - 959,954 (600,154) 29,383,553 27,044,641 754,050 (348,395) 256,099 (452,040) 27,254,355 20,571,645 1,217,056 (536,354) - (594,341) 20,658,006 19,850,259 1,165,398 (289,971) (399,660) 20,326,026 7,926,546 8,725,547 7,194,382 6,928,329	11,885,697 729,196 (506,517) (311,667) 113,423 (374,071) 11,536,061 11,289,433 559,070 (342,607) 115,558 (266,226) 11,355,228 8,556,546 915,886 (460,682) (309,083) (365,135) 8,337,532 8,141,591 666,539 (337,270) (188,745) 8,282,115 3,329,151 3,198,529 3,147,842 3,073,113	1,220,785 3,407,632 - - (1,126,737) (39,590) 3,462,090 1,310,558 812,190 - (1,022,126) (81,105) 1,019,517 - - - - - - - - - - - 1,220,785 3,462,090 1,310,558 1,019,517	62,068,640 5,900,047 (1,103,955) (1,951,886) - (1,275,970) 63,636,876 58,316,631 2,175,639 (717,888) - (971,456) 58,802,926 39,983,300 2,623,412 (1,000,043) (830,848) (987,549) 39,788,272 38,344,284 2,256,376 (654,127) (695,662) 39,250,871 22,085,340 23,848,604 19,972,347 19,552,055

As of June 30, 2021, December 31 and June 30, 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

(l) Right-of-use assets

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

Cost: Balance on January 1, 2021 Additions Deductions Transferred to non-current assets held for sale Effect of movements in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Additions Deductions Effect of movements in exchange rates Balance on June 30, 2020 Depreciation and impairment loss: Balance on January 1, 2021 Depreciation for the period Deductions Transferred to non-current assets held for sale Effect of movements in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Depreciation for the period Deductions Effect of movements in exchange rates Balance on June 30, 2020 Carrying amount: Balance on January 1, 2021 Balance on June 30, 2021 Balance on January 1, 2020 Balance on June 30, 2020	Land $ 1,268,129 - - (362,689) (36,284) $ 869,156 $ 1,110,813 321,745 - (17,576) $ 1,414,982 $ 54,756 13,347 - (37,698) (10,232) $ 20,173 $ 31,587 31,645 - (763) $ 62,469 $ 1,213,373 $ 848,983 $ 1,079,226 $ 1,352,513	Buildings 3,378,467 450,157 (69,468) - (13,820) 3,745,336 2,809,991 631,468 (123,066) (40,265) 3,278,128 1,175,689 399,990 (68,069) - (5,537) 1,502,073 659,467 405,632 (100,243) (7,947) 956,909 2,202,778 2,243,263 2,150,524 2,321,219	Machinery 76,930 - - - (198) 76,732 86,661 - (9,115) (1,572) 75,974 24,749 6,175 - - (151) 30,773 22,270 6,418 (9,803) (759) 18,126 52,181 45,959 64,391 57,848	Vehicles and Other 74,969 11,536 (7,425) - (21) 79,059 88,712 5,816 (7,358) (1,066) 86,104 46,349 10,575 (7,425) - - 49,499 32,681 18,042 (6,285) (456) 43,982 28,620 29,560 56,031 42,122	Total 4,798,495 461,693 (76,893) (362,689) (50,323) 4,770,283 4,096,177 959,029 (139,539) (60,479) 4,855,188 1,301,543 430,087 (75,494) (37,698) (15,920) 1,602,518 746,005 461,737 (116,331) (9,925) 1,081,486 3,496,952 3,167,765 3,350,172 3,773,702

(m) Short-term borrowings

The details of short-term borrowings were as follows:

June 30, 2021 Unsecured bank loans $ 106,325,908 Unused credit line for short-term borrowings $ 109,458,000 Range of interest rates 0.40%~7.56%	December 31, 2020 92,838,733 95,910,000 0.25%~2.58%	June 30, 2020
		71,905,942
		104,939,000
		0.25%~7.15%

(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)(aa).

(n) Long-term borrowings

The details of long-term borrowings were as follows:

June 30, 2021 Unsecured bank loans $ 16,320,000 Secured bank loans 690,325 Less: current portion (8,072,175) Total $ 8,938,150 Unused credit line for long-term borrowings $ 17,939,000 Range of interest rates 0.55%~1.50%	December 31, 2020 19,105,440 228,913 (8,932,615) 10,401,738 15,327,000 0.66%~1.50%	June 30, 2020 19,181,540 267,500 (9,958,715) 9,490,325 18,144,000 0.65%~1.50%

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

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

(o) Unsecured convertible corporate bonds

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

June 30, 2021 Total convertible corporate bonds issued $ 1,000,000 Unamortized discounts on corporate bonds payable (11,978) Unamortized issuance costs on corporate bonds payable (816) Accumulated converted amount (4,200) Balance of bonds payable of the reporting date$ 983,006 Conversion options included in equity components (classified as capital surplus and non-controlling interests) $ 48,463 For the three months ended June 30, 2021 2020 Interest expenses $ 3,461 3,426	December 31, 2020 June 30, 2020 1,000,000 1,000,000 (18,527) (24,978) (1,254) (1,691) - - 980,219 973,331 48,667 48,667 For the six months ended June 30,	December 31, 2020 June 30, 2020 1,000,000 1,000,000 (18,527) (24,978) (1,254) (1,691) - - 980,219 973,331 48,667 48,667 For the six months ended June 30,
	2021 6,918	2020 6,839

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) The maturity date of the above-mentioned convertible corporate bonds was June 6, 2022; therefore, the bonds were classified as current liabilities on June 30, 2021.
(iii) 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).
(iv) There were no significant issues, repurchases and repayments of bonds payable for the six months ended June 30, 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.
(p) Lease liabilities

The details of leases liabilities were as follows:

The details of leases liabilities were as follows:
June 30, 2021 Current $ 660,304 Non-current $ 1,683,685	December 31, 2020 377,161 1,910,601	June 30, 2020
		515,821
		1,914,644

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

The amounts recognized in profit or loss were as follows:

For the three months ended June 30, 2021 2020 $ 12,104 11,369 $ 799 971 $ 33,783 25,750	For the six months ended June 30,	For the six months ended June 30,
2021 $ 12,104 $ 799 $ 33,783	2021 23,773 1,386 70,010	2020
		22,934
		1,563
		50,042

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

			For the	six months ended	six months ended
				June 30,
			2021		2020
Total	cash outflow for leases	$	499,236		525,232
(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.

(q) Provisions

There is no significant changes of provisions for the six months ended June 30, 2021 and 2020. Please refer to note (6)(q) of the consolidated financial statements for the year ended December 31, 2020 for related information.

(r) 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 June 30, 2021 2020 $ 244 250 150 182 552 788 1,441 2,056 $ 2,387 3,276	For the six months ended June 30,	For the six months ended June 30,
2021 $ 244 150 552 1,441 $ 2,387	2021 498 309 1,113 2,948 4,868	2020
		497 357 1,566 4,132
		6,552

(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 $117,853 , $110,054 , $236,699 and $219,399 for the three months and six months ended June 30, 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 $279,188, $59,917, $529,014 and $309,643 for the three months and six months ended June 30, 2021 and 2020, respectively.

