Compal - Interim / Quarterly Report 2021

Stock Code:2324

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 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 17～60 61～63 63 64 64 64 64～65 65, 67～80 66, 81～86 66, 87～89 66 66

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

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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 September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2021 and 2020, as well as the changes in equity and cash flows for the nine months ended September 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 $13,418,155 thousand and $17,146,044 thousand, constituting 2.6% and 3.9% of consolidated total assets as of September 30, 2021 and 2020, respectively, total liabilities amounting to $1,730,830 thousand and $2,736,810 thousand, constituting 0.4% and 0.8% of consolidated total liabilities as of September 30, 2021 and 2020, and the absolute value of total comprehensive income (loss) amounting to $(60,651) thousand, $(22,140) thousand, $(144,101) thousand and $(239,480) thousand, constituting 1.4%, 1.2%, 1.6% and 8.1% of consolidated total comprehensive income (loss) for the three months and nine months ended September 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 September 30, 2021 and 2020, and of its consolidated financial performance for the three months and nine months ended September 30, 2021 and 2020, as well as its consolidated cash flows for the nine months ended September 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” 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) November 11, 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 September 30, 2021 and 2020

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 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), 6(k), and (7)) 1310 Inventories (note (6)(f)) 1470 Other current assets (note (8)) Non-current assets: 1550 Investments accounted for using equity method (note (6)(g)) 1510 Non-current financial assets at fair value through profit or loss (note (6)(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(c)) 1600 Property, plant and equipment (notes (6)(k) and (8)) 1755 Right-of-use assets (note (6)(l)) 1780 Intangible assets (note (8)(h)) 1840 Deferred tax assets 1990 Other non-current assets (note (8)) Total assets	September 30, 2021 Amount % $ 79,209,934 15.1 4,037,220 0.8 19,510 - 257,412,777 49.1 34,259 - 3,399,275 0.6 130,715,602 24.9 4,046,551 0.8 478,875,128 91.3 7,878,305 1.5 249,718 - 5,879,124 1.1 24,810,806 4.7 3,111,223 0.6 1,630,629 0.3 1,552,150 0.3 1,235,614 0.2 46,347,569 8.7 $ 525,222,697 100.0	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	September 30, 2020 Amount % 85,505,998 19.7 5,519,175 1.3 8,778 - 192,679,953 44.3 114,424 - 1,234,529 0.3 104,673,857 24.1 3,012,165 0.7 392,748,879 90.4 7,653,291 1.8 183,380 - 4,434,116 1.0 21,629,512 5.0 3,626,841 0.8 1,554,557 0.4 1,760,092 0.4 726,259 0.2 41,568,048 9.6 434,316,927 100.0 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(m)) 2120 Current financial liabilities at fair value through profit or loss (note (6)(b)) 2125 Current financial liabilities for hedging (note (6)(d)) 2130 Current contract liabilities (note (6)(w)) 2170 Notes and accounts payable 2180 Notes and accounts payable to related parties (note (7)) 2200 Other payables (note (7)) 2230 Current tax liabilities 2250 Current provisions (note (6)(q)) 2280 Current lease liabilities (note (6)(p)) 2300 Other current liabilities 2365 Current refund liabilities 2321 Bonds payable, current portion (note (6)(o)) 2322 Long-term borrowings, current portion (note (6)(n)) Non-Current liabilities: 2530 Bonds payable (note (6)(o)) 2540 Long-term borrowings (note (6)(n)) 2570 Deferred tax liabilities 2580 Non-current lease liabilities (note (6)(p)) 2640 Non-current net defined benefit liability 2670 Non-current liabilities, others (note (6)(g)) Total liabilities Equity: Equity attributable to owners of parent (note (6)(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	September 30, 2021	December 31, 2020	September 30, 2020 Amount % 77,205,342 17.8 26,874 - 23,069 - 896,192 0.2 190,131,940 43.8 2,043,079 0.5 20,650,649 4.8 4,492,123 1.0 836,906 0.2 436,424 0.1 1,199,149 0.3 1,480,474 0.3 - - 9,200,175 2.1 308,622,396 71.1 976,769 0.2 8,971,031 2.1 1,011,738 0.2 1,849,864 0.4 725,564 0.2 303,108 0.1 13,838,074 3.2 322,460,470 74.3 44,071,466 10.1 8,341,023 1.9 58,031,868 13.4 (6,562,580) (1.5) (881,247) (0.2) 103,000,530 23.7 8,855,927 2.0 111,856,457 25.7 434,316,927 100.0
				Amount % $ 124,888,489 23.8 8,796 - - - 930,171 0.2 215,319,152 41.1 2,609,100 0.5 26,620,379 5.1 5,956,984 1.1 1,167,374 0.2 670,126 0.1 1,874,938 0.4 1,757,421 0.3 879,379 0.2 14,944,031 2.8 397,626,340 75.8 - - 6,553,700 1.2 1,032,534 0.2 1,630,833 0.3 770,328 0.1 436,198 0.1 10,423,593 1.9 408,049,933 77.7 44,071,466 8.4 6,679,077 1.3 66,538,581 12.7 (8,385,932) (1.6) (881,247) (0.2) 108,021,945 20.6 9,150,819 1.7 117,172,764 22.3 $ 525,222,697 100.0	Amount % 92,838,733 19.9 136,617 - 2,192 - 820,016 0.2 196,837,439 42.2 2,888,624 0.6 23,397,683 5.0 5,378,651 1.2 870,050 0.2 377,161 0.1 1,470,466 0.3 1,574,469 0.3 - - 8,932,615 1.9 335,524,716 71.9 980,219 0.2 10,401,738 2.2 992,470 0.2 1,910,601 0.4 786,173 0.2 340,131 0.1 15,411,332 3.3 350,936,048 75.2 44,071,466 9.4 8,342,813 1.8 62,566,181 13.4 (7,266,708) (1.6) (881,247) (0.2) 106,832,505 22.8 9,157,145 2.0 115,989,650 24.8 466,925,698 100.0

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 nine months ended September 30, 2021 and 2020

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

4000 Net sales revenue (notes (6)(w) and (7)) 5000 Cost of sales (notes (6)(f),(6)(r), (7) and (12)) Gross profit Operating expenses: (notes (6)(r) and (12)) 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Net operating income Non-operating income and expenses: 7100 Interest income (note (6)(y)) 7210 Gains on disposals of property, plant and equipment (notes (6)(d), (6)(g), (6)(k), (6)(y) and (6)(aa)) 7050 Finance costs (notes (6)(o) and (6)(p)) 7190 Other income (note (6)(y)) 7590 Miscellaneous disbursements 7670 Impairment loss (note (6)(k)) 7770 Share of profit (loss) of associates and joint ventures accounted for using equity method (note (6)(g)) Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (note (6)(s)) Profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (note (6)(s)) Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8368 Gains (losses) on hedging instrument (note (6)(z)) 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss (note (6)(s)) Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income 8500 Total comprehensive income Profit, attributable to: 8610 Profit, attributable to owners of parent 8620 Profit, attributable to non-controlling interests Comprehensive income attributable to: 8710 Comprehensive income (loss), attributable to owners of parent 8720 Comprehensive income (loss), attributable to non-controlling interests Earnings per share (note 6(v)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the three months e	nded September 30	For the nine months e	nded September 30 2020 Amount % 714,942,173 100.0 691,734,117 96.8 23,208,056 3.2 3,183,441 0.4 3,070,896 0.4 10,614,730 1.5 16,869,067 2.3 6,338,989 0.9 1,245,680 0.2 (262,324) - (895,587) (0.1) 383,643 - (41,919) - - - 377,362 - 806,855 0.1 7,145,844 1.0 1,631,192 0.2 5,514,652 0.8 (1,938) - (462,766) (0.1) (58,679) - (6,709) - (516,674) (0.1) (2,038,247) (0.3) (9,420) - (11,357) - (11,317) - (2,047,707) (0.3) (2,564,381) (0.4) 2,950,271 0.4 4,780,214 0.7 734,438 0.1 5,514,652 0.8 2,253,359 0.3 696,912 0.1 2,950,271 0.4 1.10
	2021 Amount % $ 336,861,180 100.0 326,186,874 96.8 10,674,306 3.2 2,019,623 0.6 1,174,707 0.3 3,875,780 1.2 7,070,110 2.1 3,604,196 1.1 551,884 0.1 2,040,786 0.6 (258,145) (0.1) 250,041 0.1 (6,238) - (404,513) (0.1) (6,433) - 2,167,382 0.6 5,771,578 1.7 1,154,020 0.3 4,617,558 1.4 - - (200,470) (0.1) (6,256) - (52,842) - (153,884) (0.1) (69,168) - 1,460 - (27,873) - (2,379) - (93,202) - (247,086) (0.1) $ 4,370,472 1.3 $ 4,351,753 1.3 265,805 0.1 $ 4,617,558 1.4 $ 4,114,098 1.2 256,374 0.1 $ 4,370,472 1.3 $ 1.00 $ 0.99	2020 Amount % 269,241,623 100.0 260,248,397 96.7 8,993,226 3.3 1,225,059 0.5 1,006,848 0.4 3,709,712 1.4 5,941,619 2.3 3,051,607 1.0 338,289 0.1 (40,046) - (271,199) (0.1) 133,026 - (15,651) - - - 16,005 - 160,424 - 3,212,031 1.0 654,521 0.2 2,557,510 0.8 - - 219,009 0.1 1,431 - 40,460 - 179,980 0.1 (1,066,944) (0.4) (37,856) - 166,666 0.1 (5,582) - (932,552) (0.3) (752,572) (0.2) 1,804,938 0.6 2,188,491 0.7 369,019 0.1 2,557,510 0.8 1,477,177 0.5 327,761 0.1 1,804,938 0.6 0.50 0.50	2021 Amount % 867,846,747 100.0 838,799,511 96.7 29,047,236 3.3 4,817,058 0.6 3,298,275 0.4 11,503,742 1.3 19,619,075 2.3 9,428,161 1.0 1,534,885 0.2 2,452,288 0.3 (752,874) (0.1) 488,655 0.1 (42,386) - (404,513) - 184,553 - 3,460,608 0.5 12,888,769 1.5 2,642,213 0.3 10,246,556 1.2 (889) - 269,090 - (15,896) - 14,837 - 237,468 - (1,493,161) (0.2) 21,702 - (100,170) - (13,833) - (1,557,796) (0.2) (1,320,328) (0.2) 8,926,228 1.0 9,438,907 1.1 807,649 0.1 10,246,556 1.2 8,147,090 0.9 779,138 0.1 8,926,228 1.0 2.17 2.14
				1.09

