MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT September 30, 2021 AND 2020

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Merry Electronics Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Merry Electronics Co., Ltd. and subsidiaries (the “Group”) as on September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and nine months ended, as well as the related consolidated statements of changes in equity and of cash flows for the nine months then ended, 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 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.

Scope of Review

Except as explained in the following paragraph, 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 explained in Notes 4 (3) and 6 (8), the financial statements of certain insignificant consolidated subsidiaries and certain investments accounted for using the equity method were not reviewed by independent auditors. Those statements reflect total assets of NT$5,155,340 thousand and NT$3,758,054 thousand, constituting 15% and 12% of the consolidated total assets, and total liabilities

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of NT$2,313,612 thousand and NT$1,023,723 thousand, constituting 10% and 5% of the consolidated total liabilities as at September 30, 2021 and 2020, respectively, and reflect total revenue of NT$375,142 thousand, NT$291,960 thousand, NT$936,009 thousand and NT$708,861 thousand, constituting 4%, 3%, 4% and 3% of the consolidated revenues for the three months and nine months then ended, respectively, and total comprehensive income (loss) of NT$46,836 thousand, (NT$18,268) thousand, NT$177,524 thousand and (NT$52,775) thousand, constituting 20%, (7)%, 194% and 14% of the consolidated total comprehensive income for the three months and nine months then ended, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and certain investments accounted for using the equity method been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as on September 30, 2021 and 2020, and of its consolidated financial performance for the three months and nine months then ended, and its consolidated cash flows for the nine months then ended in accordance with 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.

Wang, Yu-Chuan

Liu, Mei-Lan

For and on behalf of PricewaterhouseCoopers, Taiwan October 28, 2021

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ review report 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, PricewaterhouseCoopers 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.

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of September 30, 2021 and 2020 were reviewed, not audited)

Notes	December 31, 2020 AMOUNT % `$` `3,046,963` `9` `78,919` `-` `195,179` `1` `866,600` `3` `-` `-` `12,441,418` `36` `273,532` `1` `71,086` `-` `705,555` `2` `3,791,659` `11` `708,638` `2` `22,179,549` `65` `26,468` `-` `1,573,153` `5` `-` `-` `4,479,708` `13` `3,694,738` `11` `356,010` `1` `1,418,090` `4` `156,125` `-` `271,507` `1` `11,975,799` `35` `$ 34,155,348` `100`	September 30, 2020	September 30, 2020
	AMOUNT `$` `3,046,963` `78,919` `195,179` `866,600` `-` `12,441,418` `273,532` `71,086` `705,555` `3,791,659` `708,638` `22,179,549` `26,468` `1,573,153` `-` `4,479,708` `3,694,738` `356,010` `1,418,090` `156,125` `271,507` `11,975,799` `$ 34,155,348`	AMOUNT `$` `4,191,857` `68,240` `196,950` `873,000` `9` `8,971,285` `36,843` `416,267` `741,541` `4,160,838` `591,194` `20,248,024` `24,305` `1,380,222` `3,562` `4,104,327` `3,112,037` `387,906` `1,427,478` `231,310` `403,762` `11,074,909` `$` `31,322,933`	% `14` `-` `1` `3` `-` `29` `-` `1` `2` `13` `2`
6 (1) 6 (2) 6 (3) 8 6 (4) 7 (2) 6 (2) 7 (2) 6 (6) 6 (7) and 7 (2) 6 (2) 6 (3) 6 (8) 6 (9) 6 (10) 6 (11) 6 (30) 6 (12)
			`65`
			`-` `4` `-` `13` `10` `1` `5` `1` `1`
			`35`
			`100`

(Continued)

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2021 and 2020 were reviewed, not audited) September 30, 2021 December 31, 2020 Liabilities andEquity Notes AMOUNT % AMOUNT % Current liabilities 2100 Short-term borrowing 6 (13) `$ 2,564,544` `8` `$` `3,271,489` `10` 2120 Financial liabilities at fair value through profit or loss - current 6 (2) `3,409` `-` `30,047` `-` 2150 Notes payable `11` `-` `-` `-` 2170 Accounts payable `5,976,546` `18` `6,466,930` `19` 2180 Accounts payable - related parties 7 (2) `2,883,797` `8` `4,167,477` `12` 2200 Other payables 6 (2)(14) `1,254,365` `4` `1,601,184` `5` 2220 Other payables - related parties 7 (2) `162,355` `-` `54,269` `-` 2230 Current income tax liabilities 6 (30) `158,076` `-` `268,961` `1` 2300 Other current liabilities 6 (15)(16)、 7 (2) `3,694,174` `11` `3,799,911` `11` 21XX Current Liabilities `16,697,277` `49` `19,660,268` `58` Non-current liabilities 2530 Bonds payable 6 (16) `2,918,512` `9` `-` `-` 2540 Long-term borrowings 6 (17) `1,435,099` `4` `807,419` `2` 2570 Deferred income tax liabilities 6 (30) `1,260,741` `4` `1,169,790` `4` 2580 Non-current lease liabilities `70,138` `-` `115,044` `-` 2640 Accrued pension liabilities `83,704` `-` `85,701` `-` 2670 Other non-current liabilities 6 (8) `56,444` `-` `46,383` `-` 25XX Non-current liabilities `5,824,638` `17` `2,224,337` `6` 2XXX Total liabilities `22,521,915` `66` `21,884,605` `64` Equity attributable to owners of parent Share capital 6 (20) 3110 Common stock `2,110,570` `6` `2,093,332` `6` Capital surplus 6 (21) 3200 Capital surplus `4,336,737` `13` `3,960,123` `11` Retained earnings 6 (22) 3310 Legal reserve `2,152,834` `6` `2,006,040` `6` 3320 Special reserve `269,144` `1` `269,144` `1` 3350 Unappropriated retained earnings `2,808,429` `8` `3,433,731` `10` Other equity interest 6 (23) 3400 Other equity interest `(` `696,672 )` `(2)` `9,326` `1` 31XX Equity attributable to owners of the parent `10,981,042` `32` `11,771,696` `35` 36XX Non-controlling interest `484,338` `2` `499,047` `1` 3XXX Total equity `11,465,380` `34` `12,270,743` `36` Significant contingent liabilities and unrecognized contract commitments 9 Significant events after the balance sheet date 11 3X2X Total liabilities and equity `$ 33,987,295` `100` `$` `34,155,348` `100`	September 30, 2020	September 30, 2020
	AMOUNT `$ 2,606,664` `12,418` `74` `6,208,351` `3,827,899` `1,621,334` `68,963` `337,353` `1,283,755` `15,966,811` `2,196,107` `436,142` `984,831` `142,280` `86,110` `32,403` `3,877,873` `19,844,684` `2,093,519` `3,968,435` `2,006,040` `269,144` `2,858,517` `(` `209,692 )` `10,985,963` `492,286` `11,478,249` `$ 31,322,933`	%
Current liabilities 2100 Short-term borrowing 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 2670 Other non-current liabilities 25XX Non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity		`9` `-` `-` `20` `12` `5` `-` `1` `4`
		`51`
		`7` `1` `3` `1` `-` `-`
		`12`
		`63`
		`7` `13` `6` `1` `9` `1`
		`35`
		`2`
		`37`
		`100`

The accompanying notes are an integral part of these consolidated financial statements.

