GS - Interim / Quarterly Report 2021

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT SEPTEMBER 30, 2021 AND 2020

Notice to Readers

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

INDEPENDENT AUDITOR’S REVIEW REPORT

To: G-Shank ENTERPRISE CO., LTD.

Introduction

We have reviewed the accompanying consolidated balance sheets of G-Shank Enterprise Co., Ltd. and its subsidiaries as of September 30, 2021 and 2020 , and the related consolidated statements of comprehensive income for the three-month and nine-month ended September 30, 2021 and 2020 , as well as the consolidated statements of changes in equity and of cash flows for the nine-month 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 these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews and the reports of other independent auditors.

Scope of Review

We conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit 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.(2) of the consolidated financial statements, the same period financial statements of the insignificant subsidiaries included in the aforementioned consolidated financial statements have not been reviewed by the independent auditors. The total assets were NT$3,478,201 thousand and NT$3,228,139 thousand, accounted for 39.55% and 40.41% of the total consolidated assets as of September 30, 2021 and 2020, respectively. The total liabilities were NT$547,568 thousand and NT$516,466 thousand, accounted for 16.84% and 17.82% of total consolidated liabilities, respectively. The total consolidated profits and losses were NT$110,584 thousand, NT$91,035 thousand and NT$254,644 thousand, NT$93,538 thousand, constituting 47.01%, 44.57% and 51.69%, 64.06% of the consolidated total comprehensive income for the three-month and nine-month periods then ended September 30, 2021 and 2020, respectively. As stated in Note 6.(9) of the consolidated financial statements, the investment book amount under the equity method on the

consolidated balance sheet of G-Shank Enterprise Co., Ltd. and its subsidiaries were NT$154,068 thousand and NT$152,408 thousand, accounted for 1.75% and 1.91% of the total consolidated assets, respectively, as of September 30, 2021 and 2020, respectively. The amount of profit (loss) from the affiliated enterprise under the equity method was NT$3,116 thousand, NT$(5,518) thousand and NT$4,473 thousand, NT$(12,071) thousand, accounted for 1.32%, (2.70)% and 0.91%, (8.27)% of the total consolidated profits and losses for the period of the three-month and nine-month periods then ended September 30, 2021 and 2020, respectively, which were calculated according to the same period financial statements of the invested companies that have not been reviewed by the independent auditors. In addition, the relevant information of the aforementioned subsidiaries as disclosed in Note 13 to the consolidated financial statements and the invested companies under the equity method have not been reviewed by the independent auditors.

Conclusion

In our conclusion, except for the financial statements of the insignificant subsidiaries and the invested companies under the equity method as stated in the “Foundation for a qualified conclusion ” paragraph and the relevant information disclosed in Note 13 to the consolidated financial statements may have affected the consolidated financial statements if they have been reviewed by the independent auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of G-Shank Enterprise Co., Ltd. as at September 30, 2021 and 2020, and of its consolidated financial performance for the three-month and nine-month periods then ended, and of its consolidated cash flows for the nine-month ended September 30, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Chiung-hui Tseng Arnico Tseng Diwan & Company November 4, 2021

Notice to Readers

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

Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, the company cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Expressed in thousands of New Taiwan dollar)

(September 30, 2021 & 2020 have been Reviewed 、 December 31, 2020 have been audited)

ASSETS	ASSETS	Notes	September 30,2021	September 30,2021	December 31,2020	December 31,2020	September 30,2020	September 30,2020
Code	Accounts		AMOUNT	%	AMOUNT	%	AMOUNT	%
11xx 1100 1110 1136 1150 1170 1180 1200 1210 1220 130x 1470 1476 15xx 1517 1550 1600 1755 1780 1840 1915 1920 1990 1xxx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Current financial assets at amortised cost Notes receivable, net Accounts receivable, net Accounts receivable- related parties Other receivables Other receivables - related parties Current tax assets Inventory Prepayments and Other current assets Other financial assets-current Total current assets Noncurrent Asset Financial assets at fair value through profit or loss - noncurrent Investments accounted for using equity method Property, Plant and Equipment Right-of-use asset Intangible assets Deferred tax assets Prepayments for business facilities Refundable deposits Other noncurrent assets, others Total noncurrent Asset Total Assets	4 & 6.(1) 6.(2) 4 & 6.(3) 6.(4) & 6.(5) 6.(5) 7 6.(5) 7 4 & 6.(30) 6.(6) 4`、`6.(7) & 8 6.(8) & 6.(22) 6.(9) 6.(10)`、`7 & 8 6.(11)`、`6.(15)`、`8 & 9 6.(12) 4 & 6.(30) 8	$ 2,857,037 1,286,047 - 34,155 1,496,390 36 32,349 - 42,630 1,032,719 153,313 77,649	32 15 - - 17 - - - 1 12 2 1	$ 3,134,587 1,101,179 22,708 80,901 1,148,656 32 57,647 - 49,054 745,421 47,689 95,560	38 13 - 1 13 - 1 - 1 9 1 1	$ 3,283,819 811,344 107,753 59,631 981,954 2 38,713 17 39,968 711,497 40,984 103,744	41 10 1 1 12 - - - 1 9 1 1
			7,012,325	80	6,483,434	78	6,179,426	77
			210,288 154,068 1,196,360 134,761 1,934 24,326 36,567 4,883 19,735	2 2 14 2 - - - - -	205,354 146,510 1,213,352 159,129 3,373 21,582 16,672 4,841 24,074	2 2 15 2 - - - - 1	205,667 152,408 1,205,000 157,819 3,373 30,852 21,122 4,636 27,953	3 2 16 2 - - - - -
			1,782,922	20	1,794,887	22	1,808,830	23
			$ 8,795,247	100	$ 8,278,321	100	$ 7,988,256	100

(CONTINUING)

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Expressed in thousands of New Taiwan dollar)

(September 30, 2021 & 2020 have been Reviewed 、 December 31, 2020 have been audited)

Liabilities and Equity	Liabilities and Equity	Notes	September 30,2021	September 30,2021	December 31,2020	December 31,2020	September 30,2020	September 30,2020
Code	Accounts		AMOUNT	%	AMOUNT	%	AMOUNT	%
21xx 2100 2120 2130 2150 2170 2180 2200 2220 2230 2280 2300 25xx 2540 2570 2580 2640 2645 2xxx 31xx 3100 3110 3140 3200 3300 3310 3320 3350 3400 3410 3420 36xx 3xxx	Current liabilities Short-term borrowings Financial liabilities at fair value through profit or loss - current Contract liabilities - current Notes payable Accounts payable Accounts payable-related parties Other payables Other payables-related parties Current tax liabilities Lease liabilities-current Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Lease liabilities - noncurrent Net defined benefit liabilities- noncurrent Guarantee deposits received Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Ordinary shares Advance Receipts for Capital Stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translation of foreign financial statements Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income Total equity attributable to owners of parent Non-controlling interests Total Equity Total liabilities and equity	6.(13)、6.(32) & 8 6.(2) 6.(25) 7 6.(10) & 6.(26) 7 4 & 6.(30) 6.(15) & 6.(32) 6.(14) & 6.(32) 4 & 6.(30) 6.(15) & 6.(32) 4 & 6.(16) 6.(17)、6.(24)&11. 6.(18)、6.(23) & 6.(24) 6.(19) & 6.(21) 6.(20) 6.(21) 6.(22) 6.(9)`、`6.(22)`、`6.(23) & 6.(29) 6.(8)`、`6.(9)`、`6.(22) & 6.(29) 6.(23)	$ 1,252,981 - 7,590 - 638,948 3,746 431,366 4,272 109,764 18,393 34,507	14 - - - 8 - 5 - 1 - -	$ 1,235,824 - 12,415 - 383,577 546 451,513 2,377 51,336 16,645 24,605	15 - - - 5 - 5 - 1 - -	$ 1,345,451 852 11,899 54 354,351 341 372,923 1,952 33,993 15,356 24,372	17 - - - 5 - 5 - - - -
			2,501,567	28	2,178,838	26	2,161,544	27
			67,683 542,877 62,318 72,326 4,710	1 6 1 1 -	44,365 555,982 84,076 82,291 4,712	1 7 1 1 -	38,272 529,050 84,385 80,704 4,210	- 7 1 1 -
			749,914	9	771,426	10	736,621	9
			3,251,481	37	2,950,264	36	2,898,165	36
			1,849,683 28,640 451,626 827,106 284,690 1,796,474 (461,945) 186,938	21 - 5 9 3 21 (5) 2	1,849,683 - 432,784 798,682 284,690 1,529,619 (357,177) 177,692	22 - 5 10 3 19 (4) 2	1,849,683 - 430,956 798,683 284,690 1,409,405 (436,907) 177,675	23 - 5 10 4 18 (5) 2
			4,963,212	56	4,715,973	57	4,514,185	57
			580,554	7	612,084	7	575,906	7
			5,543,766	63	5,328,057	64	5,090,091	64
			$ 8,795,247	100	$ 8,278,321	100	$ 7,988,256	100

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

(Reviewed, Not Audited)

Code	Accounts	Notes	For the three-months	For the three-months	ended September 30	ended September 30	For the nine-months	For the nine-months	ended September 30	ended September 30
			2021	%	2020	%	2021	%	2020	%
4000 5000 5900 6000 6100 6200 6300 6450 6500 6900 7000 7100 7010 7020 7050 7060 7630 7900 7950 8200 8300 8310 8316 8320 8349 8360 8361 8370 8399 8500 8600 8610 8620 8700 8710 8720 9750 9850	Sales revenue Operating costs Gross profit from operations Operating expense Selling expense General and administrative expenses Research and development expenses Loss (reversal) of expected credit loss Total operating expense Net other income (expenses) Net operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of the profit (loss) of associates Foreign exchange gains (loss) Total non-operating income and expenses Profit (loss) from continuing operations before tax Income Tax Expense Profit (loss) for the period Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss`：` Unrealised gain (loss) on financial assets measured at fair through other comprehensive income Share of the other comprehensive (loss) income of associates Income tax benefit (expense) relating to items that will not be reclassified subsequently to profit or loss Other comprehensive income (loss) that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss`：` Exchange differences on translating foreign operations Share of the other comprehensive income of associates Income tax expense relating to items that may be reclassified subsequently to profit or loss Total items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss) for the period Total comprehensive income for the period Net profit (loss) attributable to`：` Owners of the Corporation Non-controlling interests Net income (loss) Total comprehensive income attributable to`：` Owners of the Corporation Non-controlling interests Total comprehensive income Earnings per share (dollar) Basic Diluted	6(25) & 7 6.(6)、6.(16)、6.(26) & 7 6.(15)、6.(16)、6.(26) & 7 6.(5) 6.(10)、6.(27) & 7 6.(28) 6.(28) 6.(2)、6.(9)、6.(10) & 6.(28) 6.(15) & 6.(28) 6.(9) & 6.(28) 6.(28) 4 & 6.(30) 6.(8)、6.(9) & 6.(29) 6.(31)	$ 1,783,943 (1,242,622)	100 (70)	$ 1,231,591 (852,328)	100 (69)	$ 4,770,310 (3,352,318)	100 (70)	$ 3,443,930 (2,509,657)	100 (73)
			541,321	30	379,263	31	1,417,992	30	934,273	27
			(69,175) (108,524) (45,807) (2,157)	(4) (6) (2) -	(55,228) (103,421) (43,513) 2,378	(4) (8) (4) -	(198,361) (315,794) (132,516) (1,099)	(4) (7) (3) -	(165,718) (304,110) (118,500) (3,365)	(5) (9) (3) -
			(225,663)	(12)	(199,784)	(16)	(647,770)	(14)	(591,693)	(17)
			310	-	341	-	964	-	1,127	-
			315,968	18	179,820	15	771,186	16	343,707	10
			23,237 7,157 (13,019) (3,323) 3,116 (2,763)	1 - - - - -	22,381 7,869 12,353 (3,512) (5,518) (44,319)	2 - 1 - - (4)	70,434 27,954 (19,255) (10,891) 4,473 (16,853)	- 1 - - - -	66,225 27,260 (49,869) (9,962) (12,071) (45,992)	2 1 (2) - - (1)
			14,405	1	(10,746)	(1)	55,862	1	(24,409)	(1)
			330,373 (89,395)	19 (5)	169,074 (50,141)	14 (4)	827,048 (223,128)	17 (4)	319,298 (107,201)	9 (3)
			240,978	14	118,933	10	603,920	13	212,097	6
			6,121 1,106 -	- - -	46,708 (238) -	4 - -	4,934 5,075 -	- - -	39,235 (871) -	1 - -
			7,227	-	46,470	4	10,009	-	38,364	1
			(12,966) - -	(1) - -	38,866 3 -	3 - -	(121,331) - -	(3) - -	(104,370) (81) -	(3) - -
			(12,966)	(1)	38,869	3	(121,331)	(3)	(104,451)	(3)
			(5,739)	(1)	85,339	7	(111,322)	(3)	(66,087)	(2)
			$ 235,239	13	$ 204,272	17	$ 492,598	10	$ 146,010	4
			$ 209,655 31,323	12 2	$ 96,126 22,807	8 2	$ 516,478 87,442	11 2	$ 164,029 48,068	5 1
			$ 240,978	14	$ 118,933	10	$ 603,920	13	$ 212,097	6
			$ 205,774 29,465	11 2	$ 174,817 29,455	15 2	$ 421,719 70,879	9 1	$ 110,782 35,228	3 1
			$ 235,239	13	$ 204,272	17	$ 492,598	10	$ 146,010	4
			$ 1.13		$ 0.52		$ 2.79		$ 0.89
			$ 1.09		$ 0.51		$ 2.71		$ 0.87

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(Reviewed, Not Audited)

`項目`				Equity Att	ributable to Owners of the Corporation	ributable to Owners of the Corporation				Non-controlling Interests	Total Equity
	Share	Capital	Capital Surplus		Retained Earnings		Other Equity		Total
	Ordinary Shares	Advance Receipts for Capital Stock		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gains and Losses on Financial Assets at Fair Value Through Other Cpmprehensive Income
BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings (Note 6.(21)) Legal reserve Cash dividends to ordinary shareholders Changes in the net interest of associates recognised under the equity method Received donation from shareholders Net profit for the nine-months ended September 30, 2020 Other comprehensive income for the nine-months ended September 30, 2020 Total comprehensive income for the nine-months ended September 30,2020 The difference between the actual price of equity acquired from the subsidiary and the book amount Share-based payment expenses Cash dividends paid by subsidiaries to non-controlling interests BALANCE AT SEPTEMBER 30, 2020 BALANCE AT JANUARY 1, 2021 Appropriation of 2020 earnings (Note 6.(21)) Legal reserve Cash dividends to ordinary shareholders Share of the other comprehensive income of associates disposal equity instruments designated as at fair value hrough other comprehensive income Received donation from shareholders Net profit for the nine-months ended September 30, 2021 Other comprehensive income for the nine-months ended September 30, 2021 Total comprehensive income for the nine-months ended September 30, 2021 Share-based payment transaction Cash dividends paid by subsidiaries to non-controlling interests BALANCE AT SEPTEMBER 30, 2021	$ 1,849,683 - - - - - -	$ - - - - - - -	$ 421,121 - - 64 28 - -	$ 768,091 30,592 - - - - -	$ 284,690 - - - - - -	$ 1,516,426 (30,592) (240,458) - - 164,029 -	$ (344,771) - - - - - (91,611)	$ 139,311 - - - - - 38,364	$ 4,634,551 - (240,458) 64 28 164,029 (53,247)	$ 579,189 - - - - 48,068 (12,840)	$ 5,213,740 - (240,458) 64 28 212,097 (66,087)
	-	-	-	-	-	164,029	(91,611)	38,364	110,782	35,228	146,010
	- - -	- - -	3,563 6,180 -	- - -	- - -	- - -	(525) - -	- - -	3,038 6,180 -	(13,952) - (24,559)	(10,914) 6,180 (24,559)
	$ 1,849,683	$ -	$ 430,956	$ 798,683	$ 284,690	$ 1,409,405	$ (436,907)	$ 177,675	$ 4,514,185	$ 575,906	$ 5,090,091
	$ 1,849,683 - - - - - -	$ - - - - - - -	$ 432,784 - - - 23 - -	$ 798,682 28,424 - - - - -	$ 284,690 - - - - - -	$ 1,529,619 (28,424) (221,962) 763 - 516,478 -	$ (357,177) - - - - - (104,768)	$ 177,692 - - (763) - - 10,009	$ 4,715,973 - (221,962) - 23 516,478 (94,759)	$ 612,084 - - - - 87,442 (16,563)	$ 5,328,057 - (221,962) - 23 603,920 (111,322)
	-	-	-	-	-	516,478	(104,768)	10,009	421,719	70,879	492,598
	- -	28,640 -	18,819 -	- -	- -	- -	- -	- -	47,459 -	- (102,409)	47,459 (102,409)
	$ 1,849,683	$ 28,640	$ 451,626	$ 827,106	$ 284,690	$ 1,796,474	$ (461,945)	$ 186,938	$ 4,963,212	$ 580,554	$ 5,543,766

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(Reviewed, Not Audited)

Description CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax from continuing operations Adjustments for The profit or loss items which did not affect cash flows: Depreciation Amortization Expected credit loss Net loss on financial assets and liabilities at fair value through profit or loss Interest expenses Interest income Dividends income Share-based payment expenses Share of (profit) loss of associates ventures accounted for using the equity method Loss on disposal of investments (profit) Loss on disposal of property, plant and equipment Property, plant and equipment for recognition as an expense Unrealized foreign exchange (gains) losses Other item Changes in operating assets and liabilities： Financial assets at fair value through profit or loss Notes receivables Accounts receivable Accounts receivable-related parties Other receivables Other receivables -related parties Inventories Prepayments and Other current assets Current contract Notes payable Accounts payable Accounts payable-related parties Other payables Other payables-related parties Other current liabilities Net defined benefit liabilities-noncurrent Cash generated from operating activities: Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities	Forthenine-month	ended September30
	2021	2020
	$ 827,048 126,724 17,194 1,099 16,566 10,891 (70,434) (8,482) 3,325 (4,473) - 138 - (14,150) (2,993) (216,798) 46,746 (349,660) (4) 17,555 - (287,298) (105,624) (4,825) - 255,232 3,200 (32,269) 1,895 9,902 (9,965) 230,540 78,455 8,482 (10,859) (174,125) 132,493	$ 319,298 124,843 27,195 3,365 49,657 9,962 (66,225) (6,785) 6,180 12,071 782 (1,876) 110 44,140 - (320,825) 18,360 120,469 65 19,841 186 35,408 (8,453) (3,033) 54 (7,598) (697) (31,311) (208) 6,718 (14,000)
		337,693 67,791 6,785 (10,039) (107,225)
		295,005

(Continuing)

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUING)

(Expressed in thousands of New Taiwan dollars)

(Reviewed, Not Audited)

Description	Forthenine-month	ended September30
	2021	2020
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets measured at amortized cost Proceeds from disposal of financial assets measured at amortized cost Proceeds from disposal of investments accounted for using equity method Dividends received from investments accounted for using equity method Disposal of subsidiaries Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) Decrease in refundable deposits Acquisition of intangible assets Decrease (Increase) in other current financial assets Increase in other noncurrent assets (Increase) Decrease in prepayments for business facilities Net cash (used in) provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in Short-term borrowings Increase in long-term borrowings Cash payment for the principal portion of the lease liabilities Payment of cash dividends Employee exercise of stock warrant Cash dividends paid by subsidiaries to non-controlling interests Acquisition of subsidiaries Equity Other financing activities Net cash (used in) provided by financing activities Effect of changes in exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	$ - 22,444 - 1,990 - (105,778) 2,175 (42) (343) 17,911 (11,347) (19,895)	$ (506,464) 642,540 629 4,975 317 (115,879) 8,109 1,123 (1,139) (26,262) (23,042) 18,032
	(92,885)	2,939
	19,589 24,177 (12,466) (221,962) 44,134 (102,409) - 23	302,451 38,272 (9,089) (240,458) - (24,559) (7,749) 28
	(248,914)	58,896
	(68,244)	(106,355)
	(277,550) 3,134,587	250,485 3,033,334
	$ 2,857,037	$ 3,283,819

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(REVIEWED, NOT AUDITED)

1. Company history

G-SHANK ENTERPRISE CO., LTD. (hereinafter referred to as “the company”) was approved for incorporation on November 14, 1973. The company was registered and operated at No. 1, Jiuzhou Road, Jiudou Li, Hsinwu District, Taoyuan City for the production and sales of molds, stamping parts, fixtures and tools, automatic machines and electrical appliances, and mechanical components.

The company’s stock had been listed for trade on the “Taipei Exchange, TPEx” since February 1998, then have been listed for trade on the “Taiwan Stock Exchange Corporation, TWSE” since September 2001.

The company’s board of directors had resolved on October 22, 2007 for the merger of the company and the subsidiary “HON YEH INVESTMENT CO., LTD.” (Referred to as “HON YEH” hereinafter) with “HON YEH” discontinued and the company continues to operate. The name of the merged company is “G-SHANK ENTERPRISE CO., LTD.” still with the merger base date scheduled on December 1, 2007.

“HON YEH,” the discontinued company, was approved for incorporation on February 24, 1998 for the operation of a general investment business.

2. Financial report approval date and procedure

The consolidated financial reports of the company and the subsidiaries (hereinafter referred to as “the Group”) for the nine-month periods ended September 30, 2021 and 2020 were submitted to the company’s board of directors on November 4, 2021 and then published lawfully.

3. Application of the newly issued and revised standards and interpretations

(1)Implemented the standards and interpretations recognized and issued with effect by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

The Group has subject to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations, and Notices (IFRS), Interpretation (IFRIC) and Interpretative Announcement (SIC) announced on the website of Securities and Futures Bureau, Financial Supervisory Commission for implementation in 2021 since January 1, 2021. The new/amended/revised standards and interpretations that have been released by the International Accounting Standards Board (hereinafter referred to as IASB) and recognized and released by the FSC in 2021 are as follows:

10 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

New/Revision/Amendment Standards and Explanations	Content	Effective in the annual period commencing from the following date of IASB announcement
IFRS 4 (Amendments) IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 (Amendment) IFRS 16 (Amendment)	Extension of the Temporary Exemption from Applying IFRS 9 Interest Rate Benchmark Reform—Phase 2 Covid-19-Related Rent Concessions after June 30, 2021	Effective from the date of announcement. January 1, 2021 April 1, 2021

The management of the Group has adopted the foregoing standards amendment approved and announced for effectiveness by the Financial Supervisory Commission , and such adoption does not result in a material impact on the consolidated financial reports of the Group.

(2)New/revision/amendment standards and explanations announced by IASB that are not yet effective and are approved by the Financial Supervisory Commission without adoption.