(s) 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:

Current tax expense	For the three months ended June 30, 2021 2020 $ 728,187 659,313	For the six months ended June 30,	For the six months ended June 30,
		2021 1,488,193	2020 976,671

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

For the three months ended June 30, 2021 2020 Items that will not be reclassified subsequently to profit or loss: Remeasurement of the defined benefit liability $ (178) - Unrealized gains (losses) on equity instruments at fair value through other comprehensive income 49,476 7,794 $ 49,298 7,794 Items that will be reclassified subsequently to profit or loss: Foreign currency translation differences of foreign operations $ (11,377) (7,577)	For the six months ended June 30, 2021 2020 (178) - 67,857 (47,169) 67,679 (47,169) (11,454) (5,735)
	2021 (178) 67,857 67,679 (11,454)

For the three months ended
June 30,
2021
2020
Items that will not be
reclassified subsequently to
profit or loss:
Remeasurement of the
defined benefit liability
$ (178)
-
Unrealized gains (losses) on
equity instruments at fair
value through other
comprehensive income
49,476
7,794
$
49,298
7,794
Items that will be
reclassified subsequently to
profit or loss:
Foreign currency translation
differences of foreign
operations
$
(11,377)
(7,577)

For the six months ended
June 30,
2021
2020
(178)
-
67,857
(47,169)
67,679
(47,169)
(11,454)
(5,735)

2021
(178)
67,857
67,679
(11,454)

(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, Arcadyan Zhi-Bao, Acbel Telecom, Mactech, RBL Shennona, Aco Smartcare through 2019, of UCGI, CBN, HengHao, GLB, through 2018, and of TTI through 2017.

(Continued)

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

(t) 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 June 30, 2021 and 2020. Please refer to note (6)(t) of the consolidated financial statement for the year ended December 31, 2020.

(i) Capital surplus

The balances of capital surplus were as follows:

June 30, 2021 Additional paid-in capital $ 3,660,158 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 64,342 Changes in equity of associates and joint ventures accounted for using equity method 282,801 $ 6,666,000	December 31, 2020 5,422,060 2,541,906 36,766 60,850 281,231 8,342,813	June 30, 2020
		5,421,061 2,541,906 36,766 59,919 280,042
		8,339,694

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:

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

The subsidiaries of the Company did not sell the ordinary shares of the Company in the six months ended June 30, 2021 and 2020. As of June 30, 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 22.35, 20.70 and 19.25 New Taiwan dollars per share as of June 30, 2021, December 31 and June 30, 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 June 30, 2021 Balance on January 1, 2020 The Group Associates Balance on June 30, 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) 546,291 9,100 178,439 (306,763) (579,535) (51,306) (937,604)	Others (779) 7,058 - 6,279 (1,706) 8,806 - 7,100	Total
	$ (6,888,977) (1,382,758) (72,297) $ (8,344,032) $ (3,794,980) (950,569) (178,023) $ (4,923,572)			(7,266,708) (829,409) (63,197)
				(8,159,314)
				(4,103,449) (1,521,298) (229,329)
				(5,854,076)

(u) Share-based payment

There were no significant changes in share-based payment during the six months ended June 30, 2021 and 2020. Please refer to note (6)(u) of the consolidated financial statements for the year ended December 31, 2020 for related information.

(v) Earnings per share

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

For the three months ended June 30, 2021 2020 $ 2,466,990 1,986,712 4,357,130 4,357,130	For the six months ended June 30,	For the six months ended June 30,
2021 $ 2,466,990 4,357,130	2021 5,087,154 4,357,130	2020
		2,591,723
		4,357,130

(Continued)

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

Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (after adjustment of potential diluted ordinary shares) Weighted-average number of outstanding ordinary shares of potential diluted ordinary shares Weighted-average number of outstanding ordinary shares (in thousands) Effect of potential diluted common stock Employee compensation (in thousands) Weighted-average number of ordinary shares (after adjustment of potential diluted ordinary shares) (in thousands)	2021 $ 2,466,990 4,357,130 24,408 4,381,538	2020 1,986,712 4,357,130 16,006 4,373,136	2021 5,087,154 4,357,130 43,866 4,400,996	2020
				2,591,723
				4,357,130 36,795
				4,393,925

(w) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended June 30, 2021	For the three months ended June 30, 2021	For the three months ended June 30, 2021
IT Product Segment $ 105,311,254 32,761,216 18,378,193 9,806,144 85,188,865 $ 251,445,672 $ 251,041,954 403,718 $ 251,445,672	Strategically Integrated Product Segment 1,624,247 148,951 446,214 1,524,357 5,804,593 9,548,362 9,291,943 256,419 9,548,362	Total
		106,935,501 32,910,167 18,824,407 11,330,501 90,993,458
		260,994,034
		260,333,897 660,137
		260,994,034

(Continued)

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

For the three months ended June 30, 2020	For the three months ended June 30, 2020	For the three months ended June 30, 2020
IT Product Segment Strategically Integrated Product Segment Total $ 119,743,447 1,781,697 121,525,144 30,653,853 243,845 30,897,698 21,583,369 222,294 21,805,663 11,192,858 1,459,561 12,652,419 5,483,565 439 5,484,004 67,047,934 4,240,642 71,288,576 $ 255,705,026 7,948,478 263,653,504 $ 255,332,364 7,727,100 263,059,464 372,662 221,378 594,040 $ 255,705,026 7,948,478 263,653,504 For the six months ended June 30, 2021		Total
		121,525,144 30,897,698 21,805,663 12,652,419 5,484,004 71,288,576
		263,653,504
		263,059,464 594,040
		263,653,504
	Strategically Integrated Product Segment 3,667,701 238,233 864,991 3,402,894 10,999,358 19,173,177 18,740,242 432,935 19,173,177	Total
		207,747,857 64,620,123 39,661,364 26,907,172 192,049,051
		530,985,567
		529,617,119 1,368,448
		530,985,567

(Continued)

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

			For the six months ended June	For the six months ended June	For the six months ended June	30, 2020
				Strategically
				Integrated
			IT Product		Product
			Segment		Segment	Total
	Primary geographical markets:
	United states	$	184,048,890		3,531,340	187,580,230
	China		57,206,798		312,758	57,519,556
	Netherlands		43,041,858		399,368	43,441,226
	United Kingdom		18,486,228		2,246,589	20,732,817
	India		10,671,452		439	10,671,891
	Others		117,153,831		8,600,999	125,754,830
		$	430,609,057		15,091,493	445,700,550
	Major products:
	5C related electronics products	$	429,662,906		14,780,723	444,443,629
	Others		946,151		310,770	1,256,921
		$	430,609,057		15,091,493	445,700,550
(ii)	Contract balances
			June 30,		December 31,	June 30,
			2021		2020	2020
	Notes and accounts receivable (including		$ 209,191,956		236,120,826	221,981,522
	related parties)
	Less: allowance for impairment		(3,913,308)		(3,910,928)	(3,922,621)
	Total		$ 205,278,648		232,209,898	218,058,901
	Contract liabilities		$ 848,531		820,016	788,149

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

The amount of revenue recognized for the six months ended June 30, 2021 and 2020 that were included in the balance of contract liability at the beginning of the period was $631,555 and $792,356, 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.