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(UNAUDITED)

Items	Notes	Three months ended September 30	Three months ended September 30		Nine months ended September 30	Nine months ended September 30
		2021	2020		2021	2020
				%
4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain (loss) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under the equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period	6 (24) and 7 (2) 6 (6) and 7 (2) 6 (28)(29) 12 (2) 6 (25) 6 (26) 6 (27) 6 (8) 6 (30)

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

Three months ended September 30	Three months ended September 30	Three months ended September 30	Three months ended September 30		Nine months ended September 30	Nine months ended September 30	Nine months ended September 30	Nine months ended September 30
2021		% ( 2) - - ( 2) ( 1) - - - ( 1) ( 3) 3 6 - 6 3 - 3 2.20 1.94 ial statemen	2020		2021	% ( 2) - - ( 2) ( 1) - - - ( 1) ( 3) - 2 1 3 - - - 2.84 2.64	2020
			AMOUNT ($ 173,001) - 403 ( 172,598) ( 15,855) ( 1,614) 65,891 ( 12,921) 35,501 ($ 137,097) $ 254,898 $ 393,808 ( 1,813) $ 391,995 $ 269,069 ( 14,171) $ 254,898 $	%	AMOUNT ($ 386,208) - ( 657) ( 386,865) ( 186,171) 363 ( 83,089) 51,340 ( 217,557) ($ 604,422) $ 91,466 $ 589,736 106,152 $ 695,888 ($ 8,931) 100,397 $ 91,466 $		AMOUNT ($ 980,467) 3,366 931 ( 976,170) ( 132,067) ( 2,746) ( 37,937) 31,338 ( 141,412) ($ 1,117,582) ($ 386,176) $ 743,957 ( 12,551) $ 731,406 ($ 363,187) ( 22,989) ($ 386,176) $ $
	$		$		$			$
	se consolidated financ	i	ts.

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

Notes Nine months ended September 2020 Balance at January 1,2020 Profit (loss) for the period Other comprehensive income for the period Total comprehensive income (loss) for the period Appropriation and distribution of 2019 retained earnings 6 (22) Legal reserve Cash dividends Convertible bonds converted to equity shares Share-based payment 6 (19) Disposal of investments in equity instruments measured at fair value 6 (3) Recognition of change in equity of associates in proportion to the Group’s ownership Changes in ownership interests in subsidiaries Acquired non-controlling interests in subsidiaries Balance at September 30, 2020 Nine months ended September 2021 Balance at January 1,2021 Profit (loss) for the period Other comprehensive income for the period Total comprehensive income (loss) for the period Appropriation and distribution of 2020 retained earnings 6 (22) Legal reserve Cash dividends Share-based payments 6 (19) Convertible bonds issuance 6 (21) Recognition of change in equity of associates in proportion to the Group’s ownership Acquired non-controlling interests in subsidiaries Balance at September 30, 2021	Share capital - common stock $ 2,086,684 - - - - - 4,135 2,700 - - - - $ 2,093,519 $ 2,093,332 - - - - - 17,238 - - - $ 2,110,570		(UNAUDITED) Equity attributable to ow	(UNAUDITED) Equity attributable to ow	ners of the parent		Total Non- Controlling interest Total equity $ 12,833,977 $ 164,415 $ 12,998,392 743,957 ( 12,551 ) 731,406 ( 1,107,144 ) ( 10,438)( 1,117,582 ) ( 363,187 ) ( 22,989 ) ( 386,176 ) - - - ( 1,608,376 ) - ( 1,608,376 ) 56,595 - 56,595 64,358 - 64,358 - - - 2,499 - 2,499 97 - 97 - 350,860 350,860 $ 10,985,963 $ 492,286 $ 11,478,249 $ 11,771,696 $ 499,047 $ 12,270,743 589,736 106,152 695,888 ( 598,667 ) ( 5,755 ) ( 604,422 ) ( 8,931 ) 100,397 91,466 - - - ( 1,068,244 ) - ( 1,068,244 ) 72,859 - 72,859 96,857 - 96,857 1,699 - 1,699 115,106 ( 115,106 ) - $ 10,981,042 $ 484,338 $ 11,465,380
		Capital surplus- additional paid-in capital $ 3,870,105 - - - - - 52,460 43,274 - 2,499 97 - $ 3,968,435 $ 3,960,123 - - - - - 162,952 96,857 1,699 115,106 $ 4,336,737	Legal reserve $ 1,745,768 - - - 260,272 - - - - - - - $ 2,006,040 $ 2,006,040 - - - 146,794 - - - - - $ 2,152,834	Special reserve Unappropriated Retained earnings Other equity interest $ 269,144 $ 3,834,442 $ 1,027,834 - 743,957 - - 3,366 ( 1,110,510 ) - 747,323 ( 1,110,510 ) - ( 260,272 ) - - ( 1,608,376 ) - - - - - - 18,384 - 145,400 ( 145,400 ) - - - - - - - - - $ 269,144 $ 2,858,517 ($ 209,692 ) $ 269,144 $ 3,433,731 $ 9,326 - 589,736 - - - ( 598,667 ) - 589,736 ( 598,667 ) - ( 146,794 ) - - ( 1,068,244 ) - - - ( 107,331 ) - - - - - - - - - $ 269,144 $ 2,808,429 ($ 696,672 )

The accompanying notes are an integral part of these consolidated financial statements.

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(Reviewed, Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax

Adjustments

Adjustments to reconcile profit (loss)

Depreciation expense-property, plants and equipment
Depreciation expense - right-of-use assets

Amortization

Expected credit impairment loss (gain)

Compensation cost of employee restricted shares

Loss (gain) on financial assets or liabilities at fair
value through profit or loss

Loss on disposal of investments

Share of profit of associates and joint ventures
accounted for using equity method

Interest income

Dividend income

Deferred income of government's compensation

Loss on disposal of property, plant and equipment

Finance costs

Interest expense-lease liability

Unrealized foreign exchange losses (gains)

Effect of exchange rate changes

Changes in operating assets and liabilities

Changes in operating assets

Financial assets/liabilities mandatorily measured at
fair value through profit or loss

Notes receivable

Accounts receivable (including related parties)

Other receivables (including related parties)

Inventories

Other current assets

Changes in operating liabilities

Accounts payable

Accounts payable - related parties

Other payables

Other payables - related parties

Contract liabilities

Refund liabilities

Other current liabilities

Other non-current liabilities

Cash (outflow) inflow generated from operations
Interest received

Dividend received

Interest paid

Income taxes paid

Net cash inflows (outflows) generated from (used
in) operating activities Nine months ended September 30
Notes
2021
2020

$
840,276 $
933,407

6 (9)(28)
318,084
246,861
6 (10)(28)
121,247
85,289
6 (11)(28)
96,507
100,556
12 (2)
4,672 (
359 )
6 (19)
72,859
64,398

(
3,832 )
(
3,216 )
6 (3)(27)
5,580
333
6 (8)
(
237,536 )
(
184,187 )
6 (25)
(
30,701 ) (
32,842 )
6 (26)
(
9,409 ) (
12,738 )

(
677 ) (
3,946 )
6 (27)
6,354
954

50,055
39,169
6 (10)
6,007
4,720

(
5,181 )
15,797

(
22,596 ) (
40,615 )

6 (32)
(
3,964 )
(
50,191 )

(
5 )
442

4,812,243 (
3,685,488 )