New/Revision/Amendment Standards and Explanations	Content	Effective in the annual period commencing from the followingdate of IASB
IFRS 3 (Amendment) IFRS (Amendment) IAS 16 (Amendment) IAS 37 (Amendment)	Reference to the Conceptual Framework Annual Improvements to IFRS Standards 2018–2020 Property, Plant, and Equipment: Proceeds before Intended Use Onerous Contracts—Cost of Fulfilling a Contract	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The management of the Group is assessing the potential influence on the amendments to the foregoing standards and hence temporarily and could not reasonably estimate the impact on the consolidated financial reports of the Group.

11 -

(3) New/revision/amendment standards and explanations announced by IASB that are not yet effective and unapproved by the Financial Supervisory Commission

New/Revision/Amendment Standards and Explanations	Content	Effective in the annual period commencing from the followingdate of IASB
IFRS 10 and IAS 28 (Amendment) IFRS 17 IFRS 17 (Amendment) IAS 1 (Amendment) IAS 1 (Amendment) IAS 8 (Amendment) IAS 12 (Amendment)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Insurance Contracts Amendments to IFRS 17 Classification of Liabilities as Current or Non-current -Deferral of Effective Date Disclosure of Accounting Policies Definition of Accounting Estimates Deferred Tax related to Assets and Liabilities arising from a Single Transaction	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

The management of the Group is assessing the potential influence on the foregoing standards or amendments to standards and hence temporarily and could not reasonably estimate the impact on the consolidated financial reports of the Group.

(4)New/revision/amendment standards and explanations announced by IASB that are not yet effective and unapproved and announced by the Financial Supervisory Commission for effectivenes s ： None.

4. Summary of major accounting policies

The major accounting policies adopted for the preparation of the consolidated financial statements are summarized as follows, unless otherwise provided, these accounting policies are uniformly applicable to all reporting periods ：

(1) Financial report preparation and measurement basis

A. Statement of Compliance

These consolidated financial statements are prepared in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” (referred to as the “Regulations” hereinafter) and International Accounting Standards (IAS) No. 34 “Interim Financial Reporting” that was recognized and issued with effect by the Financial Supervisory Commission.

12 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B. Measurement basis

Except for the financial instruments measured at fair value, this consolidated financial report is prepared on the basis of historical cost. For assets, the historical cost refers to the cash, cash equivalents, or the fair value of other considerations paid to obtain assets. For liabilities, the historical cost refers to the amount received when assuming obligations or the amount expected to be paid for liquating liabilities.

C. Functional and reporting currency

The functional currency of each business entity of the Group is the currency used in the main economic environment where it operates. This consolidated financial report is prepared in New Taiwan Dollar that is the functional currency of the company. All financial information prepared in New Taiwan Dollar is in the unit of “NT$ Thousand,” unless otherwise specified.

(2) The preparation scope of consolidated financial report

The company controls the invested company when the company receives variable remuneration from the invested company or is entitled to receiving such variable remuneration; also, the company can influence such remuneration through its power over the invested company. The company controls the invested company only when meeting the following three control elements:

A. The power over the invested company, that is, with the vested power to lead the relevant activities of the invested company;
B. The risk exposure or rights to the variable remuneration resulted from the investment in the invested company; and
C. Exercise the power over the invested company to affect the company’s remuneration.

If there are facts and circumstances indicating that one or more of the aforementioned three control factors has changed, the company will reevaluate whether the control over the invested company is intake.

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

The subsidiaries included in the consolidated financial report and their changes are as follows:

Investing company The company The company The company The company The company The company The company The company GRAND STAR ENTERPRISES L.L.C. (Note 3) GLOBAL STAR INTERNATION AL CO., LTD.	Subsidiary	Location	Business nature	Shareholdingratio(%)	Shareholdingratio(%)	Shareholdingratio(%)
				September 30, 2021	December 31, 2020	September 30, 2020
	CHIN DE INVESTMENT CO., LTD. GRAND STAR ENTERPRISES L.L.C. (Note 3) G-SHANK, INC. SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. (Note 2) G-SHANK ENTERPRISE (M) SDN. BHD. G-SHANK JAPAN CO., LTD. GREAT-SHANK CO., LTD. GLOBAL STAR INTERNATIONAL CO., LTD. HONG JING (SHANGHAI) ELECTRONICS CO., LTD.	Taiwan Anguilla USA China Shanghai (Note 1) China Suzhou (Note 1) Malaysia Japan Tokyo Thailand Cayman Islands China Shanghai (Note 1)	General investment General investment Sales of stamping parts molds, and fixtures, and holding company Precision progressive die and hardware products Planer, milling machine or die machine, precision progressives die, and hardware products Stamping parts molds and fixtures International trade Precision progressive die and hardware products General investment Precision progressive die and hardware products	100.00 100.00 100.00 85.00 5.86 92.33 58.89 85.00 100.00 80.19	100.00 100.00 100.00 85.00 5.86 92.33 58.89 85.00 100.00 80.19	100.00 100.00 100.00 85.00 5.86 92.33 58.89 85.00 100.00 80.19

(Continuing to next page)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

Investing company GLOBAL STAR INTERNATION AL CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. GLOBAL STAR INTERNATIONA L CO., LTD. G-SHANK, INC. G-SHANK ENTERPRISE (M) SDN. BHD.	Subsidiary G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD. XIAMEN G-SHANK PRECISION MACHINERY CO., LTD. G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. (Note 2) QINGDAO G-SHANK PRECISION SDN.BHD. SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD TIANJIN G-SHANK PRECISION MACHINERY CO., LTD. SHENZHEN G-SHANK PRECISION SDN.BHD. SHENZHEN G-BAO PRECISION SDN.BHD. G-SHANK DE MEXICO, S.A. DE C.V. PT INDONESIA G-SHANK PRECISION	Location	Business nature		Shareholdingratio	Shareholdingratio	(%)
					September 30, 2021	December 31, 2020	September 30, 2020
		China Dongguan (Note 1) China Xiamen (Note 1) China Suzhou (Note 1) China Qingdao (Note 1) China Shanghai (Note1) China Tianjin (Note 1) China Shenzhen (Note 1) China Shenzhen (Note 1) Mexico Indonesia	Precision progressive die and hardware products Precision progressive die and hardware products Planer, milling machine or die machine, precision progressive die, and hardware products Precision progressive die and hardware products Precision progressive die and hardware products Precision progressive die and hardware products Precision progressive die and hardware products Precision progressive die and hardware products Stamping parts molds and fixtures Stamping parts molds and fixtures		51.00 79.60 94.14 92.83 85.00 88.20 93.85 91.43 100.00 94.00	51.00 79.60 94.14 92.83 85.00 88.20 93.85 91.43 100.00 94.00	51.00 79.60 94.14 92.83 85.00 88.20 93.85 91.43 100.00 94.00

(Continuing to next page)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the	last page)
Investing company SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. G-LONG PRECISION MACHINERY (DONG GUAN)	Subsidiary	Location	Business nature	Shareholdingratio(%)
				September 30, 2021	December 31, 2020	September 30, 2020
	HUBEI HANSTAR ELECTRONICS TECHNOLOGY CO., LTD. DONGGUAN QIAOJU TRADING CO., LTD.	China Hubei (Note 1) China Dongguan (Note 1)	Precision progressive die and hardware products, and electroplating processing Plastic hardware wholesale and import/export business	100.00 100.00	100.00 100.00	100.00 100.00

CO., LTD.

Note 1: The aforementioned companies are established in China where the foreign exchange control is enforced; therefore, the transfer of funds is restricted by local law and regulations. As of September 30, 2021, December 31, 2020, and September 30, 2020, the cash, bank deposits, and financial assets-current measured at amortized cost and other financial assets-current of the companies that are subject to foreign exchange control regulation were NT$1,652,580 thousand, NT$2,060,183 thousand, and NT$2,025,904 thousand, respectively.
Note 2: The company signed an equity transfer agreement with the shareholders of G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. on May 24, 2019. The company agreed to buy 5.86% shareholding for RMB 2,503,481 from G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., resulting in a total shareholding of 100% thereafter. The aforementioned equity transfer procedure was completed on January 20, 2020.
Note 3: GRAND STAR ENTERPRISES L.L.C. was originally known as “US GRAND STAR ENTERPRISES L.L.C.” and it was officially relocated from the United States to Anguilla on December 7, 2020 that was approved by the Investment Commission, MOEA on January 11, 2021.

G-SHANK ENTERPRISE CO., LTD. has prepared the consolidated financial reports with the separate statements from all subsidiaries accordingly. Except for SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD, GRAND STAR ENTERPRISES

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing) (Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

L.L.C. and GLOBAL STAR INTERNATIONAL Co., Ltd., which financial statements for the first three quarters of 2021 and 2020 having been audited by certified accounts, the financial statements of the remaining subsidiary companies have not been audited by certified accountants during the same accounting periods. The total assets of the unaudited subsidiary companies as of September 30, 2021 and 2020 are NT$3,478,201 thousand and NT$3,228,139 thousand, respectively. The total liabilities are NT$547,568 thousand and NT$516,466 thousand respectively. The total consolidated profits and losses were NT$110,584 thousand, NT$91,035 thousand and NT$254,644 thousand, NT$93,538 thousand, for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, the investment and shareholding ratios of the company and its subsidiaries are as follows:

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

G-SHANK ENTERPRISE CO., LTD.

==> picture [744 x 374] intentionally omitted <==

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

GRAND STAR SHANGHAI G-SHANK G-SHANK GREAT-SHANK
ENTERPRISES L.L.C. PRECISION G-SHANK, INC. ENTERPRISE (M)
CO., LTD.
100.00% MACHINERY CO., 100.00% SDN. BHD.
LTD. 92.33% 85.00%
85.00%
CHIN DE G-SHANK
INVESTMENT JAPAN CO.,
CO., LTD. LTD. GLOBAL STAR G-SHANK DE PT INDONESIA
100.00% 58.89%
INTERNATIONAL MEXICO, G-SHANK
CO., LTD. S.A. DE C.V. PRECISION
100.00% 100.00% 94.00%
5.86%
G-SHANK PRECISION
MACHINERY (SUZHOU)
CO., LTD.
94.14%
100.00%
HONG G-LONG XIAMEN G-SHANK SHANGHAI G-SHANK QINGDAO TIANJIN G-SHANK SHENZHEN SHENZHEN G-BAO
JING(SHANGHA PRECISION PRECISION PRECISION G-SHANK PRECISION G-SHANK PRECISION
I)ELECTRONICS MACHINERY MACHINERY CO., HARDWARE CO., PRECISION MACHINERY CO., PRECISION SDN.BHD.
CO., LTD. (DONG GUAN) LTD. LTD. SDN.BHD. LTD. SDN.BHD. 91.43%
80.19% CO., LTD. 79.60% 85.00% 92.83% 88.20% 93.85%
51.00%
HUBEI HANSTAR
DONGGUAN ELECTRONICS
QIAOJU TRADING TECHNOLOGY CO., LTD.
CO., LTD. 100.00%
100.00%
----- End of picture text -----

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(3) Principles for the preparation of consolidated financial report

A. The consolidated financial report is prepared in accordance with International Financial Reporting Standards No. 10 “Consolidated Financial Statements.” The assets and liabilities, equity, income, expenses and losses, and cash flows related to the transactions between business entities of the Group were written-off at the time of preparing the consolidated financial report; also, similar transactions and events under similar circumstances were handled in accordance with the uniform accounting policies. The consolidated financial report included income and expenses of the subsidiary incurred from the date the control was obtained to the date the control terminated. The comprehensive profit and loss are attributable to the shareholders’ equity and non-controlling interests of the company, even if it causes losses to the non-controlling interests eventually.

B. Transactions between shareholders of the company and non-controlling interests

(A) Without resulting in “loss of control”
It is handled as an equity transaction. The difference between the fair value of any consideration paid for the purchase of non-controlling interests and the net book value of the relevant assets acquired from the subsidiary is recognized as equity and is attributable to the shareholders of the company. The profit or loss from the disposal of non-controlling interests is also recognized in equity.

(B) Resulting in “loss of control”

If a change in the ownership of the subsidiary’s equity results in the loss of control, the assets, liabilities, non-controlling interests, and all other equity constituents related to the former subsidiary are delisted on the date of loss of control; also, the difference among the said delisted amount and the fair value of the considerations collected, the share distribution for the equity transaction conducted with the former subsidiary, and the fair value of any retained investment are recognized in profit and loss. In addition, any remaining investment in the former subsidiary is measured at the fair value on the date of “loss of control,” and it is regarded as the fair value of the originally recognized financial asset, or as the cost of the original investment in an affiliated enterprise or a joint venture.

(4) Employee benefits - retirement benefits

A. All full-time employees of the company are entitled to the retirement plan. The entire employee pension fund is deposited in the pension fund account and managed by the Labor Retirement Reserve Committee. The aforementioned pension fund is deposited in the name of the Labor Retirement Reserve Committee that is completely separated from
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

the company; therefore, it is not included in the aforementioned consolidated financial report. The retirement plan for employees of foreign subsidiaries is handled in accordance with local law and regulations.

B. For a defined contribution plan, the company’s monthly employee pension contribution rate shall not be less than 6% of the employee’s monthly salary, and the contributed amount is recognized as the current expense. Foreign subsidiaries are to appropriate a certain percentage of the salary as pension according to the local law; also, it is recognized as a current expense.
C. For a defined benefit plan, the actuarial pension amount should be appropriated on the annual reporting date according to the Projected Unit Credit Method. The re-measured amount is included in other comprehensive profits and losses when it occurs; also, it is immediately recognized in the retained earnings. The pension cost in the interim period is calculated according to the pension cost rate actuarially calculated at the end of the previous year for the period from the beginning to the end of the year; also, the major market fluctuations, major reductions, settlements, or other significant non-reoccurring events after the end of the year should be adjusted and disclosed accordingly.

(5) Income tax

A. Income tax expenses include current and deferred income taxes. Except for those related to business mergers, directly recognized in equity, or other comprehensive profit and loss, current income tax and deferred income tax expenses are recognized in profit and loss.
B. Current income tax expenses refer to the estimated income tax payable or tax refund receivable calculated on the taxable income or loss of the current year at the tax rate that has been legislated or substantively legislated on the reporting date, including any adjustment made to the income tax payable or refundable of the previous year.
C. Deferred income tax expenses are calculated and recognized on the temporary difference between the tax base of assets and liabilities and the book amounts reported.
D. Deferred income tax assets and liabilities are measured at the tax rate applicable when the temporary difference is expected to reverse that has been legislated or substantively legislated on the reporting date. Deferred income tax assets and liabilities can only be applied to offset current income tax assets and liabilities lawfully; also, it is limited to the same taxpayer and the same levying tax authority; or it can be offset by different taxpayers when the intention is to have the net current income tax liabilities and assets offset, or the income tax liabilities and assets will be realized at the same time.
20 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

E. The outstanding taxable losses, income tax credit, and deductible temporary differences are recognized as deferred income tax assets to the extent of the potential taxable income that occurred in the future. Also, the deferred income tax assets are evaluated on each reporting day and adjusted down to the extent of the relevant tax benefit unlikely to be realized.
F. For the domestic subsidiaries of the Group, for the additionally levied business income tax on the unappropriated earnings of the year, the income tax expense of the unappropriated earnings is recognized according to the actual earnings distribution that is resolved in the shareholders meeting of the following year.
G. The income tax expense of the interim reporting period is measured according to the best estimated annual effective tax rate by the management, that is, apply the estimated annual average effective tax rate to the net income before tax in the interim reporting period. For any change in the legislated tax rate that occurred in the interim reporting period, the relevant income tax effect is recognized in a lump sum during the said interim reporting period.

(6) Other significant accounting policies

The other significant accounting policies adopted in preparing this consolidated financial report are the same as those in Note 4 of the 2020 consolidated financial report. Please refer to the Group’s 2020 consolidated financial report for details.

5. Main causes of uncertainty to material accounting judgments, estimates and assumptions

The management must make judgments, estimations, and assumptions when preparing the Group’s consolidated financial report, which will affect the reported amount of income, expenses, assets, and liabilities. The uncertainties of these material assumptions and estimations may cause significant adjustments to the book amount of assets and liabilities in the future, that is, actual results may differ from estimates.

The significant judgments made by the management of the Group while preparing this consolidated financial report, as well as the main causes of uncertainty in assumptions and estimations about the future are the same as those in Note 5 of the 2020 consolidated financial report. Please refer to the Group’s 2020 consolidated financial report for details.

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

6. Description of important accounting items

(1) Cash and cash equivalents

Cash and cash equivalents
Cash and petty cash Checking deposit and savings deposit Time deposits Total	September 30,2021 $6,416 1,273,938 1,576,683 $2,857,037	December 31,2020 $5,058 973,561 2,155,968 $3,134,587	September 30,2020
			$5,064 1,064,872 2,213,883
			$3,283,819

A. The aforementioned time deposits can be converted into a fixed amount of cash at any time and with limited risk of value changes.
B. The aforementioned bank deposits had not been provided as collateral or mortgaged.

(2) Financial assets-current measured at fair value through profit and loss

Financial assets measured at	September 30,2021 $125,543 1,218,367 - 1,343,910 $71 (60,927) 2,993 (57,863) $1,286,047 $- - $-	December 31,2020 $118,886 1,013,585 - 1,132,471 $530 (32,711) 889 (31,292) $1,101,179 $- - $-	September 30,2020 $123,449 740,993 -
fair value through profit and
loss mandatorily Acquisition cost: Funds Bonds SWAP contracts Subtotal Evaluation adjustment: Funds Bonds SWAP contracts Subtotal Total Financial liabilities held for
			864,442
			$128 (53,226) -
			(53,098)
			$811,344
			$- 852
trading: Acquisition cost: SWAP contracts Evaluation adjustment: SWAP contracts Total
			$852

22 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

A. The SWAP contracts and structured instruments signed with financial institutions for the first three quarters of 2021 and 2020, were the financial hedging operations of the company mainly for hedging changes in claims/obligations exchange rate and interest rate, but it is not specified as a hedging tool. The company’s derivative instruments of the available-for-trade financial assets that are not subject to the hedging accounting are detailed as follows:

Financial instrument September 30, 2021 SWAP contract SWAP contract SWAP contract SWAP contract SWAP contract SWAP contract SWAP contract SWAP contract SWAP contract Total December 31, 2020 SWAP contract SWAP contract Total September 30, 2020 SWAP contract	Nominal principal (NT$Thousand) USD 2,970 USD 7,500 USD 1,080 USD 1,900 USD 2,000 USD 1,350 USD 3,300 USD 1,230 USD1,000 USD 22,330 USD 7,500 USD 3,000 USD 10,500 USD 3,300	Currency USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD USD:NTD	Due date
			10.25.2021 12.10.2021 02.10.2022 02.25.2022 03.25.2022 06.02.2022 06.21.2022 07.08.2022 08.05.2022 03.10.2021 03.22.2021 12.10.2020

The net losses arising from foreign exchange transactions were NT$1,148 thousand, NT$852 thousand, NT$8,737 thousand, and NT$852 thousand , for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively.

B. The Group's valuation (losses) profits of financial assets at fair value through income were NT$(12,373) thousand, NT$13,470 thousand, NT$(16,566) thousand, and NT$(48,805) thousand, and valuation losses of financial liabilities at fair value through income were NT$0 thousand, NT$852 thousand , NT$0 thousand, NT$852 thousand,
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively, which were booked in the “Non-operating income and expenses - other profit and loss” account.

C. The aforementioned financial assets measured at fair value through profit and loss had not been provided as collateral or mortgaged.
D. Please refer to Note 12.(2)C.(A) and (B) of the consolidated financial report for the disclosure of the market risk and credit risk of the Group’s financial assets measured at fair value through profit and loss.

(3) Financial assets-current measured at amortized cost

RMB time wealth management instruments Less: Allowance for loss Net amount	September 30,2021 $- - $-	December 31,2020 $22,708 - $22,708	September 30,2020
			$107,753 -
			$107,753

A. Financial assets measured at amortized cost refers to the business model of collecting contractual cash flow with the financial assets held, and the contractual cash flow is entirely applied to pay for the principal and the interest of the outstanding principal; therefore, it is classified to be measured at amortized cost.
B. The aforementioned financial assets measured at amortized cost had not been provided as collateral or mortgaged.
C. Please refer to Note 12.(2)C.(B) of the consolidated financial report for the disclosure of the credit risk of the Group’s financial asset measured at amortized cost.

(4) Notes receivable - net

Notes receivable-net
Notes receivable Less: Allowance for loss Net amount	September 30,2021 $34,155 - $34,155	December 31,2020 $80,901 - $80,901	September 30,2020
			$59,631 -
			$59,631

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(5) Accounts receivable - net

Accounts receivable-net
Accounts receivable Less: Allowance for loss Net amount	September 30,2021 $1,526,553 (30,163) $1,496,390	December 31,2020 $1,180,904 (32,248) $1,148,656	September 30,2020
			$1,011,443 (29,489)
			$981,954

A. The allowance for loss of the Group’s notes receivable, accounts receivable, and other receivable is simply measured by the expected credit losses amount throughout the duration. The notes receivable and accounts receivable are classified according to the common risk characteristics of the customers’ ability to pay all due amounts in accordance with the contract terms, taking into account the reasonable and provable information related to past events, current conditions, and future economic conditions (obtainable without excessive cost or investment on the reporting date), and estimating the expected credit loss according to the estimated default rate and expected credit loss rate.
B. The increase or decrease of allowance for loss of the Group’s notes receivable, accounts receivable, and other receivable is as follows:

receivable, and other receivable	is as follows:	is as follows:
Balance - beginning Allowance account for the impairment of notes receivable, accounts receivable, and other receivables Allowance reversal account for the impairment of notes receivable, accounts receivable, and other receivables Write off other uncollectible receivables Exchange difference Balance - ending	Forthe nine-month periodsended September 30,
	2021 $32,248 1,099 - (2,637) (547) $30,163	2020
		$26,500 3,365 - - (376)
		$29,489

C. Please refer to Note 12.(2)C.(B) of the consolidated financial report for the disclosure of the credit risk of the Group’s notes receivable, accounts receivable, and other receivables.
25 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(6) Inventory

nventory
Raw materials Substances Work-in-process goods Finished goods Merchandise trade Total		September 30,2021
	Cost $367,376 29,960 257,166 447,994 16,196 $1,118,692	Allowance for loss of inventoryin valuation $15,029 381 42,444 27,056 1,063 $85,973	Book amount
			$352,347 29,579 214,722 420,938 15,133
			$1,032,719

	December 31,2020
Cost $243,238 40,857 200,263 324,561 12,812 $821,731	Allowance for loss of inventoryin valuation $18,784 64 29,747 23,135 4,580 $76,310	Bookamount
		$224,454 40,793 170,516 301,426 8,232
		$745,421

	September 30,2020
Cost $239,797 39,432 187,642 307,631 12,314 $786,816	Allowance for loss of inventoryin valuation $19,987 137 24,529 29,767 899 $75,319	Book amount
		$219,810 39,295 163,113 277,864 11,415
		$711,497

A. Cost of goods sold related to inventory is as follows:

For the three-month periods ended September 30,	For the three-month periods ended September 30,	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $1,234,027 7,492 - 1,103 $1,242,622	2020	2021	2020
	$850,592 - (1,748) 3,484	$3,333,655 11,004 - 7,659	$2,500,760 - (357) 9,254
	$852,328	$3,352,318	$2,509,657

26 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B. Due to the recovery of raw material price or the use of raw material that was with allowance for inventory loss in valuation appropriated for the three-month and nine-month periods ended September 30, 2020, or the work-in-process goods completed and transferred to the finished goods and sold or the finished goods sold, so the reason for the net cash value of inventory lower than the cost had disappeared and the booked net cash value of inventory increased; resulting in the cost of goods sold decreased by NT$1,748 thousand, and NT$357 thousand.
C. The aforementioned inventory had not been provided as collateral or mortgaged.