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 nine months ended September 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 4,780,214 (851) 4,779,363 (695,590) 3,366,088 (4,407,147) - (33,051) (9,057) - (24,844) - 33,515,385 38,049,698 9,438,907 (599) 9,438,308 (924,672) (3,164,965) (5,288,576) - (5,338) (29,553) - (142,441) - - 37,932,461	57,726,604 4,780,214 (851) 4,779,363 - - (4,407,147) - (33,051) (9,057) - (24,844) - 58,031,868 62,566,181 9,438,907 (599) 9,438,308 - - (5,288,576) - (5,338) (29,553) - (142,441) - - 66,538,581	(3,794,980) - (2,008,646) (2,008,646) - - - - - - - - - (5,803,626) (6,888,977) - (1,543,533) (1,543,533) - - - - - - - - - - (8,432,510)		(306,763) - (515,051) (515,051) - - - - 33,051 8,978 - 24,844 - (754,941) (376,952) - 244,752 244,752 - - - - - 29,553 - 142,441 - - 39,794	(1,706) - (2,307) (2,307) - - - - - - - - - (4,013) (779) - 7,563 7,563 - - - - - - - - - - 6,784	(4,103,449) - (2,526,004) (2,526,004) - - - - 33,051 8,978 - 24,844 - (6,562,580) (7,266,708) - (1,291,218) (1,291,218) - - - - - 29,553 - 142,441 - - (8,385,932)	(881,247) - - - - - - - - - - - - (881,247) (881,247) - - - - - - - - - - - - - (881,247)	105,972,633 4,780,214 (2,526,855) 2,253,359 - - (4,407,147) (881,429) 1,490 1,603 60,021 - - 103,000,530 106,832,505 9,438,907 (1,291,817) 8,147,090 - - (5,288,576) (1,762,859) 11,118 1,683 80,027 - 957 - 108,021,945	8,786,711 734,438 (37,526) 696,912 - - - - - - - - (627,696) 8,855,927 9,157,145 807,649 (28,511) 779,138 - - - - - - - - - (785,464) 9,150,819	114,759,344 5,514,652 (2,564,381)
		-	-	-												2,950,271
			695,590 - - - - - - - -													- - (4,407,147) (881,429) 1,490 1,603 60,021 - (627,696)
			20,414,740													111,856,457
			20,414,740 - -													115,989,650 10,246,556 (1,320,328)
	-		-													8,926,228
	- - - - - - - - - -		924,672 - - - - - - - - -													- - (5,288,576) (1,762,859) 11,118 1,683 80,027 - 957 (785,464)
	$ 44,071,466		21,339,412													117,172,764

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

See accompanying notes to consolidated financial statements.

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

Notes to the Consolidated Financial Statements

September 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 November 11, 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

(Continued)

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

●Amendments to IFRS 3 “Reference to the Conceptual Framework”
(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 Effective date per Interpretations Content of amendment IASB Amendments to IAS 1 The amendments aim to promote January 1, 2023 “Classification of Liabilities consistency in applying the requirements as Current or Non-current” 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.

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	September 30, 2021	Percentage of ownership December 31, 2020 September 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 September 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	September 30, 2021	Percentage of ownership December 31, 2020 September 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% 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”) 〃	September 30, 2021	Percentage of ownership December 31, 2020 September 30, 2020 Description 100% 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	September 30, 2021	Percentage of ownership December 31, 2020 September 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% 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	September 30, 2021	Percentage of ownership December 31, 2020 September 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% 61% 51% 100% 100% 64% 100% 100% 45% 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 Quest International Group Co., Ltd. (“Quest”) Investment 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 Rayonnant 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	September 30, 2021	Percentage of ownership December 31, 2020 September 30, 2020 Description 100% 100% 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 in 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% 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”) 〃〃 Compal USA (Indiana), Inc. (“CIN”) Foundry of automotive electronic products GLB Rapha Bio Ltd. (“RBL”) Detector and feature Unicore Raycore Biotech Co., Ltd. (“Raycore”) Animal medication retail and wholesale	September 30, 2021	Percentage of ownership December 31, 2020 September 30, 2020 Description 100% 100% 100% 100% 100% 100% 99% 99% - - The Group acquired 100% of its shares in September 2021. 100% 100% The liquidation had been completed in July 2021. 51% 51%
	100% 100% 100% 99% 100% - 100%

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

(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

September 30, 2021 Cash on hand $ 13,847 Checking accounts and demand deposits 24,760,545 Time deposits 54,435,542 Bonds purchased under resale agreements - $ 79,209,934	December 31, 2020 18,637 19,537,842 69,560,444 10,000 89,126,923	September 30, 2020
		19,888 16,820,102 67,333,991 1,332,017
		85,505,998

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

September 30, 2021 Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Structured deposits $ 2,425,344 Stock unlisted in domestic markets 138,230 Fund in domestic or foreign markets 1,504,574 Derivative instruments not used for hedging Foreign exchange contracts 217,713 Swap contracts 1,077 Total $ 4,286,938	December 31, 2020 2,234,184 100,190 101,419 - 11,069 2,446,862	September 30, 2020
		5,333,670 97,525 85,855 166,456 19,049
		5,702,555

(Continued)

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

September 30, 2021 Current $ 4,037,220 Non-current 249,718 $ 4,286,938 September 30, 2021 Financial liabilities held-for-trading: Derivative instruments not used for hedging Foreign exchange contracts $ 4,792 Swap contracts 4,004 $ 8,796	December 31, 2020		September 30, 2020
	2,245,254 201,608 2,446,862 December 31, 2020 130,865 5,752 136,617		5,519,175 183,380
			5,702,555
			September 30, 2020 26,874 - 26,874

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:

September 30, 2021 Contract amount (in thousand) Currency Maturity date Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 44,100 EUR to USD October 8, 2021~ January 14, 2022 Forward exchange sold EUR 1,500 EUR to TWD January 5, 2022 Forward exchange purchased USD155,500 USD to BRL October 6, 2021~July 4, 2022 Swap contracts: Currency Swap 10,000 USD to TWD October 14, 2021 Foreign exchange contracts: Forward exchange purchased USD 23,000 USD to CNY October 28, 2021~November 29, 2021 Swap contracts: Currency swap USD 40,000 USD to TWD October 28, 2021~November 29, 2021

(Continued)

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

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) Derivative financial assets: Foreign exchange contracts: Forward exchange sold EUR 11,000 Forward exchange purchased USD 95,500 Swap contracts: Currency swap USD 42,500 Derivative financial liabilities: Foreign exchange contracts: Forward exchange sold EUR 24,000 Forward exchange sold EUR 1,000		December 31, 2020	December 31, 2020
		Currency Maturity date USD to TWD January 13~February 26, 2021 EUR to USD January 13~April 14, 2021 USD to BRL January 7~August 26, 2021 USD to TWD March 12~April 29, 2021 September 30, 2020	Maturity date
		Currency EUR to USD USD to BRL USD to TWD EUR to USD EUR to TWD	Maturity date
			October 8, 2020~February 25, 2021 October 1, 2020~August 26, 2021 October 13~December 18, 2020 October 29, 2020~January 28, 2021 October 8. 2020

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

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

(Continued)

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

September 30, 2021 Equity investments at fair value through other comprehensive income: Stock listed in domestic markets $ 2,761,142 Stock listed in foreign markets 576,312 Stock unlisted in domestic markets 2,178,889 Stock unlisted in foreign markets 362,781 Total $ 5,879,124	December 31, 2020 1,972,849 491,243 2,152,542 200,377 4,817,011	September 30, 2020
		1,701,936 486,451 2,022,760 222,969
		4,434,116

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

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

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

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

If there is an increase (decrease) in the market price by 5% on the reporting date of the equity securities hold by the Group, the increase (decrease) in other comprehensive income (pre-tax) for the nine months ended September 30, 2021 and 2020, will be $293,956 and $221,706, 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 September 30, 2021, December 31 and September 30, 2020, the Group did not provide any financial assets at fair value through other comprehensive income as collaterals for its loans.

(Continued)

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

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

September 30, 2021 Cash flow hedge: Financial assets used for hedging: Forward exchange contracts $ 19,510 Financial liabilities used for hedging: Forward exchange contracts $ -	December 31, 2020 - 2,192	September 30, 2020
		8,778
		23,069

(ii) Cash flow hedge

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

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

	September 30, 2021	September 30, 2021
Contract amount (in thousands)	Currency Maturity period EUR to USD October 28~ December 29, 2021 December 31, 2020		Average strike price
EUR 13,000			1.2157
Contract amount (in thousands)	Currency EUR to USD	Maturity period April 29~June 29, 2021	Average strike price
EUR 6,000			1.2192

(Continued)

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

Derivative financial assets used for hedging Foreign exchange contracts: Forward exchange sold Derivative financial liabilities used for hedging Forward exchange sold		September 30, 2020
	Contract amount (in thousands)	Currency Maturity period EUR to USD October 29~ December 29, 2020 EUR to USD October 26~ December 29, 2020	Average strike price
	EUR 11,000 USD 26,000		1.1980 1.1423

(iii) For the three months and nine months ended September 30, 2021 and 2020, the ineffective portion of cash flow hedge recognized in profits (losses) amounted of $0, $(3,117), $0 and $1,138, respectively, recorded as “other gains and losses, net”.
(iv) For the three months and nine months ended September 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).
(e) Notes and accounts receivable

September 30, 2021 Notes receivables from operating activities $ 35,295 Accounts receivables – measured at amortized cost 226,696,749 Accounts receivables – fair value through other comprehensive income 34,628,113 261,360,157 Less: allowance for uncollectible accounts (3,913,121) $ 257,447,036 Notes and accounts receivable $ 257,412,777 Notes and accounts receivable – related parties $ 34,259	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	September 30, 2020 28,314 169,175,554 27,516,157 196,720,025 (3,925,648) 192,794,377 192,679,953 114,424

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.