(
95,278 ) (
403,797 )

(
2,300,333 ) (
2,071,310 )

312,591 (
338,475 )

(
378,266 )
3,517,392

(
1,270,794 ) (
31,912 )

(
265,364 )
218,681

108,102 (
67,072 )

439,017
330,468

(
133,105 )
-

(
3,386 )
16,799

12,070
-

2,445,237 (
1,350,882 )

33,670
33,130

9,409
12,738

(
50,298 ) (
16,301 )

(
178,426 ) (
118,329 )

2,259,592
(
1,439,644 )

(Continued)

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(Reviewed, Unaudited)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in financial assets mandatorily measured at fair
value through profit or loss
Acquisition of financial assets at fair value through other
comprehensive income
Proceeds from disposal of financial assets at fair value
through other comprehensive income
Increase in financial assets at amortized cost
Decrease in financial assets at amortized cost
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets

Proceeds from disposal of intangible assets

(Increase) decrease in other non - current assets
(Increase) decrease in guarantee deposits paid
Acquisition of non-controlling interests in Subsidiary
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings

Repayment of short-term borrowings

Repayment of principal portion of lease liabilities

Corporate bonds issuance
Proceeds from long-term borrowings

Repayment of long-term borrowings
(Decrease) increase in other non - current liabilities

Cash dividends

Change in non-controlling interests
Cancellation of restricted employee shares
Net cash inflows generated from financing activities
Effect of change in foreign currency exchange
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Nine months ended September 30
Notes
2021
2020

6 (32)
($
293,717 )
$
-
(
30,000 )
6 (32)
83,970
206,987
(
3,853 )
(
876,562 )
839,871
6 (32)
(
948,233 )
(
1,281,878 )
23,544
14,669
6 (32)
(
81,382 ) (
24,893 )

7,606
-
37,734 (
18,034 )
8,413 (
33,604 )
(
364,914 )
-
(
690,961 ) (
2,043,315 )

6 (33)
6,721,568
2,166,379
6 (33)
(
7,407,352 )
-
6 (10)(33)(
136,584 ) (
160,549 )
6 (16)
3,015,000
6 (33)
689,476
436,323
- (
62,000 )
6 (33)
(
2,491 )
27,490
6 (33)
(
1,068,244 ) (
1,608,376 )
4 (3)
-
350,860
- (
40 )
1,811,373
1,150,087
(
160,359 ) (
65,134 )
3,219,645 (
2,398,006 )
3,046,963
6,589,863
$
6,266,608 $
4,191,857

The accompanying notes are an integral part of these consolidated financial statements.

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(REVIEWED, UNAUDITED)

1. HISTORY AND ORGANISATION

Merry Electronics Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) on December 24, 1975. The Company and its subsidiaries (collectively referred here in as the “Group”) are primarily engaged in manufacturing, processing, repairing, sales of electric appliance and audiovisual electric products, telecommunication equipment and apparatus electronic parts and components, computers and computing peripheral equipment, restrained telecom radio frequency equipment and medical appliances; planning, design, input as well as output of service items’ equipment; production as well as marketing management consultant of service items’ relevant business; and all business items that are not prohibited or restricted by law, except those that are subject to special approval. The Company’s shares were listed on the Taipei Exchange since August 1998 and transferred to the Taiwan Stock Exchange starting September 2000 with approval from the competent authority. The Company merged with its subsidiary, Huges Hi-Tech Inc., on September 1, 2005. The Company was the surviving company while Huges Hi-Tech Inc. was the dissolved company.

THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported to the Board of Directors on October 28, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Impact on the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2021 are as follows:

follows:
New Standards, Interpretations and Amendments Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2” Amendments to IFRS 16 “COVID-19-Related Rent Concessions after June 30, 2021”	Effective date by International Accounting Standards Board
	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

Note: The FSC permitted early adoption started from January 1, 2021.

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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(2) Impact on new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by FSC effective from 2022 are as follows:

follows:
New Standards, Interpretations and Amendments Amendments to IFRS 3 “'Reference to the Conceptual Framework” Amendments to IAS 16“Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract” Annual Improvements to IFRS Standards 2018–2020	Effective date by International Accounting Standards Board
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) Impact on IFRS issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

IFRSs as endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments Amendments to IFRS 10 and IAS 28, “Sale or contribution of assets between an investor and its associate or joint venture” IFRS 17 “Insurance contracts” Amendments to IFRS 17 “Insurance contracts” Amendments to IAS 1 “Classification of liabilities as current or non-current” Amendments to IAS 1 “The disclosure of accounting policies“ Amendments to IAS 8 “The definition of accounting estimates“ Amendments to IAS 12 “Deferred tax related to assets and liabilities arising from a single transaction”	Effective date by International Accounting Standards Board
	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

IFRSs as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 10 and IAS 28, “Sale or contribution of
assets between an investor and its associate or joint venture”
IFRS 17 “Insurance contracts”
Amendments to IFRS 17 “Insurance contracts”
Amendments to IAS 1 “Classification of liabilities as current or
non-current”
Amendments to IAS 1 “The disclosure of accounting policies“
Amendments to IAS 8 “The definition of accounting estimates“
Amendments to IAS 12 “Deferred tax related to assets and
liabilities arising from a single transaction”

Effective date by
International Accounting
Standards Board

To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2020, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

~12~

(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2020.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets and liabilities at fair value through other comprehensive income measured at fair value.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

Basis for preparation for the current period financial statements and the 2020 consolidated financial statements is the same.

B. Subsidiaries included in the consolidated financial statements:

Name of investor MEHO MEHO MEHO MEHO	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 Merry Electronics (HK) Co., Ltd. (MEST) Sales of the same products as the Company. 100.00% 100.00% 100.00% Merry Electronics (Thailand) Co., Ltd. (METC) The same main business as the Company. 99.99% 99.99% 99.99% Merry Electronics (U.S.A.) Co., Ltd. ("MECA") Agency selling microphone and security system manufactured by affiliates. 99.90% 99.90% 99.90% Danny Dynamics Limited ("DDBV") Equity investments. 100.00% 100.00% 100.00%	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 Merry Electronics (HK) Co., Ltd. (MEST) Sales of the same products as the Company. 100.00% 100.00% 100.00% Merry Electronics (Thailand) Co., Ltd. (METC) The same main business as the Company. 99.99% 99.99% 99.99% Merry Electronics (U.S.A.) Co., Ltd. ("MECA") Agency selling microphone and security system manufactured by affiliates. 99.90% 99.90% 99.90% Danny Dynamics Limited ("DDBV") Equity investments. 100.00% 100.00% 100.00%	Description
		100.00% 99.99% 99.90% 100.00%	NOTE 1 NOTE 1