(7) Other financial assets-current

Time deposit Restricted assets – bank deposit Special account for transferring overseas funds back to Taiwan Savings deposit Time deposit Total	September 30,2021 $29,183 1,065 47,401 - $77,649	December 31,2020 $61,301 3,962 2,586 27,711 $95,560	September 30,2020
			$61,119 3,421 4,604 34,600
			$103,744

Please refer to Note 8 of the consolidated financial report for the other financial assets-current provided as collateral or mortgaged.

(8) Financial assets-noncurrent measured at fair value through other comprehensive profit and

loss Equity instrument Unlisted stocks Equity instrument investment evaluation adjustment Total	September 30,2021 $27,006 183,282 $210,288	December 31,2020 $27,006 178,348 $205,354	September 30,2020
			$27,006 178,661
			$205,667

A. Equity instrument investment measured at fair value through other comprehensive profit and loss was not an available-for-trade investment; therefore, the Group chose to have it designated as measured at fair value through other comprehensive profit and loss.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B. The Group had recognized dividend income from the investment in equity instrument measured at fair value through other comprehensive profit and loss were NT$0 thousand, NT$0 thousand, NT$8,482 thousand, and NT$6,785 thousand for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively.
C. The Group did not have cumulative profit or loss transferred within equity for the three-month and nine-month periods ended September 30, 2021 and 2020.
D. The aforementioned financial assets measured at fair value through other omprehensive profit and loss had not been provided as collateral or mortgaged.
E. Please refer to Note 12.(2)C.(A) and (B) of the consolidated financial report for the disclosure of the market risk and credit risk of the Group’s financial asset measured at fair value through other comprehensive profit and loss.

(9) Investment under the equity method

A. The Group’s invested companies under the equity method are individually insignificant affiliated companies with the book amount and equity holding ratio as follows:

Affiliated enterprises	September 30, 2021	Equity holding ratio(%)	December 31, 2020	Equity holding ratio(%)	September 30, 2020	Equity holding ratio(%)
SUNFLEX TECHNOLOGY CO., LTD. (Note 3) CHANG HONG SHEN HARDWARE CO., LTD. (Note 2) OASIS WORLD CO., LTD. (Note 1) Total	$154,068 - -	14.74 - -	$146,510 - -	14.74 - -	$152,408 - -	14.74 - -
	$154,068		$146,510		$152,408

Note 1: The company’s board of directors had resolved to have the subsidiary, OASIS WORLD CO., LTD., dissolved and liquidated on November 7, 2019 due to the needs of business operation and management. Therefore, the said subsidiary was not included in the consolidated financial report since the said date. The liquidation procedure was completed on May 22, 2020.
Note 2: The Group decided to terminate the investment in CHANG HONG SHEN HARDWARE CO., LTD. (referred to as “CHANG HONG SHEN HARDWARE” hereinafter) according to the evaluation result with an agreement reached with the operating shareholders of CHANG HONG SHEN HARDWARE in May 2020. The company had recognized an investment loss of RMB 183,680 (equivalent to NT$782 thousand) according to the book amount of RMB 683,680 at the end of April 2020, net of the equipment payable of RMB 350,000 to CHANG HONG SHEN HARDWARE , and the recovered investment of RMB 150,000, which was booked in the “loss from the disposal of investment” for the three-month periods ended June 30, 2020.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

  - (Unit amount in NT$ Thousand, unless otherwise specified)

Note 3: The Group is the largest single shareholder of SUNFLEX TECHNOLOGY CO., LTD. with 14.74% voting shares. The shareholding of other top-ten shareholders (not related parties) exceeds the Group, and the shareholders have not agreed to discuss or make decisions collectively; apparently, the Group has no actual ability to lead relevant decision-making. Therefore, it is concluded that the Group has no control over SUNFLEX TECHNOLOGY CO., LTD., but only significant influence.
B. The Group’s shareholding in each individual insignificant affiliated company is summarized as follows:

as follows:
Net profit (loss) of thecontinuing business unit – current Other comprehensive profit and loss (after tax) - current Total comprehensive profit and loss - current	For the three-month periods ended September 30,		For the nine-month periods ended September 30,
	2021	2020	2021	2020
	$3,116 1,106	$(5,518) (235)	$4,473 5,075	$(12,071) (952)
	$4,222	$(5,753)	$9,548	$(13,023)

C. The increase or decrease of the Group’s investments under the equity method is as follows:

Balance - beginning Dividends pay from associates Profit (loss) amount - current Value of investment under the equity method for the current term disposition Losses on Disposal of Equity Investments under the Equity Method Changes in the affiliated enterprises under the equity method The exchange difference amount from the conversion of the financial statements of foreign operating institutions The unrealized valuation profit (loss) amount of the financial assets measured at fair value through other comprehensive profit and loss Earnings from equity instruments at fair value through other comprehensive income are retained by division Balance - ending	For the nine-monthperiods ended September 30,	For the nine-monthperiods ended September 30,
	2021 $146,510 (1,990) 4,473 - - - - 4,312 763 $151,068	2020
		$173,537 (4,975) (12,071) (2,413) (782) 64 (81) (871) -
		$152,408

D. The aforementioned investments under the equity method had not been provided as collateral or mortgaged.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(10) Property, plant and equipment

A. The change in the Group’s property, plant and equipment is as follows:

For the nine months ended September 30, 2021

Cost	Land	House & building	Machinery equipment	Transportati on equipment	Office equipment	Other equipment	Construction in progress and equipment yet to be tested	Total
Balance at January 1, 2021 Addition Dispositiont Reclassification Exchange difference Balance at September 30, 2021 Accumulated depreciation	$135,721 - - - (3,869)	$1,023,778 7,028 - 5,058 (20,434)	$2,199,454 80,930 (21,245) 18,192 (42,228)	$96,652 9,741 (6,203) - (2,227)	$82,518 5,688 (1,233) 494 (2,304)	$224,324 10,267 (1,388) (18,451) (4,628)	$5,260 5,201 - (5,293) (81)	$3,767,707 118,855 (30,069) - (75,771)
	131,852	1,015,430	2,235,103	97,963	85,163	210,124	5,087	3,780,722
	- - - - -	587,284 30,635 - - (11,718)	1,677,535 63,696 (20,140) 3,413 (34,714)	65,903 6,181 (5,230) - (1,559)	67,577 2,933 (1,113) - (1,902)	156,056 8,106 (1,273) (3,413) (3,895)	- - - - -	2,554,355 111,551 (27,756) - (53,788)
Balance at January 1, 2021 Depreciation Disposition Reclassification Exchange difference Balance at September 30, 2021 Carrying amount at September 30, 2021
	-	606,201	1,689,790	65,295	67,495	155,581	-	2,584,362
	$131,852	$409,229	$545,313	$32,668	$17,668	$54,543	$5,087	$1,196,360

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

For the nine months ended September 30, 2020

Cost	Land	House & building	Machinery equipment	Transportati on equipment	Office equipment	Other equipment	Construction in progress and equipment yet to be tested	Total
Balance at January 1, 2020 Addition Dispositiont Reclassification Exchange difference Balance at September 30, 2020 Accumulated depreciation	$138,206 - - - (3,053)	$1,015,145 2,113 - 4,813 (16,848)	$2,144,727 81,447 (48,468) 1,310 (36,547)	$94,403 6,937 (5,178) - (2,593)	$85,382 1,616 (2,873) - (2,646)	$207,608 16,372 (1,252) 671 (3,354)	$5,829 7,479 - (6,904) (27)	$3,691,300 115,964 (57,771) (110) (65,068)
	135,153	1,005,223	2,142,469	93,569	81,479	220,045	6,377	3,684,315
	- - - -	547,596 29,014 - (8,891)	1,634,855 66,620 (43,166) (28,913)	66,842 4,916 (4,640) (1,608)	66,809 3,269 (2,604) (2,037)	145,707 9,357 (1,128) (2,683)	- - - -	2,461,809 113,176 (51,538) (44,132)
Balance at January 1, 2020 Depreciation Disposition Exchange difference Balance at September 30, 2020 Carrying amount at September 30, 2020
	-	567,719	1,629,396	65,510	65,437	151,253	-	2,479,315
	$135,153	$437,504	$513,073	$28,059	$16,042	$68,792	$6,377	$1,205,000

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

B. The Group’s major building constituents mainly include the main plant buildings, workshops, and plant decoration, which are depreciated according to their service life of 20-50 years and 3-20 years, respectively.
C. The Group did not acquire property, plant and equipment that caused the capitalization of the loan cost for the three-month and nine-month periods ended September 30, 2021 and 2020.
D. The Group did not have any impairment occurred to the property, plant and equipment for the three-month and nine-month periods ended September 30, 2021 and 2020.
E. The aforementioned property, plant and equipment had not been provided as collateral or mortgaged.
F. The acquired property, plant and equipment listed in the consolidated cash flow statemen t:

For the nine-monthperiods ended September 30, 2021 2020 The current addition of property, plant and equipment listed in Note 6(10)A of the consolidated financial report $118,855 $115,964 Add: Equipment payable`–`beginning 4,556 3,258 Less: Equipment payable`–`ending (17,633) (1,876) Disposal of the investment price using the equity method minus the payable on equipment - (1,467) Cash outflow for the acquisition of property, plant and equipment $105,778 $115,879 G. The Group's leased assets are as follows: September 30,2021 December 31,2020 September 30,2020 House and building $1,340 $1,340 $1,340 Less: Accumulated depreciation (960) (932) (923) Leased assets - net $380 $408 $417	For the nine-monthperiods ended September 30,	For the nine-monthperiods ended September 30,	For the nine-monthperiods ended September 30,	For the nine-monthperiods ended September 30,
		2021 $118,855 4,556 (17,633) - $105,778 December 31,2020 $1,340 (932) $408		2020
				$115,964 3,258 (1,876) (1,467)
				$115,879
				September 30,2020
				$1,340 (923)
				$417

(A) The company had part of the plant building leased to BAIYUE PRECISION CO., LTD. (hereinafter referred to as “BAIYUE”) for a period from October 1, 2019 to September 30, 2020. The lease contract was renewed on September 30, 2020 for a lease period from October 1, 2020 to September 30, 2021. The lease contract was renewed on September 30, 2021 for a lease period from October 1, 2021 to September 30, 2022.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(B) SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. of the Group had part of the plant building leased to CHANG HONG SHEN HARDWARE CO., LTD. (hereinafter referred to as “CHANG HONG SHEN HARDWARE”) for a period from March 1, 2019 to February 28, 2024. The said two parties agreed to have the lease contract terminated in May 2020.
(C) The Group had part of the plant building leased to BAIYUE and CHANG HONG SHEN HARDWARE. The said plant building could not be sold independently; also, the said plant building owned by the Group was mainly for the purpose of product production, service providing, and management; therefore, the proprietary plant was not classified as an investment property.

(11) Right-of-use assets

A. The increase and decrease of the Group’s right-of-use assets are as follows:

For the nine-monthperiods ended September 30,2021	For the nine-monthperiods ended September 30,2021	For the nine-monthperiods ended September 30,2021	For the nine-monthperiods ended September 30,2021
Land House & building Total $66,045 $125,053 $191,098 - - - - (5,692) (5,692) (2,017) (2,526) (4,543) 64,028 116,835 180,863 4,036 27,933 31,969 1,415 13,758 15,173 - - - (298) (742) (1,040) 5,153 40,949 46,102 $58,875 $75,886 $134,761 For the nine-monthperiods ended September 30,2020		Total
		$191,098 - (5,692) (4,543)
		180,863
		31,969 15,173 - (1,040)
		46,102
		$134,761
Land $66,166 - - (1,511) 64,655	House & building $98,874 21,805 - (1,043) 119,636		Total
			$165,040 21,805 - (2,554)
			184,291

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

For the nine-monthperiods ended September 30,2020	For the nine-monthperiods ended September 30,2020	For the nine-monthperiods ended September 30,2020
Land $1,926 1,412 - 319 3,657 $60,998	House & building $12,671 10,255 - (111) 22,815 $96,821	Total
		$14,597 11,667 - 208
		26,472
		$157,819

B. The Group did not have the right-of-use assets sublet for the three-month and nine-month periods ended September 30, 2021 and 2020.
C.The Group did not have any impairment occurred to the right-of-use assets for the three-month and nine-month periods ended September 30, 2021 and 2020.
D. The aforementioned right-of-use assets had not been provided as collateral or mortgaged.

(12) Intangible assets

A. The increase or decrease of the Group’s intangible assets-computer software is as follows:

Cost Balance – beginning Addition - current Decrease in the current period – delisted on the due date Exchange difference Balance – ending Accumulated depreciation Balance – beginning Amortization – current Decrease in current period – delisted on the due date Exchange difference Balance – ending Book amount - ending	For the nine-monthperiods ended September 30,	For the nine-monthperiods ended September 30,
	2021 $8,598 343 (1,525) (51) 7,365 (5,225) (1,781) 1,525 50 (5,431) $1,934	2020
		$7,200 1,139 - (52)
		8,287
		(3,229) (1,734) - 49
		(4,914)
		$3,373

34 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

B. The Group did not have any impairment occurred to the intangible assets for the three-month and nine-month periods ended September 30, 2021 and 2020.

(13) Short-term loans

ort-term loans
Credit loans Guaranteed loans Total	September 30,2021 $1,252,981 - $1,252,981	December 31,2020 $1,222,202 13,622 $1,235,824	September 30,2020
			$1,339,000 6,451
			$1,345,451

A. The Group’s short-term loan interest rate is as follows:

Nature of loan Credit loan Guaranteed loan	September 30,2021 0.700%-1.269% -	December 31,2020 0.700%-1.325% 3.990%-4.350%	September 30,2020
			0.700%-1.269% 4.350%

B. Please refer to Note 8 of the consolidated financial report for the Group’s short-term loans provided as collateral.

(14) Long-term loans

Long-term loans
Creditor Nature of loan September 30, 2021 Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Fubon Bank Credit loan Credit loan Fubon Bank Credit loan Fubon Bank Credit loan	Contract period 01/03/2020~01/03/2025 02/05/2020~01/03/2025 02/07/2020~02/07/2025 03/05/2020~01/03/2025 04/01/2020~01/03/2025 05/05/2020~01/03/2025 06/05/2020~01/03/2025 07/03/2020~01/03/2025 07/20/2020~01/03/2025 08/05/2020~01/03/2025 08/07/2020~02/07/2025 09/04/2020~01/03/2025 10/05/2020~01/03/2025 11/05/2020~01/03/2025 12/15/2020~01/03/2025	Amount $3,242 1,598 16,461 1,904 1,789 1,753 2,023 1,719 867 1,873 2,276 1,938 1,895 2,151 2,017	Repayment method
			(Note 1) (Note 1) (Note 2) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 1) (Note 1) (Note 1) (Note 1)

(Continuing to next page)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the last page)
Creditor Nature of loan Contractperiod Fubon Bank Credit loan 01/05/2021~01/03/2025 Fubon Bank Credit loan 01/20/2021~01/03/2025 Fubon Bank Credit loan 02/05/2021~01/03/2025 Fubon Bank Credit loan 03/05/2021~01/03/2025 Fubon Bank Credit loan 04/01/2021~01/03/2025 Fubon Bank Credit loan 05/05/2021~01/03/2025 Fubon Bank Credit loan 06/04/2021~01/03/2025 Fubon Bank Credit loan 07/05/2021~01/03/2025 Fubon Bank Credit loan 07/20/2021~01/03/2025 Fubon Bank Credit loan 08/05/2021~01/03/2025 Fubon Bank Credit loan 09/03/2021~01/03/2025 Total Less: Long-term loans due within one year Long-term loans due after one year	Contractperiod	Amount 2,175 1,591 2,086 2,490 2,157 2,634 2,444 2,426 672 2,452 3,050 67,683 - $67,683	Repayment method
			(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)

Creditor Nature of loan December 31, 2020 Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan Fubon Bank Credit loan	Contractperiod 01/03/2020~01/03/2025 02/05/2020~01/03/2025 02/07/2020~02/07/2025 03/05/2020~01/03/2025 04/01/2020~01/03/2025 05/05/2020~01/03/2025 06/05/2020~01/03/2025 07/03/2020~01/03/2025 07/20/2020~01/03/2025 08/05/2020~01/03/2025 08/07/2020~02/07/2025 09/04/2020~01/03/2025 10/05/2020~01/03/2025 11/05/2020~01/03/2025 12/15/2020~01/03/2025	Amount $3,242 1,598 16,461 1,904 1,789 1,753 2,023 1,719 867 1,873 2,276 1,938 1,895 2,151 2,017	Repayment method
			(Note 1) (Note 1) (Note 2) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 1) (Note 1) (Note 1) (Note 1)

(Continuing to next page)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the last page)
Creditor Nature of loan Contractperiod BBVA USA Credit loan 05/04/2020~05/04/2022 Total Less: Long-term loans due within one year Long-term loans due after one year	Amount 859 44,365 - $44,365	Repayment method
		(Note 3)

Creditor Nature of loan Contractperiod September 30, 2020 Fubon Bank Credit loan 01/03/2020~01/03/2025 Fubon Bank Credit loan 02/05/2020~01/03/2025 Fubon Bank Credit loan 02/07/2020~02/07/2025 Fubon Bank Credit loan 03/05/2020~01/03/2025 CTBC Credit loan 03/31/2020~03/31/2025 Fubon Bank Credit loan 04/01/2020~01/03/2025 Fubon Bank Credit loan 05/05/2020~01/03/2025 Fubon Bank Credit loan 06/05/2020~01/03/2025 Fubon Bank Credit loan 07/03/2020~01/03/2025 Fubon Bank Credit loan 07/20/2020~01/03/2025 Fubon Bank Credit loan 08/05/2020~01/03/2025 Fubon Bank Credit loan 08/07/2020~02/07/2025 Fubon Bank Credit loan 09/04/2020~01/03/2025 Total Less: Long-term loans due within one year Long-term loans due after one year	Amount	Repayment method
	$3,242 1,598 16,461 1,904 829 1,789 1,753 2,023 1,719 867 1,873 2,276 1,938	(Note 1) (Note 1) (Note 2) (Note 1) (Note 4) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 1)
	38,272 -
	$38,272

Note 1: The first repayment date to Fubon Bank is on January 15, 2023, followed by a monthly installment for a total of 24 payments with the principal paid equally and the interest paid monthly.
Note 2: The first repayment date to Fubon Bank is on February 15, 2023, followed by a monthly installment for a total of 24 payments with the principal paid equally and the interest paid monthly.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Note 3: The interest to Compass Bank is repaid in a lump sum at maturity. The Group meets the repayment exemption for U.S. relief loan and hence has recognized this loan principal under other income for the three-month periods ended June 30, 2021 .
Note 4: The first repayment date to China Trust Commercial Bank is on October 15, 2021, followed by a monthly installment for a total of 42 payments with the principal paid equally and the interest paid monthly. The company had already paid off the loan in advance on October 26, 2020.
A. The aforementioned long-term loan from Fubon Bank is a loan for the special investment projects in Taiwan of home-coming Taiwanese businessmen with an interest rate of 0.70% on September 30, 2021 and December 31, 2020, and an interest rate of 0.45%~0.70% on September 30, 2020.
B. The aforementioned long-term loan from BBVA USA is the United States relief loan with an interest rate of 1.00% on December 31, 2020.
C. The Group did not provide collateral for the aforementioned long-term loans.

(15) Lease liabilities

Lease liabilities
Lease liabilities House and building Less: Lease liabilities due within one year Lease liabilities due after one year	Discount rate	September 30, 2021	December 31, 2020	September 30, 2020
	2.475%-4.750%	$80,711 (18,393)	$100,721 (16,645)	$99,741 (15,356)
		$62,318	$84,076	$84,385

A. The Group’s subsidiaries, G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD., SHENZHEN G-SHANK PRECISION SDN.BHD., G-SHANK JAPAN CO., LTD., and SHENZHEN G-BAO PRECISION SDN.BHD. had leased factory and dormitory from the Group in September 2007, June 2016, April 2017, and August 2017 for a lease period of 40 years, 5, years 2 years, ad 3 years, respectively, which have been booked as right-of-use assets since January 1, 2019, with a monthly rent paid.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B. Other rental information is listed as follows:

For the three-month periods ended September 30, 2021 2020 $1,327 $1,224 $- $- $- $- $6,718 $4,757 $985 $1,095	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $1,327 $- $- $6,718 $985	2021 $3,872 $- $- $19,552 $3,214	2020
		$3,807
		$-
		$-
		$12,896
		$3,081

The Group chose to have the qualified short-term dormitories lease exempted from lease recognition, and no related right-of-use assets and lease liabilities of such lease are recognized.