(Continued)

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

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:

	September 30, 2021	September 30, 2021
Credit rating	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 237,868,347 0% 12,374,397 0.54% 3,817,340 100% $ 254,060,084 December 31, 2020		Lifetime ECLs Credit- impaired - No 66,245 No 3,817,340 Yes 3,883,585
Level A Level B Level C
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 213,584,823 0% 11,779,368 0.57% 3,817,340 100% $ 229,181,531 September 30, 2020		Lifetime ECLs Credit- impaired - No 66,757 No 3,817,340 Yes 3,884,097
Credit rating Level A Level B Level C	Carrying amount of notes and accounts receivable $ 174,601,427 10,718,853 3,817,340 $ 189,137,620	Weighted- average ECL rate 0% 0.739% 100%	Lifetime ECLs Credit- impaired - No 79,190 No 3,817,340 Yes 3,896,530

(Continued)

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

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

	September 30, 2021	September 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 $ 2,601,268 0% 3,944,774 0.10% 735,909 1.00% - - 18,122 100% $ 7,300,073 December 31, 2020		Lifetime ECLs Credit- impaired - No 4,049 No 7,365 No - - 18,122 Yes 29,536
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable Weighted- average ECL rate $ 2,705,044 0% 3,772,573 0.10% 443,092 1.00% - - 18,586 100% $ 6,939,295 September 30, 2020		Lifetime ECLs Credit- impaired - No 3,814 No 4,431 No - - 18,586 Yes 26,831
Credit rating Level A Level B Level C Level D Level E	Carrying amount of notes and accounts receivable $ 3,373,279 3,538,387 651,736 - 19,003 $ 7,582,405	Weighted- average ECL rate 0% 0.10% 1.00% - 100%	Lifetime ECLs Credit- impaired - No 3,598 No 6,517 No - - 19,003 Yes 29,118

(Continued)

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

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

September 30, 2021 Overdue 1 to 180 days $ 1,383,785 Overdue 181 to 365 days 7,711 $ 1,391,496	December 31, 2020 2,073,442 104,264 2,177,706	September 30, 2020
		1,505,736 -
		1,505,736

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 September 30	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 3,910,928 3,356 (1,163) $ 3,913,121	2020
		3,928,716 (2,474) (594)
		3,925,648

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

The Group entered into accounts receivable factoring agreements with banks. As of September 30, 2021, December 31 and September 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 September 30, 2021, December 31 and September 30, 2020, the factored account receivable with no advance amounting $28,826, $42,550 and $8,818, 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 September 30, 2021, December 31 and September 30, 2020, accounts receivable factored were recovered and derecognized since the conditions of derecognition were met.

(Continued)

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

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

		September	30, 2021
Purchaser Financial Institution	Accounts receivable factored (gross) $ 33,020,840	Amount advanced Unpaid Paid - 32,992,014 December	Amount recognized in other receivable 28,826 31, 2020	Collateral -	Amount derecognized Interest rate 33,020,840 0.46%~0.78%
		Unpaid -
Purchaser Financial Institution		Amount advanced Unpaid Paid - 42,555,222 September	Amount recognized in other receivable 42,550 30, 2020	Collateral -	Amount derecognized Interest rate 42,597,772 0.58%~0.93%
		Unpaid -
Purchaser Financial Institution		Amount advanced Unpaid Paid - 25,721,992	Amount recognized in other receivable 8,818	Collateral -	Amount derecognized Interest rate 25,730,810 0.58%~1.44%
		Unpaid -

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

(f) Inventories

September 30, 2021 Finished goods $ 23,060,102 Work in progress 9,949,349 Raw materials 95,284,414 Raw materials in transit 2,421,737 $ 130,715,602	December 31, 2020 23,237,892 9,630,864 62,694,104 589,099 96,151,959	September 30, 2020
		20,376,851 12,431,249 70,892,499 973,258
		104,673,857

(i) For the three months and nine months ended September 30, 2021 and 2020, inventory cost recognized as cost of sales amounted to $326,186,874, $260,248,397 , $838,799,511 and $691,734,117, respectively.
(ii) The loss due to the write-down of inventories to net realizable value amounted $778,781, $27,233, $1,454,776 and $319,485 for the three months and nine months ended September 30, 2021 and 2020.
(iii) As of September 30, 2021, December 31 and September 30, 2020, the Group did not provide any inventories as collaterals for its loans.

(Continued)

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

(g) Investments accounted for using equity method

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

September 30, 2021 Associates $ 7,962,797 Joint venture (17,327) 7,945,470 Plus: credit balance of investment in equity method (other non-current liability) 42,738 Less: unrealized profits or losses (109,903) $ 7,878,305	December 31, 2020 8,036,165 (17,106) 8,019,059 43,177 (112,311) 7,949,925	September 30, 2020
		7,742,086 (16,482
		7,725,604 42,367 (114,680
		7,653,291

(i) Associates

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

September 30, 2021 Allied Circuit Co., Ltd. (“Allied Circuit”) $ 2,436,078 Avalue Technology Inc. (“Avalue”) 759,635 $ 3,195,713	December 31, 2020 2,075,813 828,286 2,904,099	September 30, 2020
		1,921,414 764,112
		2,685,526

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 September 30, 2021 2020 $ (5,913) 23,819	For the three months ended September 30, 2021 2020 $ (5,913) 23,819	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ (5,913)		2021 184,637	2020
		23,819		387,106

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

September 30, 2021 Carrying amount of individually immaterial associates $ 7,962,797	December 31, 2020 8,036,165	September 30, 2020
		7,742,086

(Continued)

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

For the three months ended September 30, 2021 2020 The Group’s share of the net income (loss) of associates: Profit (loss) from continuing operations $ (5,913) 23,819 Other comprehensive income (34,129) 168,097 Total comprehensive income $ (40,042) 191,916	For the nine months ended September 30, 2021 2020 184,637 387,106 (116,066) (70,036) 68,571 317,070
	2021 184,637 (116,066) 68,571

4) For the nine months ended September 30, 2020, the Group had sold parts of its shares held in Avalue, with a consideration (net of costs of disposal) amounting to $38,952. The transaction has been completed and the price has been fully received, wherein the Group recognized a gain of $28,772, which was accounted for as other gain and loss.

(ii) Joint venture

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

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

September 30, 2021 The carrying amount of the Group’s interests in all individually insignificant joint ventures $ (17,327) For the three months ended September 30, 2021 2020 The Group’s share of the net income (loss) of joint ventures: Losses from continuing operations (also the total comprehensive losses) $ (520) (7,814)	December 31, 2020 September 30, 2020 (17,106) (16,482) For the nine months ended September 30, 2021 2020 (84) (9,744) (Continued)
	2021 (84)

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

(iii) Although the Group is the single largest shareholder of some associates, after a comprehensive assessment that the remaining shares of these associates are not concentrated in specific shareholders, the Group is still not able to obtain more than half of the board seats, and it has not obtained more than half of the voting rights of shareholders attending the shareholders' meeting. The Group judges that it does not have absolute power and leading ability over the relevant activities and variable remuneration of these associates, so it assesses that the Group has no control over these associates.
(iv) As of September 30, 2021, December 31 and September 30, 2020, the Group did not provide any investments accounted for using equity method as collaterals for its loans.
(h) Acquisition of the subsidiary

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

Since the acquisition of 100% equity of CIN was completed on September 30, 2021, the revenue and net profit contributed by CIN for the nine months ended September 30, 2021 are both $0. The management authority estimates that the Group’s revenue in 2021 will increase by $490,751 and net profit will decrease by $8,992, if the transaction of acquisition occurred on January 1, 2021. When determining these amounts, the management assumed that the transaction occurred on January 1, 2021, and the provisional fair value adjustments on the acquisition date were the same.

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

(i) Consideration transferred

cash

$ 226,421

(Continued)

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

(ii) The identifiable assets acquired and the liabilities assumed

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

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

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

(i) Changes in subsidiaries’ equity

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

(i) Issuance of new shares for cash of subsidiaries

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

(ii) The acquisition of additional equity in the subsidiary

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

(Continued)

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

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	2021 $ 79,791 (85,129) $ (5,338)

(j)

Material non-controlling interests of subsidiaries

There were no significant transactions for the nine months ended September 30, 2021 and 2020. Please refer to note (6)(j) of the consolidated financial statement for the year ended December 31, 2020.

(k) Property, plant and equipment

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

Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
$ 1,944,094 10,892 479,509 - - (749) $ 2,433,746 $ 1,705,220 4,611 - 222,770 1 $ 1,932,602 $ - - - - - - $ -	18,519,873 87,477 173,190 (1,703,957) 104,535 (348,699) 16,832,419 16,966,779 1,454,658 (34,423) 546,993 (318,866) 18,615,141 10,855,109 18,824 687,175 - (576,417) (121,262) 10,863,429	28,498,191 162,654 1,713,374 (753,320) 1,222,805 (368,620) 30,475,084 27,044,641 1,428,865 (469,334) 700,454 (835,496) 27,869,130 20,571,645 148,912 1,788,354 378,072 (646,760) (1,099,478) 21,140,745	11,885,697 4,376 1,339,263 (986,146) 163,280 (588,991) 11,817,479 11,289,433 1,024,794 (402,591) 236,214 (563,234) 11,584,616 8,556,546 4,290 1,503,050 26,441 (902,611) (257,113) 8,930,603	1,220,785 - 4,498,019 - (1,490,620) (41,329) 4,186,855 1,310,558 1,865,443 - (1,706,431) (87,692) 1,381,878 - - - - - - -	62,068,640 265,399 8,203,355 (3,443,423) - (1,348,388)
					65,745,583
					58,316,631 5,778,371 (906,348) - (1,805,287)
					61,383,367
					39,983,300 172,026 3,978,579 404,513 (2,125,788) (1,477,853)
					40,934,777

(Continued)

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

Land	Buildings and building improvement	Machinery	Other equipment	Under construction and prepayment for purchase of equipment	Total
$ - - - - $ - $ 1,944,094 $ 2,433,746 $ 1,705,220 $ 1,932,602	10,352,434 658,251 (33,777) (219,604) 10,757,304 7,664,764 5,968,990 6,614,345 7,857,837	19,850,259 1,761,867 (384,927) (697,413) 20,529,786 7,926,546 9,334,339 7,194,382 7,339,344	8,141,591 1,136,783 (386,403) (425,206) 8,466,765 3,329,151 2,886,876 3,147,842 3,117,851	- - - - - 1,220,785 4,186,855 1,310,558 1,381,878	38,344,284 3,556,901 (805,107) (1,342,223
					39,753,855
					22,085,340
					24,810,806
					19,972,347
					21,629,512

As of September 30, 2021, December 31 and September 30, 2020, part of the Group’s property, plant and equipment were provided as collateral for long-term borrowings. Please refer to note (8).

In order to activate the assets of the Group, the Board of Directors passed a resolution on May 7, 2021, that the subsidiary CDE and Kunshan Xincheng Construction Development Co., Ltd., a nonrelated party, signed a real estate purchase and sale contract. The transaction targets include land use rights and existing land building, with the transaction price of $4,147,946 (CNY 956,012) in total. The Group has completed the above transaction in the third quarter of 2021. The Group recognized a disposal gain of $1,961,419, which was accounted for as other gains and losses, after deducting the book value of assets and related transaction costs from the transaction price. The balance of the consideration of $1,648,721 is recognized in other receivables, which has been fully collected after the period.