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Name of investor MEHO MEHO MEHO MEHO MEHO MEHO MEST DDBV DDBV INSA SOCV SOCA MHKY FUSA FUSA	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 Merry Electronics (Singapore) Pte.Ltd. ("MESG") Manufacturing of other electronic components and circuit board. 100.00% 100.00% 100.00% Merry Healthcare Co., LTD. (“MHKY”) Sales of medical device. 100.00% 100.00% 100.00% Asian Elite International Ltd. (“MSCS”) Manufacturing and sales of speaker and amplifier. 100.00% 70.00% 70.00% Indigo Enterprise Inc. ("INSA") Equity investments. 100.00% 70.00% 70.00% Biotest Medical Corporation (“BTTT”) Manufacturing of medical device. 100.00% 100.00% 100.00% MERRY & LUXSHARE (VIETNAM) CO., LTD. ("MEVN") Manufacturing of speaker system and microphone for consumer electronics used. 51.00% 51.00% 51.00% Merry Electronics (Shenzhen)Co., Ltd. ("MECL") The same main business as the Company. 100.00% 100.00% 100.00% Universal Capital Investment ("UCMU") Equity investments. 100.00% 100.00% 100.00% Merrytech (HK) Co., Limited ("MTHK") Equity investments. 100.00% 100.00% 100.00% Sonavox Canada Inc. ("SOCV") Develop-to-order and appearance design of speaker and amplifier. 100.00% 100.00% 100.00% Sonavox Canada Holding. ("SOCA") Equity investments. 100.00% 100.00% 100.00% Seas Fabrikker ("SENM") Manufacturing and sales of speaker monomer. 100.00% 100.00% 100.00% Fulicare Co., Ltd. ("FUSA") Sales of medical device. 96.01% 97.12% 97.12% Fulicare Medical Instruments (Suzhou) Co., Ltd. ("FUSZ") Sales of medical device. 100.00% 100.00% 100.00% Fulicare Medical Instruments Manufacturing of medical device. 100.00% 100.00% 100.00%	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 Merry Electronics (Singapore) Pte.Ltd. ("MESG") Manufacturing of other electronic components and circuit board. 100.00% 100.00% 100.00% Merry Healthcare Co., LTD. (“MHKY”) Sales of medical device. 100.00% 100.00% 100.00% Asian Elite International Ltd. (“MSCS”) Manufacturing and sales of speaker and amplifier. 100.00% 70.00% 70.00% Indigo Enterprise Inc. ("INSA") Equity investments. 100.00% 70.00% 70.00% Biotest Medical Corporation (“BTTT”) Manufacturing of medical device. 100.00% 100.00% 100.00% MERRY & LUXSHARE (VIETNAM) CO., LTD. ("MEVN") Manufacturing of speaker system and microphone for consumer electronics used. 51.00% 51.00% 51.00% Merry Electronics (Shenzhen)Co., Ltd. ("MECL") The same main business as the Company. 100.00% 100.00% 100.00% Universal Capital Investment ("UCMU") Equity investments. 100.00% 100.00% 100.00% Merrytech (HK) Co., Limited ("MTHK") Equity investments. 100.00% 100.00% 100.00% Sonavox Canada Inc. ("SOCV") Develop-to-order and appearance design of speaker and amplifier. 100.00% 100.00% 100.00% Sonavox Canada Holding. ("SOCA") Equity investments. 100.00% 100.00% 100.00% Seas Fabrikker ("SENM") Manufacturing and sales of speaker monomer. 100.00% 100.00% 100.00% Fulicare Co., Ltd. ("FUSA") Sales of medical device. 96.01% 97.12% 97.12% Fulicare Medical Instruments (Suzhou) Co., Ltd. ("FUSZ") Sales of medical device. 100.00% 100.00% 100.00% Fulicare Medical Instruments Manufacturing of medical device. 100.00% 100.00% 100.00%	Description
		100.00% 100.00% 70.00% 70.00% 100.00% 51.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.12% 100.00% 100.00%	NOTE 1 NOTE 1, 5 NOTE 5 NOTE 1 NOTE 1, 4 NOTE 1 NOTE 1 NOTE 1 NOTE 1, 2 NOTE 1 NOTE 1

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Name of investor FUSA FUSZ and FUSA ASCX ASCX	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 (Xiamen) Co., Ltd. ("FUXM") Xiamen Etimbre Hearing Technology Co., Ltd. ("ETCX") Research and development, manufacturing as well as sales of hearing aid, hearing device and acoustics equipment. 100.00% 100.00% 100.00% Austar Hearing Science And Technology (Xiamen) Co., Ltd. ("ASCX") Research and development, manufacturing as well as sales of hearing aid, hearing device and acoustics equipment. 99.50% 99.50% 99.50% Austar Hearing Science And Technology (Zhangzhou) Co., Ltd. ("ASCZ") Manufacturing of hearing aid and acoustics for rehabilitation device. 0.00% 100.00% 100.00% Xiamen Laiyate Medical Devices Co., Ltd. ("LACX") Research and development as well as technical sales of software functions for hearing aid. 100.00% 100.00% 100.00%	Ownership (%) Name of subsidiary Main business Activities September 30, 2021 December 31, 2020 September 30, 2020 (Xiamen) Co., Ltd. ("FUXM") Xiamen Etimbre Hearing Technology Co., Ltd. ("ETCX") Research and development, manufacturing as well as sales of hearing aid, hearing device and acoustics equipment. 100.00% 100.00% 100.00% Austar Hearing Science And Technology (Xiamen) Co., Ltd. ("ASCX") Research and development, manufacturing as well as sales of hearing aid, hearing device and acoustics equipment. 99.50% 99.50% 99.50% Austar Hearing Science And Technology (Zhangzhou) Co., Ltd. ("ASCZ") Manufacturing of hearing aid and acoustics for rehabilitation device. 0.00% 100.00% 100.00% Xiamen Laiyate Medical Devices Co., Ltd. ("LACX") Research and development as well as technical sales of software functions for hearing aid. 100.00% 100.00% 100.00%	Description
		100.00% 99.50% 100.00% 100.00%	NOTE 1, 3 NOTE 1 NOTE 1, 6 NOTE 1

Note 1: The financial statements of the entity as of and for the nine months ended September 30, 2021 and 2020 were not reviewed by the independent auditors as the entity did not meet the definition of a significant subsidiary.
Note 2: In February 2020, March 2020, June 2020, August 2020 and May 2021 the Group increased its capital in FUSA by cash amounting to USD 76 thousand (NTD 2,238 thousand), USD 4,000 thousand (NTD 116,400 thousand), USD 963 thousand (NTD 28,026 thousand), USD 3,000 thousand (NTD 87,300 thousand) and USD 740 thousand (NTD 20,773 thousand), respectively.
Note 3: The Group increased its capital in ETCX by cash amounting to USD 566 thousand (NTD 16,748 thousand) on June 18, 2020.
Note 4: On February 27, 2020, the Board of Directors of the Group approved to establish a joint venture, MERRY & LUXSHARE (VIETNAM) CO., LTD., with Luxshare-ICT through investments amounting to USD 12,240 thousand (NTD 366,710 thousand) and USD 11,760 thousand (NTD 350,860 thousand), which resulted in acquiring 51% and 49% of the joint venture equity interests, respectively. The joint venture was established on May 9, 2020.
Note 5: The Group acquired 70% of ordinary shares of Asian Elite International Ltd. and Indigo

~15~

Enterprise Inc. in cash from 3[rd] party Newood Consultancy Limited and Keen Star Holding Limited on July 1, 2018, with an agreement of acquisition of the remaining 30% ordinary shares by the Group after 3 years from the trading date. The payment has been made amounting to USD 13,200 thousand (NTD 364,914 thousand) on June 30, 2021 in exchange for the remaining 30% ordinary shares. Please refer to Table 7 and Table 8 in Note 13. The total shareholding is 100%, and the business registration has been completed on August 23, 2021 and July 5, 2021, respectively.