(16) Retirement benefits

A. Defined benefits plan

(A) The company has established an employee retirement plan according to the employees’ years of service and the expected wages before retirement. A certain percentage of the monthly wage is appropriated as pension in accordance with the “Labor Standards Act” that is deposited in the special account and managed by the Labor Retirement Reserve Committee. The aforementioned pension fund is completely separated from the company; therefore, it is not included in the consolidated financial report. As of September 30, 2021, December 31, 2020, and September 30, 2020, the company’s pension reserve deposit account with the Bank of Taiwan was with a balance of NT$157,916 thousand, NT$155,402 thousand, and NT$156,454 thousand, respectively.
(B) Please refer to Note 6.(16)A. of the 2020 consolidated financial report for the company’s defined benefit plan on December 31, 2020.
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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(C) Pension expenses recognized as profit or loss:

For the three-month periods ended September 30, 2021 2020 $565 $588 154 140 345 341 92 117 $1,156 $1,186	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $565 154 345 92 $1,156	2021 $1,713 473 1,041 277 $3,504	2020
		$1,768 443 1,008 337
		$3,556

B. Defined contribution plan

(A) The company has adopted a definite contribution plan since the implementation of the “Labor Pension Act” in July 2005. The employees can choose the relevant pension plan of the “Labor Standards Act” since then or apply the pension system of the “Labor Pension Act” and retain the seniority accumulated before the Act. For employees subject to the “Labor Pension Act,” the company shall appropriate an amount not less than 6% of the employee’s monthly salary and have it deposited in the employee’s personal account with the Bureau of Labor Insurance, Ministry of Labor. The company after paying the monthly pension for each employee is not liable for the statutory and constructive obligations of paying additional contributions.
(B) The Group’s subsidiaries in Mainland China, Malaysia, Indonesia, the United States, Mexico, Thailand, and Japan shall appropriate an amount equivalent to a certain percentage of the salaries as pension in accordance with the local law and regulations, and pay the appropriated amount to the responsible government departments and then have it deposited in each employee’s personal account.
(C) The pension expenses recognized according to the defined contribution plan of the Group is as follows:

For the three-month periods ended September 30, 2021 2020 $11,401 $3,854 1,941 819 2,319 974 1,500 406 $17,161 $6,053	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $11,401 1,941 2,319 1,500 $17,161	2021 $30,720 5,511 6,568 4,274 $47,073	2020
		$14,344 3,072 3,600 1,761
		$22,777

40 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(17) Capital stock

Capital stock
Balance amount on January 1,2020 Balance amount on September 30, 2020 Balance amount on January 1,2021 Employee exercise of stock warrant Balance amount on September 30,2021	Authorized capital stock (1,000 shares) 350,000 350,000 350,000	Common stock shares issued at NT$10 par (including Advance Receipts for Capital Stock)
		Shares(1,000 shares) 184,968 184,968 184,968 2,864 187,832	Capital stock
			$1,849,683
			$1,849,683
			$1,849,683 28,640
	350,000
			$1,878,323

A. As of September 30, 2021, December 31, 2020, and September 30, 2020, the company’s authorized capital stock included 20,000 thousand shares reserved for the issuance of an employee stock warrant.
B. The related rights, priority, and restrictions of the common stock shares issued by the company are as follows:
(A) Each shareholder is entitled to one vote per share.
(B) The distribution of dividends and bonuses are based on the shareholding ratio of each shareholder.
(C) The property net of the debt is distributed proportionally to the shareholding ratio of each shareholder.
C. As of September 30, 2021, December 31, 2020 and September 30, 2020, of 7,780 thousand shares, 4,916 thousand shares and 4,916 thousand shares were subscribed, respectively, due to the company’s issuance of an employee stock warrant. Among them, as of September 30, 2021, there were still 2,864 thousand shares that have not yet completed the change registration procedures, so they are temporarily listed under the Advance Receipts for Capital Stock item. Please refer to Note 6.(24) of the consolidated financial report for the related information on the issuance of an employee stock warrant.
41 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

- (18) Additional paid in capital

Common stock premium Treasury stock transaction The difference between the actual acquisition price of the subsidiary’s equity and the book amount Changes in the net equity value of subsidiaries under the equity method and affiliated enterprises Employee stock options Invalid employee stock options Received donation from shareholders Total	September 30, 2021 $287,379 63,306 3,563 31,847 27,634 36,240 1,657 $451,626	December 31, 2020 $258,152 63,306 3,563 31,847 38,042 36,240 1,634 $432,784	September 30, 2020
			$258,152 63,306 3,563 31,752 36,309 36,240 1,634
			$430,956

According to the Company Act, the company shall apply the additional paid-in capital to make up for losses only. However, if the company has no loss, the stock premium and all or part of the donation received may be used to distribute new shares or cash proportionally to the shareholders’ original shareholding ratio. In addition, the company may apply the additional paid-in capital to supplement the capital loss only when there is an insufficient reserve.

(19) Legal reserve

According to the Company Act, the company after having all taxes paid and ready for earnings distribution shall first appropriate 10% legal reserve and continue to appropriate until the total legal reserve amount equals total capital. The legal reserve can be applied to make up for the company’s losses; also, if the company has no loss, the amount of the legal reserve exceeding 25% of the paid-in capital can be used to distribute new shares or cash proportionally to the shareholders’ original shareholding ratio.

(20) Special reserve

According to the provision of Jin-Guan-Chen-Far-Tzi No. 1010012865 Order, the relevant regulations for the comprehensiveness and stability of the company’s financial structure are as follows:

42 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

A. When adopting IFRS for the first time, for the unrealized revaluation increments and cumulative conversion adjustments (benefits) under the shareholders’ equity that is transferred to retained earnings due to the adoption of FIRS 1 “Exemption,” a special reserve for the same amount should be appropriated. However, when there are insufficient retained earnings for appropriation on the transfer date due to the first-time adoption of IFRS, it is acceptable to appropriate only the amount of retained earnings increased due to the first-time adoption of IFRS. When the company subsequently uses, disposes, or reclassifies the related assets, an amount proportionally to the originally appropriated special reserve can be reversed for earnings distribution.
B. After starting to prepare financial reports according to the IFRS, when distributing the distributable earnings, a special reserve for an amount equivalent to the net amount debited to other shareholders’ equity of the year (such as the cumulative balance amount of the exchange differs from the conversion of financial statements of foreign operating institutions, the unrealized profit and loss of the financial assets measured at fair value through other comprehensive profit and loss, the profit and loss of hedging instruments, and revaluation increments) should be appropriated from the current profit and loss and the unappropriated earrings of the previous period. For the cumulative amount debited to other shareholders’ equity in the previous period, a special reserve for the same amount should be appropriated from the unappropriated earrings of the previous year, which may not be distributed. However, if the company has a special reserve appropriated in accordance with the aforementioned provision, an additional special reserve for an amount equivalent to the difference between the appropriated amount and the net amount debited to other equity should be appropriated. When the amount debited to other shareholders’ equity is reversed subsequently, the reversed amount can be applied for earnings distribution.

(21) Earnings distribution and dividend policy

A. According to the company’s Articles of Incorporation, the annual earnings, if any, should be applied to pay income tax and make up for the losses of the previous years; also, appropriate 10% legal reserve from the remaining balance, if any. In addition, appropriate or reverse a certain amount of special reserve according to the regulations of the competent authority. Then, for the balance amount, if any, and the unappropriated earnings of the previous year, except for the retained amount, the board of directors shall draft an earnings distribution plan for the resolutions of the shareholders meeting.
B. The company’s dividend policy: the company’s current industrial development is growing and will be expanded to support the business development. The earnings distribution shall be handled in accordance with the company’s Articles of Incorporation. However, the shareholders’ dividends distributed in the current year shall include not more than 50% of the stock dividend and must be more than 50% of the cash.
43 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

C. The aforementioned earnings distribution proposal issued by resolved in the shareholders’ meeting is as follows:

Legal reserve Special reserve Shareholder’s dividends Cash Cash dividend per share Stock (NT$10 par) Stock dividend per share	2020 $28,424 - $221,962 NT$1.20 -share -NT$	2019
		$30,592 - $240,458 NT$1.30 -share -NT$

(22) Other equity (net amount after tax)

A. The exchange difference from the conversion of the financial statements of foreign operating institutions:

perating institutions:
Balance`–`beginning Transactions of current period Non-controlling interests obtained in current period Reclassified to (profit) and loss in the current period Balance - ending	For the nine-monthperiods ended September 30,
	2021 $(357,177) (104,768) - - $(461,945)	2020
		$(344,771) (91,530) (525) (81)
		$(436,907)

B. Unrealized valuation benefits of financial assets measured at fair value through other comprehensive profit and loss:

omprehensive profit and loss:
Balance - beginning Transactions of current period Recognized under the equity method in the current period - affiliated enterprise Reclassified to retained earnings in the current period Balance - ending	For the nine-monthperiods ended September 30,
	2021 $177,692 4,934 5,075 (763) $186,938	2020
		$139,311 39,235 (871) -
		$177,675

44 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

- (23) Non controlling interests

Non-controlling interests
Balance - beginning The amount attributable to non-controlling interests: Net income Book amount of non-controlling interests purchased Exchange difference from the conversion of the financial statements of foreign operating institutions Cash dividends paid by subsidiaries to non-controlling interests Balance - ending	For the nine-monthperiods ended September 30,
	2021 $612,084 87,442 - (16,563) (102,409) $580,554	2020
		$579,189 48,068 (13,952) (12,840) (24,559)
		$575,906

A. The Group had no subsidiaries with significant non-controlling interests for the first three quarters of 2021 and 2020.

B. Obtained non-controlling interests

(A) The company purchased 5.86% shareholding for RMB 2,503,481 from the non-controlling interest of the subsidiary, G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., on January 20, 2020, so the comprehensive shareholding ratio was increased from 94.14% to 100%. The shareholding change of the Group in G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD., has affected the equity attributable to the shareholders of the parent company as follows:

Book amount of non-controlling interests purchased Considerations paid for non-controlling interests Other equity-exchange differences from the conversion of the financial statements of foreign operating institutions The difference between the actual price of equity acquired from the subsidiary and the book amount adjusted to the additional paid-in capital	Amount
	$13,952 (10,914) 525
	$3,563

45 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(B) Acquisition of equity from the subsidiaries listed in the consolidated cash flow statement:

statement:
The consideration paid for non-controlling interests listed in Note 6.(23)B.(A) to the consolidated financial report Less: Prepaid investment funds at the beginning of the period Cash outflow for acquiring equity from the subsidiary	For the nine-monthperiods ended September 30,
	2021	2020
	$- -	$10,914 (3,165)
	$-	$7,749

- (24) Share based payment employee rewards

The company was authorized by the Securities and Futures Bureau of the Financial Supervisory Commission to issue 500,000 units of employee stock warrants on January 13, 2015 and August 22, 2018, respectively. One stock warrant is entitled to subscribe to 10 common stock shares of the company. New shares will be issued for the stock option exercised by employees and the subscription price is the company’s common stock closing price on the issuance day. The stock warrant holders can exercise a certain percentage of the stock warrant after 2-year from the issuance date (according to the regulations, the exercisable subscription amount is 40% of the amount available for subscription in each stock warrant issued after 2-year from the issuance date, 60% after 3-year from the issuance date, 80% after 4-year from the issuance date, and 100% after 5 years from the issuance date). The duration of the stock warrant is for seven years. The unexercised stock options after 7 years shall be deemed as being waived, and the subscribers cannot claim their rights to subscribe.

As of September 30, 2021, the issuance of compensatory employee stock warrants is disclosed as follows:

Warrant issuance date	Total warrants issued originally	Total warrants outstanding at yearend	Total warrants available for subscription at yearend	Subscription price (NTD) (Note)
July27,2015	300,000	99,200	992,000	$13.40
January8,2016	200,000	163,200	1,632,000	15.30
September 12,2018	290,000	220,400	1,092,000	21.20
August 12,2019	210,000	187,800	678,000	21.30

Note: The company has the subscription price adjusted when there is a change in common stock share or cash dividend is distributed for common stock shares in accordance with the “Regulations Governing the Issuance of Employee Stock Warrant and Stock Subscription.” The stock subscription price per share after adjustment is disclosed as of September 30, 2021.

46 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

A. The company adopts the Black-Scholes stock options model to assess the fair value of the employee stock warrant issued each year. The remuneration cost accrued were NT$1,118 thousand, NT$1,994 thousand, NT$3,325 thousand, and NT$6,180 thousand, for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively. The input values of the stock option pricing model are as follows:

Expected dividend ratio Expected price fluctuation ratio Risk-free interest rate Expected duration	2018 Stock optionplan	2018 Stock optionplan	2014 Stock optionplan	2014 Stock option plan
	-% 18.99%~20.95% 0.554%~0.582% 4.5~6 years	-% 21.38%~22.07% 0.700%~0.758% 4.5~6 years	-% 22.64%~25.43% 0.663%~0.831% 4.5~6 years	-% 22.80%~27.68% 0.976%~1.203% 4.5~6 years

The assumption of the expected price fluctuation ratio is measured according to the impact of the annual dividend distribution in the past on stock price, and the expected stock price fluctuations in the future period. The stock option duration is the employee exercising stock option period that is deducted from the historical data and current expectation, which may not necessarily match the actual result or actual implementation.

B. The quantity and weighted average price of the compensatory employee stock option plan issued by the company is disclosed as follows:

Employee stock operations	For the nine-month periods ended September 30, 2021 QTY(unit) Weighted average price per share (NTD) 957,000 $18.07 - - (286,400) 15.41 - - 670,600 18.64 439,400 17.26 $-	For the nine -month periods ended September 30, 2020	For the nine -month periods ended September 30, 2020
	QTY(unit)	QTY(unit)	Weighted average price per share (NTD)
Outstanding shares - beginning Granted in current period Exercised in current period Lost in current period (expired) Outstanding shares - ending Exercisable employee stock options - ending Average fair value per share of stock options granted to employees in the current period (NTD)	957,000 - (286,400) -	967,000 - - -	$19.34 - - - 18.11 15.80
	670,600	967,000
	439,400	554,400
	$-	$-

47 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

The weighted average share price is NTD $52.85 of the company's employees did execute stock options for the nine-month periods ended September 30, 2021. The company’s employees did not execute stock options for the nine-month periods ended September 30, 2020.

As of September 30, 2021, December 31, 2020 and September 30, 2020, the company’s outstanding compensatory employee stock option plan is as follows:

September 30, 2021 2014 Stock option plan 2014 Stock option plan 2018 Stock option plan 2018 Stock option plan December 31, 2020 2014 Stock option plan 2014 Stock option plan 2018 Stock option plan 2018 Stock option plan September 30, 2020 2014 Stock option plan 2014 Stock option plan 2018 Stock option plan 2018 Stock option plan	Price range per share (NTD)	Outstanding stock options	Outstanding stock options	Outstanding stock options	Exercisable employee stock options Exercisable QTY(Unit) Weighted average price per share (NTD) 99,200 $13.40 163,200 15.30 109,200 21.20 67,800 21.30 300,000 $13.70 143,200 15.60 111,200 21.70 - 21.80 300,000 $13.70 143,200 15.60 111,200 21.70 - 21.80	Exercisable employee stock options Exercisable QTY(Unit) Weighted average price per share (NTD) 99,200 $13.40 163,200 15.30 109,200 21.20 67,800 21.30 300,000 $13.70 143,200 15.60 111,200 21.70 - 21.80 300,000 $13.70 143,200 15.60 111,200 21.70 - 21.80
		Outstanding QTY(Unit)	Weighted average expected remainingduration	Weighted average price per share (NTD)	Exercisable QTY(Unit)
	$13.40 15.30 21.20 21.30 $13.70 15.60 21.70 21.80 $13.70 15.60 21.70 21.80	99,200 163,200 220,400 187,800 300,000 179,000 278,000 200,000 300,000 179,000 278,000 210,000	- 0.06 2.20 3.00 0.12 0.31 2.79 3.70 0.23 0.46 3.04 3.95	$13.40 15.30 21.20 21.30 $13.70 15.60 21.70 21.80 $13.70 15.60 21.70 21.80	99,200 163,200 109,200 67,800 300,000 143,200 111,200 - 300,000 143,200 111,200 -	$13.40 15.30 21.20 21.30 $13.70 15.60 21.70 21.80 $13.70 15.60 21.70 21.80

48 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(25) Net operating income

For the three-month periods ended September 30, 2021 2020 $1,683,982 $1,110,798 58,886 50,389 25,729 23,998 21,670 51,343 1,790,267 1,236,528 (2,723) (3,072) (3,601) (1,865) $1,783,943 $1,231,591	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $1,683,982 58,886 25,729 21,670 1,790,267 (2,723) (3,601) $1,783,943	2021 $4,494,329 157,896 68,105 68,551 4,788,881 (9,036) (9,535) $4,770,310	2020
		$3,104,989 183,259 66,285 101,633
		3,456,166 (7,397) (4,839)
		$3,443,930

A. Income classification:

(A) Main merchandise / service

For the three-month periods ended September 30, 2021 2020 $1,677,739 $1,105,949 58,826 50,324 25,729 23,979 21,649 51,399 $1,783,943 $1,231,591	For the three-month periods ended September 30, 2021 2020 $1,677,739 $1,105,949 58,826 50,324 25,729 23,979 21,649 51,399 $1,783,943 $1,231,591	For the nine-month periods ended September 30, 2021 2020 $4,477,432 $3,092,909 156,288 183,194 68,096 66,247 68,494 101,580 $4,770,310 $3,443,930	For the nine-month periods ended September 30, 2021 2020 $4,477,432 $3,092,909 156,288 183,194 68,096 66,247 68,494 101,580 $4,770,310 $3,443,930
2021 $1,677,739 58,826 25,729 21,649		2021 $4,477,432 156,288 68,096 68,494

$1,783,943	$1,231,591	$4,770,310	$3,443,930

(B) Main regional markets

Main regional markets
Customer location Taiwan Asia (other than Taiwan) America Others Total	For the three-month periods ended September 30, 2021 2020 $379,567 $148,727 1,223,460 969,725 83,212 45,512 97,704 67,627 $1,783,943 $1,231,591		For the nine-month periods ended September 30,
	2021 $379,567 1,223,460 83,212 97,704 $1,783,943		2021 $857,518 3,400,504 226,636 285,652 $4,770,310	2020
		$148,727 969,725 45,512 67,627 $1,231,591		$451,046 2,660,246 142,348 190,290
				$3,443,930

49 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(C) Income recognition time

Income recognition time
Goods transferred at a certain time	For the three-month periods ended September 30, 2021 2020 $1,783,943 $1,231,591	For the nine-month periods ended September 30,
	2021 $1,783,943	2021 $4,770,310	2020
			$3,443,930

B. Contract liabilities:

Contract liabilities:
Contract liabilities	September 30,2021 $7,590	December 31,2021	September 30,2020
		$12,415	$11,899

The significant changes in the contract liability balance are as follows:

Contract liabilities balance – beginning transferred to income in the current period Increase in cash received in advance in the current period	Forthenine-monthperiods ended September30,	Forthenine-monthperiods ended September30,
	2021 $(9,858) 5,033	2020
		$(12,923) 9,820

(26) Operating costs and expenses

The Group’s employee welfare expenses, depreciation, and amortization expenses are summarized as follows:

Function Nature	For the three-month periods ended September 30,2021	For the three-month periods ended September 30,2021	For the three-month periods ended September 30,2021	For the three-month periods ended September 30,2020	For the three-month periods ended September 30,2020	For the three-month periods ended September 30,2020
	Attributable to operating cost	Attributable to operating expense	Total	Attributable to operating cost	Attributable to operating expense	Total
Employee welfare expenses
Employee expense(Note 1)	$204,017	$103,367	$307,384	$178,640	$106,837	$285,477
Labor and health insurance expenses	14,327	8,572	22,899	11,654	7,789	19,443
Pension expenses	11,966	6,351	18,317	4,442	2,797	7,239
Director remuneration	-	446	446	-	426	426
Other welfare expenses	7,167	3,212	10,379	6,014	2,877	8,891
Depreciation expenses (Note 2)	31,280	11,560	42,840	29,080	13,158	42,238
Amortization expense	3,517	1,839	5,356	5,033	2,668	7,701

50 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Function Nature	For the nine-month periods ended September 30, 2021	For the nine-month periods ended September 30, 2021	For the nine-month periods ended September 30, 2021	For the nine-month periods ended September 30, 2020	For the nine-month periods ended September 30, 2020	For the nine-month periods ended September 30, 2020
	Attributable to operating cost	Attributable to operating expense	Total	Attributable to operating cost	Attributable to operating expense	Total
Employee welfare expenses
Employee expense(Note 1)	$600,370	$316,026	$916,396	$518,519	$308,378	$826,897
Labor and health insurance expenses	40,938	25,128	66,066	33,709	22,327	56,036
Pension expenses	32,433	18,144	50,577	16,112	10,221	26,333
Director remuneration	-	1,349	1,349	-	1,476	1,476
Other welfare expenses	20,804	9,335	30,139	16,535	8,394	24,929
Depreciation expenses(Note 2)	92,052	34,644	126,696	87,607	37,145	124,752
Amortization expense	11,234	5,960	17,194	19,322	7,873	27,195

Note 1 ： A According to the company’s Articles of Incorporation, the company shall appropriate an amount equivalent to 1-10% of the company’s net income before tax before deducting remuneration to employees, directors, and supervisors as remuneration to employees and not more than 3% as remuneration to directors and supervisors. However, it is necessary to reserve a sufficient amount to make up for the losses, if any. The remuneration to employees in the preceding paragraph is paid in the form of stocks or cash, including the employees of the controlled companies who meet the conditions set by the board of directors. The remuneration to directors and supervisors must be paid in cash. The aforementioned matters shall be resolved by the board of directors for implementation and shall be reported to the shareholders meeting.

The amendments to the company’s Articles of Incorporation were resolved in the shareholders meeting on June 15, 2020 as follows:

The company shall appropriate an amount equivalent to 1-10% of the company’s net income before tax before deducting remuneration to employees and directors as remuneration to employees and not more than 3% as remuneration to directors. However, it is necessary to reserve a sufficient amount to make up for the losses, if any. The remuneration to employees in the preceding paragraph is paid in the form of stocks or cash, including the employees of the controlled companies who meet the conditions set by the board of directors. The remuneration to directors must be paid in cash.