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

(l)

Right-of-use assets

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

Cost: Balance on January 1, 2021 Additions Deductions Effect of movements in exchange rates Balance on September 30, 2021	Land $ 1,268,129 - (362,689) (37,587) $ 867,853	Buildings 3,378,467 695,352 (261,732) (25,383) 3,786,704	Machinery 76,930 - - (412) 76,518	Vehicles and Other 74,969 17,650 (8,522) (209) 83,888	Total 4,798,495 713,002 (632,943) (63,591) 4,814,963

(Continued)

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

Balance on January 1, 2020 Additions Deductions Effect of movements in exchange rates Balance on September 30, 2020 Depreciation and impairment loss: Balance on January 1, 2021 Depreciation for the period Deductions Effect of movements in exchange rates Balance on September 30, 2021 Balance on January 1, 2020 Depreciation for the period Deductions Effect of movements in exchange rates Balance on September 30, 2020 Carrying amount: Balance on January 1, 2021 Balance on September 30, 2021 Balance on January 1, 2020 Balance on September 30, 2020	Land $ 1,110,813 320,318 - (39,934) $ 1,391,197 $ 54,756 30,494 (37,698) (12,904) $ 34,648 $ 31,587 26,988 - (1,561) $ 57,014 $ 1,213,373 $ 833,205 $ 1,079,226 $ 1,334,183	Buildings 2,809,991 762,755 (216,631) (25,814) 3,330,301 1,175,689 595,337 (180,651) (8,310) 1,582,065 659,467 611,116 (117,315) (25,371) 1,127,897 2,202,778 2,204,639 2,150,524 2,202,404	Machinery 86,661 - (9,115) (1,216) 76,330 24,749 9,245 - (261) 33,733 22,270 9,194 (9,803) (300) 21,361 52,181 42,785 64,391 54,969	Vehicles and Other 88,712 6,797 (10,077) (1,004) 84,428 46,349 15,593 (8,522) (126) 53,294 32,681 25,875 (9,001) (412) 49,143 28,620 30,594 56,031 35,285	Total 4,096,177 1,089,870 (235,823) (67,968) 4,882,256 1,301,543 650,669 (226,871) (21,601) 1,703,740 746,005 673,173 (136,119) (27,644) 1,255,415 3,496,952 3,111,223 3,350,172 3,626,841

(m) Short-term borrowings

The details of short-term borrowings were as follows:

September 30, 2021 Unsecured bank loans $ 124,888,489 Unused credit line for short-term borrowings $ 104,779,000 Range of interest rates 0.05%~3.04%	December 31, 2020 92,838,733 95,910,000 0.25%~2.58%	September 30, 2020
		77,205,342
		114,514,000
		0.25%~7.15%

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

(Continued)

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

(n) Long-term borrowings

The details of long-term borrowings were as follows:

September 30, 2021 Unsecured bank loans $ 20,826,700 Secured bank loans 671,031 Less: current portion (14,944,031) Total $ 6,553,700 Unused credit line for long-term borrowings $ 17,888,000 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%	September 30, 2020 17,923,000 248,206 (9,200,175) 8,971,031 19,243,000 0.60%~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:

September 30, 2021 Total convertible corporate bonds issued $ 1,000,000 Unamortized discounts on corporate bonds payable (7,702) Unamortized issuance costs on corporate bonds payable (619) Accumulated converted amount (112,300) Balance of bonds payable of the reporting date$ 879,379 Conversion options included in equity components (classified as capital surplus and non-controlling interests) $ 43,201 For the three months ended September 30, 2021 2020 Interest expenses $ 3,100 3,438	December 31, 2020 September 30, 2020 1,000,000 1,000,000 (18,527) (21,758) (1,254) (1,473) - - 980,219 976,769 48,667 48,667 For the nine months ended September 30,	December 31, 2020 September 30, 2020 1,000,000 1,000,000 (18,527) (21,758) (1,254) (1,473) - - 980,219 976,769 48,667 48,667 For the nine months ended September 30,
	2021 10,018	2020 10,277

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

(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.

(Continued)

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

(iii) As of September 30, 2021, the convertible corporate bonds were converted into ordinary shares of Arcadyan for $13,582 with a par value of $112,300, and the capital surplus were recognized for $102,741 (including the stock option conversion premium of $5,465 and the unamortized discounts on corporate bonds payable of 1,442).
(iv) There were no significant issues, repurchases and repayments of bonds payable for the nine months ended September 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:

September 30, 2021 Current $ 670,126 Non-current $ 1,630,833	December 31, 2020 377,161 1,910,601	September 30, 2020
		436,424
		1,849,864

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 September 30, 2021 2020 $ 11,019 8,728 $ 795 793 $ 169,032 39,355	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 11,019 $ 795 $ 169,032	2021 34,792 2,181 239,042	2020
		31,662
		2,356
		89,397

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

		For the nine months ended
		September 30,
		2021 2020
Total cash outflow for leases	$	894,739 774,057

(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 nine months ended September 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 September 30, 2021 2020 $ 254 249 153 183 545 761 1,482 2,086 $ 2,434 3,279	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 254 153 545 1,482 $ 2,434	2021 752 462 1,658 4,430 7,302	2020
		746 540 2,327 6,218
		9,831

(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 $136,857 , $111,648 , $373,556 and $331,047 for the three months and nine months ended September 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 $316,546, $329,092, $845,560 and $638,735 for the three months and nine months ended September 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 September 30, 2021 2020 $ 1,154,020 654,521	For the nine months ended September 30,	For the nine months ended September 30,
		2021 2,642,213	2020 1,631,192

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

For the three months ended September 30, 2021 2020 Items that will not be reclassified subsequently to profit or loss: Remeasurement of the defined benefit liability $ - - Unrealized gains (losses) on equity instruments at fair value through other comprehensive income (52,842) 40,460 $ (52,842) 40,460 Items that will be reclassified subsequently to profit or loss: Foreign currency translation differences of foreign operations $ (2,379) (5,582)	For the nine months ended September 30, 2021 2020 (178) - 15,015 (6,709) 14,837 (6,709) (13,833) (11,317)
	2021 (178) 15,015 14,837 (13,833)

For the three months ended
September 30,
2021
2020
Items that will not be
reclassified subsequently to
profit or loss:
Remeasurement of the
defined benefit liability
$ -
-
Unrealized gains (losses) on
equity instruments at fair
value through other
comprehensive income
(52,842)
40,460
$
(52,842)
40,460
Items that will be
reclassified subsequently to
profit or loss:
Foreign currency translation
differences of foreign
operations
$
(2,379)
(5,582)

For the nine months ended
September 30,
2021
2020
(178)
-
15,015
(6,709)
14,837
(6,709)
(13,833)
(11,317)

2021
(178)
15,015
14,837
(13,833)

(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, Heng Hao, GLB, through 2018, and of TTI through 2019. However, TTI’s tax returns through 2018 has not yet been approved.

(Continued)

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

(t) Capital and other equities

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to September 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:

September 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 77,306 Changes in equity of associates and joint ventures accounted for using equity method 282,914 $ 6,679,077	December 31, 2020 5,422,060 2,541,906 36,766 60,850 281,231 8,342,813	September 30, 2020
		5,421,061 2,541,906 36,766 60,605 280,685
		8,341,023

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

(ii) Retained earnings

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

(Continued)

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

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

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

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

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

(iii) Treasury stock

The subsidiaries of the Company did not sell the ordinary shares of the Company in the nine months ended September 30, 2021 and 2020. As of September 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 23.60, 20.70 and 19.05 New Taiwan dollars per share as of September 30, 2021, December 31 and September 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 September 30, 2021 Balance on January 1, 2020 The Group Associates Balance on September 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) 402,867 13,879 39,794 (306,763) (398,303) (49,875) (754,941)	Others (779) 7,563 - 6,784 (1,706) (2,307) - (4,013)	Total
	$ (6,888,977) (1,443,363) (100,170) $ (8,432,510) $ (3,794,980) (1,997,289) (11,357) $ (5,803,626)			(7,266,708) (1,032,933) (86,291)
				(8,385,932)
				(4,103,449) (2,397,899) (61,232)
				(6,562,580)

(u) Share-based payment

There were no significant changes in share-based payment during the nine months ended September 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 September 30, 2021 2020 $ 4,351,753 2,188,491 4,357,130 4,357,130 $ 4,351,753 2,188,491	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 4,351,753 4,357,130 $ 4,351,753	2021 9,438,907 4,357,130 9,438,907	2020
		4,780,214
		4,357,130
		4,780,214

(Continued)

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

For the three months ended September 30, 2021 2020 4,357,130 4,357,130 42,195 29,177 4,399,325 4,386,307	For the nine months ended September 30,	For the nine months ended September 30,
2021 4,357,130 42,195 4,399,325	2021 4,357,130 55,167 4,412,297	2020
		4,357,130 43,036
		4,400,166

(w) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021
IT Product Segment $ 130,847,063 47,385,579 23,979,615 12,695,127 17,436,202 95,036,306 $ 327,379,892 $ 326,779,868 600,024 $ 327,379,892	Strategically Integrated Product Segment 2,194,361 70,562 479,505 1,663,292 2,594 5,070,974 9,481,288 9,167,845 313,443 9,481,288	Total
		133,041,424 47,456,141 24,459,120 14,358,419 17,438,796 100,107,280
		336,861,180
		335,947,713 913,467
		336,861,180

(Continued)

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

For the three months ended September 30, 2020	For the three months ended September 30, 2020	For the three months ended September 30, 2020
IT Product Segment Strategically Integrated Product Segment Total $ 111,502,687 2,338,597 113,841,284 32,654,550 160,703 32,815,253 17,630,049 530,462 18,160,511 10,822,368 1,272,599 12,094,967 11,383,207 69,154 11,452,361 75,696,974 5,180,273 80,877,247 $ 259,689,835 9,551,788 269,241,623 $ 259,168,653 9,434,550 268,603,203 521,182 117,238 638,420 $ 259,689,835 9,551,788 269,241,623 For the nine months ended September 30, 2021		Total
		113,841,284 32,815,253 18,160,511 12,094,967 11,452,361 80,877,247
		269,241,623
		268,603,203 638,420
		269,241,623
	Strategically Integrated Product Segment 5,862,062 308,795 1,344,496 5,066,186 99,931 15,972,995 28,654,465 27,908,087 746,378 28,654,465	Total
		340,789,281 112,076,264 64,120,484 41,265,591 35,319,901 274,275,226
		867,846,747
		865,564,832 2,281,915
		867,846,747

(Continued)