(Continued)

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

(x) Employees’ and directors’ compensations

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

The Company accrued and recognized its employee compensation of $262,920, $237,226, $545,508 and $308,116, and directors’ compensation of $13,903, $12,672, $28,846 and $16,459 for the three months and six months ended June 30, 2021 and 2020, respectively. The estimated amounts mentioned above are based on the net profit before tax without the compensations to employees and directors of each respective ending period, multiplied by the percentage of the compensation to employees and directors, which was approved by the management. The estimations are recorded under operating expenses and cost. The differences between the amounts estimated and recognized in the financial statements, if any, are accounted for as changes in accounting estimates and recognized as profit or loss in the distribution year. If the Board of Directors approve to distribute employee compensation in the form of stock, the number of the shares of the employee compensation is based on the closing price of the day before the Board of Directors’ meeting.

The 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.

(y) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

For the three months ended June 30 2021 2020 $ 483,453 428,096 44 52 $ 483,497 428,148	For the six months ended June 30	For the six months ended June 30
2021 $ 483,453 44 $ 483,497	2021 982,923 78 983,001	2020
		907,286 105
		907,391

(Continued)

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

(ii) Other income

The other incomes for the three months and six months ended June 30, 2021 and 2020, were as follows:

For the three months ended June 30, 2021 2020 $ 74,448 103,473 76,522 79,103 $ 150,970 182,576	For the six months ended June 30,	For the six months ended June 30,
2021 $ 74,448 76,522 $ 150,970	2021 82,647 155,967 238,614	2020
		103,473 147,144
		250,617

(iii) Other gains and losses

The other gains and losses for the three months and six months ended June 30, 2021 and 2020, were as follows:

Gains on disposal of investments Gains (losses) on financial assets and liabilities at fair value through profit or loss, net Foreign currency exchange gains (losses), net Gains (losses) on disposal of property, plant, and equipment, net	For the three months ended June 30, 2021 2020 $ - - (423,986) 75,477 794,420 (251,183) (20,233) 7,401 $ 350,201 (168,305)	For the six months ended June 30, 2021 2020 - 4,899 (14,279) 552,486 444,171 (788,152) (18,390) 8,489 411,502 (222,278)
	2021 $ - (423,986) 794,420 (20,233) $ 350,201	2021 - (14,279) 444,171 (18,390) 411,502

(Continued)

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

(z) Reclassification of the components of other comprehensive income

The details of reclassification of the components of other comprehensive income for the three months and six months ended June 30, 2021 and 2020, were as follows:

Cash flow hedge: Gains (losses) from current period Less: reclassification of gains (losses) included in profit or loss Profit (loss) recognized in other comprehensive income	For the three months ended June 30, 2021 2020 $ 13,198 (22,212) 2,705 27,911 $ 10,493 (50,123)	For the six months ended June 30,
	2021	2021 2020 25,173 80,332 4,931 51,896 20,242 28,436
	$ 13,198 2,705 $ 10,493

(aa) 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 six months ended June 30, 2021 and 2020 were as follows:

follows:
		Other
		receivables
Balance on January 1, 2021	$	2,392
Impairment losses recognized (reversed)		95
Balance on June 30, 2021	$	2,487
Balance on January 1, 2020	$	1,012
Impairment losses recognized (reversed)		1,429
Balance on June 30, 2020	$	2,441

(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 June 30, 2021 Non-derivative financial liabilities Secured borrowings $ 690,325 Unsecured borrowings 122,645,908 Lease liabilities－current and non-current 2,343,989 Notes and accounts payable 180,106,009 Other payables and dividends payable 23,998,689 Bonds payable 983,006 Derivative financial liabilities Forward exchange contracts: 178,483 Outflow Inflow Currency swap contracts 2,609 Outflow Inflow $ 330,949,018 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 (690,325) (122,645,908) (2,449,223) (180,106,009) (23,998,689) (995,800) (4,503,691) 4,249,436 (655,533) 652,289 (331,143,453) (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) (114,320,908) (697,080) (180,106,009) (23,998,689) (995,800) (4,503,691) 4,249,436 (655,533) 652,289 (320,453,160) (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 (37,800) (7,325,000) (516,249) - - - - - - - (7,879,049) (77,175) (5,125,000) (562,952) - - (1,000,000) - - - - - - (6,765,127)	Over 2 years (575,350) (1,000,000) (1,235,894) - - - - - - - (2,811,244) (74,563) (5,125,000) (1,352,885) - - - - - - - - - (6,552,448)

(Continued)

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

Carrying Amount June 30, 2020 Non-derivative financial liabilities Secured borrowings $ 267,500 Unsecured borrowings 91,087,482 Lease liabilities－current and non-current 2,430,465 Notes and accounts payable 167,403,495 Other payables and dividends payable 24,285,533 Bonds payable 973,331 Derivative financial liabilities Forward exchange contracts: 22,190 Outflow Inflow Forward exchange contracts for hedging: 322 Outflow Inflow $ 286,470,318	Contractual cash flows (267,500) (91,087,482) (2,558,764) (167,403,495) (24,285,533) (1,000,000) (1,853,730) 1,836,095 (354,960) 355,404 (286,619,965)	Within 1 year (77,175) (81,787,482) (559,032) (167,403,495) (24,285,533) - (1,853,730) 1,836,095 (354,960) 355,404 (274,129,908)	1~ 2 years (77,175) (2,975,000) (1,526,858) - - (1,000,000) - - - - (5,579,033)	Over 2 years (113,150) (6,325,000) (472,874) - - - - - - - (6,911,024)

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	J	une 30, 2021			De	cember 31, 20	20	Foreign currency 11,408,296 13,822 58,401 2,498,268 351,922 11,216,835 3,634 110,234 12,716 2,644,222	June 30, 2020
	Foreign currency $ 12,100,886 18,557 60,341 3,823,064 893,017 12,349,115 2,465 147,885 12,755 3,044,431	Exchange rate 27.86 6.4604 33.15 0.1548 0.8721 27.86 6.4604 5.0022 33.15 0.1548	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 29.63 338,027,810 7.07465 409,546 33.27 1,943,001 0.1413 10,459,546 0.9601 337,880 29.63 332,354,821 7.07465 107,675 5.476 3,266,233 33.27 423,061 0.1413 11,070,614
			337,130,684 516,998 2,000,304 16,487,835 778,800 344,046,344 68,675 4,120,076 422,828 13,129,803				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 each major foreign currency against Group entities’ functional currency as of June 30, 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.

		June 30, 2021	June 30, 2020
USD (against the TWD)
Strengthening 5%	$	(345,783)	283,649
Weakening 5%		345,783	(283,649)
USD (against the CNY)
Strengthening 5%		22,416	15,094
Weakening 5%		(22,416)	(15,094)
USD (against the BRL)
Strengthening 5%		(206,004)	(163,312)
Weakening 5%		206,004	163,312
EUR (against the TWD)
Strengthening 5%		78,874	75,997
Weakening 5%		(78,874)	(75,997)
CNY (against the USD)
Strengthening 5%		167,902	(30,553)
Weakening 5%		(167,902)	30,553

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 and six months ended June 30, 2021 and 2020, the foreign exchange gains (losses), including both realized and unrealized, amounted to $794,420 , $(251,183) , $444,171 and $(788,152), 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 six months ended June 30, 2021 and 2020, which would be mainly resulted from the bank savings and borrowings with variable interest rates.