51 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B The estimated remuneration payable to employees of the company for the first three quarters of 2021 and 2020 were NT$15,759 thousand and NT$15,750 thousand, respectively, and the remuneration to directors and supervisors was NT$0, respectively. The estimated remuneration to employees was based on a certain percentage of the net income before tax (without considering the impact of employee remuneration) for the first three quarters of 2021 and 2020. The estimated remuneration to employees is recognized as the current operating cost or operating expense. However, if there is a change in the distribution amount resolved by the board of directors, it will be treated according to the accounting estimates changes and adjusted to the profit and loss of the following year.
C The company’s board of directors had resolved on March 15, 2021 to distribute the 2020 remuneration to employees for NT$21,000 thousand in cash and remuneration to directors for NT$0 that were reported in the regular shareholders meeting on July 16, 2021; also, it was not different from the estimated remuneration to employees and directors in the company’s 2020 financial report. The company’s board of directors had resolved on March 20, 2020 to distribute the 2019 remuneration to employees for NT$21,000 thousand in cash and remuneration to directors and supervisors for NT$0 that were reported in the regular shareholders meeting on June 13, 2020; also, it was not different from the estimated remuneration to employees, directors, and supervisors in the company’s 2019 financial report.
D Please refer to the Market Observation Post System for the information regarding the remuneration to employees and directors resolved by the company’s board of directors.
Note 2 ： The Group had appropriated the depreciation expenses were NT$42,850 thousand, NT$42,247 thousand, NT$126,724 thousand, and NT$124,843 thousand, for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively. Also, the depreciation expenses of the property, plant and equipment - leased assets were NT$10 thousand, NT$9 thousand, NT$28 thousand, and NT$91 thousand, respectively, and listed in the “Other income and expenses - net” account.
52 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(27) Other income and expenses `–` net

For the three-month periods ended September 30, 2021 2020 Property, plant and equipment – lease assets Rent income $320 $350 Depreciation expense (10) (9) Other income and expenses - net $310 $341 Non-operating income and expense A.Interest income For the three-month periods ended September 30, 2021 2020 Bank deposit interest $8,588 $12,231 Financial assets measured at amortized cost interest income - 1,242 Other interest income 14,649 8,908 Total $23,237 $22,381 B.Other income Cash dividends $- $- Other income-other 7,157 7,869 Total $7,157 $7,869 C.Other profit and loss Net loss of financial assets measured at fair value through profit and (loss) $(12,373) $12,618 Net profit from the disposal of property, plant, and equipment (595) 879 Net loss from the disposal of investment - (1) Other expenses (51) (1,143) Total $(13,019) $12,353	For the three-month periods ended September 30, 2021 2020 Property, plant and equipment – lease assets Rent income $320 $350 Depreciation expense (10) (9) Other income and expenses - net $310 $341 Non-operating income and expense A.Interest income For the three-month periods ended September 30, 2021 2020 Bank deposit interest $8,588 $12,231 Financial assets measured at amortized cost interest income - 1,242 Other interest income 14,649 8,908 Total $23,237 $22,381 B.Other income Cash dividends $- $- Other income-other 7,157 7,869 Total $7,157 $7,869 C.Other profit and loss Net loss of financial assets measured at fair value through profit and (loss) $(12,373) $12,618 Net profit from the disposal of property, plant, and equipment (595) 879 Net loss from the disposal of investment - (1) Other expenses (51) (1,143) Total $(13,019) $12,353	For the three-month periods ended September 30,	For the three-month periods ended September 30,	For the three-month periods ended September 30,	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
		2021		2020	2021	2020
		$320 (10)		$350 (9)	$992 (28)	$1,218 (91)
		$310		$341	$964	$1,127
A.Interest income Bank deposit interest Financial assets measured at amortized cost interest income Other interest income Total B.Other income Cash dividends Other income-other Total C.Other profit and loss Net loss of financial assets measured at fair value through profit and (loss) Net profit from the disposal of property, plant, and equipment Net loss from the disposal of investment Other expenses Total
	2021		2020 $12,231 1,242 8,908 $22,381 $- 7,869		2021		2020
	$8,588 - 14,649				$27,338 38 43,058		$36,446 4,534 25,245
	$23,237				$70,434		$66,225
	$- 7,157				$8,482 19,472		$6,785 20,475
	$7,157		$7,869		$27,954		$27,260
	$(12,373) (595) - (51)		$12,618 879 (1) (1,143)		$(16,566) (138) - (2,551)		$(49,657) 1,876 (782) (1,306)
	$(13,019)		$12,353		$(19,255)		$(49,869)

- (28) Non operating income and expense

53 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

D. Financial cost

Financial cost
Bank loan interest Lease liability interest Total	For the three-month periods ended September 30, 2021 2020 $(2,338) $(2,417) (985) (1,095) $(3,323) $(3,512)	For the nine-month periods ended September 30,
	2021	2021	2020
	$(2,338) (985)	$(7,677) (3,214)	$(6,881) (3,081)
	$(3,323)	$(10,891)	$(9,962)

E. Profit (loss) amount from the affiliated enterprises under the equity method Please refer to Note 6(9)C. of the consolidated financial report for details.

F. Exchange loss - net

Realized exchange profit (loss) - net $(3,997) $24,637 $(31,003) $(1,852) Unrealized exchange profit (loss)-net 1,234 (68,956) 14,150 (44,140) Total $(2,763) $(44,319) $(16,853) $(45,992)

(29) Other comprehensive profit and loss

(29) Other comprehensive profit and loss	(29) Other comprehensive profit and loss
Other comprehensive profit andloss constituents Transactions of current period		Reclassific ation and adjustment of current period	Other comprehens ive profit andloss	Income tax expense	Amount aftertax
For the three-month periods ended September 30,2021 Items not reclassified to profit and loss: Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive loss $6,121 Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive profit of affiliated enterprises under the equity method 1,106 Total amount of items not reclassified to profit and loss: 7,227		$- -	$6,121 1,106	$- -	$6,121 1,106
Items not reclassified to profit and loss: Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive loss Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive profit of affiliated enterprises under the equity method Total amount of items not reclassified to profit and loss:
	7,227	-	7,227	-	7,227

54 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Other comprehensive profit and loss constituents	Transactions of current period	Reclassific ation and adjustment of current period	Other comprehens ive profit and loss	Income tax expense	Amount after tax
For the three-month periods ended September 30,2021 Items that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions (12,966) Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method - Total amount of items that may be reclassified to profit and loss subsequently: (12,966) Total $(5,739) For the three-month periods ended September 30,2020 Items not reclassified to profit and loss: Unrealized appraisal loss of equity instrument investment measured at fair value through other comprehensive profit $46,708 Unrealized appraisal loss of equity instrument investment measured at fair value through other comprehensive profit of affiliated enterprises under the equity method (238) Total amount of items not reclassified to profit and loss: 46,470 Item that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions 38,866 Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method 3 Total amount of items that may be reclassified to profit and loss subsequently: 38,869 Total $85,339		- -	(12,966) -	- -	(12,966) -
	(12,966)	-	(12,966)	-	(12,966)
	$(5,739)	$-	$(5,739)	$-	$(5,739)
		$- -	$46,708 (238)	$- -	$46,708 (238)
Items not reclassified to profit and loss: Unrealized appraisal loss of equity instrument investment measured at fair value through other comprehensive profit Unrealized appraisal loss of equity instrument investment measured at fair value through other comprehensive profit of affiliated enterprises under the equity method Total amount of items not reclassified to profit and loss: Item that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method Total amount of items that may be reclassified to profit and loss subsequently: Total
	46,470	-	46,470	-	46,470
	38,866 3	- -	38,866 3	- -	38,866 3
	38,869	-	38,869	-	38,869
	$85,339	$-	$85,339	$-	$85,339

55 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Other comprehensive profit andloss constituents	Transactions of current period	Reclassific ation and adjustment of current period	Other comprehens ive profit andloss	Income tax expense	Amount aftertax
For the nine-month periods ended September 30,2021 Items not reclassified to profit and loss: Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive loss $4,934 Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive profit of affiliated enterprises under the equity method 5,075 Total amount of items not reclassified to profit and loss: 10,009 Items that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions (121,331) Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method - Total amount of items that may be reclassified to profit and loss subsequently: (121,331) Total $(111,322) For the nine-month periods ended September 30,2020 Items not reclassified to profit and loss: Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive loss $39,235 Unrealized appraisal benefits of equity instrument investment measured at fair value through other comprehensive loss of affiliated enterprises under the equity method (871) Total amount of items not reclassified to profit and loss: 38,364		$- - - - - - $- $- -	$4,934 5,075	$- -	$4,934 5,075
			10,009	-	10,009
			(121,331) -	- -	(121,331) -
			(121,331)	-	(121,331)
			$(111,322)	$-	$(111,322)
			$39,235 (871)	$- -	$39,235 (871)
	38,364	-	38,364	-	38,364

56 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Other comprehensive profit and loss constituents	Transactions of current period	Reclassific ation and adjustment of current period	Other comprehens ive profit and loss	Income tax expense	Amount after tax
For the nine-month periods ended September 30,2020 Items that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions (104,370) Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method (81) Total amount of items that may be reclassified to profit and loss subsequently: (104,451) Total $(66,087)		- -	(104,370) (81)	- -	(104,370) (81)
Items that may be reclassified to profit and loss subsequently: Exchange difference from the conversion of the financial statements of foreign operating institutions Exchange difference from the conversion of the financial statements of foreign operating institutions of affiliated enterprises under the equity method Total amount of items that may be reclassified to profit and loss subsequently: Total
	(104,451)	-	(104,451)	-	(104,451)
	$(66,087)	$-	$(66,087)	$-	$(66,087)

(30) Income tax

A. The Group’s income tax return must be filed by each entity independently instead of filing collectively. The company’s business income tax return filed before 2018 (inclusive) and the subsidiary, CHIN DE INVESTMENT CO., LTD., filed before 2019

(inclusive) were reviewed and approved by the tax collection agency.

B. The income tax expense constituents:

(A) Income tax recognized in profit and loss

For the three-month periods endedSeptember30,	For the three-month periods endedSeptember30,	For the nine-month periods endedSeptember30,	For the nine-month periods endedSeptember30,
2021	2020 $27,750 22,391 $50,141	2021	2020
$63,168 26,227		$238,977 (15,849)	$95,848 11,353
$89,395		$223,128	$107,201

(B)The Group had no income tax related to other comprehensive profit and loss constituents or direct debited or credited to equity for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively.

57 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(31) Earnings per share

A. Basic earnings per share

The basic earnings per share are calculated by dividing the profit and loss attributable to the company’s common stock shareholders by the outstanding weighted average common stock shares in the current period as follows:

For the three-month periods ended September 30,	For the three-month periods ended September 30,	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021	2020	2021	2020
$209,655	$96,126	$516,478	$164,029
184,968,298 shares 1,366,391	184,968,298 shares -	184,968,298 shares 460,469	184,968,298 shares -
186,334,689 shares	184,968,298 shares	185,428,767 shares	184,968,298 shares
$1.13	$0.52	$2.79	$0.89

Note：Calculated based on the period of circulation of each subscription.

B. Diluted earnings per share

The diluted earnings per share are calculated by having the dilutive potential common stock share effect adjusted to the profit and loss attributable to the common stock shareholders of the company divided by the dilutive potential common stock share effect adjusted to the outstanding weighted average shares of the period as follows:

For the three-month periods ended September 30, 2021 2020 $209,655 $96,126 - - $209,655 $96,126	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021	2021	2020
$209,655 -	$516,478 -	$164,029 -
$209,655	$516,478	$164,029

58 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

For the three-month periods ended September 30, 2021 2020 186,334,689 shares 184,968,298 shares 5,479,042 1,269,889 304,816 833,333 192,118,547 shares 187,071,520 shares $1.09 $0.51	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021	2021	2020
186,334,689 shares 5,479,042 304,816	185,428,767 shares 4,880,236 487,848	184,968,298 shares 1,380,978 1,210,649
192,118,547 shares	190,796,851 shares	187,559,925 shares
$1.09	$2.71	$0.87

Note: The outstanding employee stock options issued by the Company in 2018 and 2019 underwent anti-dilution for the three-month and nine-month periods ended September 30, 2020, which hence is unrecognized in the calculation of diluted earnings per share.

59 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(32) Reconciliation of liabilities from financing activities

Accountingitem	Balance - beginning	Cash flow		Changes in non-cash	Changes in non-cash	Balance - ending
			Transactionof currentperiod	Change in exchange rate $(279) (19) (1,852) $(2,150)	Other
		$19,589 24,177 (12,466)	$- - (5,692)		$(2,153) (840) -	$1,252,981 67,683 80,711
Short-term loan Long-term loan Lease liabilities (including current and noncurrent) Total
	$1,380,910	$31,300	$(5,692)		$(2,993)	$1,401,375

Accountingitem For the nine-month periods ended September 30,2020	Balance - beginning		Changes in non-cash	Changes in non-cash
		Transactionof currentperiod $- - 21,805 $21,805	Change in exchange rate $- - (947) $(947)	Balance - ending
	$1,043,000 - 87,972			$1,345,451 38,272 99,741
Short-term loan Long-term loan Lease liabilities (including current and noncurrent) Total
	$1,130,972			$1,483,464

60 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

7. Related party transactions

The account balance amount, transactions, income, and expenses related to the transactions between entities within the Group were written-off at the time of preparing the consolidated financial report. Please refer to Note 13.(1) J. of the consolidated financial report for the business relationships and important transactions between the company and the subsidiaries and among subsidiaries. The relationship and transactions between the Group and related parties are disclosed as follows:

(1) Name of related party and relationship

Name of related party Relationship with the Group KUAI LUNG PRECISION INDUSTRY The chairman of KUAI LUNG is the general CO., LTD. (KUAI LUNG) manager of G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD., the subsidiary of the company. SUNFLEX TECHNOLOGY CO., LTD. SUNFLEX is invested by the company under (SUNFLEX) equity method. SHANG HAI CHANG HONG SHEN SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. (SHANG HAI HARDWARE is invested by the CHANG HONG SHEN HARDWARE) company’s subsidiary under equity method (Note) WU HAN CHANG HONG SHEN WU HAN CHANG HONG SHEN HARDWARE CO., LTD. (WU HAN HARDWARE is transfer-invested by the CHANG HONG SHEN HARDWARE) invested company under equity method of the company’s subsidiary (Note)

Note: The Group had terminated the investment in SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. at the end of May 2020. Therefore, the related party transactions of SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. and WU HAN CHANG HONG SHEN HARDWARE CO., LTD. were disclosed only up to May 31, 2020. Please refer to Note 6.(9) of the consolidated financial report for details.

61 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(2) Major transactions with related parties

A. Purchases

Purchases
Relatedpartycategory/name Other related parties KUAI LUNG Affiliated enterprises WU HAN CHANG HONG SHEN HARDWARE SUNFLEX Subtotal Total	For the three-month periods ended September 30, 2021 2020 $98 $67 - - 3,401 122 3,401 122 $3,499 $189	For the nine-month periods ended September 30,
	2021 $98 - 3,401 3,401 $3,499	2021 $180 - 7,400 7,400 $7,580	2020
			$130
			301 794
			1,095
			$1,225

The aforementioned purchase is mostly for molds and parts with special specifications from one single supplier. Therefore, there is no other purchase price available for comparison. The payment term from such a single supplier is OA 30-60 days; while other suppliers are with a payment term of OA 90-120 days.

B. Sales

Sales
Relatedpartycategory/name Other related parties KUAI LUNG Affiliated enterprises SUNFLEX Total	For the three-month periods ended September 30,		For the nine-month periods ended September 30,
	2021 $40 - $40	2020 $- 2 $2	2021 $82 - $82	2020
				$10 1,007
				$1,017

The products sold in the preceding paragraph are mostly equipment, tools, and materials used for production with the price negotiated by both parties by adding a percentage to the cost or by the cost price at the time of trade depending on the type of product traded; also, taking into account the expenses and exchange rate risk. The specifications of products that are sold to related parties are exclusive; therefore, there is no other customer available for comparison. The payment term of sales to a related party is OA 60-90 days; while the general customer is with a payment term of OA 90-120 days.

62 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

C. Rent income

The Group - SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had part of the plant building leased to SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD. with a lease income of NT$0 thousand and NT$200 thousand for the three-month and nine-month periods ended September 30, 2020, respectively, and the rent was collected on a monthly basis. In addition, please refer to Note 6.(10)G. of the consolidated financial report for details.

D. Processing expense

(A)The Group - SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD., SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD., HONG JING(SHANGHAI)ELECTRONICS CO., LTD., and HUBEI HANSTAR ELECTRONICS TECHNOLOGY CO., LTD. had contracted the affiliated enterprise, SHANG HAI CHANG HONG SHEN HARDWARE CO., LTD., for product processing with a processing expense of NT$0 thousand and NT$276 thousand incurred for the three-month and nine-month periods ended September 30, 2020, respectively.
(B)The company had contracted the affiliated enterprise, SUNFLEX TECHNOLOGY CO., LTD., for product proceeding with a processing expense of NT$5,354 thousand, NT$2,046 thousand, NT$10,672 thousand and NT$6,160 thousand incurred for the three-month and nine-month periods ended September 30, 2021 and 2020, respectively.

E. Claims/obligations arising from the aforementioned transactions

	Relatedpartycategory/name ) Accounts receivable–related party Other related parties KUAI LUNG Affiliated enterprises SUNFLEX Total Other receivable`–`related party Affiliated enterprises SUNFLEX	September 30, 2021 $12 24 $36 $-	December 31, 2020 $32 - $32 $-	September 30, 2020
(A (B)				$- 2
				$2
				$17

63 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

	Relatedpartycategory/name Accounts payable`–`related party Other related parties KUAI LUNG Affiliated enterprises SUNFLEX Total ) Other payable`–`related party Other related parties KUAI LUNG Affiliated enterprises SUNFLEX Total	September 30, 2021 $104 3,642 $3,746 $576 3,696 $4,272	December 31, 2020 $204 342 $546 $652 1,725 $2,377	September 30, 2020 $70 271 $341 $487 1,465 $1,952
(C) (D

The claims/obligations between the Group and the related party are without collateral or guarantee received or provided, and a conclusion is made after thorough evaluations that it is no need to appropriate allowance for loss for the Group’s claims against the related parties.

F. Information on total remunerations of key management personnel

The total remunerations to the Group’s directors, general manager, vice general manager, and other managerial officers are summarized as follows:

For the three-month periods ended September 30, 2021 2020 $3,101 $2,748 36 83 63 131 $3,200 $2,962	For the nine-month periods ended September 30,	For the nine-month periods ended September 30,
2021 $3,101 36 63 $3,200	2021 $9,196 208 189 $9,593	2020
		$9,295 255 391
		$9,941

The remuneration to key management personnel is determined by the Group’s Remuneration Committee with reference to the general standards of the industry and taking into account personal performance, the company operating performance, and related future risks.

64 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

8. Mortgaged assets

As of September 30, 2021, December 31, 2020, and September 30, 2020, the Group had assets provided as collateral to financial institutions for loans, applying for credit line, electricity deposits, materials, contracts, and issuing the letter of credit as follows:

Accountingitem Other financial assets - current Bank deposits Other noncurrent assets - othersBank deposits Other noncurrent assets – others Bank deposits Property, plant and equipment-House and building Right-of-use assets- Land Total	September 30,2021 $1,065 207 1,246 - - $2,518	December 31, 2020 $3,962 236 1,384 31,412 12,751 $49,745	September 30,2020 $3,421 345 1,380 30,415 12,513 $48,074	Mortgage agency	Collateral for loans
				Bank of China Bangkok Bank Mizuho Bank Bank of China Bank of China	Material deposit, contract deposit, and others Electricity deposit Tariff deposits Short-term loan Short-term loan

Significant contingent liabilities and unrecognized contractual commitments

The Group had the following significant contingent liabilities and unrecognized contractual commitments not yet included in the aforementioned consolidated financial report as of September 30, 2021:

(1)The company had had a guaranteed loan from financial institutions for the tariff guarantee amount of NT$500 thousand on September 30, 2021.
(2)The Group’s G-SHANK ENTERPRISE (M) SDN. BHD. had a guaranteed loan of NT$26,933 thousand from financial institutions for the introduction of foreign labor and other matters on September 30, 2021.
(3)The Group had a contract signed for the lease of the right-of-use asset-land for an amount of RMB 30,636 thousand with a payable amount of RMB 10,636 thousand.
(4)The unused balance of Letter of Credit issued by the Company is JPY 41,650 thousand.
65 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

10. Significant disaster loss

None

11. Material post events

As stated in Note 6.(17)C. of the consolidated financial report, the number of shares subscribed for by employees of the company in the third quarter of 2021 was 2,864 thousand shares (under the account of Advance Receipts for Capital Stock), which was issued in the third quarter of 2021. On November 4, 2021, the board of directors resolved to set the base date for capital increase as November 8, 2021.

12. Others

(1) Capital management

A. The Group’s capital management is aimed to ensure the Group’s ongoing concern, to continue to provide remuneration to shareholders and benefits to stakeholders, and to maintain the best capital structure in order to reduce capital costs and to set the price of products or services according to the relative risk levels in order to provide shareholders with sufficient remuneration.
B. The Group bases on the risk ratio to set the capital stock; also, manage and adjust the capital structure appropriately in accordance with the changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the dividends paid to shareholders, refund shareholders by de-capitalization, and issue new shares or sell assets to settle liabilities.

(2) Financial risk management

A. The Group’s main financial instruments include cash and cash equivalents, financial assets measured at fair value through profit and loss, financial assets measured at fair value through other comprehensive profit and loss, financial assets measured at amortized cost, other financial assets (time deposits), short-term loans, long-term loans, lease liabilities, receivables and payables arising from operating activities, etc., also, adjust operating fund needs through such financial instruments. Therefore, the Group’s operations are subject to various financial risks, including market risk (including exchange rate risk, interest rate risk, and other price risks), credit risk, and liquidity risk. The purpose of the Group’s overall financial risk management is to reduce the potential adverse effects of the Group’s exposure to financial risks due to changes in the financial market.
66 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

B. The Finance Department of the Group is responsible for identifying, evaluating, and hedging financial risks through close contact with the business units of the Group, planning and coordinating the access to domestic and international financial markets, and manages the Group’s operation related financial risks by analyzing the degree of risk exposure; also, the Group’s board of directors is responsible for supervision and management. In addition, the Group uses derivative financial instruments to hedge risk exposure at an appropriate time to reduce the impact of financial risks. The Group has the procedures for derivative financial instrument transactions stipulated that have been approved by the board of directors and the shareholders meeting. The said procedures include trade principles and policies, risk management measures, internal audit systems, regular evaluation methods, and handling of nonconformities, of which, the risk management includes credit, market prices, liquidity, cash flow, operations, law, etc.
C. The main risks of the Group’s financial instruments are as follows: (A) Market risk

The main market risks of the Group are exchange rate risks arising from operating activities, such as sales or purchases denominated in non-functional currencies, and interest rate risks or price risks arising from financial instruments transactions.

a. Exchange rate risk

(a) The Group evaluates and analyzes the overall exchange rate risk. When the listed assets and liabilities and future business transactions are exposed to significant exchange rate risk, within the permitted range of the policy, manage risk through forwarding exchange contract. In addition, the Group’s net investment in foreign operating institutions is a strategic investment; therefore, no hedging is performed.

The Group’s financial assets and liabilities denominated in non-functional currencies with significant risk exposure of exchange rate fluctuations on the reporting date, and sensitivity analysis information are as follows (the functional currency of the company and some subsidiaries is “NTD,” and the functional currency of some subsidiaries is RMB, THB, USD, MYR, IDR, and JPY); sensitivity analysis is regarding the impact of the Group’s financial assets and liabilities denominated in non-functional currencies appreciated by 5% against a respective foreign currency that is the functional currency of each overseas subsidiary on the net income before tax or equity on the reporting date; also, when it depreciated by 5%, it will affect the net income before tax and equity reversely:

67 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing) (Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Exchange rate	Book amount		Sensitive analysis
		Change ratio	Increase/ decrease in net income before tax	Decrease in Equity
27.84 0.2492 4.306 3.578 32.34 27.84 27.86 27.84 0.2492 3.578	$1,207,853 11,625 604,587 24,983 71,512 $1,157,440 $2,993 (Note) $29,995 13,450 2,501	5% 5% 5% 5% 5% 5% 5% 5% 5% 5%	$60,393 581 30,229 1,249 3,576 $57,872 $150 $1,500 673 125	$- - - - - $- $- $- - -

Non-monetary items: None

Derivative financial instrument: None

December 31, 2020

December 31, 2020
Financial assets
Monetary items
USD	$40,427	28.48	$1,151,351	5%	$57,568	$-
JPY	42,458	0.2767	11,748	5%	587	-
RMB	63,038	4.38	276,106	5%	13,805	-
HKD	8,216	3.625	29,783	5%	1,489	-
EUR	2,495	35.06	87,487	5%	4,374	-

(Continuing to next page)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the last page)
December 31, 2020 Foreign currency (Thousand) Non-monetary items USD $34,441 Derivative financial instrument USD 10,500 Financial liabilities Monetary items USD 464 JPY 21,839 HKD 725 Non-monetary items :None Derivative instrument :None September 30, 2020 Financial assets Monetary items USD $50,387 JPY 45,898 RMB 48,680 HKD 6,809 EUR 1,946 Non-monetary items USD $23,635 Derivative financial instrument :None Financial liabilities Monetary items USD $351 JPY 22,104 HKD 573 Non-monetary items :None Derivative financial instrument : USD $29	Exchange rate	Book amount		Sensitive analysis
			Change ratio 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%	Increase / decrease in net income (loss) before tax	Decrease in Equity
				$49,044 44 661 302 131 $73,313 633 10,398 1,280 3,326 $34,388 $511 305 108 $43	$- - - - - $- - - - - $- $- - - $-

69 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

Note: The aforementioned derivatives information refers to the book amount of the SWAP contracts that have not yet been settled on each reporting day. Please refer to Note 6.(2) of the consolidated financial report for the operation position, nominal principal, and due date.