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

			For the nine months ended September 30, 2020	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020
				Strategically
				Integrated
			IT Product		Product
			Segment		Segment	Total
	Primary geographical markets:
	United states	$	295,551,577		5,869,937	301,421,514
	China		89,861,348		473,461	90,334,809
	Netherlands		60,671,907		929,830	61,601,737
	United Kingdom		29,308,596		3,519,188	32,827,784
	India		22,054,659		69,593	22,124,252
	Others		192,850,805		13,781,272	206,632,077
		$	690,298,892		24,643,281	714,942,173
	Major products:
	5C related electronics products	$	688,831,559		24,215,273	713,046,832
	Others		1,467,333		428,008	1,895,341
		$	690,298,892		24,643,281	714,942,173
(ii)	Contract balances
			September		December 31,	September
			30, 2021		2020	30, 2020
	Notes and accounts receivable (including		$ 261,360,157		236,120,826	196,720,025
	related parties)
	Less: allowance for impairment		(3,913,121)		(3,910,928)	(3,925,648)
	Total		$ 257,447,036		232,209,898	192,794,377
	Contract liabilities		$ 930,171		820,016	896,192

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

The amount of revenue recognized for the nine months ended September 30, 2021 and 2020 that were included in the balance of contract liability at the beginning of the period was $329,751 and $469,151, 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 $450,292, $247,708, $995,800 and $555,824, and directors’ compensation of $23,811, $13,232, $52,657 and $29,691 for the three months and nine months ended September 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 September 30 2021 2020 $ 551,841 338,241 43 48 $ 551,884 338,289	For the nine months ended September 30	For the nine months ended September 30
2021 $ 551,841 43 $ 551,884	2021 1,534,764 121 1,534,885	2020
		1,245,527 153
		1,245,680

(Continued)

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

(ii) Other income

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

For the three months ended September 30, 2021 2020 $ 55,665 5,523 194,376 127,503 $ 250,041 133,026	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 55,665 194,376 $ 250,041	2021 138,312 350,343 488,655	2020
		108,996 274,647
		383,643

(iii) Other gains and losses

The other gains and losses for the three months and nine months ended September 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 on disposal of property, plant, and equipment Others	For the three months ended September 30, 2021 2020 $ - 24,858 329,246 49,123 (269,629) (123,432) 1,981,399 9,405 (230) - $ 2,040,786 (40,046)	For the nine months ended September 30, 2021 2020 - 29,757 314,967 601,609 174,542 (911,584) 1,963,009 17,894 (230) - 2,452,288 (262,324)
	2021 $ - 329,246 (269,629) 1,981,399 (230) $ 2,040,786	2021 - 314,967 174,542 1,963,009 (230) 2,452,288

(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 nine months ended September 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 September 30, 2021 2020 $ 14,674 (63,334) 13,214 (25,478) $ 1,460 (37,856)	For the nine months ended September 30, 2021 2020 39,846 16,998 18,144 26,418 21,702 (9,420)
	2021
	$ 14,674 13,214 $ 1,460

(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 nine months ended September 30, 2021 and 2020 were as follows:

were as follows:
		Other
		receivables
Balance on January 1, 2021	$	2,392
Impairment losses recognized (reversed)		472
Balance on September 30, 2021	$	2,864
Balance on January 1, 2020	$	1,012
Impairment losses recognized (reversed)		1,370
Balance on September 30, 2020	$	2,382

(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 September 30, 2021 Non-derivative financial liabilities Secured borrowings $ 671,031 Unsecured borrowings 145,715,189 Lease liabilities－current and non-current 2,300,959 Notes and accounts payable 217,928,252 Other payables 26,620,379 Bonds payable 879,379 Derivative financial liabilities Forward exchange contracts: 4,792 Outflow Inflow Currency swap contracts 4,004 Outflow Inflow $ 394,123,985 December 31, 2020 Non-derivative financial liabilities Secured borrowings $ 228,913 Unsecured borrowings 111,944,173 Lease liabilities－current and non-current 2,287,762 Notes and accounts payable 199,726,063 Other payables 23,397,683 Bonds payable 980,219 Forward exchange contracts: 130,865 Outflow Inflow Currency swap contracts: 5,752 Outflow Inflow Forward exchange contracts used for hedging: 2,192 Outflow Inflow $ 338,703,622	Contractual cash flows (671,031) (145,715,189) (2,398,561) (217,928,252) (26,620,379) (887,700) (645,405) 639,285 (1,111,800) 1,110,649 (394,228,383) (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 (67,331) (139,765,189) (705,035) (217,928,252) (26,620,379) (887,700) (645,405) 639,285 (1,111,800) 1,110,649 (385,981,157) (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 (121,133) (5,450,000) (496,866) - - - - - - - (6,067,999) (77,175) (5,125,000) (562,952) - - (1,000,000) - - - - - - (6,765,127)	Over 2 years (482,567) (500,000) (1,196,660) - - - - - - - (2,179,227) (74,563) (5,125,000) (1,352,885) - - - - - - - - - (6,552,448)

(Continued)

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

Carrying Amount September 30, 2020 Non-derivative financial liabilities Secured borrowings $ 248,206 Unsecured borrowings 95,128,342 Lease liabilities－current and non-current 2,286,288 Notes and accounts payable 192,175,019 Other payables 20,650,649 Bonds payable 976,769 Derivative financial liabilities Forward exchange contracts: 26,874 Outflow Inflow Forward exchange contracts for hedging: 23,069 Outflow Inflow $ 311,515,216	Contractual cash flows (248,206) (95,128,342) (2,406,886) (192,175,019) (20,650,649) (1,000,000) (850,000) 825,921 (884,000) 864,826 (311,652,355)	Within 1 year (77,175) (86,328,342) (476,120) (192,175,019) (20,650,649) - (850,000) 825,921 (884,000) 864,826 (299,750,558)	1~ 2 years (67,331) (4,850,000) (1,456,568) - - (1,000,000) - - - - (7,373,899)	Over 2 years (103,700) (3,950,000) (474,198) - - - - - - - (4,527,898)

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	September 30, 20	September 30, 20	21		De	cember 31, 20	20	September 30, 2020 Foreign currency Exchange rate TWD 11,001,048 29.1 320,130,497 15,669 6.8086 455,968 63,633 34.15 2,173,067 3,320,783 0.1469 14,195,650 526,348 0.9242 486,451 11,002,218 29.1 320,164,544 3,995 6.8086 116,255 99,301 5.6407 2,889,659 12,837 34.15 438,384 3,214,701 0.1469 13,742,172	September 30, 2020 Foreign currency Exchange rate TWD 11,001,048 29.1 320,130,497 15,669 6.8086 455,968 63,633 34.15 2,173,067 3,320,783 0.1469 14,195,650 526,348 0.9242 486,451 11,002,218 29.1 320,164,544 3,995 6.8086 116,255 99,301 5.6407 2,889,659 12,837 34.15 438,384 3,214,701 0.1469 13,742,172
	Foreign currency $ 15,733,778 22,251 71,448 3,840,963 700,428 15,924,254 1,277 185,445 11,329 3,261,957	Exchange rate 27.85 6.4596 32.32 0.1548 0.8228 27.85 6.4596 5.4394 32.32 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 29.1 320,130,497 6.8086 455,968 34.15 2,173,067 0.1469 14,195,650 0.9242 486,451 29.1 320,164,544 6.8086 116,255 5.6407 2,889,659 34.15 438,384 0.1469 13,742,172
			438,185,717 619,690 2,309,199 16,559,083 576,312 443,490,474 35,564 5,164,643 366,153 14,062,884				396,622,135 381,091 2,124,909 15,877,352 491,243 400,316,162 89,199 3,744,750 441,812 13,716,669

(Continued)

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

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable, and other payables that are denominated in foreign currency. Assuming all other variable factors remain constant, a strengthening (weakening) 5% of appreciation (depreciation) of the each major foreign currency against Group entities’ functional currency as of September 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.

		September 30,	September 30,
		2021	2020
USD (against the TWD)
Strengthening 5%	$	(265,238)	(1,702)
Weakening 5%		265,238	1,702
USD (against the CNY)
Strengthening 5%		29,206	16,986
Weakening 5%		(29,206)	(16,986)
USD (against the BRL)
Strengthening 5%		(258,232)	(144,483)
Weakening 5%		258,232	144,483
EUR (against the TWD)
Strengthening 5%		97,152	86,734
Weakening 5%		(97,152)	(86,734)
CNY (against the USD)
Strengthening 5%		124,810	22,674
Weakening 5%		(124,810)	(22,674)

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 nine months ended September 30, 2021 and 2020, the foreign exchange gains (losses), including both realized and unrealized, amounted to $(269,629) , $(123,432) , $174,542 and $(911,584), 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 nine months ended September 30, 2021 and 2020, which would be mainly resulted from the bank savings and borrowings with variable interest rates.

			For the nine months ended	For the nine months ended
			September	30,
			2021	2020
Interest increased by	0.25%	$	25,377	11,424
Interest decreased by	0.25%		(25,377)	(11,424)

(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.

		September 30, 2021	September 30, 2021	September 30, 2021
Book value			Fair Value
		Level 1 - -	Level 2 218,790 3,818,430	Level 3 Total - 218,790 249,718 4,068,148
	4,286,938

(Continued)

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

		September 30, 2021	September 30, 2021	September 30, 2021
	Book value		Fair Value
		Level 1 - 2,761,142 576,312 - - - - - - - - - - - - - - - - - -	Level 2 19,510 - - - - 34,628,113 - - - - - 8,796 - - - - - - - - -	Level 3 Total - 19,510 - 2,761,142 - 576,312 2,178,889 2,178,889 362,781 362,781 - 34,628,113 - - - - - - - - - - - 8,796 - - - - - - - - - - - - - - - - - -
19,510 2,761,142 576,312 2,178,889 362,781 34,628,113 40,507,237 79,209,934 222,784,664 34,259 3,399,275 859,094 306,287,226 $ 351,100,911 $ 8,796 124,888,489 215,319,152 2,609,100 26,620,379 879,379 2,300,959 14,944,031 6,553,700 381,740 394,496,929 $ 394,505,725	19,510
	2,761,142 576,312 2,178,889 362,781 34,628,113
	40,507,237
	79,209,934 222,784,664 34,259 3,399,275 859,094
	306,287,226

(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 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 $ 185,505 Non-derivative financial assets mandatorily measured at fair value through profit or loss 5,517,050 Subtotal 5,702,555 Derivative financial assets for hedging 8,778 Financial assets at fair value through other comprehensive income Stocks listed on domestic markets 1,701,936 Stocks listed on foreign markets 486,451 Stocks unlisted on domestic markets 2,022,760 Stocks unlisted on foreign markets 222,969 Accounts receivable 27,516,157 Subtotal 31,950,273 Financial assets measured at amortized cost Cash and cash equivalents 85,505,998 Notes and accounts receivable, net 165,163,796 Notes and accounts receivable due from related parties, net 114,424 Other receivables 1,234,529 Refundable deposits 502,380 Subtotal 252,521,127 Total $ 290,182,733 Financial liabilities at fair value through profit or loss Derivative financial liabilities for non- hedging $ 26,874 Derivative financial liabilities for hedging 23,069 Financial liabilities measured at amortized cost Short-term borrowings 77,205,342 Notes and accounts payable 190,131,940 Notes and accounts payable to related parties 2,043,079 Other payables 20,650,649 Bonds payable 976,769 Lease liabilities－current and non-current 2,286,288 Long-term borrowings current portion 9,200,175 Long-term borrowings 8,971,031 Deposits received 249,020 Subtotal 311,714,293 Total $ 311,764,236			September 30, 2020	September 30, 2020	September 30, 2020
	Book value			Fair Value
			Level 1 - - - 1,701,936 486,451 - - - - - - - - - - - - - - - - - - -	Level 2 185,505 5,333,670 8,778 - - - - 27,516,157 - - - - - 26,874 23,069 - - - - - - - - -	Level 3 Total - 185,505 183,380 5,517,050 - 8,778 - 1,701,936 - 486,451 2,022,760 2,022,760 222,969 222,969 - 27,516,157 - - - - - - - - - - - 26,874 - 23,069 - - - - - - - - - - - - - - - - - -

(Continued)

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

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

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

a) Financial liabilities measured at amortized cost

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

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

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

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

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

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

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

(Continued)

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

b) Derivative financial instruments

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

4) Transfer from one level to another

There was no transfer from one level to another in the nine months ended September 30, 2021 and 2020.