			For the six months ended	For the six months ended
			June 30,
			2021	2020
Interest increased by	0.25%	$	13,232	161
Interest decreased by	0.25%		(13,232)	(161)

(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.

		June 30, 2021	June 30, 2021	June 30, 2021
Book value			Fair Value
		Level 1 - -	Level 2 22,831 1,092,417	Level 3 Total - 22,831 223,102 1,315,519
	1,338,350

(Continued)

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

		June 30, 2021	June 30, 2021	June 30, 2021
	Book value		Fair Value
		Level 1 - 2,671,532 778,800 - - - - - - - - - - - - - - - - - -	Level 2 18,050 - - - - 29,823,608 - - - - - 181,092 - - - - - - - - -	Level 3 Total - 18,050 - 2,671,532 - 778,800 2,285,218 2,285,218 352,487 352,487 - 29,823,608 - - - - - - - - - - - 181,092 - - - - - - - - - - - - - - - - - -
18,050 2,671,532 778,800 2,285,218 352,487 29,823,608 35,911,645 79,469,866 175,421,885 33,155 2,262,922 855,345 258,043,173 $ 295,311,218 $ 181,092 106,325,908 177,919,901 2,186,108 23,998,689 983,006 2,343,989 8,072,175 8,938,150 390,878 331,158,804 $ 331,339,896	18,050
	2,671,532 778,800 2,285,218 352,487 29,823,608
	35,911,645
	79,469,866 175,421,885 33,155 2,262,922 855,345
	258,043,173

(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 $ 74,429 Non-derivative financial assets mandatorily measured at fair value through profit or loss 1,310,697 Subtotal 1,385,126 Derivative financial assets for hedging 23,565 Financial assets at fair value through other comprehensive income Stocks listed on domestic markets 1,729,551 Stocks listed on foreign markets 337,880 Stocks unlisted on domestic markets 1,976,919 Stocks unlisted on foreign markets 174,860 Accounts receivable 35,373,059 Subtotal 39,592,269 Financial assets measured at amortized cost Cash and cash equivalents 58,264,469 Notes and accounts receivable, net 182,631,251 Notes and accounts receivable due from related parties, net 54,591 Other receivables 1,976,666 Refundable deposits 429,799 Subtotal 243,356,776 Total $ 284,357,736 Financial liabilities at fair value through profit or loss Derivative financial liabilities for non- hedging $ 22,512 Financial liabilities measured at amortized cost Short-term borrowings 71,905,942 Notes and accounts payable 165,195,046 Notes and accounts payable to related parties 2,208,449 Other payables and dividends payable 24,285,533 Bonds payable 973,331 Lease liabilities－current and non-current 2,430,465 Long-term borrowings current portion 9,958,715 Long-term borrowings 9,490,325 Deposits received 157,006 Subtotal 286,604,812 Total $ 286,627,324			June 30, 2020	June 30, 2020	June 30, 2020
	Book value			Fair Value
			Level 1 - - - 1,729,551 337,880 - - - - - - - - - - - - - - - - - -	Level 2 74,429 1,139,451 23,565 - - - - 35,373,059 - - - - - 22,512 - - - - - - - - -	Level 3 Total - 74,429 171,246 1,310,697 - 23,565 - 1,729,551 - 337,880 1,976,919 1,976,919 174,860 174,860 - 35,373,059 - - - - - - - - - - - 22,512 - - - - - - - - - - - - - - - - - -

(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 the following methods and assumptions:

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 six months ended June 30, 2021 and 2020.

5) Changes in level 3

The change in level 3 at fair value in the six months ended June 30, 2021 and 2020, were as follows:

Balance on January 1, 2021 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Proceeds from liquidation of investments Effect of changes in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Disposal Proceeds from capital reduction of investments Effect of changes in exchange rates Balance on June 30, 2020	Financial assets at fair value through profit or loss $ 201,609 6,643 - 14,850 - - $ 223,102 $ 115,359 (4,113) - 60,000 - - - $ 171,246	Financial assets at fair value through other comprehensive income 2,352,919 - 100,185 187,540 (104) (2,835) 2,637,705 2,424,053 - (241,239) 17,434 (44,915) (1,980) (1,574) 2,151,779	Total 2,554,528 6,643 100,185 202,390 (104) (2,835) 2,860,807 2,539,412 (4,113) (241,239) 77,434 (44,915) (1,980) (1,574) 2,323,025

For the six months ended June 30, 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:

(Continued)

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

		For the six months ended	For the six months ended
		June 30,
		2021	2020
Total gains and losses recognized:
In profit or loss before tax (as “other gains and
losses”)	$	6,643	(4,113)
In other comprehensive income (as “unrealized gains
and losses from equity instruments at fair value
through other comprehensive income”)	$	100,316	(200,499)

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

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

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

The quantified information for significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income－equity investment without an active market	Valuation technique Comparable market approach (Price-Book ratio method and Earnings multiplier method)	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value
		Price-Book ratio multiples (1.79~7.95, 1.72~7.9 and 0.9~7.34, respectively, on June 30, 2021, December 31 and June 30, 2020) The higher the multiple is, the higher the fair value will be. Multiples of earnings (17.69, 14.68 and 11.62, respectively, on June 30, 2021, December 31 and June 30, 2020) The higher the multiple is, the higher the fair value will be. Lack-of-Marketability discount rate (35%~85%, on June 30, 2021, December 31 and June 30, 2020) The higher the Lack- of-Marketability discount rate is, the lower the fair value will be.

(Continued)

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

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

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

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

June 30, 2021 Financial assets at fair value through other comprehensive income December 31, 2020 Financial assets at fair value through other comprehensive income June 30, 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 49,599 5,258 2,719 36,119 5,734 3,942 40,296 4,737 4,928	Unfavorable change 46,664 4,962 671 35,448 5,801 3,942 39,252 4,675 3,942

(Continued)

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

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.

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

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

June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -	June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -	June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -	June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -	June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -	June 30, 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 $ 374,887,020 (USD 13,455,791 ) 374,887,020 (USD 13,455,791 ) - - - -
Other current assets	Gross amounts of recognized financial assets (a) $ 374,887,020 (USD 13,455,791 )	Gross amounts of financial liabilities offset in the balance sheet (b) 374,887,020 (USD 13,455,791 )	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

June 30, 2021

			June 30, 2021	June 30, 2021	June 30, 2021	June 30, 2021
Financial liabilities that are offset			which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 374,887,020 (USD 13,455,791 ) - - - -
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 374,887,020 (USD 13,455,791 )		Gross amounts of financial assets offset in the balance sheet (b) 374,887,020 (USD 13,455,791 )	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

(Continued)

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


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 Net amount of financial liabilities presented in the balance sheet (b) the balance sheet (c)=(a)-(b) 199,267,863 (USD 6,996,765 ) - June 30, 2020		Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
					Financial instruments -
	$ (USD
		(USD	(USD
Financial assets that are offset which have an exercisable master netting arrangement or
Other current assets	Gross amounts of recognized financial assets (a) $ 203,441,166 (USD 6,866,054 )		Gross amounts of financial liabilities offset in the balance sheet (b) 203,441,166 (USD 6,866,054 )	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

			June 30, 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) 203,441,166 (USD 6,866,054 ) - - - -	June 30, 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) 203,441,166 (USD 6,866,054 ) - - - -	June 30, 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) 203,441,166 (USD 6,866,054 ) - - - -	June 30, 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) 203,441,166 (USD 6,866,054 ) - - - -
Financial liabilities that are offset
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 203,441,166 (USD 6,866,054 )		Gross amounts of financial assets offset in the balance sheet (b) 203,441,166 (USD 6,866,054 )	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

(ab) 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.