The exchange profit and loss (including realized and unrealized) of the Group’s monetary items converted to functional currencies, and the exchange rate for the conversion to the reporting currency of the consolidated financial report are as follows:

Functional currency NTD USD RMB MYR Others Total	For the three-month periods ended September 30, 2021 Exchange profit (loss) Average exchange rate $(3,374) - (433) 27.847 776 4.312 457 6.647 (189) - $(2,763)	For the three-month periods ended September 30, 2020	For the three-month periods ended September 30, 2020
	Exchange profit (loss) $(3,374) (433) 776 457 (189) $(2,763)	Exchange profit (loss) $(15,680) 538 (29,366) (21) 210 $(44,319)	Average exchange rate
			- 29.357 4.266 7.003 -

Functional currency NTD USD RMB MYR Others Total	For the nine-month periods ended September 30,2021 Exchange profit (loss) Average exchange rate $(10,929) - 1,316 28.019 (9,751) 4.32 2,993 6.78 (482) - $(16,853)	For the nine-month periods ended September 30, 2020	For the nine-month periods ended September 30, 2020
	Exchange profit (loss) $(10,929) 1,316 (9,751) 2,993 (482) $(16,853)	Exchange profit (loss) $(25,501) (1,248) (22,720) 3,040 437 $(45,992)	Average exchange rate
			- 29.806 4.256 7.039 -

(b) In addition, the SWAP contracts held by the Group are a financial hedging operation intended to hedge exchange rate risk arising from the change (mainly including sales and purchases denominated in non-functional currencies, such as USD) in the exchange rate of foreign claims. Regarding the aforementioned SWAP contracts, the profit and loss arising from changes in the exchange rate will generally offset the profit and loss of the hedged project, so there is no significant market risk. As for the aforementioned hedged project, the net position of foreign currency claims that are not effectively hedged is linked to the market risk of changes in exchange rates, of which, the depreciation or appreciation of USD, RMB, MYR, or JPY will result in the risk of exchange profit or loss.
70 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

b. Interest rate risk

The Group’s interest rate risks include the fair value interest rate risk of the financial instruments with fixed interest rate and the cash flow interest rate risk of financial instruments with floating interest rate. The financial instruments with fixed interest rate refer to the company’s time deposits, some financial assets-current measured at fair value through profit and loss, financial assets measured at amortized cost, some other financial assets-current and some bank loans; the financial instruments with floating rate refer to savings deposits, some other financial assets-current, some other noncurrent assets-others, and some bank loans. The Group has interest rate risk evaluated and analyzed on a dynamic basis and controlled the interest rate risk exposure by maintaining an appropriate combination of fixed and floating interest rates. The Group expects no significant interest rate risk.

(a) The Group’s financial assets and liabilities with fixed and floating interest rates

rates
Fixed interest rate Financial assets Financial liabilities Net amount Floating interest rate Financial assets Financial liabilities Net amount	September 30,2021 $2,763,306 (1,333,692) $1,429,614 $1,224,651 (67,683) $1,156,968	December 31,2020 $3,248,563 (1,337,404) $1,911,159 $837,341 (43,506) $793,835	September 30,2020
			$3,105,122 (1,445,192)
			$1,659,930
			$963,846 (38,272)
			$925,574

(b) Sensitivity Analysis

For the Group’s financial assets and liabilities with a floating interest rate, if the interest rate of market deposits or loans increased by 0.5% on the reporting date, assuming that it is held for an accounting quarter and all other factors are given, it would cause the Group’s net income before tax increased by NT$4,339 thousand and NT$3,471 thousand for the first three quarters of 2021 and 2020, respectively.

71 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(c) Other price risks

The Group’s beneficiary certificates and equity securities, such as financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive profit and loss, are with price risk resulted. The Group manages the price risk of beneficiary certificates and equity securities by holding investment portfolios with different risks.

Sensitivity Analysis

For the Group’s financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive profit and loss, the impact of the beneficiary certificates and equity securities with a 5% price increase on the net income before tax or equity on the reporting date is as follows; also, the beneficiary certificates and equity securities with a 5% price decrease will affect the net income before tax or equity reversely:

Increase in net income before tax Financial assets measured at fair value through profit and loss Increase in equity Financial assets measured at fair value through other comprehensive profit and loss	September 30,2021 $64,153 $10,514	Decdmber 31,2020 $55,015 $10,268	September 30,2020
			$40,567
			$10,283

(B) Credit risk

a. The Group’s credit risk is mainly the potential impact of the counterparty or other parties’ failure in performing financial assets contracts, which includes the concentration of credit risks, constituents, contract amounts, and other receivables of the financial assets transactions of the Group. In order to reduce credit risk, the Group has dealt with all well-known domestic and foreign financial or securities institutions for bank deposits, financial assets measured at fair value through profit and loss, financial assets measured at amortized cost, some other financial assets, which are with low credit risk. For receivables, the Group continues to evaluate the financial status of the counterparties, historical experience, and other factors to adjust the trade amount and trade method of individual customers appropriately in order to improve the Group’s credit-granting quality.
72 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

b. The Group evaluates and analyzes the overdue or impairment of financial assets on the balance sheet date. The Group’s credit risk exposure amount is as follows:

September 30, 2021 Decdmber 31, 2020 September 30, 2020 Credit risk exposure amount Allowance for losses-measured by the expected credit losses amount for 12-month $- $- $- Allowance loss-measured by the expected credit loss amount throughout the duration - Accounts receivable 30,163 32,248 29,489 Total $30,163 $32,248 $29,489

The aforementioned credit risk exposure amounts are all from the recovery of accounts receivable. The Group has continuously evaluated the losses that affect the estimated future cash flow of accounts receivable with appropriate allowance accounts appropriated. Therefore, the book amount of accounts receivable is with credit risk properly considered and reflected. In addition, the Group does not hold collateral for the impairment of financial assets that is with an allowance account appropriated.

c. The expected credit loss of the Group’s notes and accounts receivable as of September 30, 2021, December 31, 2020 and September 30, 2020 is analyzed as follows:

September 30, 2021 Not overdue 30days overdue 31-90 days overdue 91-180 days overdue 181-365 days overdue Over 366 days overdue Total	Total book amount of notes and accounts receivable $1,416,526 108,600 8,221 409 1,011 25,941 $1,560,708	Reserve matrix (lossrate) 0%-0.84% 0%-24.53% 0%-34.59% 0%-52.15% 0%-76.08% 100.00%	Allowance for loss (expected credit loss throughout the duration)
			$2,541 1,009 338 31 303 25,941
			$30,163

73 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing) (Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

December 31, 2020 Not overdue 30days overdue 31-90 days overdue 91-180 days overdue 181-365 days overdue Over 366 days overdue Total September 30, 2020 Not overdue 30days overdue 31-90 days overdue 91-180 days overdue 181-365days overdue Over 366 days overdue Total	Total book amount of notes and accounts receivable $1,129,251 57,566 26,400 17,985 3,591 27,012 $1,261,805 $901,933 120,369 14,966 2,762 4,725 26,319 $1,071,074	Reserve matrix (lossrate) 0%~0.9% 0%~23.54% 0%~32.95% 0%~49.03% 0%~65.94% 100.00% 0%-0.9% 0%-23.54% 0%-32.95% 0%-46.18% 5.69%-57.37% 100.00%	Allowance for loss (expected credit loss throughout the duration)
			$2,182 505 770 991 788 27,012
			$32,248
			$1,186 457 191 194 1,142 26,319
			$29,489

d. The concentration of credit risk of accounts receivable is analyzed as follows:

September 30, 2021 December 31,2020 September 30,2020 The accounts receivable ratio of the top five customers 33.12% 32.37% 32.79%

(C) Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents to support all contractual obligations for business operations and to minimize the impact of cash flow fluctuations. Bank loans are an important source of liquidity to the Group. The management ensures the repeating bank loans through capital structure management, monitoring the use of bank credit line, and complying with loan contract terms to reduce liquidity risk. The Group’s stock investment under the financial assets measured at fair value through other comprehensive profit and loss is exposed to liquidity risk due to lack of an active market. In addition, the exchange rate of the Group’s SWAP contract has been determined; therefore, there is no significant cash flow risk.

74 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

a. Bank loan amount

Short-term loan Long-term loan Long-term and short-term loan amount Total	September 30,2021 $1,009,121 300,000 132,317 $1,441,438	December 31,2020 $1,153,398 300,000 6,494 $1,459,892	September 30,2020
			$796,346 681,728 -
			$1,478,074

b. Maturity analysis of undiscounted financial liabilities

September 30, 2021 Non-derivative financial liabilities Short-term loan Accounts payable Accounts payable – related party Other payables Other payables – related party Lease liabilities Long-term loan Total	Less than 1 year	More than 1-2years	More than 2-5 years	Over 5 years	Total
	$1,256,216 638,948 3,746 396,941 4,272 21,857 474	$- - - 11,636 - 15,856 27,831	$- - - - - 9,489 40,455	$- - - 22,789 - 78,285 -	$1,256,216 638,948 3,746 431,366 4,272 125,487 68,760
	$2,322,454	$55,323	$49,944	$101,074	$2,528,795

Derivative financial liabilities: None

December 31, 2020 Non-derivative financial liabilities Short-term loan Accounts payable Accounts payable – related party Other payables Other payables – related party Lease liabilities Long-term loans Total	$1,239,758 383,577 546 409,547 2,377 20,443 305	$- - - - - 21,019 1,163 $22,182	$- - - - - 23,809 43,821 $67,630	$- - - 41,966 - 78,980 -	$1,239,758 383,577 546 451,513 2,377 144,251 45,289
	$2,056,553			$120,946	$2,267,311

Derivative financial liabilities: None

75 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Less than 1 year	More than 1-2years	More than 2-5years	Over 5 years	Total
$1,349,207 54 354,351 341 332,624 1,952 19,686 266	$- - - - - - 19,617 502	$- - - - - - 27,567 38,378	$- - - - 40,299 - 80,603 -	$1,349,207 54 354,351 341 372,923 1,952 147,473 39,146
$2,058,481	$20,119	$65,945	$120,902	$2,265,447
$852	$-	$-	$-	$852

D. Fair value of financial instruments

The book amount of the Group’s financial instruments is an amount reasonably close to the fair value.

(A) The methods adopted for the fair value of financial instruments and the assumptions

adopted for the use of evaluation techniques

a. The fair value of short-term financial instruments is estimated according to the book value on the balance sheet. Such financial instruments are with a short maturity date; also, the present value of future cash flows discounted at the market interest rate is close to the book amount; therefore, the book amount should be a reasonable basis for estimating the fair value. This method is applied to cash and cash equivalents, net notes receivable, net accounts receivable (including related parties), other receivables (including related parties), short-term loans, accounts payable (including related parties), and other payables (including related parties).
b. The financial assets measured at fair value through profit and loss are with a market price available for reference; therefore, the said market price is the fair value.
c. Financial assets measured at fair value through other comprehensive profit and loss are equity instrument investments without market price available for reference; therefore, the fair value is estimated according to the Market
76 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

Approach. The company has the fair value estimated according to the prices derived from the market transactions of the same or comparable equity instruments and other relevant information.

d. The fair value of other financial assets and other noncurrent assets-restricted assets is estimated according to the book amount, since the present value of future cash collected and discounted at the market interest rate is close to the book amount; therefore, the book amount should be a reasonable basis for estimating the fair value.
e. The financial assets measured at amortized cost refer to the debt instrument investments that do not have market price available for reference, but with a fixed or decidable amount to be collected. The Group adopts the evaluation method of the cash flow model for estimation.
f. The evaluation of derivative financial instruments is based on the evaluation models that are widely accepted in the market, such as, discount method and option pricing model.
g. Lease liabilities are discounted at the Group’s increment loan interest rate on the unpaid lease expense on the lease starting day and then measured at amortized cost of the effective interest method subsequently. The book amount of the lease liabilities is an amount reasonably close to the fair value.
h. The Group’s long-term loans are based on floating interest rates with the fair value estimated according to the book amount on the balance sheet, which has been adjusted with reference to market conditions. Therefore, the company’s loan interest rate is close to the market interest rate.

(B) Classification of fair value measurement

All assets and liabilities measured or disclosed at the fair value are classified to the respective fair value level according to the lowest level input value critical to the overall fair value measurement. The input values for each level are as follows:

Level 1: The market price (unadjusted) available for the same asset or liability on the measurement date;

Level 2: Direct or indirect observable input values of assets or liabilities, except for those quotations in Level 1;
Level 3: Unobservable input value of assets or liabilities;
77 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

The assets and liabilities that were originally measured at fair value on a repetitive basis and recognized on the balance sheet should be reassessed for classification at the end of each reporting period to determine whether there is a swift between the levels of the fair value hierarchy.

a. The classification of financial instruments measured at fair value and recognized in the balance sheet

The Group does not have assets and liabilities measured at fair value on a non-repetitive basis. The fair value level of assets and liabilities measured at fair value on a repetitive basis is as follows:

September 30, 2021 Assets Financial assets measured at fair value through profit and loss Funds Bonds SWAP contracts Financial assets measured at fair value through other profit and loss Unlisted stocks Liabilities :None December 31, 2020 Assets Financial assets measured at fair value through profit and loss Funds Bonds SWAP contracts Financial assets measured at fair value through other profit and loss Unlisted stocks	Lever 1 $125,614 1,157,440 - - $119,416 980,874 - -	Level 2 $- - 2,993 - $- - 889 -	Level 3 $- - - 210,288 $- - - 205,354	Total
				$125,614 1,157,440 2,993 210,288 $119,416 980,874 889 205,354

Liabilities: None

78 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

September 30, 2020 Assets Financial assets measured at fair value through profit and loss Funds Bonds Financial assets measured at fair value through other profit and loss Unlisted stocks Liabilities : Financial assets measured at fair value through profit SWAP contracts	Level 1 $123,577 687,767 - $-	Level 2 $- - - $852	Level 3 $- - 205,667 $-	Total
				$123,577 687,767 205,667 $852

b. The Group did not have any significant shift between Level 1 and Level 2 of the fair value for the first three quarters of 2021 and 2020.
c. The adjustment of the fair value measurement in Level 3 is as follows:

Items Balance`–`beginning Total loss Recognized in other comprehensive profit and loss Balance - ending	Financial assets measured at fair value through other comprehensiveprofit and loss	Financial assets measured at fair value through other comprehensiveprofit and loss
	Equityinstrument investment – Unlisted stocks
	For the nine-monthperiods ended September 30
	2021 $205,354 4,934 $210,288	2020
		$166,432 39,235
		$205,667

The Group had recognized total current loss for an amount of NT$4,934 thousand and NT$39,235 thousand in other comprehensive profit and loss due to change in Level 3 fair value for the first three quarters of 2021 and 2020, respectively, and they were booked in the “other comprehensive profit and loss – unrealized appraisal loss of equity instrument investment measured at fair value through other comprehensive profit and loss.

79 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards)

  - (Unit amount in NT$ Thousand, unless otherwise specified)

d. The evaluation techniques and assumptions adopted to measure the fair value of financial assets.
(a)The fair value of financial assets with standard terms and conditions that are traded in an active market is determined by referring to market price.
(b)The fair value of domestic unlisted equity instrument investment is evaluated with the Market Approach.
e. Quantitative information on the fair value measurement of significant unobservable input values (Level 3):

Significant Relationship between Sensitivity analysis of the Evaluation unobservable input Quantitative the input value and relationship between the input technique value information fair value value and fair value September 30, 2021 Financial assets Financial assets measured at fair value through other comprehensive profit and loss: Stock Market Similar 2.62 The higher the stock When the stock price-to-net Approach company’s stock price-to-net value value ratio of similar price-to-net value ratio of similar companies increases ratio companies, the (decreases) by 5%, the higher the estimated equity of the Group will fair value increase/decrease by NT$10,515 thousand.

Financial assets measured at fair value through other comprehensive profit and loss:

December 31,2020 Financial assets

Financial assets measured at fair value through other comprehensive profit and loss:

Stock Market Similar 2.84 The higher the stock When the stock price-to-net Approach company’s stock price-to-net value value ratio of similar price-to-net value ratio of similar companies increases ratio companies, the (decreases) by 5%, the higher the estimated equity of the Group will fair value increase/decrease by NT$10,268 thousand. September 30,2020 Financial assets

Financial assets measured at fair value through other comprehensive profit and loss

Stock Market Similar 2.94 The higher the stock When the stock price-to-net Approach company’s stock price-to-net value value ratio of similar price-to-net value ratio of similar companies increases ratio companies, the (decreases) by 5%, the higher the estimated equity of the Group will fair value increase/decrease by NT$10,283 thousand.

80 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

f. The evaluation process for the fair value measurement of significant unobservable input values (Level 3):

The Accounting Department of the Group is responsible for fair value verification, using independent sources of information to bring the evaluation results closer to the market, confirming that the data source is independent, reliable, consistent with other data resources, and representing executable prices. Also, analyze the value change in the assets and liability that must be re-measured or re-evaluated on the reporting date according to the Group’s accounting policies to ensure the reasonableness of the evaluation result.

(3) Others

The Group conducted an assessment on the economic impact as a result of the COVID-19 pandemic. As of the reporting and announcement day of the consolidated financial reports, the economic impact does not affect the continuation of management, asset impairment, and fundraising risks of the Group.

81 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

13. Supplementary disclosure matters

The transactions between the company and the following subsidiaries and among the subsidiaries were written-off at the time of preparing the consolidated financial report. The information disclosed below is for reference only.

(1) Information on major transactions

Supplementary information of the company and the subsidiaries for the nine-month periods ended September 30, 2021 is disclosed as follows:

A. Loans to others:

															Unit:NT$ Thousand/USD	Unit:NT$ Thousand/USD
No	Lending company	Borrower	Accountin g item	Relate d party	Maximum amount - current	Balance – ending (09.30.2021) (Note 2)	Actual amount implemented (Note 3)	Intere st rate range	Nature of loan	Transacti on amount	Reason for short-term loan	Allowance for bad debt appropriated	Collateral		Loaning of fund limit to individual (Note 1)	Total loaning of fund limit (Note 1)
													Name	Value
1	G-SHANK ENTERPR ISE CO., LTD.	G-SHAN K JAPAN CO., LTD.	Other accounts receivable – related party	Yes	$50,112 (USD1,800,000)	$50,112 (USD1,800,000)	$19,488 (USD700,000)	1%	Short- term loan	$-	Business operation of affiliated enterprise	$-	-	$-	$471,597	$1,886,389

Note 1: The total loaning of fund limit refers to an amount equivalent to 40% of the current net value of the lending company. The loaning of fund limit to individual refers to

an amount equivalent to 10% of the current net value of the lending company. The current net value is based on the latest financial statements audited by an independent auditor.

Note 2: It is the loaning of fund amount resolved by the company’s board of directors.

Note 3: It is the actual outstanding loan amount at yearend.