5) Changes in level 3

The change in level 3 at fair value in the nine months ended September 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 and capital reduction of investments Effect of changes in exchange rates Balance on September 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 September 30, 2020	Financial assets at fair value through profit or loss $ 201,609 8,259 - 39,850 - - $ 249,718 $ 115,359 8,021 - 60,000 - - - $ 183,380	Financial assets at fair value through other comprehensive income 2,352,919 - 12,591 187,540 (8,502) (2,878) 2,541,670 2,424,053 - (143,188) 25,013 (52,105) (4,085) (3,959) 2,245,729	Total 2,554,528 8,259 12,591 227,390 (8,502) (2,878) 2,791,388 2,539,412 8,021 (143,188) 85,013 (52,105) (4,085) (3,959) 2,429,109

(Continued)

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

For the nine months ended September 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:

		For the nine months ended	For the nine months ended
		September 30,
		2021	2020
Total gains and losses recognized:
In profit or loss before tax (as “other gains and
losses”)	$	8,259	8,021
In other comprehensive income (as “unrealized gains
and losses from equity instruments at fair value
through other comprehensive income”)	$	12,723	(99,638)

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 (1.72~11.62, 1.72~7.9 and 1.19~10.23, respectively, on September 30, 2021, December 31 and September 30, 2020) The higher the multiple is, the higher the fair value will be. Multiples of earnings (16.27, 14.68 and 14.45, respectively, on September 30, 2021, December 31 and September 30, 2020) The higher the multiple is, the higher the fair value will be.

(Continued)

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

Inter-relationships between significant unobservable inputs and fair value The higher the Lackof-Marketability discount rate is, the lower the fair value will be.

Valuation Significant Item technique unobservable inputs Lack-of-Marketability discount rate (35%~85%, on September 30, 2021, December 31 and will be. September 30, 2020) Financial assets at fair Net asset value Net asset value Inapplicable value through other method comprehensive income Financial assets at fair Net asset value Net asset value Inapplicable value through profit method or loss

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:

September 30, 2021 Financial assets at fair value through other comprehensive income December 31, 2020 Financial assets at fair value through other comprehensive income	Input Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate	Move up or down 5% $ 5% $ 5% $ 5% $ 5% $ 5% $	Other comprehensive income	Other comprehensive income
			Favorable change 54,486 2,650 9,863 36,119 5,734 3,942	Unfavorable change 54,203 1,515 9,910 35,448 5,801 3,942

(Continued)

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

September 30, 2020 Financial assets at fair value through other comprehensive income	Input Price-Book ratio multiples Multiples of earnings Lack-of-Marketability discount rate	Move up or down 5% 5% 5%	Other comprehensive income	Other comprehensive income
			Favorable change $ 34,517 $ 5,913 $ 3,942	Unfavorable change 34,507 5,441 3,942

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

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

September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -	September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -	September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -	September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -	September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -	September 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 $ 360,734,315 (USD 12,952,758 ) 360,734,315 (USD 12,952,758 ) - - - -
Other current assets	Gross amounts of recognized financial assets (a) $ 360,734,315 (USD 12,952,758 )	Gross amounts of financial liabilities offset in the balance sheet (b) 360,734,315 (USD 12,952,758 )	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

			September 30, 2021 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 360,734,315 (USD 12,952,758 ) - - - -	September 30, 2021 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 360,734,315 (USD 12,952,758 ) - - - -	September 30, 2021 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 360,734,315 (USD 12,952,758 ) - - - -	September 30, 2021 which have an exercisable master netting arrangement or similar agreement Gross amounts of financial assets Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) offset in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) 360,734,315 (USD 12,952,758 ) - - - -
Financial liabilities that are offset
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 360,734,315 (USD 12,952,758 )		Gross amounts of financial assets offset in the balance sheet (b) 360,734,315 (USD 12,952,758 )	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

(Continued)

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

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

September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -	September 30, 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 $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - - September 30, 2020 Financial liabilities that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts of Gross amounts of financial assets offset in Net amount of financial liabilities presented in Amounts not offset in the balance sheet (d) recognized financial liabilities (a) the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments Cash collateral received Net amount (e)=(c)-(d) Short-term borrowings $ 231,315,927 (USD 7,948,980 ) 231,315,927 (USD 7,948,980 ) - - - -
Other current assets	Gross amounts of recognized financial assets (a) $ 231,315,927 (USD 7,948,980 )		Gross amounts of financial liabilities offset Net amount of financial assets presented in in the balance sheet (b) the balance sheet (c)=(a)-(b) 231,315,927 (USD 7,948,980 ) - September 30, 2020		Amounts not offset in the balance sheet (d) Financial instruments Cash collateral received - -
					Financial instruments -
	$ (USD
			(USD
Financial liabilities that are offset			which have an exercisable master netting arrangement o
Short-term borrowings	Gross amounts of recognized financial liabilities (a) $ 231,315,927 (USD 7,948,980 )		Gross amounts of financial assets offset in the balance sheet (b) 231,315,927 (USD 7,948,980 )	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.

(Continued)

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

(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.

(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 nine months ended September 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 31,891,013 - 2,163,378 (618,724) 96,506 33,532,173 Cash flow 16,253,498 - (7,577,232) (650,642) 56,422 8,082,046	Other non-cash changes 158,743 (100,840) - 631,921 (439) 689,385 Other non-cash changes - 10,277 - 669,842 648 680,767	September 30, 2021 124,888,489 879,379 21,497,731 2,300,959 436,198
				150,002,756
				September 30, 2020 77,205,342 976,769 18,171,206 2,286,288 303,108
				98,942,713

(Continued)

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

(7) Related-party transactions:

(a) Name and relationship with related parties

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

Name of related party Relationship with the Group Compal Precision Module (Jiangsu) Co., Ltd. (“CPM”) An associate Changbao Electronic Technology (Chongqing) Co., An associate Ltd. (“Changbao”) Avalue An associate Crownpo Technology Inc. (“Crownpo”) An associate Allied Circuit An associate LIZ Electronics (Kunshan) Co., Ltd. An associate LIZ Electronics (Nantong) Co., Ltd. An associate ARCE Therapeutics Co., Ltd. (“ARCE”) An associate Raypal Biomedical Co., Ltd. (“Raypal”) An associate Acbel Polytech Inc. (“Acbel”) and its subsidiaries The Chairman of the Board is the first degree of kinship of the Chairman of the Company Cal-Comp Electronics (USA) Co., Ltd. (“CCUS”) The same Chairman of the Ultimate parent company with the Company Cal-Comp Electronics (Thailand) Public Company 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 September 30, 2021 2020 $ 198,060 178,687 1,929 2,012 1,443 2,429 $ 201,432 183,128	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 198,060 1,929 1,443 $ 201,432	2021 538,342 5,898 4,329 548,569	2020
		490,069 6,286 16,269
		512,624

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

(Continued)

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

(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 September 30, 2021 2020 $ 69,098 62,184 233 90,416 - 221 $ 69,331 152,821	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 69,098 233 - $ 69,331	2021 160,946 34,026 - 194,972	2020
		186,710 90,825 221
		277,756

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

(ii) Purchase of goods from related parties

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

For the three months ended September 30, 2021 2020 $ 1,541,198 1,113,225 1,104,019 526,911 $ 2,645,217 1,640,136	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 1,541,198 1,104,019 $ 2,645,217	2021 4,371,009 3,027,066 7,398,075	2020
		3,061,860 1,568,446
		4,630,306

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 September 30, 2021 Associates $ 34,144 Other related parties 115 Associates 1,678 Other related parties 82 $ 36,019	December 31, 2020 29,643 349,291 908 64 379,906	September 30, 2020
Notes and accounts receivable Notes and accounts receivable Other receivables Other receivables			25,643 88,781 - 88
			114,512

(Continued)

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

(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 September 30, 2021 Associates $ 1,573,225 Other related parties 1,035,875 Associates 151 $ 2,609,251	December 31, 2020 1,632,862 1,255,762 600 2,889,224	September 30, 2020
			1,249,810 793,269 201
			2,043,280

(v) Property transactions

Relationship Other related party-Jipo Investment Other related party-CCUS Associates-RayPal Biomedical	Item Acquisition of financial assets at fair value through other comprehensive income Acquisition of the subsidiary Acquisition of minority shares	For the nine months ended September 30, 2021	For the nine months ended September 30, 2021
		Number of shares	Object Acquisition price Common stocks of Kinpo 616,864 Common stocks of CIN 226,421 Common stocks of Raycore Biotech 15,129
		46,197 thousand shares 1 thousand shares 588 thousand shares

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged Assets	Subject September 30, 2021 Bail for court mandatory execution $ - Long-term borrowings (including current portion) 471,385 Guarantee of post-release duty payment to the customs and guarantee of the customs 500 $ 471,885	September 30, 2021	December 31, 2020 41,090 486,581 500 528,171	September 30, 2020
Other current assets Property, plant and equipment Other non-current assets				41,090 491,646 500
				533,236

(Continued)

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

(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 September 30, 2021, December 31 and September 30, 2020, the Group’s signed commitments to purchase property, plant and equipment amounted to $313,475, $473,370 and $462,092, respectively.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(12) Other:

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

By function By item	Three months endedSeptember 30, 2021	Three months endedSeptember 30, 2021	Three months endedSeptember 30, 2021	Three months endedSeptember 30, 2020	Three months endedSeptember 30, 2020	Three months endedSeptember 30, 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	3,694,301 274,938 311,180 568,493 1,286,092 11,339	3,582,677 238,225 144,657 225,052 289,657 119,893	7,276,978 513,163 455,837 793,545 1,575,749 131,232	4,842,885 254,453 313,372 517,109 1,081,035 9,379	3,336,268 191,575 130,647 149,390 430,926 106,677	8,179,153 446,028 444,019 666,499 1,511,961 116,056