(ac) 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.

(Continued)

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

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

The Group’s investing and financing activities which did not affect the current cash flow in the six months ended June 30, 2021 and 2020 were acquisition of right-of-use assets by leasing, please refer to note (6)(l).

Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Proceeds from issuance of convertible bonds Long-term borrowings Lease liabilities 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 13,487,175 - (2,324,028) (404,067) 105,646 10,864,726 Cash flow 10,954,098 - (6,299,398) (450,693) (32,063) 4,171,944	Other non-cash changes - 2,787 - 460,294 (431) 462,650 Other non-cash changes - 6,839 - 614,070 (203) 620,706	June 30, 2021 106,325,908 983,006 17,010,325 2,343,989 445,346
				127,108,574
				June 30, 2020 71,905,942 973,331 19,449,040 2,430,465 213,772
				94,972,550

(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”)

(Continued)

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

Name of related party Relationship with the Group 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 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 (“Cal-Comp”) Company Kinpo The same Chairman of the Board with the Company Jipo Investment Inc. (“Jipo Investment”) The same Chairman of the Board with the Company

(b) Transactions with key management personnel

Key management personnel remunerations comprised:

For the three months ended June 30, 2021 2020 $ 162,301 176,330 1,964 2,168 1,443 6,271 $ 165,708 184,769	For the six months ended June 30,	For the six months ended June 30,
2021 $ 162,301 1,964 1,443 $ 165,708	2021 340,282 3,969 2,886 347,137	2020
		311,382 4,274 13,840
		329,496

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

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

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

For the three months ended June 30, 2021 2020 $ 47,492 73,695 2,313 390 $ 49,805 74,085	For the six months ended June 30,	For the six months ended June 30,
2021 $ 47,492 2,313 $ 49,805	2021 91,848 33,793 125,641	2020
		124,526 409
		124,935

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 June 30, 2021 2020 $ 1,618,356 1,185,833 989,001 618,302 $ 2,607,357 1,804,135	For the six months ended June 30,	For the six months ended June 30,
2021 $ 1,618,356 989,001 $ 2,607,357	2021 2,829,811 1,923,047 4,752,858	2020
		1,948,635 1,041,535
		2,990,170

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 June 30, 2021 Associates $ 33,155 Other related parties - Associates 1,149 Other related parties 156 $ 34,460	December 31, 2020 29,643 349,291 908 64 379,906	June 30, 2020
Notes and accounts receivable Notes and accounts receivable Other receivables Other receivables			54,337 254 - 73
			54,664

(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 June 30, 2021 Associates $ 1,149,932 Other related parties 1,036,176 Associates 39 $ 2,186,147	December 31, 2020 1,632,862 1,255,762 600 2,889,224	June 30, 2020 1,345,781 862,668 11,089 2,219,538

(Continued)

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

(v) Property transactions-acquisitions of financial assets

Relationship Other related parties-Jipo Investment	Account Non-Current financial assets at fair value through other comprehensive income	For the six months ended June 30, 2021	For the six months ended June 30, 2021
		Number of shares	Object Acquisition price Common stocks of Kinpo 616,864
		46,197 thousand shares

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged Assets	Subject June 30, 2021 Bail for court mandatory execution $ 41,090 Long-term borrowings (including current portion) 476,450 Guarantee of post-release duty payment to the customs and guarantee of the customs 500 $ 518,040	June 30, 2021	December 31, 2020 41,090 486,581 500 528,171	June 30, 2020
Other current assets Property, plant and equipment Other non-current assets				41,090 496,439 500
				538,029

(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 June 30, 2021, December 31 and June 30, 2020, the Group’s signed commitments to purchase property, plant and equipment amounted to $259,480, $473,370 and $210,397, respectively.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(Continued)

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

(12) Other:

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

By function By item	Three months endedJune 30, 2021	Three months endedJune 30, 2021	Three months endedJune 30, 2021	Three months endedJune 30, 2020	Three months endedJune 30, 2020	Three months endedJune 30, 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	3,618,730 253,751 262,362 541,653 1,243,122 21,575	3,506,758 225,295 137,066 148,957 270,743 152,701	7,125,488 479,046 399,428 690,610 1,513,865 174,276	4,468,831 131,451 65,377 340,795 1,027,287 8,494	3,158,648 201,305 107,870 142,955 265,315 125,484	7,627,479 332,756 173,247 483,750 1,292,602 133,978

By function By item	Six months endedJune 30, 2021			Six months endedJune 30, 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	7,707,156 491,953 494,713 1,103,883 2,485,081 33,173	6,796,359 460,396 275,868 295,913 568,418 276,112	14,503,515 952,349 770,581 1,399,796 3,053,499 309,285	8,085,926 341,464 300,421 1,028,020 2,203,535 18,235	6,023,789 414,738 235,173 304,320 514,578 222,097	14,109,715 756,202 535,594 1,332,340 2,718,113 240,332

(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 six month ended June 30, 2020:

(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 June 30, 2021 (excluding investment in subsidiaries, associates and joint ventures): Please refer to Table 3

(Continued)

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

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 4
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 5
(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 6
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 7
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 8
(ix) Trading in derivative instruments: Please refer to notes (6)(b) and (6)(d)
(x) Business relationships and significant intercompany transactions: Please refer to Table 9
(b) Information on investees: Please refer to Table 10
(c) Information on investment in mainland China: Please refer to Table 11
(d) Major shareholders: There were no shareholders holding more than 5% shares.