Note 6: The Group dissolved and liquidated Austar Hearing Science and Technology (Zhangzhou) Co., Ltd. with the resolution of the Board of the company on July 1, 2021. The business registration has been completed on August 31, 2021.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions:
- None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Employee benefits

Pensions

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost

rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

(5) Income tax

The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

There was no significant change in the reporting period. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits Short-term securities		September 30, 2021 $ 1,871 6,089,072 105,665 70,000 $ 6,266,608	December 31, 2020 $ 1,073 3,032,069 13,821 - $ 3,046,963	September 30, 2020 $ 836 3,726,287 344,734 120,000 $ 4,191,857
					$

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The Group has cash and cash equivalents that are in restricted use due to the application of

~16~

Taiwan Industry Innovation Platform Program (TIIP). Such restricted assets had been classified as financial assets at amortized cost. Please refer to Note 8.

C. The Group’s time deposits with maturity over 3 months had been classified as current financial assets at amortized cost on September 30, 2021, December 31, 2020 and September 30, 2020.

(2) Financial assets at fair value through profit or loss

Items Current items: Financial assets mandatorily measured at fair value through profit or loss -Funds -Non-hedging derivatives -Call options of convertible bonds -Bonds Valuation adjustment Total Non-current items: Funds Items Current items: Financial liabilities held for trading	September 30, 2021 $ 50,000 3,137 300 292,322 6,407 $ 352,166 $ 27,863 September 30, 2021 $ 3,409	December 31, 2020 $ 50,000 26,316 446 - 2,157 $ 78,919 $ 26,468 December 31, 2020 $ 30,047	September 30, 2020 $ 50,000 16,316 670 - 1,254 $ 68,240 $ 24,305 September 30, 2020 $ 12,418

A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

or loss are listed below:
Net gains on financial assets (liabilities) at fair value through profit or loss Net gains on financial assets (liabilities) at fair value through profit or loss	Three months ended September 30 2021 2020 $ 6,262 $ 24,720 Nine months ended September 30


		2020 $ 55,613

~17~

B. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed as follows:

Derivative instruments Forward foreign exchange contract to sell Forward foreign exchange contract to buy Derivative instruments Forward foreign exchange contract to sell Forward foreign exchange contract to sell Forward foreign exchange contract to sell Forward foreign exchange contract to buy Forward foreign exchange contract to buy Derivative instruments Forward foreign exchange contract to sell Forward foreign exchange contract to sell Forward foreign exchange contract to sell Forward foreign exchange contract to buy Forward foreign exchange contract to buy			September 30, 2021
		Contract amount (Notional principal) USD 26,000 thousand USD 26,000 thousand
		Contract amount (Notional principal) USD 70,000 thousand USD 3,000 thousand USD 8,189 thousand USD 84,000 thousand USD 8,205 thousand
		Contract amount (Notional principal) USD 30,300 thousand USD 8,000 thousand USD 16,182 thousand USD 40,300 thousand USD 16,211 thousand

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

C. As of September 30, 2021, December 31, 2020 and September 30, 2020, the collectible payments for settled transactions amounted to $42,186 thousand (shown as other receivables), $0 thousand and $325,133 thousand, respectively. As of September 30, 2021, December 31, 2020 and September 30, 2020, the Group had outstanding payments for settled transactions amounting to $42,259 thousand (shown as other payables), $306 thousand and $325,438 thousand, respectively.

~18~

D. The Group has no financial assets at fair value through profit or loss pledged to others as collateral.
E. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12 (2).

(3)	Financial assets at fair value through other comprehensive income Items September 30, 2021 December 31, 2020 Current items: Debt instruments Bonds $ - $ 89,550 Valuation adjustment - (3,735) - 85,815 Equity instruments Stocks 106,080 106,080 Valuation adjustment 2,896 3,284 108,976 109,364 $ 108,976 $ 195,179 Items September 30, 2021 December 31, 2020 Non-current items: Debt instruments Bonds $ 144,625 $ 144,625 Valuation adjustment (792) 1,620 143,833 146,245 Equity instruments Listed stocks $ 748,154 $ 748,154 Unlisted stocks 78,214 73,884 826,368 822,038 Valuation adjustment 217,480 604,870 1,043,848 1,426,908 Total $ 1,187,681 $ 1,573,153	September 30, 2020 $ 89,550 (1,879) 87,671 106,080 3,199 196,279 $ 196,950 September 30, 2020 $ - - - $ 748,154 63,785 811,939 568,283 1,380,222 $ 1,380,222

A. The Group has elected to classify equity and debt investments that are considered to be strategic investments or steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $1,296,657 thousand, $1,768,332 thousand and $1,577,172 thousand as on September 30, 2021, December 31, 2020 and September 30, 2020, respectively.
B. During the nine months ended September 30, 2021, the Group repurchased bond investments at fair value of $83,970 thousand due to the maturity of bonds and resulted in cumulative losses on disposal amounting to $5,580 thousand (shown as other gains and losses).
C. During the nine months ended September 30, 2020, the Group repurchased bond investments at fair value of $30,274 thousand due to the maturity of bonds and resulted in cumulative losses on disposal amounting to $333 thousand (shown as other gains and losses). Aiming to satisfy its capital needs, the Company sold $172,377 thousand of equity investments at fair value and resulted in cumulative gains on disposal amounting to $145,400 thousand (transferred from other equity interest to unappropriated retained earnings) during the nine months ended September 30, 2020.
D. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

~19~

Equity instruments at fair value through othercomprehensive income Fair value change recognized in other comprehensive income Cumulative (gains) losses reclassified to retained earnings due to derecognition Debt instruments at fair value through other comprehensive income Fair value change recognized through profit or loss Fair value change recognized in other comprehensive income Cumulative other comprehensive (loss) income reclassified to profit or loss Reclassified due to derecognition Interest income recognized in profit or loss Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income Cumulative (gains) losses reclassified to retained earnings due to derecognition Debt instruments at fair value through other comprehensive income Fair value change recognized through profit or loss Fair value change recognized in other comprehensive income Cumulative other comprehensive (loss) income reclassified to profit or loss Reclassified due to derecognition Interest income recognized in profit or loss	Three months ended September 30 2021 2020 ($ 197,680) ($ 173,001) $- ($ 57,822) ($ 50) $- ($ 444) ($ 1,614) $- $- $ 1,313 $ 274 Nine months ended September 30 2021 2020 ($ 386,208) ($ 980,467) $- ($ 145,400) $ 960 $- ($ 5,217) ($ 3,079) $ 5,580 $ 333 $ 4,462 $ 1,733
	2021 ($ 386,208) $- $ 960 ($ 5,217) $ 5,580 $ 4,462

Equity instruments at fair value through
othercomprehensive income
Fair value change recognized in other
comprehensive income
Cumulative (gains) losses reclassified to
retained earnings due to derecognition
Debt instruments at fair value through other
comprehensive income
Fair value change recognized through
profit or loss
Fair value change recognized in other
comprehensive income
Cumulative other comprehensive (loss)
income reclassified to profit or loss
Reclassified due to derecognition
Interest income recognized in profit or
loss
Equity instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive income
Cumulative (gains) losses reclassified to
retained earnings due to derecognition
Debt instruments at fair value through other
comprehensive income
Fair value change recognized through
profit or loss
Fair value change recognized in other
comprehensive income
Cumulative other comprehensive (loss)
income reclassified to profit or loss
Reclassified due to derecognition
Interest income recognized in profit or
loss

Three months ended September 30
2021
2020
($ 197,680)
($ 173,001)
$-
($ 57,822)
($ 50)
$-
($ 444)
($ 1,614)
$-
$-
$ 1,313
$ 274
Nine months ended September 30
2021
2020
($ 386,208)
($ 980,467)
$-
($ 145,400)
$ 960
$-
($ 5,217)
($ 3,079)
$ 5,580
$ 333
$ 4,462
$ 1,733

2021
($ 386,208)
$-
$ 960
($ 5,217)
$ 5,580
$ 4,462

E. As on September 30, 2021, December 31, 2020 and September 30, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $1,296,657 thousand, $1,768,332 thousand and $1,577,172 thousand, respectively.
F. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.
G. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12 (2).