(Continued)

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

By function By item	Nine months ended September 30, 2021	Nine months ended September 30, 2021	Nine months ended September 30, 2021	Nine months ended September 30, 2020	Nine months ended September 30, 2020	Nine months ended September 30, 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	11,401,457 766,891 805,893 1,672,376 3,771,173 44,512	10,379,036 698,621 420,525 520,965 858,075 396,005	21,780,493 1,465,512 1,226,418 2,193,341 4,629,248 440,517	12,954,033 595,917 613,793 1,545,129 3,284,570 27,614	9,465,685 606,313 365,820 453,710 945,504 328,774	22,419,718 1,202,230 979,613 1,998,839 4,230,074 356,388

(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 nine months ended September 30, 2021:

(i) Loans to other parties: Please refer to Table 1
(ii) Guarantees and endorsements for other parties: Please refer to Table 2
(iii) Securities held as of September 30, 2021 (excluding investment in subsidiaries, associates and joint ventures): Please refer to Table 3
(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 4
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 5
(vi) Disposals of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please refer to Table 6
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 7
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please refer to Table 8
(ix) Trading in derivative instruments: Please refer to notes (6)(b) and (6)(d)
(x) Business relationships and significant intercompany transactions: Please refer to Table 9

(Continued)

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

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

(14) Segment information:

Segment information:
Revenue Revenue from external customers Reportable segment profit Revenue Revenue from external customers Reportable segment profit Revenue Revenue from external customers Reportable segment profit Revenue Revenue from external customers Reportable segment profit	Three months ended September 30, 2021
	Information technology product segment			Total
				336,861,180
				5,771,578
		Information technology product segment	Strategically integrated product segment 24,643,281 1,660,596	Total
	$ 690,298,892 $ 5,485,248			714,942,173
				7,145,844

��

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

Table 1 Loans to other parties:

(September 30, 2021)

Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 30, 2021)	Table 1 Loans to other parties: (September 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 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 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 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 Other receivables	Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y	475,325 400,000 1,985,950 838,800 57,070 1,315,200 438,400 1,997,450 137,098 856,050 998,725 657,600 523,740 570,700 1,200,000 57,020 55,590 285,100 285,100 255,510 57,020 484,670 153,440	225,325 200,000 557,000 835,500 55,700 1,291,500 430,500 1,949,500 69,625 835,500 974,750 645,750 258,300 557,000 600,000 36,134 55,590 - 277,950 - 6,876 472,515 -	225,325 200,000 557,000 835,500 55,700 688,800 430,500 1,570,740 - 835,500 974,750 645,750 172,200 557,000 600,000 36,134 - - - - 6,876 472,515 -	1.02%~1.08% 1.08% 1.02%~2.05% 1.02% 3.50% 2.20% 2.20% 2.00% 1.30%~4.35% 1.30% 2.00% 2.20% 2.00%~2.20% 2.00% 1.08% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 3.85%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing 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	- - - - - - - - - - - - - - - - - 4,368,068 4,363,815 5,397,428 166,680 - -	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 Operating financing	- - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - -	21,604,389 21,604,389 21,604,389 21,604,389 35,228,322 1,987,846 1,987,846 20,913,770 20,913,770 20,913,770 2,810,936 2,810,936 4,761,295 8,030,522 2,222,153 2,333,803 2,333,803 2,333,803 2,333,803 2,333,803 133,344 2,078,062 25,932	43,208,778 43,208,778 43,208,778 43,208,778 35,228,322 1,987,846 1,987,846 20,913,770 20,913,770 20,913,770 2,810,936 2,810,936 4,761,295 8,030,522 2,222,153 4,667,607 4,667,607 4,667,607 4,667,607 4,667,607 4,667,607 2,078,062 25,932	(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 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 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 shall be combined with the company’s endorsements/guarantees for calculation. In addition, the total amount lendable to 100% directly or indirectly owned 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													Company. When a short-term financing facility % of the Company’s lendable amount limit, and subsidiaries by the Company is unrestricted by 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.

(Continued)

��

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

Table 1 Loans to other parties:

(September 30, 2021)

Note	3:	According to CPC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPC. When a short-term financing facility with CPC is
		necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPC’s total amount of capital lent, and shall be combined with the
		company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
		limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPC, and shall be combined with the company’s endorsements/guarantees for the borrower when
		calculating.
Note	4:	According to CIT’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIT. When a short-term financing facility with CIT is
		necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIT’s total amount of capital lent, and shall be combined with the
		company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
		limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIT, and shall be combined with the company’s endorsements/guarantees for the borrower when
		calculating.
Note	5:	According to CPO’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CPO. When a short-term financing facility with CPO is
		necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CPO’s total amount of lendable capital, and shall be combined with the
		company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
		limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CPO, and shall be combined with the company’s endorsements/guarantees for the borrower when
		calculating.
Note	6:	According to CET’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CET. When a short-term financing facility with CET is
		necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CET’s total amount of lendable capital, and shall be combined with the
		company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
		limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CET, and shall be combined with the company’s endorsements/guarantees for the borrower when
		calculating.
Note	7:	According to CIC’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of CIC. When a short-term financing facility with CIC is
		necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of CIC’s total amount of lendable capital, and shall be combined with the
		company’s endorsements/guarantees for calculation. In addition, when lending to the ultimate parent company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not
		limited by the two aforesaid restrictions, but the maximum amount shall not exceed the net worth of CIC, and shall be combined with the company’s endorsements/guarantees for the borrower when
		calculating.
Note	8:	According to Panpal’s Procedures for Lending Funds to Other parties, the total amount of loans to others shall not exceed 40% of the net worth of Panpal. When a short-term financing facility with Panpal
		is necessary, the total amount for lending the borrower shall not exceed 80% of the borrower’s net worth, nor shall it exceed 50% of Panpal’s total amount of lendable capital, and shall be combined with
		the company’s endorsements/guarantees for calculation. In addition, when lending to the total amount lendable to 100% directly or indirectly owned subsidiaries by the Company, or the ultimate parent
		company’s 100% directly or indirectly owned overseas subsidiaries, the total amount of loans is not limited by the two aforesaid restrictions of 80%, but the maximum amount shall not exceed Panpal’s
		total amount of lendable capital, and shall be combined with the company’s endorsements/guarantees for the borrower when calculating.
Note	9:	According to 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:

(September 30, 2021)

		(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period		Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 1�2)	Parent company endorsements /guarantees to third parties on behalf of subsidiary	Subsidiary endorsements /guarantees to third parties on behalf of parent company	Endorsements / guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 0 0 0 1	The Company The Company The Company The Company Arcadyan	CEB CEA CEP HengHao Kunshan Arcadyan AU	(Note 4) (Note 4) (Note 3) (note 4) (Note 4)	27,005,486 27,005,486 27,005,486 27,005,486 1,555,869	57,070 102,726 151,129 25,830 209,700	55,700 100,260 113,692 25,830 208,463	1 1	55,700 00,260 13,692 25,830 ~~-~~	~~-~~ ~~-~~ ~~-~~ ~~-~~ ~~-~~	0.05% 0.09% 0.11% 0.02% 1.80%	54,010,972 54,010,972 54,010,972 54,010,972 4,667,607	Y Y Y Y Y	- - - - -	- - - - -

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

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

(Continued)

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

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

(In Thousands of shares/ units)

					(In Thousands of	(In Thousands of	(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 Chairman of the Board is the first degree of kinship of the Chairman of the Company � The parent company �	Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through profit or loss-non current Financial assets at fair value through profit or loss-non current Financial assets at fair value through profit or loss and other comprehensive income Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current Financial assets at fair value through other comprehensive income-non-current	98,046 124,044 259,600 290 632 4,000 6,685 402 5,000 6,000 31,648 69,370 54,000 5,677 6,995 18,369 2,140	697,110 1,655,984 576,312 16,765 12,250 37,800 106,355 4,410 49,550 88,680 300,294 __ 3,545,510 746,895 926,085 898,020 161,501 107,580 155,772 __ 2,995,853 433,517 132,175 1,785 _____ 567,477	3% 9% 5% 10% 11% 3% 10% 2% 8% 19% 1% 5% 5% 1% 4% - 6%	697,110 1,655,984 576,312 16,765 12,250 37,800 106,355 4,410 49,550 88,680 746,895 926,085 898,020 161,501 107,580 433,517 132,175	(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 September 30, 2021 (excluding investment in subsidiaries, associates and joint ventures): (September 30, 2021)

(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 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
Arcadyan Mactech HHB Mithera BT CPC CIT CIT CIC CIC BSH 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. Bank of Communications Yuntong Wealth Time-type structured deposit Structured Deposits-Bank of China RMB Structured Deposit Bank of Communications Yuntong Wealth Time-type structured deposit products Bank of Communications Yuntong Wealth Time-type structured deposit products Structured Deposits-Bank of China RMB Structured Deposit CitiBank RED ARC TERMLIQUIDITY FUND 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 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% - -	- - - - - - 41,176 20,691 - 8,910 - 125,325 4,311 216,428 779,801 432,856 216,428 520,590 1,393,086 129,179 130,062	(Note 2)
					-
					- - - - 41,176 20,691 - _____ 61,867 8,910 -
					125,325 4,311 216,428 779,801 432,856 216,428 520,590 1,393,086 129,179 130,062

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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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 CIT CIT CEC CPO CNC BSH CIC CET CET CPO Panpal CIC	Stock : Structured deposits : Structured deposits Fund: RED ARCTERMLIQUIDI TYFUND 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 Kinpo Structured deposits– Bank of China RMB Strcutured Deposit Structured deposits– Industrial and Commercial Bank of China RMB Strcutured Deposit Structured deposits– Bank of China RMB Strcutured Deposit Structured deposits- Yuntong Wealth Time-type structured deposit products	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 profit or loss-current Financial assets at fair value through other comprehensive income-non- current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current	Kunshan Rural Commercial Bank CitiBank, N.A. 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 Jipo Investment Bank of China Industrial and Commercial Bank of China Bank of China Bank of Communications	- - - - - - - Related party - - -	23,172 - - - - - - - - - -	281,546 1,470,031 - - - - - 261,366 - 241,113 -	46,197 - - - - - - - - - -	616,864 1,659,591 780,984 433,880 867,760 542,350 520,656 520,656 494,623 520,656 238,634 390,492 387,081 1,403,450	- - - - - - - - - -	- 3,153,480 - - 876,810 546,339 526,086 525,270 761,286 526,086 484,493 395,551 260,408	- 3,129,622 - - 867,760 542,350 520,656 520,656 755,989 520,656 479,747 390,492 258,054	- 23,858 (Note 2) - - 9,050 (Note 2) 3,989 (Note 2) 5,430 (Note 2) 4,614 (Note 2) 5,297 (Note 2) 5,430 4,746 (Note 2) 5,059 (Note 2) 2354 (Note 2) (10,364) (Note 1)	- - - - - - - - - - -	27,675 (Note 1) - (1,183) (Note 1) (1,024) (Note 1) - - - - (66) (Note1) - - 152 (Note 1) (10,364) (Note 1)	69,369 - - - - - - - - - -	926,085 - 779,801 432,856 - - - - 520,590 - - 129,179 1,393,086