B. Provision of endorsements and guarantees to others: None

82 -

C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures):

Unit: NT$ Thousand/RMB/THB/USD

Holding company	Type of securities	Name of securities	Relationship with the securities issuer	Accounting title		Ending (September 30,2021)	Ending (September 30,2021)	Ending (September 30,2021)
					Shares / unit / 1,000 shares	Book amount	Shareholding ratio (%)	Fair value / net value
G-SHANK ENTERPR ISE CO., LTD.	Stocks	REEL MASK INDUSTRY CO., LTD.	None	Financial assets-noncurrent measured at fair value through other comprehensiveprofit and loss	3,392,713	$210,288	9.98	$210,288
	Bonds	AXA bonds AXASA 4.5 12/29/2049	None	Financial assets-current measured at fair value throughprofit and loss	700,000	19,790 (USD710,843)	-	19,790 (USD710,843)
	Bonds	HSBC Holding bonds HSBC 6 RERP(I)	None	Financial assets-current measured at fair value throughprofit and loss	1,800,000	55,059 (USD1,977,678)	-	55,059 (USD1,977,678)
	Bonds	Macquarie Group Limited bonds MQGAU 6 1/8 PERP	None	Financial assets-current measured at fair value through profit and loss	1,400,000	42,768 (USD1,536,220)	-	42,768 (USD1,536,220)
	Bonds	BNP Paribas bonds BNP 5 1/8 PERP(I)	None	Financial assets-current measured at fair value throughprofit and loss	600,000	17,818 (USD640,020)	-	17,818 (USD640,020)
	Bonds	Societe Generale bonds SOCGEN 6.75 PERP(I)	None	Financial assets-current measured at fair value throughprofit and loss	1,020,000	32,043 (USD1,150,978)	-	32,043 (USD1,150,978)
	Bonds	DB-Deutsche Bank AG bonds DB 4.789 PERP	None	Financial assets-current measured at fair value through profit and loss	3,800,000	107,062 (USD3,845,600)	-	107,062 (USD3,845,600)
	Bonds	Credit Suisse bonds CS 5.1 PERP(I)	None	Financial assets-current measured at fair value throughprofit and loss	800,000	22,825 (USD819,856)		22,825 (USD819,856)
	Bonds	DB-Deutsche Bank AG bonds DB 6 PERP	None	Financial assets-current measured at fair value through profit and loss	2,800,000	82,196 (USD2,952,460)	-	82,196 (USD2,952,460)

(Continuing to next page)

83 -

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing) (Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

						Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD
Holding company	Type of securities	Name of securities	Relationship with the securities issuer	Accounting title		Ending (September 30,2021)			Remarks
					Shares / unit / 1,000 shares	Book amount	Shareholdin g ratio (%)	Fair value / net value
G-SHANK ENTERPR ISE CO., LTD.	Bonds	Internationale Nederlanden Group N.V. bonds INTNED 4 7/8 PERP(I)	None	Financial assets-current measured at fair value through profit and loss	600,000	$17,432 (USD626,142)	-	$17,432 (USD626,142)
	Bonds	Societe Generale bonds SOCGEN 5 3/8 PERP	None	Financial assets-current measured at fair value throughprofit and loss	581,000	17,404 (USD625,156)	-	17,404 (USD625,156)
	Bonds	Standard Chartered bonds STANLN 4 3/4 PERP	None	Financial assets-current measured at fair value throughprofit and loss	1,900,000	53,437 (USD1,919,418)	-	53,437 (USD1,919,418)
	Bonds	HSBC Holding bonds HSBC 4.7 PERP(I)	None	Financial assets-current measured at fair value through profit and loss	6,300,000	177,961 (USD6,392,295)	-	177,961 (USD6,392,295)
	Bonds	Societe Generale bonds SOCGEN 6.75 PERP(II)	None	Financial assets-current measured at fair value through profit and loss	1,500,000	47,082 (USD1,691,175)	-	47, 082 (USD1,691,175)
	Bonds	HSBC Holding bonds HSBC 6 3/8 PERP	None	Financial assets-current measured at fair value throughprofit and loss	1,000,000	30,126 (USD1,082,110)	-	30,126 (USD1,082,110)
	Bonds	HSBC Holding bonds HSBC 6 RERP(II)	None	Financial assets-current measured at fair value throughprofit and loss	300,000	$9,180 (USD329,727)	-	$9,180 (USD329,727)
	Bonds	UBS Group AG bonds UBS 5 PERP	None	Financial assets-current measured at fair value throughprofit and loss	300,000	8,430 (USD302,796)	-	8,430 (USD302,796)
	Bonds	Internationale Nederlanden Group N.V. bonds INTNED 4 7/8 PERP(II)	None	Financial assets-current measured at fair value through profit and loss	1,348,000	39,152 (USD1,406,314)	-	39,152 (USD1,406,314)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing) (Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

						Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD
Holding company	Type of securities	Name of securities	Relationship with the securities issuer	Accounting title		Ending (September 30,2021)			Remarks
					Shares / unit / 1,000 shares	Book amount	Shareholdin g ratio (%)	Fair value / net value
G-SHANK ENTERPR ISE CO., LTD.	Bonds	Credit Suisse bonds CS 5.1 PERP(II)	None	Financial assets-current measured at fair value throughprofit and loss	790,000	22,488 (USD807,751)	-	22,488 (USD807,751)
	Bonds	BNP Paribas bonds BNP 5 1/8 PERP(II)	None	Financial assets-current measured at fair value throughprofit and loss	1,250,000	37,094 (USD1,332,388)	-	37,094 (USD1,332,388)
	Bonds	HSBC Holding bonds HSBC 4.7 PERP(II)	None	Financial assets-current measured at fair value throughprofit and loss	1,100,000	31,078 (USD1,116,302)	-	31,078 (USD1,116,302)
	Bonds	BNP Paribas bonds BNP 5 1/8 PERP(III)	None	Financial assets-current measured at fair value throughprofit and loss	200,000	5,922 (USD212,720)	-	5,922 (USD212,720)
	Bonds	HSBC Holding bonds HSBC 6 RERP(III)	None	Financial assets-current measured at fair value throughprofit and loss	700,000	21,384 (USD768,117)	-	21,384 (USD768,117)
	Bonds	UBS Group AG bonds UBS 4.375 PERP	None	Financial assets-current measured at fair value throughprofit and loss	1,000,000	28,242 (USD1,014,420)	-	28,242 (USD1,014,420)
	Bonds	BCS-Barclays Plc bonds BACR 4 3/8 PERP	None	Financial assets-current measured at fair value throughprofit and loss	3,300,000	91,428 (USD3,284,061)	-	91,428 (USD3,284,061)
	Bonds	Standard Chartered bonds STANLN 4.3 PERP(I)	None	Financial assets-current measured at fair value throughprofit and loss	2,900,000	79,005 (USD2,837,853)	-	79,005 (USD2,837,853)
	Bonds	Standard Chartered bonds STANLN 4.3 PERP(II)	None	Financial assets-current measured at fair value throughprofit and loss	470,000	12,820 (USD460,487)	-	12,820 (USD460,487)

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing) (Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

						Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD	Unit: NT$ Thousand/RMB/THB/USD
Holding company	Type of securities	Name of securities	Relationship with the securities issuer	Accounting title		Ending (September 30,2021)			Remarks
					Shares / unit / 1,000 shares	Book amount	Shareholdin g ratio (%)	Fair value / net value
CHIN DE INVESTMEN T CO., LTD.	Funds	First Bank Taiwan MonetaryFunds	None	Financial assets-current measured at fair value throughprofit and loss	209,672	3,242	-	3,242
	Bonds	HSBC Holding bonds HSBC 6 RERP	None	Financial assets-current measured at fair value throughprofit and loss	470,000	14,358 (USD515,736)	-	14,358 (USD515,736)
	Bonds	HSBC Holding bonds HSBC 4.7 PERP	None	Financial assets-current measured at fair value throughprofit and loss	1,200,000	$33,856 (USD1,216,080)	-	$33,856 (USD1,216,080)
GREAT-SHA NK CO., LTD.	Funds	SCB FIXEDA (RA)	None	Financial assets-current measured at fair value throughprofit and loss	714,728	6,194 (THB7,516,722)	-	6,194 (THB7,516,722)
	Funds	SCBASF6ML5	None	Financial assets-current measured at fair value throughprofit and loss	7,150,000	58,945 (THB71,535,750)	-	58,945 (THB71,535,750)
	Funds	SCB-SCBFP	None	Financial assets-current measured at fair value throughprofit and loss	3,179,281	33,820 (THB41,043,574)	-	33,820 (THB41,043,574)
	Funds	KTB-KTFix1Y3Y	None	Financial assets-current measured at fair value throughprofit and loss	2,402,144	23,413 (THB28,413,763)	-	23,413 (THB28,413,763)

D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: None

E. Acquired real estate for an amount of more than NT$300 million or 20% of the paid-in capital: None

F. Disposed real estate for an amount more than NT$300 million or 20% of the paid-in capital: None

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing)

(Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

G. The purchase or sale of goods with the related party for an amount more than NT$100 million or 20% of the paid-in capital:

Purchaser/seller	Counterparty	Relationship with the counterparty	Transactions	Transactions			Differences in transactionterms compared to thirdparty transactions	Differences in transactionterms compared to thirdparty transactions	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage oftotalnotes/ accountsreceivable (payable)
HONG JING (SHANGHAI) ELECTRONICS CO., LTD.	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	Associates	sales	$119,107 (RMB27,571,146)	99.98%	60 days T/T	(Note)	(Note)	$24,806 (RMB5,760,767)	100.00%

Note ： The specifications of products that are sold to related parties are exclusive; therefore, there is no other customer available for comparison. The payment term for sales to general customers is OA 30-90 days.

H. Accounts receivable from related parties amounted to more than NT$100 million or 20% of the paid-in capital: None

I. Engage in derivative instruments transactions: Please refer to Notes 6.(2) and 12 of the consolidated financial statements.

87 -

J. Business relationship and important transactions and transaction amount between the parent company and subsidiaries and among subsidiaries:

No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
0	G-SHANK ENTERPRISE CO., LTD.	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	1	Sales income Other income Accounts receivable – related party Other receivables – relatedparty	$ 524 25,732 230 25,574	Note 4 Note 7	0.01% 0.54% - 0.29%
0	G-SHANK ENTERPRISE CO., LTD.	G-LONG PRECISION MACHINERY (DONG GUAN)CO.,LTD.	1	Other income Other receivables – related party	1,419 1,411	Note 7	0.03% 0.02%
0	G-SHANK ENTERPRISE CO., LTD.	XIAMEN G-SHANK PRECISION MACHINERY CO.,LTD.	1	Other income Other receivables – related party Otherpayable – relatedparty	2,699 2,682 5	Note 7	0.06% 0.03% -
0	G-SHANK ENTERPRISE CO., LTD.	G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD.	1	Sales income Cost of goods sold Other income Accounts receivable – related party Accounts payable – related party Other receivables – relatedparty	834 966 4,913 837 361 4,883	Note 4 Note 5 Note 7	0.02% 0.02% 0.10% 0.01% - 0.06%

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
0	G-SHANK ENTERPRISE CO., LTD.	QINGDAO G-SHANK PRECISION SDN.BHD.	1	Sales income Other income Other receivables – related party Otherpayables – relatedparty	$ 798 5,044 5,012 4	Note 4 Note 7	0.02% 0.11% 0.06% -
0	G-SHANK ENTERPRISE CO., LTD.	SHENZHEN G-SHANK PRECISION SDN.BHD.	1	Sales income Cost of goods sold Other income Accounts receivable – related party Accounts payable – related party Other receivables – related party Otherpayables – relatedparty	92 275 2,000 92 269 1,994 6	Note 4 Note 5 Note 7	- 0.01% 0.04% - - 0.02%- -
0	G-SHANK ENTERPRISE CO., LTD.	TIANJIN G-SHANK PRECISION MACHINERY CO.,LTD.	1	Sales income Other income Other receivables – relatedparty	809 4,836 4,805	Note 4 Note 7	0.02% 0.10% 0.05%
0	G-SHANK ENTERPRISE CO., LTD.	G-SHANK, INC.	1	Sales income Accounts receivable - related party Other receivables – relatedparty	3,772 529 230	Note 4	0.08% 0.01% -

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
0	G-SHANK ENTERPRISE CO., LTD.	SHENZHEN G-BAO PRECISION SDN.BHD.	1	Sales income Cost of goods sold Other income Accounts receivable – related party Accounts payable – related party Other receivables – related party Otherpayable – relatedparty	$ 4,468 719 4,781 1,933 43 3,411 37	Note 4 Note 5 Note 7	0.09% 0.02% 0.10% 0.02% - 0.04% -
0	G-SHANK ENTERPRISE CO., LTD.	GREAT-SHANK CO., LTD.	1	Sales income Other income Accounts receivable – related party Other receivables – relatedparty	4,024 2,603 2,664 1,154	Note 4 Note 7	0.09% 0.05% 0.03% 0.01%
0	G-SHANK ENTERPRISE CO., LTD.	G-SHANK ENTERPRISE (M) SDN. BHD.	1	Sales income Other income Accounts receivable – related party Other receivables – relatedparty	7,521 4,044 3,478 1,344	Note 4 Note 7	0.16% 0.08% 0.04% 0.02%
0	G-SHANK ENTERPRISE CO.,LTD.	PT INDONESIA G-SHANK PRECISION	1	Sales income Accounts receivable – relatedparty	1,382 165	Note 4	0.03% -

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing) (Review only without following generally accepted auditing standards) (Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the lastpage)	(Continued from the lastpage)
No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
0	G-SHANK ENTERPRISE CO., LTD.	G-SHANK JAPAN CO., LTD.	1	Sales income Cost of goods sold Other income Operating expense Accounts receivable – related party Other receivables – related party Otherpayables – relatedparty	$ 816 643 156 1,846 206 19,519 962	Note 4 Note 5 Note 8 Note 7	0.02% 0.01% - 0.04% - 0.22% 0.01%
1	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	HONG JING (SHANGHAI) ELECTRONICS CO., LTD.	3	Sales income Cost of goods sold Other profit and loss Accounts receivable – related party Other receivable – related party Otherpayable – relatedparty	4,043 119,107 11,664 1,079 3,138 24,806	Note 6 Note 6 Note 7	0.08% 2.50% 0.24% 0.01% 0.04% 0.28%
1	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	TIANJIN G-SHANK PRECISION MACHINERY CO.,LTD.	1	Sales income Accounts receivable – related party	2,483 1,556	Note 6	0.05% 0.02%

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
1	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD.	3	Sales income Cost of goods sold Other profit and loss Accounts receivable – related party Accounts payable – related party Other receivables – related party Otherpayables – relatedparty	$ 2,637 43,158 6,480 834 18 1,653 7,647	Note 6 Note 6 Note 7	0.06% 0.90% 0.14% 0.01% - 0.02% 0.09%
1	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	GREAT-SHANK CO., LTD.	3	Sales income Accounts receivable – related party	1,675 405	Note 6	0.04% -
1	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	G-SHANK JAPAN CO., LTD.	3	Sales income Cost of goods sold Accounts receivable – related party Other receivables – related party Otherpayables – relatedparty	2,089 17,014 296 29 2,891	Note 6 Note 6	0.04% 0.36% - - 0.03%
1	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	PT INDONESIA G-SHANK PRECISION	3	Sales income Accounts receivable – related party	2,618 1,601	Note 6	0.05% 0.02%

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note 3)
1	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	3	Sales income Cost of goods sold Otherpayables – relatedparty	$ 26 3,623 426	Note 6 Note 6	- 0.08% -
1	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	G-SHANK ENTERPRISE (M) SDN. BHD.	3	Sales income Cost of goods sold Accounts receivable – related party Accountspayable – relatedparty	1,087 565 362 248	Note 6 Note 6	0.02% 0.01% - -
1	SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	HUBEI HANSTAR ELECTRONICS TECHNOLOGY CO., LTD.	3	Sales income Cost of goods sold Accounts receivable – related party Accountspayable – relatedparty	1,632 9,562 362 2,165	Note 6 Note 6	0.03% 0.20% - 0.02%
1	SHANGHAI G-SHANK PRECISION MACHINERY CO.,LTD.	G-LONG PRECISION MACHINERY (DONG GUAN)CO.,LTD.	3	Sales income Accounts receivable – related party	23 10	Note 6	- -
2	SHENZHEN G-SHANK PRECISION SDN.BHD.	G-LONG PRECISION MACHINERY (DONG GUAN)CO.,LTD.	3	Cost of goods sold Accounts payable – related party	656 175	Note 6	0.01% -

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note3)
2	SHENZHEN G-SHANK PRECISION SDN.BHD.	SHENZHEN G-BAO PRECISION SDN.BHD.	3	Sales income Cost of goods sold Accounts receivable – related party Accountspayable – relatedparty	$ 5,620 750 2,651 180	Note 6 Note 6	0.12% 0.02% 0.03% -
2	SHENZHEN G-SHANK PRECISION SDN.BHD.	XIAMEN G-SHANK PRECISION MACHINERY CO.,LTD.	3	Sales income Accounts receivable – related party	1,859 839	Note 6	0.04% 0.01%
2	SHENZHEN G-SHANK PRECISION SDN.BHD.	TIANJIN G-SHANK PRECISION MACHINERY CO.,LTD.	3	Sales income Accounts receivable – related party	375 12	Note 6	0.01% -
2	SHENZHEN G-SHANK PRECISION SDN.BHD.	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	3	Sales income Accounts receivable – related party	962 542	Note 6	0.02% 0.01%
3	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	PT INDONESIA G-SHANK PRECISION	3	Sales income Accounts receivable – related party	4,312 2,436	Note 6	0.09% 0.03%
3	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	G-SHANK JAPAN CO., LTD.	3	Cost of goods sold Accounts payable – related party	122 39	Note 6	- -

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note3)
3	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	QINGDAO G-SHANK PRECISION SDN.BHD.	3	Cost of goods sold	$ 8	Note 6	-
3	G-SHANK PRECISION MACHINERY (SUZHOU)CO.,LTD.	DONGGUAN QIAOJUTRADING CO., LTD.	3	Sales income	22	Note 6	-
4	G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.	TIANJIN G-SHANK PRECISION MACHINERY CO., LTD.	3	Sales income Accounts receivable – related party	265 31	Note 6	0.01% -
4	G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.	SHENZHEN G-BAO PRECISION SDN.BHD.	3	Sales income Accounts receivable – related party	72 62	Note 6	- -
4	G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.	DONGGUAN QIAOJUTRADING CO., LTD.	3	Sales income Other profit and loss Accounts receivable – related party Other receivables – relatedparty	14,753 117 5,740 30	Note 6	0.31% - 0.07% -
5	G-SHANK ENTERPRISE (M) SDN. BHD.	G-SHANK JAPAN CO., LTD.	3	Sales income Cost of goods sold Accounts receivable – related party Accounts payable – related party Otherpayables – relatedparty	5,087 3,897 2,076 49 1,637	Note 6 Note 6	0.11% 0.08% 0.02% - 0.02%

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No. (Note 1)	Trading party	Counterparty	Relationship with the trading party (Note 2)	Transactions	Transactions	Transactions	Transactions
				Item	Amount	Transaction conditions	Ratio to total consolidated operating income or total assets(Note3)
5	G-SHANK ENTERPRISE (M)SDN. BHD.	GREAT-SHANK CO., LTD.	3	Sales income	$ 175	Note 6	-
6	HONG JING (SHANGHAI) ELECTRONICS CO., LTD.	SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD.	3	Sales income	25	Note 6	-
7	G-SHANK JAPAN CO., LTD.	SHENZHEN G-BAO PRECISION SDN.BHD.	3	Sales income Cost of goods sold Accounts receivable – related party Accountspayable – relatedparty	231 1,701 174 1,665	Note 6 Note 6	- 0.04% - 0.02%
8	QINGDAO G-SHANK PRECISION SDN.BHD.	TIANJIN G-SHANK PRECISION MACHINERY CO., LTD.	3	Sales income Cost of goods sold Accounts receivable – relatedparty	1,346 13 280	Note 6 Note 6	0.03% - -
8	QINGDAO G-SHANK PRECISION SDN.BHD.	XIAMEN G-SHANK PRECISION MACHINERY CO.,LTD.	3	Sales income	9	Note 6	-

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Note 1: Business transactions conducted between the parent company and subsidiaries should be noted in the “No.” column as follows: (1) Fill in “0” for the parent company;
(2) The subsidiaries are numbered sequentially starting from the Arabic number “1” by the company type.
Note 2: The “relationship with the trading companies” includes three types (The same transaction between parent company and subsidiary or between two subsidiaries needs not to be disclosed repeatedly, for example, if the parent company has already disclosed the transaction conducted with the subsidiary, the subsidiary does not need to have it disclosed again. If one of the two subsidiaries has already disclosed the transaction conducted, the other subsidiary does not need to have it disclosed again), which should be marked as follows:
(1) The parent company to the consolidated subsidiary;
(2) Consolidate subsidiary to parent company;
(3) Consolidated subsidiary to consolidated subsidiary;
Note 3: For the ratio of the transaction amount to the consolidated total operating income or total assets, if it is an asset or liability item, it is calculated for the ratio of the ending balance amount to the consolidated total assets; if it is a profit and loss item, it is calculated for the ratio of the interim cumulative amount to total consolidated operating income.
Note 4: The products sold are mostly equipment, tools, and materials used for production with the price negotiated by both parties by adding a percentage to the cost or by the cost price of trade depending on the type of product traded; also, taking into account the expenses and exchange rate risk. However, the specifications of products that are sold to related parties are exclusive; therefore, there is no other customer available for comparison. The payment term of sales to a related party is OA 60-150 days.
Note 5: The purchase is mostly for molds and parts with special specifications from one single supplier. Therefore, there is no other purchase price available for comparison. The payment term for such single supplier is OA 60-120 days.
Note 6: The collection (payment) term is OA 90-150 days according to the contract signed.

Note 7: It is calculated and collected according to the contract signed.

Note 8: Interest collection and principal repayment are made according to the loan contract signed.
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(2) Re-investment business-related information

Supplementary disclosure of information related to the company’s direct or indirect significant influence, control, or joint venture equity on the investee company not in Mainland China for the nine-month period ended September 30, 2021.

				Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR	Uni`t：`NTD Thousand/USD/MYR
Investor Company	Investee Company	Location	Main business operation	Original investment amount (Note 12)		As of September 30, 2021			Current profit (loss) of the Investee Company	Investment profit (loss) recognized in current period (Note 11)	Footnote
				September 30, 2021	December 31, 2020	Number of shares	Ratio (%)	Book amount (Note 11)
G-SHANK ENTERPRISE CO., LTD.	CHIN DE INVESTMENT CO., LTD.	Note 1	General investment	$ 50,000	$ 50,000	5,000,000	100.00	$ 54,595	$ 491	$ 491
	GRAND STAR ENTERPRISES L.L.C.(Note 2)	Note 2	General investment	588,055	588,055	-	100.00	1,658,056	176,911	177,413
	G-SHANK, Inc.	Note 3	Stamping parts molds,fixtures	36,686	36,686	1,000	100.00	307,017	15,272	15,284
	G-SHANK ENTERPRISE (M) SDN. BHD.	Note 4	Stamping parts molds, fixtures	85,112	85,112	6,924,750	92.33	362,193	75,822	70,168
	GREAT-SHANK CO., LTD.	Note 5	Precision progressive die and hardwareproducts	69,509	69,509	7,968,750	85.00	175,620	27,861	23,659
	G-SHANK JAPAN CO., LTD.	Note 6	International trade	19,749	19,749	1,060	58.89	7,121	6,227	3,667
	SUNFLEX TECHNOLOGY CO., LTD.	Note 7	Manufacturing and trading of electronic components	40,448	40,448	9,940,956	14.73	153,911	30,340	4,468
CHIN DE INVESTMEN T CO.,LTD.	SUNFLEX TECHNOLOGY CO., LTD.	Note 7	Manufacturing and trading of electronic components	217	217	10,000	0.01	157	30,340	5

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Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and Subsidiaries (Continuing)

(Review only without following generally accepted auditing standards)

(Unit amount in NT$ Thousand, unless otherwise specified)

(Continued from the last page)

(Continued from the last page)	(Continued from the last page)	(Continued from the last page)	(Continued from the last page)
				Uni`t：`NTD Thousand/USD/MYR Original investment amount (Note 12) As of September 30, 2021 September 30, 2021 December 31, 2020 Number of shares Ratio (%) Book amount (Note 11) Current profit (loss) of the Investee Company Investment profit (loss) recognized in current period (Note 11) Footnote $47,511 (RM 7,144,500) $47,511 (RM 7,144,500) 18,800 94.00 $191,113 (RM 28,738,865) $43,740 (RM 6,451,351) $- 4,427 (USD 159,025) 4,427 (USD 159,025) - 100.00 17,872 (USD641,955) 1,442 (USD 51,474) - 532,245 (USD19,118,011) 532,245 (USD19,118,011) 19,118,011 100.00 1,647,855 177,088 -
Investor Company	Investee Company	Location	Main business operation	Original investment amount (Note 12)		As of September 30, 2021			Current profit (loss) of the Investee Company	Investment profit (loss) recognized in current period (Note 11)	Footnote
				September 30, 2021	December 31, 2020	Number shares	of Ratio (%)	Book amount (Note 11)
G-SHANK ENTERPRI SE (M) SDN. BHD.	PT INDONESIA G-SHANK PRECISION	Note 8	Stamping parts molds, fixtures	$47,511 (RM 7,144,500)	$47,511 (RM 7,144,500)	18,800	94.00	$191,113 (RM 28,738,865)	$43,740 (RM 6,451,351)	$-
G-SHANK, INC.	G-SHANK DEMEXICO,S.A. DE C.V.	Note 9	Stamping parts molds, fixtures	4,427 (USD 159,025)	4,427 (USD 159,025)	-	100.00	17,872 (USD641,955)	1,442 (USD 51,474)	-
GRAND STAR ENTERPRI SES L.L.C. (Note 2)	GLOBAL STAR INTERNATIONAL CO., LTD.	Note 10	General investment	532,245 (USD19,118,011)	532,245 (USD19,118,011)	19,118,011	100.00	1,647,855	177,088	-

Note 1: 20F-2, No. 83, Section 1, Chung Hsiao E. Road, Zhongzheng District, Taipei City

Note 2: 201 Rogers Office Building Edwin Wallace Rey Drive George Hill Anguilla

Please refer to Note 4.(2) (Note 3) of the consolidated financial report for the relocation of the former US GRAND STAR ENTERPRISES L.L.C.