~20~

H. The counterparties of the Company’s investments in debt instruments have good credit quality; those debt securities are all rated as investment grade.
(4) Accounts receivable

Accounts receivable
September 30, 2021 December 31, 2020 Accounts receivable $ 7,859,403 $ 12,471,094 Less: Allowance for doubtful accounts ( 32,985) ( 29,676) $ 7,826,418 $ 12,441,418 A. The aging analysis of accounts receivable is as follows: September 30, 2021 December 31, 2020 Not past due $ 7,657,011 $ 12,401,873 Up to 30 days 160,083 38,897 31 to 90 days 29,304 6,066 91 to 180 days 719 24,136 Over 180 days 12,286 122 $ 7,859,403 $ 12,471,094	September 30, 2021		December 31, 2020		September 30, 2020
					$ 9,000,142 ( 28,857) $ 8,971,285 September 30, 2020

		$ 7,657,011 160,083 29,304 719 12,286 $ 7,859,403		$ 12,401,873 38,897 6,066 24,136 122 $ 12,471,094		$ 8,945,138 27,123 1,902 1,324 24,655 $ 9,000,142

The above aging analysis was based on past due date.

B. As of September 30, 2021, December 31, 2020, September 30, 2020, and January 1, 2020, the balances of receivables (including notes receivable) from contracts with customers amounted to $7,826,423 thousand, $12,441,418 thousand, $8,971,294 thousand and $5,448,381 thousand, respectively.
C. The Group insured against its accounts receivable since December, 2020, which the insured amount has been reviewed and granted by the insurance company. If bad debts occur, the insurance company will settle the claim up to 90% of the insured amount. As of September 30, 2021, December 31, 2020 and September 30, 2020, the balance of insured accounts receivable amounted to $6,423,328 thousand, $10,360,837 thousand and $0 thousand, respectively.
D. The Group does not hold any collateral as security.
E. The Company entered into a factoring agreement which has no right of recourse with Bank of America. As of September 30, 2021, there were no accounts receivable that were expected to be transferred (reclassified as financial assets at fair value through other comprehensive income). Please refer to Note 6 (5) for information on transfers of financial assets.
F. Information relating to credit risk of accounts receivable is provided in Note 12 (2).
(5) Transfer of financial assets Transferred financial assets that are derecognized in their entirety

On October 2, 2019, the Group entered into a factoring agreement with Bank of America to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognized the transferred accounts receivable. As of September 30, 2021, there was no amount that had been past due.

~21~

(6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods	September 30, 2021
	Cost $ 2,433,771 1,044,148 2,765,379 $ 6,243,298		Book value $ 2,335,492 1,034,668 2,721,832 $ 6,091,992
	Cost $ 1,748,375 543,188 1,613,403 $ 3,904,966		Book value $ 1,682,967 534,870 1,573,822 $ 3,791,659
	Cost $ 1,404,800 1,255,620 1,625,683	Allowance for valuation loss ($ 62,923) ( 7,327) ( 55,015) ($ 125,265)	Book value $ 1,341,877 1,248,293 1,570,668 $ 4,160,838

	$ 4,286,103

The cost of inventories recognized as expense for the period:

Cost of goods sold Gain on reversal of loss on slow-moving inventories and decline in market value Loss on scrapping inventory Loss (gain) on physical inventory Cost of goods sold (Gain on reversal of) loss on slow-moving inventories and decline in market value Loss on scrapping inventory Loss (gain) on physical inventory	Three months ended September 30	Three months ended September 30	Three months ended September 30
	2021 $ 7,098,289 ( 17,074) 12,851 19,461
	2021 $ 21,359,675 37,999 33,202 19,356		2020 $ 18,975,252 ( 57,407) 28,420 343 $ 18,946,608

	$ 21,450,232

The Group reversed a previous inventory write-down because of the sale of certain written-down inventories by the Group for the three months ended September 30, 2021 and 2020, and for the nine months ended September 30, 2020.

~22~

(7) Other current assets

Other current assets
Tax refund receivable (including input tax) Prepayment for purchases Contract assets Others	September 30, 2021 $ 225,954 13,031 58,110 81,638 $ 378,733	December 31, 2020 $ 490,909 14,241 43,363 160,125 $ 708,638	September 30, 2020 $ 359,651 15,589 36,437 179,517 $ 591,194

(8) Investments accounted for using the equity method

	Nine months ended September 30 2021 2020 4,479,708 $ 3,951,152 237,536 184,187 1,699 2,499 83,089) ( 37,937) 15) 1,060 - 3,366 4,635,839 $ 4,104,327 December 31, 2020 September 30, 2020 $ 3,146,355 $ 2,830,435 910,702 825,501 372,839 367,861 49,812 80,530 ( 1,070) ( 1,062) 4,478,638 4,103,265 1,070 1,062 $ 4,479,708 $ 4,104,327	Nine months ended September 30 2021 2020 4,479,708 $ 3,951,152 237,536 184,187 1,699 2,499 83,089) ( 37,937) 15) 1,060 - 3,366 4,635,839 $ 4,104,327 December 31, 2020 September 30, 2020 $ 3,146,355 $ 2,830,435 910,702 825,501 372,839 367,861 49,812 80,530 ( 1,070) ( 1,062) 4,478,638 4,103,265 1,070 1,062 $ 4,479,708 $ 4,104,327
	2021 4,479,708 237,536 1,699 83,089) 15) -
$ ( (		$ (
$	4,635,839	$

~23~

B. Share of profit (loss) of associates accounted for using the equity method：

Three months ended September 30	Three months ended September 30	Three months ended September 30
2021
($ 12,630) 53,922 1,543 ( 2,203) 1
2021		2020 $ 13,155 164,668 ( 7,062) 13,639 ( 213) $ 184,187
$ 67,807 163,827 5,909 ( 1) ( 6) $ 237,536
	$ 237,536

C. Associates

(a) The basic information of the associates that is material to the Group is as follows:

Company name Principal place of business MECE Mainland of China	Shareholding ratio September 30, 2021 December 31, 2020 September 30, 2020 49.00% 49.00% 49.00%	Nature of relationship Holding more than 20% of voting right	Method of measurement Equity method

(b) The summarized financial information of the associates that is material to the Group is as follows:

Balance sheet

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Share in associate’s net assets Realized (unrealized) gain or loss from upstream and side stream transactions Carrying amount of the associate	MERRY ELECTRONICS (SUZHOU) CO., LTD. September 30, 2021 December 31, 2020 September 30, 2020 $ 4,557,205 $ 4,958,305 $ 3,648,938 6,187,249 6,448,198 6,443,503 ( 4,136,353) ( 4,794,701) ( 4,036,518) ( 37,509) ( 50,495) ( 67,787) $ 6,570,592 $ 6,561,307 $ 5,988,136 $ 3,219,590 $ 3,215,041 $ 2,934,187 ( 57,790) ( 68,686) ( 103,752) $ 3,161,800 $ 3,146,355 $ 2,830,435

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Statement of comprehensive income

Statement of comprehensive income
MERRY ELECTRONICS (SUZHOU) CO., LTD. Three months ended September 30 2021 2020 Revenue $ 2,285,495 $ 2,680,567 Profit for the period from continuing operations $ 5,624 $ 32,717 Total comprehensive income $ 5,624 $ 32,717 MERRY ELECTRONICS (SUZHOU) CO., LTD. Nine months ended September 30 2021 2020 Revenue $ 6,727,683 $ 6,860,327 Profit for the period from continuing operations $ 116,145 $ 105,408 Total comprehensive income $ 116,145 $ 105,408 The carrying amount of the Group’s interests in all individually immaterial associates a the Group’s share of the operating results are summarized below: Three months ended September 30 2021 2020 Share of profit of associates and joint ventures accounted for using the equity method $ 53,263 $ 90,574 Other comprehensive income (loss), net of tax ( 3,521) 16,973 Total comprehensive income $ 49,742 $ 107,547 Nine months ended September 30 2021 2020 Share of profit of associates and joint ventures accounted for using the equity method $ 169,729 $ 171,032 Other comprehensive income (loss), net of tax ( 24,583) ( 6,451) Total comprehensive income $ 145,146 $ 164,581	MERRY ELECTRONICS (SUZHOU) CO., LTD. Three months ended September 30
	2021
	2021	2020 $ 171,032 ( 6,451) $ 164,581
	$ 169,729 ( 24,583)
	$ 145,146

(c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below:

Note: Partial investments accounted for using the equity method are share of profit (loss) of associates and joint ventures recognized based on financial statements prepared by associates and not reviewed by independent auditors.

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(9) Property, plant and equipment

			Nine months ended September 30, 2021	Nine months ended September 30, 2021	Nine months ended September 30, 2021
Cost Land Land improvements Buildings and structures Machinery Transportationequipment Office equipment Others Unfinished construction Total Accumulated depreciation Land improvements Buildings and structures Machinery Transportationequipment Office equipment Others Total	Opening balance $ 794,952 621 1,284,577 2,366,092 30,451 279,929 247,668 272,471 $ 5,276,761 ($ 621) ( 467,206) ( 811,707) ( 20,392) ( 171,656) ( 110,441) ($ 1,582,023) $ 3,694,738	$ $ $ ( ( ( ( (		Transfers $ - - 112,556 11,409 - 4,414 3,344 ( 131,723) $- $ - - - - - - $-	Effect of foreign currency exchange difference ($ 4,708) ( 83) ( 50,171) ( 71,923) ( 479) ( 6,732) ( 4,863) ( 1,917) ($ 140,876) $ 83 17,484 25,539 322 3,991 2,190 $ 49,609	Ending balance $ 790,244 538 1,370,745 2,686,676 21,819 274,956 233,398 254,641 $ 5,633,017 ($ 538) ( 489,277) ( 944,002) ( 14,483) ( 184,841) ( 105,270) ($ 1,738,411) $ 3,894,606

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			Nine months ended September 30, 2020	Nine months ended September 30, 2020
Cost Land Land improvements Buildings and structures Machinery Transportationequipment Office equipment Others Unfinished construction Total Accumulated depreciation Land improvements Buildings and structures Machinery Transportationequipment Office equipment Others Total	Opening balance $ 596,275 656 1,016,760 1,472,017 30,774 242,600 136,073 132,528 $ 3,627,683 ($ 580) ( 439,193) ( 636,595) ( 17,024) ( 161,280) ( 87,918) ($ 1,342,590) $ 2,285,093	$	Transfers $ - - ( 51,400) 1,917 - ( 555) ( 1,733) ( 83,174) ($ 134,945) $ - 51,400 ( 90) - 252 435 $ 51,997	Effect of foreign currency exchange difference	Ending balance $ 593,107 601 993,979 1,941,529 29,786 273,231 218,026 546,917 $ 4,597,176 ($ 601) ( 448,661) ( 744,938) ( 18,937) ( 171,318) ( 100,684) ($ 1,485,139) $ 3,112,037
				($ 3,168) ( 55) ( 27,287) ( 30,822) ( 340) ( 3,794) ( 2,339) ( 5,862) ($ 73,667) $ 51 6,644 10,782 200 2,261 1,439 $ 21,377
		$

A. The Group has no property, plant and equipment that apply to capitalization of borrowing costs.
B. The Group has no property, plant and equipment pledged to others as collateral.

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(10) Leasing arrangements - lessee
A. The Group leases various assets including land, buildings, machinery and equipment as well as business vehicles. Rental contracts are typically made for periods of 1 to 30 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

B. The carrying amount of right-of-use assets and the depreciation charge September 30, 2021 December 31, 2020 Carrying amount Carrying amount Land $ 87,620 $ 92,481 Buildings and structures 134,814 254,778 Machinery and equipment 4,707 5,810 Transportation equipment 1,256 2,701 Office equipment 75 220 Other equipment 45 20 $ 228,517 $ 356,010	are as follows: September 30, 2020 Carrying amount $ 94,376 284,598 6,280 2,458 194 - $ 387,906

Land Buildings and structures Machinery and equipment Transportation equipment Office equipment Other equipment Land Buildings and structures Machinery and equipment Transportation equipment Office equipment Other equipment	Three months endedSeptember30	Three months endedSeptember30
	2021 2020 Depreciation charge Depreciation charge $ 1,207 $ 1,303 32,325 46,146 347 359 269 373 38 30 45 - $ 34,231 $ 48,211 Nine months endedSeptember30
	2021 Depreciation charge $ 3,582 115,379 1,103 927 145 111 $ 121,247	2020 Depreciation charge $ 2,886 80,115 1,036 1,121 121 - $ 85,289

C.For the three months and nine months ended September 30, 2021 and 2020, the additions to right-ofuse assets were $9,671 thousand, $242,626 thousand, $40,495 thousand and $327,235 thousand, respectively.

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D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Items affecting profit or loss Interest expense on lease liabilities	Three months ended September 30	Three months ended September 30
	2021 2020 $ 1,237 $ 3,199 Nine months ended September 30
	2021 $ 6,007	2020 $ 4,720

E. For the three and nine months ended September 30, 2021 and 2020, the Group’s total cash outflow for leases were $31,894 thousand, $108,947 thousand, $142,591 thousand and $160,549 thousand, respectively..