(14) Segment information:

Segment information:
Revenue Revenue from external customers Reportable segment profit Revenue Revenue from external customers Reportable segment profit	Three months ended June 30, 2021
	Information technology product segment			Total
				260,994,034
				3,448,550
		Information technology product segment	Strategically integrated product segment 7,948,478 475,430	Total
	$ 255,705,026 $ 2,369,723			263,653,504
				2,845,153

(Continued)

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

Six months ended June 30, 2021	Six months ended June 30, 2021	Six months ended June 30, 2021	Six months ended June 30, 2021
Information technology product segment			Total
			530,985,567
			7,117,191
	Information technology product segment	Strategically integrated product segment 15,091,493 931,589	Total
$ 430,609,057 $ 3,002,224			445,700,550
			3,933,813

(Continued)

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COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Table 1 Loans to other parties:

(June 30, 2021)

Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)	Table 1 Loans to other parties: (June 30, 2021)
													(In Thousands of New Taiwan Dollars)
No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short- term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Value
0 0 0 0 1 2 2 3 3 3 4 4 5 6 7 8 8 8 8 8 9 10	The Company 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 CEA 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 Other receivables	Y 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 1,983,950 835,800 57,070 1,315,200 438,400 1,997,450 137,098 856,050 998,725 657,600 523,740 570,700 1,200,000 57,020 285,100 285,100 255,510 57,020 484,670 153,440	250,000 200,000 1,950,200 835,800 55,720 1,292,700 430,900 1,950,200 69,650 835,800 975,100 646,350 258,540 557,200 600,000 55,790 278,950 278,950 - 6,934 474,215 -	220,000 200,000 557,200 557,200 55,720 1,292,700 - 1,571,304 - 417,900 975,100 - 172,360 557,200 600,000 36,264 - - - 6,934 474,215 -	1.08% 1.08% 1.02%~2.05% 1.02% 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 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	- - - - - - - - - - - - - - - - 4,383,783 4,379,515 5,416,846 167,279 - -	Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating demand Operating financing Operating demand Operating demand Operating demand Operating demand Operating demand Operating financing - - - - Operating financing Operating financing	- - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - -	20,778,945 20,778,945 20,778,945 20,778,945 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 8,030,552 2,222,153 2,216,412 2,216,412 2,216,412 2,216,412 133,823 2,132,291 25,803	41,557,890 41,557,890 41,557,890 41,557,890 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 8,030,552 2,222,153 4,432,825 4,432,825 4,432,825 4,432,825 4,432,825 2,132,291 25,803	(Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 3) (Note 3) (Note 4) (Note 4) (Note 4) (Note 5) (Note 5) (Note 6) (Note 7) (Note 8) (Note 9) (Note 9) (Note 9) (Note 9) (Note 9) (Note 10) (Note 11 �12)

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:

(June 30, 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:	SVA completed capital reduction procedures in April 2021. However, the credit line for CNC had been approved in November 2020, which was cancelled in April 2021. Therefore, the amount SVA lending
		CNC did not exceed the limit in the period.
Note	13:	The transactions had been eliminated in the consolidated financial statements.

(Continued)

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

Table 2 Guarantees and endorsements for other parties:

(June 30, 2021)

(June 30, 2021)	(June 30, 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�2)	Parent company endorsements /guarantees to third parties on behalf of subsidiary	Subsidiary endorsements /guarantees to third parties on behalf of parent company	Endorsements / guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 0 0 1	The Company The Company The Company Arcadyan	CEB CEA CEP Arcadyan AU	(Note 4) (Note 4) (Note 3) (Note 4)	25,973,681 25,973,681 25,973,681 1,447,608	57,070 102,726 151,129 209,212	55,720 100,296 127,544 209,212	55,720 100,296 127,544 ~~-~~	~~-~~ ~~-~~ ~~-~~ ~~-~~	0.05% 0.10% 0.12% 1.89%	51,947,362 51,947,362 51,947,362 4,432,825	Y Y Y Y	- - - -	- - - -

Note 1: According to the Company’s Procedures for Endorsement and Guarantee, the total amount of endorsements/ guarantees the Company or the Group is permitted to make shall not exceed 50% of the Company’s net worth. Endorsements/ guarantees the Company and the Group are permitted to make for a single company shall not exceed 25% of the Company’s net worth. For entities having business relationship with the Company, the amount of endorsements/ guarantees for a single company shall not exceed 80% of the transaction amount in the last fiscal year or the expecting amount of the current year, and shall be combined with the amount lend to others when calculating. The amount of endorsements/ guarantees permitted to make between subsidiaries whose over 90% of its voting shares are owned, directly or indirectly, by the Company shall be no more than 10% of the net worth of the Company. The amount of endorsements/ guarantees permitted to make between directly or indirectly wholly owned subsidiaries is not limited by the aforementioned restriction, only the maximum amount shall be no more than 25% of the net worth of the Company. Note 2: According to Arcadyan's Procedures for Endorsement and Guarantee, the total amount of endorsements/guarantees Arcadyan and its subsidiaries are permitted to make shall not exceed 40% of the Arcadyan's net worth. Endorsements/guarantees Arcadyan and its subsidiaries are permitted to make for a single company shall not exceed 1/3 of the aforementioned total amount. Note 3: Subsidiary whose over 50% common stock is directly owned. Note 4: Subsidiary whose over 50% common stock is indirectly owned.

(Continued)

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

Table 3 Securities held as of June 30, 2021 (excluding investment in subsidiaries, associates and joint ventures): (June 30, 2021)

(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 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
The Company Panpal Gempal	Taiwan Star Kinpo Cal-Comp 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. Others Total	� 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 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 69,369 54,000 5,677 6,995 18,369 2,140	704,954 1,606,367 778,800 23,322 19,800 48,040 36,432 7,046 24,375 84,840 285,502 __ 3,619,478 707,335 898,337 867,240 147,593 118,536 238,285 2,977,326 410,555 213,658 2,139 __ 626,352	2% 9% 5% 10% 11% 3% 10% 3% 8% 19% 1% 5% 5% 1% 4% - 6%	704,954 1,606,367 778,800 23,322 19,800 48,040 36,432 7,046 24,375 84,840 707,335 898,337 867,240 147,593 118,536 410,555 213,658	(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 June 30, 2021 (excluding investment in subsidiaries, associates and joint ventures): (June 30, 2021)

					(In Thousands of shares/ units)	(In Thousands of shares/ units)	(In Thousands of shares/ units)	(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
Arcadyan Mactech HHB Mithera BT CIT CPO CET CNC CNC Hong Ji Hong Jin	SUYIN Optronics Co., Ltd. (“SUYIN Optronics”) SUYIN Optronics GeoThings Inc. AirHop Communication Inc. Adant Technologies Inc. IOT EYE, Inc. TIEF FUND L.P. Chimei Motor Electronics Co., LTD Golden Smarthome Technology Corp. Total Taichung International Golf Country Club HWALLAR OPTRONICS (Fuzhou) CO., LTD. Beyond Limits, Inc. Suzhou Genki Fuhong Health Management Co., Ltd. Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits–Agricultural Bank of China "HuiLiFeng" customization RMB Structured Deposit Structured deposits - SPD Bank Yield Plus Structured Deposit 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 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	380 332 200 1,152 349 60 - 1,650 1,229 - - 873 - - - - - -	-	1% 1% 7% 5% 5% 14% 7% 7% 6% - 19% - 17% - - - - -	- - - - - - 40,217 27,274 - 8,700 - 125,370 4,312 398,445 260,572 174,184 129,685 129,531	(Note 2)
					-
					- - - - 40,217 27,274 - _____ 67,491 8,700 -
					125,370 4,312 398,445 260,572 174,184 129,685 129,531

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 Six months ended June 30, 2021)