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: (September 30, 2021)

(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 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	Paid	Natural person	Non-related party	Not applicable	Not applicable	Not applicable	Not applicable	Appraisal and price negotiation	Operational use	None

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

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

(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	4,147,8946 CNY 956,012 thousand	The balance of $1,648,721 has been fully received after the period	1,961,419	Kunshan XinCheng Construction and Development Co., Ltd.	Non-related party	Activating the assets	Appraisal and price negotiation	None

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

(Continued)

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

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

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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 CEB BCI and its subsidiaries HSI 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	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale Sale	(588,104) (513,817) 164,804 104,664,203 128,299,583 22,464,247 29,292,572 13,615,714 (128,661,592) (102,381) 148,602 (105,007,051) (314,707) (215,452) (1,939,058) (3,174,579)	(0.1)% (0.1)% - 12.9% 15.8% 2.8% 3.6% 1.7% (99.9)% (0.1)% 0.1% (94.2)% (0.3)% (0.2)% (1.7)% (2.8)%	120 days Net 90 days from sale 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	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Markup based on BCI and its subsidiaries' cost Markup based on Etrade and its subsidiaries' cost Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties	There is no significant difference There is no significant difference There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, and adjustments will be made based on demand for funding if necessary There is no significant difference, 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 There is no significant difference, and adjustments will be made based on demand for funding if necessary	258,874 350,439 - (41,644,211) (2,023,019) (807,564) (17,457,023) (3,001,132) 2,023,019 57,836 (35,508) 41,644,211 187,830 196,011 3,436,100 1,347,527	0.1% 0.1% - (22.2)% (1.1)% (0.4)% (9.3)% (1.6)% 99.8% 0.2% (0.1)% 94.7% 0.2% 0.2% 3.2% 1.3%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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	Henghao HSI and its subsidiaries Just and its subsidiaries CPM Changbao Acbel and its subsidiaries Compal Electronic, Inc. Compal Electronic, Inc. HSI and its subsidiaries CEB CEA CIH and its subsidiaries CPM Acbel and its subsidiaries CIH 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.	With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company 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 same ultimate parent 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	Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Sale Purchase Purchase Purchase Sale Purchase Purchase Sale Sale Sale	183,322 515,038 102,453 3,214,478 725,158 869,729 497,946 (29,514,359) (389,178) (471,408) (532,434) 1,933,975 296,031 444,355 215,626 471,295 1,464,281 (107,187) 315,165 532,777 107,187 (13,608,794) 1,281,799 594,382 (183,649) (164,804) (22,477,633)	0.2% 0.5% 0.1% 3.0% 0.7% 0.8% 28.0% (88.8)% (6.6)% (1.4)% (1.6)% 6.0% 0.9% 1.4% 4.3% 9.5% 29.4% (2.2)% 33.0% 55.8% 11.2% (99.5)% 13.7% 93.5% (2.2)% (99.7)% (85.6)%	120 days 120 days 120 days 120 days 120 days 120 days Net 90 days from delivery 120 days 120 days 120 days 120 days 120 days 120 days 120 days 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	Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties - Markup based on BCI and its subsidiaries' cost According to markup pricing According to markup pricing According to markup pricing According to markup pricing Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties Similar to non- related parties 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	Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference There is no significant difference Adjustments will be made based on demand for funding Adjustments will be made based on demand for funding There is no significant difference There is no significant difference Adjustments will be made based on demand for funding There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference There is no significant difference 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	(19,438) (217,192) (57,836) (1,191,488) (239,618) (511,517) (350,439) 17,457,023 1,800,519 1,298,195 430,164 (3,436,100) (65,950) (278,074) (196,011) (1,298,195) (35,157) 3,575 (187,830) (430,164) (3,575) 3,001,132 (339,481) (258,874) 19,438 - 807,564	(0.1)% (0.2)% (0.1)% (1.1)% (0.2)% (0.5)% (37.0)% 92.5% 4.3% 1.9% 0.6% (5.0)% (0.1)% (0.4)% (16.2)% (47.0)% (2.9)% 0.4% (16.8)% (38.4)% (0.3)% 98.6% (12.1)% (98.9)% 0.7% - 81.1%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 1�2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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	Just and its subsidiaries Etrade and its subsidiaries 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 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 Sale Sale Purchase Purchase Sale Sale Sale Purchase Purchase Sale Sale Purchase Purchase Purchase	(149,098) (1,280,703) (535,118) 2,980,883 122,431 (1,003,685) (4,979,290) (402,049) 9,578,084 572,122 (9,578,084) (572,122) 1,003,685 4,979,290 402,049	(0.6)% (4.9)% (2.0)% 12.2% 7.9% (4.0)% (18.0)% (1.0)% 26.0% 2.0% (100.0)% (100.0)% 100.0% 100.0% 100.0%	120 days Net 60 days from delivery 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 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 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 - - - - - - - - - -	35,508 339,481 217,192 (1,347,527) (1,800,519) 234,380 1,164,813 (12,555) (1,782,015) (Note 3) 1,782,015 (Note 3) (234,380) (1,164,813) 12,555	0.4% 3.6% 2.3% (5.7)% (13.4)% 3.0% 16.0% - % (13.0)% - 99.0% - % (100.0)% (100.0)% (100.0)%	(Note 2) (Note 2) (Note 2) (Note 2) (Note 1�2) (Note 2) (Note 2) (Note 2�4) (Note 1�2) (Note 1�2) (Note 1�2) (Note 1�2) (Note 2) (Note 2) (Note 2�4)

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 September 30, 2021 is 1,222,728 thousand dollars.

Note 4: The balance is the sales discount paid by Arcadyan to Arcadyan AU.

(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: (September 30, 2021)

(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 30, 2021)	(September 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 CIH and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries Etrade and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan CNC CBN	CBN UCGI Compal Electronic, Inc. Compal Electronic, Inc. CEA CEB BCI and its subsidiaries HSI and its subsidiaries Compal Electronic, Inc. HSI and its subsidiaries CEB CEA Compal Electronic, Inc. Compal Electronic, Inc. Etrade and its subsidiaries CIH and its subsidiaries Arcadyan Germany Arcadyan USA Arcadyan Vietnam Arcadyan Just and its subsidiaries	The Company's subsidiary The Company's subsidiary Parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company With the same ultimate parent company With the same ultimate parent company With the same ultimate parent company Parent company Parent company With the same ultimate parent company With the same ultimate parent Arcadyan's subsidiary Arcadyan's subsidiary Arcadyan's subsidiary With the same ultimate parent company With the same ultimate parent company	350,439 258,874 2,023,019 41,644,211 187,830 196,011 3,436,100 1,347,527 17,457,023 1,800,519 1,298,195 430,146 3,001,132 807,564 339,481 217,192 234,380 1,164,813 1,222,728 (Note 4) 1,782,015 (Note 5) 191,269 (Note 6)	2.13 2.95 40.02 3.00 4.47 2.16 1.04 2.18 2.81 0.25 0.47 3.30 5.36 4.30 5.45 6.56 5.61 6.02 (Note 4) 4.92 -	- - - - - - - - - - - - - - - - - - - 2,160	- - - - - - - - - - - - - - - - - - - Enhanced the collection	78,953 84,127 - 37,841,999 34,613 - - - 13,133,445 - 53,338 5,712 - - - - 476,821 - 1,058,314 171,149	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 3)	- - - - - - - - - - - - - - - - - - -

Note 1:Balance as of November 5, 2021.

Note 2:Balance as of October 26, 2021.

Note 3:Balance as of November 8, 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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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 2 3 3 3 3	The Company The Company JUST and its subsidiaries JUST and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries CIH and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries BCI and its subsidiaries	CBN UCGI The Company CIH and its subsidiaries The Company CEA CEB BCI and its subsidiaries HSI and its subsidiaries The Company HSI and its subsidiaries CEB CEA	1 1 2 3 2 3 3 3 3 2 3 3 3	Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sale Revenue	513,817 350,439 588,104 258,874 128,661,592 2,023,019 102,381 57,836 105,007,051 41,644,211 314,707 187,830 215,452 196,011 1,939,058 3,436,100 3,174,579 1,347,527 29,514,359 17,457,023 389,178 1,800,519 471,408 1,298,195 532,434	There is no significant difference of price to non-related parties. The credit period is net 90 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � There is no significant difference of price to non-related parties. The credit period is net 120 days, and will be adjusted if necessary. � The price is based on BCI and its subsidiaries's operating cost. The credit period is net 120 days, and will be adjusted if necessary. � 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 net120 days.	0.1% 0.1% 0.1% 0.0% 14.8% 0.4% - - 12.1% 7.9% - - 0.0% - 0.2% 0.7% 0.4% 0.3% 3.4% 3.3% 0.0% 0.3% 0.1% 0.2% -

(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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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
4 5 6 7 8 8 8 8 9 9 9 9 10	CEB Etrade and its subsidiaries HHT CEP HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries HSI and its subsidiaries Arcadyan Arcadyan Arcadyan Arcadyan CNC	CEA The Company 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	3 2 2 2 2 3 3 3 3 3 3 3 3	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 Sales Revenue Accounts Receivable Sales Revenue Accounts Receivable Sales Revenue Other Receivable Processing Revenue Accounts Receivable	430,164 107,187 3,575 13,608,794 3,001,132 183,649 19,438 164,804 - 22,477,633 807,564 149,098 35,508 1,280,703 339,481 535,118 217,192 1,003,685 234,380 4,979,290 1,164,813 402,049 1,222,728 9,578,084 1,782,015	� 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. � 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 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. �	- - - 1.6% 0.6% - - - - 2.6% 0.2% - - 0.1% 0.1% 0.1% - 0.1% 0.0% 0.6% 0.2% 0.0% 0.2% 1.1% 0.3%

(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 nine months ended September 30, 2021)

(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 30, 2021)	(For the nine months ended September 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
11	Arcadyan Vietnam	Arcadyan	3	Processing Revenue	572,122	The credit period is net 180 days from the end of the month of delivery and depended on funding demand.	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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