Note 3: 1034 Old Port Isabel Rd., Suite 2 Brownsville, TX 78521, U.S.A.

Note 4: Plot 94, Bayan Lepas Industrial Estate 11900 Bayan Lepas, Penang, Malaysia.

Note 5: 116 Moo 1 Hitech Industrial Estate T.Banlane , A.Bang Pa-In , Ayutthaya Thailand 13160

Note 6: 1-17-14, Nishi-Shinbashi ,Excel Annex 8F, Nishi-Shinbashi, Minato-Ku,Tokyo, 105-0003 Japan.

Note 8: Jl. Industri Kawasan JABABEKA Tahap Il Block RR 5C-5D Cikarang-Bekasi 17530, Indonesia

Note 9: NO.15, Gral, Pedro Hinojosa, cd industrial H.Matamoros, Tamps, Mexico.

Note 10: Suite 102, Cannon Place, P.O. Box 712, North Sound Rd., George Town, Grand Cayman, KYl-9006 Cayman Islands.
Note 11: It is calculated according to the financial statements of the invested companies of the same period that have not been reviewed by the independent auditors.
Note 12: The original investment amount at the end of the current period and the end of last year is calculated according to the exchange rate on September 30, 2021.

Note 7: No. 522, Nanshang Road, Guishan District, Taoyuan City

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(3) Investment in China

A. The name, main business operation, paid-in capital, investment methods, remittance in and out of funds, shareholding ratio, investment profit and loss, investment book amount at yearend, remittance in of investment profit and loss, and investment limits of the invested company in China:

					Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD	Uni`t：`NTD Thousand/USD/RMB/HKD
Invested company in China	Main business operation	Paid-in capital	Investment method	Cumulative investment amount remitted out of Taiwan in current period - beginning	Investment amount remitted in or out in currentperiod		Cumulative investment amount remitted out of Taiwan in current period - ending	Current profit (loss) of the invested company	The company’s direct or indirect investment shareholdin gratio(%)	Investmen t profit (loss) recognized in current period (Note 4)	Book amount of investment - ending	Investment profit remitted into Taiwan as of current period

					Remitted	Remitted
					out	in

SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.	Precision progressive die and hardware products	USD 10,000,000 (Note 1)	Entrusted investment (Note 2)	USD1,700,000	$-	$-	USD1,700,000	$238,616	85.00	$202,821	$1,238,579	$1,598,320 (USD57,410,906)
HONG JING (SHANGHAI) ELECTRONICS CO., LTD.	Precision progressive die and hardware products	USD1,590,000	Investment through the company set up in the third region(Note 3)	USD1,275,000	-	-	USD1,275,000	26,598	80.19	21,328	74,470	57,520 (USD2,066,082)
G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.	Precision progressive die and hardware products	USD3,000,000	Investment through the company set up in the third region(Note 4)	USD1,530,000	-	-	USD1,530,000	30,749	51.00	15,682	123,426	18,992 (USD682,168)
XIAMEN G-SHANK PRECISION MACHINERY CO., LTD.	Precision progressive die and hardware products	USD2,500,000	Investment through the company set up in the third region(Note 5)	USD1,990,000	-	-	USD1,990,000	1,385	79.60	1,103	96,178	57,633 (USD2,070,148)

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(Continued from the last page)

(Continued from the last page)	(Continued from the last page)	(Continued from the last page)	(Continued from the last page)	(Continued from the last page)
					Uni`t：`NTD Thousand/USD/RMB/HKD
Invested company in China	Main business operation	Paid-in capital	Investment method	Cumulative investment amount remitted out of Taiwan in current period - beginning	Investment amount remitted in or out in currentperiod		Cumulative investment amount remitted out of Taiwan in current period - ending	Current profit (loss) of the invested company	The company’s direct or indirect investment shareholdin gratio(%)	Investmen t profit (loss) recognized in current period (Note 4)	Book amount of investment - ending	Investment profit remitted into Taiwan as of current period
					Remitted out	Remitted in
G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD.	Planer, milling machine or die machine, precision continuous die and hardware products	USD1,400,000	Investment through the company set up in the third region (Note 6)	USD1,671,825	$-	$-	USD1,671,825	$21,391	100.00	$21,391	$238,290	$75,494 (USD2,711,713)
QINGDAO G-SHANK PRECISION SDN.BHD.	Precision progressive die and hardware products	USD4,000,000	Investment through the company set up in the third region(Note 7)	USD3,342,000	-	-	USD3,342,000	5,092	92.83	4,727	279,690	260,283 (USD9,349,241)
TIANJIN G-SHANK PRECISION MACHINERY CO., LTD.	Precision progressive die and hardware products	USD2,500,000	Investment through the company set up in the third region(Note 8)	USD2,205,000	-	-	USD2,205,000	47,178	88.20	41,611	202,819	36,182 (USD1,299,651)
SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD.	Precision progressive die and hardware products	USD300,000	Investment through the company set up in the third region(Note 9)	USD 255,000	-	-	USD 255,000	46,391	85.00	39,432	191,205	411,929 (USD14,796,288)

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Uni t ： NTD Thousand/USD/RMB/HKD

Invested company in China	Main business operation	Paid-in capital	Investment method	investment amount remitted out of Taiwan in current period - beginning	Investment amount remitted in or out in currentperiod	Investment amount remitted in or out in currentperiod	Cumulative investment amount remitted out of Taiwan in current period - ending	Current profit (loss) of the invested company	The company’s direct or indirect investment shareholdin gratio(%)	Investmen t profit (loss) recognized in current period (Note 4)	Book amount of investment - ending	Investment profit remitted into Taiwan as of current period
					Remitted out	Remitted in
SHENZHEN G-SHANK PRECISION SDN.BHD.	Precision progressive die and hardware products	USD2,600,000	Investment through the company set up in the third region(Note 10)	USD2,440,000	-	-	USD2,440,000	$ 5,345	93.85	$ 5,016	$110,523	$ 7,259 (USD260,742)
SHENZHEN G-BAO PRECISION SDN.BHD.	Precision progressive die and hardware products	USD3,150,000	Investment through the company set up in the third region(Note 11)	USD2,880,000	$-	$-	USD2,880,000	30,712	91.43	28,080	345,013	$137,442 (USD4,936,848)
HUBEI HANSTAR ELECTRONICS TECHNOLOGY CO., LTD. (Note 5)	Precision progressive die and hardware products, electroplating processing	RMB30,000,000	Transfer investment of SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD.	-	-	-	-	14,449	100.00	14,449	133,309	-
DONGGUAN QIAOJU TRADING CO., LTD. (Note 5)	Plastic hardware wholesale and import/export business	HKD3,000,000	Transfer investment of G-LONG PRECISION MACHINERY (DONG GUAN) CO.,LTD.	-	-	-	-	6,652	100.00	6,652	41,681	-

102 -

Cumulative investment amount remitted out from Taiwan to China atyearend(Note 1)	Investment amount approved by the Investment Commission,MOEA(Notes 1 and 2)	The investment amount limit stipulated by the Investment Commission,MOEA(Note 3)
$587,038 (USD21,086,140)	$787,688 (USD28,257,472)	$3,326,260

Note 1: It includes the net amount of USD1,797,315 derived from the approved investment of GSYUE DG TOOLING CO.,LTD. for USD2,730,000 and net of the liquidating investment fund remitted in for USD932,685.
Note 2: It includes the capital increase from earnings of SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in May 2001 and October 2004, and the capital increase from earnings of QINGDAO G-SHANK PRECISION SDN.BHD. in January 2019.
Note 3: According to the “Principles for the Review of Investment or Technical Cooperation in Mainland China” stipulated by the Investment Commission, MOEA the company’s investment in China is limited to 60% of the net worth or consolidated net worth, whichever is higher. However, the enterprises that are with the certification document to evidence its meeting the operation scope of the headquarters issued by the Industrial Development Bureau, MOEA is not subject to this limit. The company had applied to the Industrial Development Bureau, MOEA for approval as the corporate operation headquarters on April 18, 2019 that would be valid from April 16, 2019 to April 15, 2021 for the investment in China, which had not violated the investment limit of the Investment Commission, MOEA.
Note 4: The profit and loss amount from the subsidiary under the equity method for the nine-month period ended September 30, 2021 was calculated according to the investee company’s financial statements not audited by the independent auditors, except for SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD.
Note 5: It is an investment made through the invested company in China; therefore, it is unnecessary to report to the Investment Commission MOEA and is not included in the “Cumulative investment amount remitted out from Taiwan to China.”
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Note 1 ： SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had a paid-in capital of US$2,000 thousand originally. It had arranged a capital increase from earnings for an amount of US$2,500 thousand and US$5,500 thousand in May 2001 and October 2004, respectively. As of March 31, 2021, SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. had a paid-in capital of US$10,000 thousand.
Note 2 ： The company has signed a power of attorney with G-SHANK ENTERPRISE (M) SDN. BHD. (hereinafter referred to as the “trustee”), a business entity of the company in the third region, to indirectly establish SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in China with the related party, Yuhuang Lin. The main content of the power of attorney is as follows:
A. The company designated the trustee to invest US$1,700,000 (including bank transfer of US$1,250,000 and machinery and equipment for an amount of US$450,000) in SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in China.
B. The trustee is to apply to the competent authorities in China to invest and establish SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. in the name of the trustee.
C. The trustee upon receiving income or benefits from SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. should have it transferred to the company entirely.
D. If SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. is to return the investment funds due to capital reduction, business termination, or other reasons, the trustee upon receiving such refund shall have it transferred to the company entirely.
E. The trustee shall notify the company when transferring investment funds, benefits, or income due to the reasons stated in the last two preceding paragraphs according to the instruction of the company.
F. The trustee’s rights and obligations in SHANGHAI G-SHANK PRECISION MACHINERY CO., LTD. are transferred to the company due to this entrusted investment relationship; therefore, the trustee does not guarantee the income and profit and loss.
G. The trustee shall exercise due diligence to manage investment, foreign exchange settlement, and benefit collection.
H. The matters not addressed in the power of attorney shall be handled in accordance with the law and regulations of the Republic of China, domestic and foreign banking practices, and other regulations.
Note 3 ： HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90010260 (Investment Commission, MOEA had the (90) Shen-II-Tzi No. 90010260 amended by issuing the (95) Shen-II-Tzi No. 095004988 on 03.03.2006), and the company was
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approved by the Investment Commission, MOEA by issuing the Shen-II-Tzi No. 093031757 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in HONG JING (SHANGHAI) ELECTRONICS CO., LTD. HONG JING (SHANGHAI) ELECTRONICS CO., LTD. had arranged a capital increase in cash on November 1, 2012; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was 80.19% thereafter.

Note 4 ： HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90010259 and Jin-Shen-II-Tzi No. 91015965, and the company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092042580 Letter and Jin-Shen-II-Tzi No. 093031432 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in G-LONG PRECISION MACHINERY (DONG GUAN) CO., LTD.
Note 5 ： HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90022866, and the company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092042581 Letter and Jin-Shen-II-Tzi No. 093006075 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in XIAMEN G-SHANK PRECISION MACHINERY CO., LTD.
Note 6 ： HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Tou-Shen-II-Tzi No. 90001835, Jin-Shen-II-Tzi No. 091031112, and Jin-Shen-II-Tzi No. 92008940 to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in G-SHANK PRECISION MACHINERY (SUZHOU) CO., LTD. Subsequently, 5.86% (investment amount of US$82 thousand) and 2% (investment mount US$28 thousand) of the shareholding was transferred to non-related parties, Mr. Bershin Lo and Mr. Guodong Hsu, in March 2003, respectively. The company’s shareholding was reduced to 92.14 % thereafter that was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092010563 Letter. HON YEH INVESTMENT CO., LTD., a subsidiary of the company, had paid US$23 thousand to acquire the 2% (investment amount US$28 thousand) shareholding from Mr. Guodong Hsu on January 5, 2007 with the shareholding increased to 94.14% thereafter and it was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09500329480 Letter. The
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company’s board of directors had resolved on June 13, 2019 to acquire the 5.86% (investment amount US$361 thousand) shareholding from the non-related party, Mr. Bershin Lo, and it was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 10800157300 Letter with the comprehensive shareholding increased to 100% thereafter.

Note 7 ： HON YEH INVESTMENT CO., LTD., a subsidiary of the company, was approved by the Investment Commission, MOEA by issuing the (90) Shen-II-Tzi No. 90010261, Jin-Shen-II-Tzi No. 91039369, Jin-Shen-II-Tzi No. 092003008 Letter, and Jin-Shen-II-Tzi No. 094008181 to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in QINGDAO G-SHANK PRECISION SDN.BHD. Subsequently, 5% (investment amount of US$130 thousand), 2.23% (investment mount US$58 thousand), and 0.58% (investment amount US$15 thousand) of the shareholding was transferred to non-related parties, Mr. Shenwei Guo, Mr. Hongjun Li, and Mr. Bangyong Liu, in March 2003, respectively. The company’s shareholding was reduced to 92.19 % thereafter that was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092010560 Letter. QINGDAO G-SHANK PRECISION SDN.BHD. had arranged capital increase in cash on November 25, 2006; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was 92.83% thereafter. QINGDAO G-SHANK PRECISION SDN.BHD. had a paid-in capital of US$3,600 thousand and then arranged a capital increase from earnings for an amount of US$400 thousand in January 2019 and the paid-in capital of QINGDAO G-SHANK PRECISION SDN.BHD. was US$4,000 thousand thereafter.
Note 8 ： The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 092044159, Jin-Shen-II-Tzi No. 093005557, and Jin-Shen-II-Tzi No. 093006249 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in TIANJIN G-SHANK PRECISION MACHINERY CO., LTD.
Note 9 ： The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 095026420 Letter to indirectly invest in SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. through G-SHANK ENTERPRISE (M) SDN. BHD. in the third region. Then it was approved for amendment by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 095032048 Letter to invest in SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. through GLOBAL STAR INTERNATIONAL CO., LTD. that was invested by GRAND STAR ENTERPRISES L.L.C. in the third region. The investment fund was transferred through
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GRAND STAR ENTERPRISES L.L.C. to GLOBAL STAR INTERNATIONAL CO., LTD. for an amount of US$255 thousand on November 18, 2006, and the said amount was then transferred to SHANGHAI G-SHANK PRECISION HARDWARE CO., LTD. on January 20, 2006.

Note 10 ： The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09500121350, Jin-Shen-II-Tzi No. 09600108160, and Jin-Shen-II-Tzi No. 09600265810 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in SHENZHEN G-SHANK PRECISION SDN.BHD.
Note 11 ： The Company was approved by the Investment Commission, MOEA by issuing the Jin-Shen-II-Tzi No. 09600405610 and Jin-Shen-II-Tzi No. 09700084160 Letter to invest in GLOBAL STAR INTERNATIONAL CO., LTD. through GRAND STAR ENTERPRISES L.L.C. in the third region and then it indirectly invested in SHENZHEN G-BAO PRECISION SDN.BHD. SHENZHEN G-BAO PRECISION SDN.BHD. had arranged capital increase in cash on September 13, 2012; however, the company did not subscribe shares proportionally to the shareholding ratio; therefore, the company’s shareholding ratio was reduced to 91.43% thereafter.
B. Significant transactions conducted with the invested companies in China in the current perio d ：
(A) The purchase amount and percentage and the related payable amount and percentage at yearen d ：

Please refer to Notes 7 and 13.(1) J of the consolidated financial report for details.

(B) The sales amount and percentage and the related receivable amount and percentage at yearend:

Please refer to Note 7 and 13.(1) J of the consolidated financial report for details.

(C) The property transaction amount and the profit and loss resulte d ： None
(D) The ending balance and purpose of notes endorsements/guarantees or collateral provide d ： None
(E) Maximum balance amount, ending balance amount, interest rate range, and total interest of the current period of loans: Please refer to Note 13.(1)A of the consolidated financial report for details.
(F) Other transactions that have a significant impact on the profit and loss or financial status: Please refer to Notes 7 and 13.(1) J of the consolidated financial report for details.
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(4) Major Shareholder information

The name, shareholding, and shareholding ratio for more than 5% of the company’s shareholders ：

Shares Major shareholders	Shareholding (shares)	Shareholding ratio (%)
JIHONG INVESTMENT CO., LTD. CHEN-LIN INVESTMENT COMPANY	16,089,465 shares 10,213,790 shares	8.69 5.43

Note 1 ： The information of the major shareholders in this table is based on the shareholders who have received more than 5% common stock shareholding completed with dematerialized registration (including treasury stock) on the last business day of each quarter that is counted by Taiwan Depository & Clearing Corporation. The capital stock recorded in the company’s consolidated financial report and the company’s actual number of shares delivered with dematerialized registration may be different due to different calculation bases adopted.
Note 2 ： If the aforementioned information is regarding shareholders having their shares delivered to the trust, it is disclosed by the individual account of the principal who entrusts the trustee to open a trust account. As for the shareholder’s reporting 10% or more of insider’s shareholding in accordance with the Securities and Exchange Act, the shareholding includes the principal’s shareholding and the shares delivered to the trust that remains under the control of the principal. Please refer to the Market Observation Post System for the insider’s equity reporting information.

(14) Department information

There are two reporting departments within the Group, including the stamping parts department and the general investment department. The stamping parts department is mainly for the manufacturing and production, processing, and trading of stamping components, while the general investment department is engaged in short-term investment and general investment activities. The reportable departmental profit and loss are measured by operating profit and loss before tax (excluding the total management and logistics costs to be amortized, non-operating income and benefits, non-operating expenses and losses, and income tax expenses) and it is the base for performance evaluation. This measurement amount is provided to the operating decision-maker to determine the allocation of resources to each department and to evaluate the performance of each department. The accounting policies of the operating department are the same as the summary of the significant accounting policies described in Note 4. of the consolidated financial report.

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Department information

Department information
For the three-month period ended September 30, 2021 Income Income from external customers Inter-department income Total income Departmental profit and loss Non-operating income and expense Net income before tax of the continuing business unit For the three-month period ended September 30, 2020 Income Income from external customers Inter-department income Total income Departmental profit and loss Non-operating income and expense Net loss before tax of the continuing business unit For the nine-month period ended September 30, 2021 Income Income from external customers Inter-department income Total income Departmental profit and loss Non-operating income and expense Net income before tax of the continuing business unit	Stamping parts department	General investment department	Adjustment & write-off	Consolidation
	$1,783,943 -	$- -	$- -	$1,783,943 -
	$1,783,943	$-	$-	$1,783,943
	$315,990	$(443)	$-	$315,547 14,826
	$1,231,591 -	$- -	$- -
				$330,373
				$1,231,591 -
	$1,231,591	$-	$-	$1,231,591
	$179,829	$(334)	$-	$179,495 (10,421)
	$4,770,310 -	$- -	$- -
				$169,074
				$4,770,310 -
	$4,770,310	$-	$-	$4,770,310
	$771,221	$617	$-	$771,838 55,210

				$827,048

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Stamping parts department	General investment department	Adjustment & write-off	Consolidation
$3,443,930 -	$- -	$- -	$3,443,930 -
$3,443,930	$-	$-	$3,443,930
$343,720	$(3,140)	$-	$340,580 (21,282)
$7,075,466 42,562 23,709 1,598,790	$54,035 68 617 -	$- - - -
			$319,298
			$7,129,501 42,630 24,326 1,598,790
$8,740,527	$54,720	$-	$8,795,247
$2,526,514 109,640 542,877 72,326	$- 124 - -	$- - - -	$2,526,514 109,764 542,877 72,326
$3,251,357	$124	$-	$3,251,481
$6,702,263 48,986 21,108 1,451,839	$53,583 68 474 -	$- - - -	$6,755,846 49,054 21,582 1,451,839
$8,224,196	$54,125	$-	$8,278,321

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Stamping parts department $2,260,630 51,336 555,982 82,291	General investment department	Adjustment & write-off	Consolidation
	$25 - - -	$- - - -	$2,260,655 51,336 555,982 82,291
$2,950,239	$25	$-	$2,950,264
$6,610,249 39,844 30,407 1,253,745	$53,442 124 445 -	$- - - -	$6,6663,691 39,968 30,852 1,253,745
$7,934,245	$54,011	$-	$7,988,256
$2,254,418 33,993 529,050 80,704	$- - - -	$- - - -	$2,254,418 33,993 529,050 80,704
$2,898,165	$-	$-	$2,898,165

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AI assistant

GS — Interim / Quarterly Report 2021

52110_rns_2021-12-09_b7786f0f-fec2-4bb9-bd23-a4e6d8aa8733.pdf

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

INDEPENDENT AUDITOR’S REVIEW REPORT

To: G-Shank ENTERPRISE CO., LTD.

Introduction

Scope of Review

Basis for Qualified Conclusion

Conclusion

Notice to Readers

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUING)

1. Company history

2. Financial report approval date and procedure

3. Application of the newly issued and revised standards and interpretations

4. Summary of major accounting policies

A. Statement of Compliance

B. Measurement basis

C. Functional and reporting currency

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES (Continuing)

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

(Continuing)

G-SHANK ENTERPRISE CO., LTD.

(B) Resulting in “loss of control”

(4) Employee benefits - retirement benefits

(5) Income tax

(6) Other significant accounting policies

5. Main causes of uncertainty to material accounting judgments, estimates and assumptions

6. Description of important accounting items

(1) Cash and cash equivalents

(2) Financial assets-current measured at fair value through profit and loss

(6) Inventory

(7) Other financial assets-current

(9) Investment under the equity method

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(10) Property, plant and equipment

For the nine months ended September 30, 2021

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES

(Continuing)

For the nine months ended September 30, 2020

(11) Right-of-use assets

(12) Intangible assets

(13) Short-term loans

(Continued from the last page)

B. Other rental information is listed as follows:

(16) Retirement benefits

A. Defined benefits plan

(C) Pension expenses recognized as profit or loss:

B. Defined contribution plan

(17) Capital stock

- (18) Additional paid in capital

(19) Legal reserve

(20) Special reserve

(21) Earnings distribution and dividend policy

- (23) Non controlling interests

B. Obtained non-controlling interests

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(25) Net operating income

A. Income classification:

(A) Main merchandise / service

(B) Main regional markets

(C) Income recognition time

B. Contract liabilities:

(26) Operating costs and expenses

Notes to Consolidated Financial Statements of G-SHANK ENTERPRISE CO., LTD. and SUBSIDIARIES (Continuing)

(27) Other income and expenses – net

- (28) Non operating income and expense

D. Financial cost

F. Exchange loss - net

GS Interim / Quarterly Report 2021

(27) Other income and expenses `–` net