(For the Six months ended June 30, 2021)	(For the Six months ended June 30, 2021)	(For the Six months ended June 30, 2021)	(For the Six months ended June 30, 2021)	(For the Six months ended June 30, 2021)
					(In Thousands of New Taiwan Dollars/ shares)
Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance		Purchases		Sales				Others		Ending Balance
					Shares/ Units	Amount	Shares/ Units	Amount	Shares/ Units	Price	Cost	Gain (loss) on disposal	Shares/ Units	Amount	Shares/ Units	Amount
CIT CIT CEC CPO CIC CET CET CPO Panpal	Stock : 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- 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 Strcutured Deposit Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Structured deposits- Win-win Interest Rate Structure RMB Structural Deposits Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Kinpo	Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income-non- current	Agricultural Bank of China Agricultural Bank of China Agricultural Bank of China Agricultural Bank of China Industrial and Commercial Bank of China Industrial and Commercial Bank of China China CITIC Bank Industrial and Commercial Bank of China Jipo Investment	- - - - - - - - Related party	23,172 - - - - - - - -	281,546 1,470,031 - - - - 261,366 241,113 -	46,197 - - - - - - - -	616,864 1,665,748 870,979 544,362 522,588 522,588 496,458 239,519 391,941	- - - - - - - - -	- 2,759,053 880,063 548,366 528,038 263,509 764,110 308,749.00 397,018	- 2,737,306 870,979 544,362 522,588 261,294 757,824 306,436 391,941	- 21,747 (Note 2) 9,084 (Note 2) 4,004 (Note 2) 5,450 (Note 2) 2,215 (Note 2) 6,286 (Note 2) 2,313 (Note 2) 5,077 (Note 2)	- - - - - - - - -	(73) (Note 1) (28) (Note 1) - - - (722) (Note 1) - (12) (Note 1) -	69,369 - - - - - - - -	898,337 398,445 - - - 260,572 - 174,184 -

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

(Continued)

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

Table 5 Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)

(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 2021)
							(In Thousands of New Taiwan Dollars)
Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter- party	Relationship with the Company	If the counter-party is a related party, disclose theprevious transfer information				References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
Arcadyan	Land located at Guangfu Road, Hsinchu City	March 17, 2021 (Note 1)	415,480	Depending on the contract	Natural person	Non-related party	Not applicable	Not applicable	Not applicable	Not applicable	Appraisal and price negotiation	Operational use	None

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

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

(June 30, 2021)

Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)	Table 6 Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: (June 30, 2021)
(In Thousands of New Taiwan Dollars)
Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Amount actually received	Gain (losses) on disposal	Counter- party	Relationship with the company	Purpose of disposal	~~References~~ for determine price	Others
CDE	Right-of-use assets�land and building	May 7, 2021 (Note 1)	2011~2016	1,446,029	CNY 956,012 thousand	Prepayments of CNY 286,800 thousand	(Note 2)	Kunshan XinCheng Construction and Development Co., Ltd.	Non-related party	Activating the assets	Appraisal and price negotiation	None

Note 1: To activate its assets, the Group signed an agreement with a non-related party regarding the disposal of property on May 7, 2021.

Note 2: The Group expects to complete the transaction in the third quarter of 2021. The actual gains or losses on disposal should include related cost and tax, which would be reported after the transaction is completed.

(Continued)

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

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the six months ended June 30, 2021)

(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)
			(In Thousands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
Just and its subsidiaries CIH and its subsidiaries The Company	UCGI CBN CEP CIH and its subsidiaries Just and its subsidiaries HSI and its subsidiaries BCI and its subsidiaries Etrade and its subsidiaries Compal Electronic, Inc. CIH and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. CEA BCI and its subsidiaries HSI and its subsidiaries Henghao HSI and its subsidiaries Just and its subsidiaries	Subsidiaries wholly owned by the Company The Company's subsidiaries Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Subsidiaries wholly owned by the Company Parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale Purchase Purchase Purchase	(426,156) (312,028) 110,493 65,692,615 83,439,379 11,598,321 17,084,385 9,363,678 (83,628,944) (102,761) 113,242 (65,911,495) (160,657) (1,530,399) (1,805,858) 143,380 278,835 102,833	(0.1)% (0.1)% - 12.5% 15.9% 2.2% 3.3% 1.8% (99.8)% (0.1)% 0.2% (94.2)% (0.2)% (2.2)% (2.6)% 0.2% 0.4% 0.2%	120 days 90 days 120 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 120 days	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Markup based on BCI and its subsidiaries' cost Markup based on Etrade and its subsidiaries' cost Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties	There is no significant difference There is no significant difference There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary 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	347,772 306,590 - (39,832,536) (3,343,356) (940,279) (11,806,340) (2,523,253) 3,343,356 57,887 (68,389) 39,832,536 133,436 3,052,656 2,780,133 (49,599) (63,525) (57,887)	0.2% 0.2% - (26.3)% (2.2)% (0.6)% (7.8)% (1.7)% 99.7% 0.1% (0.1)% 91.3% 0.2% 4.1% 3.8% (0.1)% (0.1)% (0.1)%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)

(Continued)

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

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the six months ended June 30, 2021)

(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)
			(In Thousands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unitprice	Payment Terms	Ending Balance	Percentage of total notes/accounts receivable (payable)
CIH and its subsidiaries CBN BCI and its subsidiaries CEB CEA Etrade and its subsidiaries UCGI HengHao CEP HSI and its subsidiaries	CPM Changbao Acbel and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. HSI and its subsidiaries CEB CEA CIH and its subsidiaries CPM Acbel and its subsidiaries BCI and its subsidiaries Cal-Comp CEA CIH and its subsidiaries BCI and its subsidiaries CEB Compal Electronic, Inc. HSI and its subsidiaries Compal Electronic, Inc. CIH and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. Just and its subsidiaries Etrade and its subsidiaries	An associate An associate With the samechairman Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company An associate With the same chairman With the same ultimate parent company With the samechairman With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company Parent company With the same ultimate parent company Parent company Parent company With the same ultimate parent company With the same ultimate parent company	Purchase Purchase Purchase Purchase Sale Sale Sale Sale Purchase Purchase Purchase Purchase Purchase Sale Purchase Purchase Purchase Sale Purchase Purchase Sale Sale Sale Sale Sale	2,021,507 485,512 517,492 314,816 (17,201,970) (591,706) (308,939) (133,873) 1,528,600 230,720 254,791 299,803 1,005,323 (103,122) 156,288 130,133 103,122 (9,360,105) 808,791 425,268 (143,468) (112,033) (11,601,407) (113,633) (846,723)	2.9% 0.7% 0.8% 26.0% (89.1)% (6.4)% (1.6)% (0.7)% 8.0% 1.2% 1.3% 8.2% 27.6% (2.6)% 40.1% 33.4% 26.5% (99.2)% 12.2% 96.1% (2.6)% (99.5)% (86.1)% (0.8)% (6.3)%	120 days 120 days 120 days Net 90 days from delivery 120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days 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 120 days	Similar to non- related parties Similar to non- related parties Similar to non- related parties - Markup based on BCI and its subsidiaries' cost According to markup pricing According to markup pricing According to markup pricing According to markup pricing Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties According to markup pricing Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties	There is no significant difference There is no significant difference There is no significant difference There is no significant difference Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference, 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	(789,173) (163,590) (432,164) (306,590) 11,806,340 2,894,230 1,301,760 98,527 (3,052,656) (123,285) (210,393) (1,301,760) (183,901) 113,404 (133,436) (98,527) (113,404) 2,523,253 (271,224) (347,772) 49,599 - 940,279 68,389 271,224	(1.1)% (0.2)% (0.6)% (37.0)% 85.9% 9.1% 3.4% 0.3% (8.1)% (0.3)% (0.6)% (56.7)% (18.2)% 8.5% (20.5)% (15.2)% (17.4)% 98.3% (8.7)% (97.6)% 1.7% - 85.4% 0.9% 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) (Note 2)

(Continued)

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

Table 7 Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (For the six months ended June 30, 2021)

(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 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)
HSI and its subsidiaries Arcadyan CNC Acradyan Vietnam Acradyan Germany Acradyan USA Acradyan AU	CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries Acradyan Germany Acradyan USA Acradyan AU CNC Acradyan Vietnam Arcadyan Arcadyan Arcadyan Arcadyan Arcadyan	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 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 With the same ultimate parent company	Sale Purchase Purchase Sale Sale Sale Purchase Purchase Sale Sale Purchase Purchase Purchase	(278,739) 1,814,247 400,002 (728,198) (3,082,572) (255,138) 6,381,600 407,367 (6,381,600) (407,367) 728,198 3,082,572 255,138	(2.1)% 11.8% 6.8% (4.0)% (17.0)% (1.0)% 26.0% 2.0% (100.0)% (100.0)% 100.0% 100.0% 100.0%	120 days 120 days 120 days Net 150 days from delivery Net 120 days from delivery Net 60 days from the end of the month of delivery Net 120 days from delivery Net 180 days from the end of the month of delivery Net 120 days from delivery Net 180 days from the end of the month of delivery Net 150 days from delivery Net 120 days from delivery Net 120 days from the end of the month of delivery	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, 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 - - - - - - - - - -	63,525 (2,780,133) (2,894,230) 391,238 843,244 150,156 (2,607,747) (Note 3) 2,607,747 (Note 3) (391,238) (843,244) (150,156)	0.9% (13.3)% (16.1)% 5.0% 12.0% 2.0% (29.0)% - 99.0% - (100.0)% (100.0)% (99.0)%	(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 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 June 30, 2021 is 788,856 thousand dollars.

(Continued)

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

Table 8 Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: (June 30, 2021)

(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 2021)	(June 30, 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 CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries CEB Etrade and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan Arcadyan CNC CBN	CBN UCGI Compal Electronic, Inc. Compal Electronic, Inc. CEA BCI and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. HSI and its subsidiaries CEB CEA Compal Electronic, Inc. Compal Electronic, Inc. Etrade and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan AU Arcadyan Vietnam Arcadyan Just and its subsidiaries	The Company's subsidiary The Company's subsidiary Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company 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	306,590 347,772 3,343,356 39,832,536 133,436 3,052,656 2,780,133 11,806,340 2,894,230 1,301,760 113,404 2,523,253 940,279 271,224 391,238 843,244 150,156 788,856 (Note 4) 2,607,747 (Note 5) 134,177 (Note 6)	2.08 2.75 33.81 2.88 4.82 1.33 1.36 3.08 0.45 0.46 3.64 5.95 3.30 6.06 4.59 6.55 5.92 (Note 4) 4.24 -	- - - - - - - - - - - - - - - - - - - 18,428	- - - - - - - - - - - - - - - - - - - Enhanced the collection	41,772 82,158 - 37,841,999 58,248 - - 11,806,340 - 46,932 - - - - 83,261 407,734 70,981 - 1,276,738 28,479	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 3)	- - - - - - - - - - - - - - - - - - - -

Note 1:Balance as of August 3, 2021. Note 2:Balance as of July 29, 2021.

Note 3:Balance as of August 6, 2021.

Note 4:Other receivables due to purchasing on behalf of related parties. Note 5:Accounts receivables due to processing raw material.

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

(Continued)

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

Table 9 Business relationships and significant intercompany transactions: (For the six months ended June 30, 2021)

(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)
				(In Thousands of New Taiwan Dollars)
No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Intercompany transactions
				Accounts name	Amount	Terms	Percentage of the consolidated net revenue or total assets
0 0 1 1 2 2 2 2 3 3 3 3 4 5	The Company The Company JUST and its subsidiaries JUST and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries CEB Etrade and its subsidiaries	CBN UCGI The Company CIH and its subsidiaries The Company CEA BCI and its subsidiaries HSI and its subsidiaries The Company HSI and its subsidiaries CEB CEA CEA The Company	1 1 2 3 2 3 3 3 2 3 3 3 3 2	Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue Accounts Receivable Sale Revenue Accounts Receivable Sales Revenue Accounts Receivable	312,028 306,590 426,156 347,772 83,628,944 3,343,356 102,761 57,887 65,911,495 39,832,536 160,657 133,436 1,530,399 3,052,656 1,805,858 2,780,133 17,201,970 11,806,340 591,706 2,894,230 308,939 1,301,760 133,873 98,527 103,122 113,404 9,360,105 2,523,253	There is no significant difference of price to non-related parties. The credit period is net 90 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � 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. � The price is based on the operating cost. The credit period is net 120 days. � The price is based on the operating cost. The credit period is net 120 days. � The price is based on the operating cost. The credit period is net 60 days from delivery, and will be adjusted if necessary. �	0.1% 0.1% 0.1% 0.1% 15.7% 0.7% - - 12.4% 8.7% - - 0.3% 0.7% 0.3% 0.6% 3.2% 2.6% 0.1% 0.6% 0.1% 0.3% - - - - 1.8% 0.6%

(Continued)

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

Table 9 Business relationships and significant intercompany transactions:

(For the six months ended June 30, 2021)

(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)	(For the six months ended June 30, 2021)
				(In Thousands of New Taiwan Dollars)
No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Intercompany transactions
				Accounts name	Amount	Terms	Percentage of the consolidated net revenue or total assets
6 7 8 8 8 8 9 9 9 9 10 11	HHT CEP HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan Arcadyan CNC Arcadyan Vietnam	CIH and its subsidiaries The Company The Company Just and its subsidiaries Etrade and its subsidiaries CIH and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan AU Arcadyan Vietnam Arcadyan Arcadyan	2 2 2 3 3 3 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 Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Other Receivable Processing Revenue Accounts Receivable Processing Revenue	143,468 49,599 112,033 - 11,601,407 940,279 113,633 68,389 846,723 271,224 278,739 63,525 728,198 391,238 3,082,572 843,244 255,138 150,156 788,856 6,381,600 2,607,747 407,367	There is no significant difference of price to non-related parties. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 150 days from delivery. � There is no significant difference of price to non-related parties. The credit period is net 120 days from delivery. � There is no significant difference of price to non-related parties. The credit period is net 60 days from the end of the month of delivery. � The credit period is net 180 days from the end of the month of delivery and depended on funding demand. The price is based on the operating cost. The credit period is net 120 days from delivery and depended on funding demand. � The credit period is net 180 days from the end of the month of delivery and depended on funding demand.	- - - - 2.2% 0.2% - - 0.2% 0.1% 0.1% - 0.1% 0.1% 0.6% 0.2% 0.0% - 0.2% 1.2% 0.6% 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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