(Remainder of page intentionally left blank)

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(11) Intangible assets

Cost			Nine months ended September 30, 2021	Nine months ended September 30, 2021
	Opening balance	Additions	Reductions	Effect of foreign currency exchange difference $ - ( 382) - - - ( 60) ($ 442) ($ 110) - - - 18 ($ 92)		Ending balance
Goodwill Computer software Customer relationship Trademarks Know-how Others Total Accumulated amortization Computer software Customer relationship Trademarks Know-how Others Total	$ 937,379 500,570 326,550 61,481 115,748 41,805 $ 1,983,533 ($ 356,307) ( 109,439) ( 13,367) ( 57,874) ( 28,456) ($ 565,443) $ 1,418,090	$ - 37,553 - - - 3,793 $ 41,346 ($ 36,784) ( 33,048) ( 4,139) ( 17,362) ( 5,174) ($ 96,507)	$ - ( 10,623) - - - - ($ 10,623) $ 3,017 - - - - $ 3,017			$ 937,379 527,118 326,550 61,481 115,748 45,538 $ 2,013,814 ($ 390,184) ( 142,487) ( 17,506) ( 75,236) ( 33,612) ($ 659,025) $ 1,354,789

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Cost			Nine months ended September 30, 2020	Nine months ended September 30, 2020
	Opening balance	Additions	Reductions	Effect of foreign currency exchange difference $ - ( 766) - - - ( 173) ($ 939) $ 663 304 ( 250) ( 54) 25 $ 688	Ending balance
Goodwill Computer software Customer relationship Trademarks Know-how Others Total Accumulated amortization Computer software Customer relationship Trademarks Know-how Others Total	$ 937,379 457,428 326,550 61,481 115,748 37,295 $ 1,935,881 ($ 304,302) ( 65,679) ( 7,598) ( 34,671) ( 20,855) ($ 433,105) $ 1,502,776	$ - 23,439 - - - 2,894 $ 26,333 ($ 40,094) ( 33,048) ( 4,139) ( 17,362) ( 5,913) ($ 100,556)	$ - ( 860) - - - - ($ 860) 36 - - - - $ 36		$ 937,379 479,241 326,550 61,481 115,748 40,016 $ 1,960,415 ($ 343,697) ( 98,423) ( 11,987) ( 52,087) ( 26,743) ($ 532,937) $ 1,427,478

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A. Details of amortization on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses Operating costs Selling expenses Administrative expenses Research and development expenses		Three months ended September 30	Three months ended September 30	Three months ended September 30
		2021
		$ 3,113 2,838 15,764 10,682
		$ 32,397
		2021		2020 $ 11,700 9,244 47,133 32,479 $ 100,556
		$ 7,955 9,072 48,003 31,477
		$ 96,507

B. As of September 1, 2005, the Group merged with Huges Hi-Tech Inc. Thus, the transaction generated goodwill in the amount of $139,735 thousand. The goodwill from business combination shall be tested annually at least for impairment in accordance with IAS 36.

The recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired. The key assumptions used for value-in-use calculations are as follows:

The cash flow projections are based on financial budgets approved by the management covering a five-year period. As the Company is committed to developing and taking blue tooth orders, it expects 10% year-on-year growth in sales through the launching of new products and improving its technologies during this period.

Management determined budgeted gross margin based on past performance and their expectations of market development. The weighted average growth rate used is consistent with the projection included in industry reports. The discount rate of 10.53% used was pre-tax and reflected specific risks relating to the relevant operating segments.

C. As of September 30, 2021, the goodwill arose from acquiring Asian Elite International Ltd. and Indigo Enterprise Inc. amounting to $581,644 thousand due to the benefits from production technology and market channel such as smart speakers of the companies that are expected to be merged. The goodwill from business combination shall be tested annually at least for impairment in accordance with IAS 36.

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The cash flow projections are based on financial budgets approved by the management covering a five-year period. As the Company is committed to developing and taking smart speaker orders, it expects 12%-25% year-on-year growth in sales through the launching of new products and improving its technologies during this period.

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rate used is consistent with the projection included in industry reports. The discount rate of 16.90% used was pre-tax and reflected specific risks relating to the relevant operating segments.

D. As of September 30, 2021, the goodwill arose from acquiring Austar Hearing Science and Technology (Xiamen) Co. , Ltd. amounting to $210,299 thousand due to the benefits from production technology and market channel such as hearing-aids of the company that are expected to be merged. The goodwill from business combination shall be tested for impairment at least annually in accordance with IAS 36.

The cash flow projections are based on financial budgets approved by the management covering a five-year period. As the Company is committed to developing and taking hearing-aids orders, it expects 3%-15% year-on-year growth in sales through the launching of new products and improving its technologies during this period.

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rate used is consistent with the projection included in industry reports. The discount rate of 16.17% used was pre-tax and reflected specific risks relating to the relevant operating segments.

(12) Other non-current assets

Other non-current assets
Prepayments for property, plant and equipment (including intangible asset) Refundable deposits Others	September 30, 2021 $ 158,827 62,301 38,208 $ 259,336	December 31, 2020 $ 121,924 71,625 77,958 $ 271,507	September 30, 2020 $ 323,750 51,181 28,831 $ 403,762

(13)	Short-term borrowings Type of borrowings Bank borrowings Credit loan	September 30, 2021 $ 2,564,544	September 30, 2021 $ 2,564,544	Interest rate range Collateral 0%~4.00% None
			$ 2,564,544

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Type of borrowings Bank borrowings Credit loan Type of borrowings Bank borrowings Credit loan	December 31, 2020 $ 3,271,489 September 30, 2020 $ 2,606,664	Interest rate range Collateral 0%~4.35% None Interest rate range Collateral 0%~4.57% None

A. Interest expense recognized in profit or loss amounted to $8,275 thousand, $3,703 thousand, $23,988 thousand and $16,410 thousand for the three months and nine months ended September 30, 2021 and 2020, respectively.
B. The Group provided endorsements and guarantees for the credit loans as of September 30, 2021, December 31, 2020 and September 30, 2020.

(14) Other payables

Other payables
	September 30, 2021		December 31, 2020		September 30, 2020
Payroll and bonus payable	$	421,895	$	466,806	$	427,075
Payables on equipment
(Including intangible assets)		279,065		360,938		190,125
Employee compensation payable		80,955		127,027		168,059
Directors’ remuneration
payable		16,095		25,575		20,178
Others		456,355		620,838		815,897
	$	1,254,365	$	1,601,184	$	1,621,334

(15) Other current liabilities

Other current liabilities
Bonds payable-expiring within one year Contract liability Agreed liabilities on acquisition ofsubsidiaries (Note) Refund liabilities Current lease liability Other current liabilities -others	September 30, 2021		December 31, 2020 $ 2,203,801 627,002 402,072 343,164 146,612 77,260 $ 3,799,911		September 30, 2020
		$ 2,225,952 1,065,390 - 210,027 69,188 123,617 $ 3,694,174			$ - 446,683 402,072 222,199 148,210 64,591 $ 1,283,755

Note: The Group acquired 70% of ordinary shares of Asian Elite International Ltd. and Indigo Enterprise Inc. in cash on July 1, 2018, with an agreement of acquisition of the remaining 30% ordinary shares by the Group after 3 years from the trading date. In accordance with the relevant contracts, the Group had recognized 30% of subsequent equity investment

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obligations. Please refer to Note 4 (3).

(16) Bonds payable

Bonds payable
Bonds payable Less: Discount on bonds payable Sub-total Less: Expiring within one year	September 30, 2021 $ 5,231,900 (87,436) 5,144,464 (2,225,952) $ 2,918,512	December 31, 2020 $ 2,231,900 (28,099) 2,203,801 (2,203,801) $-	September 30, 2020
				$ 2,231,900 (35,793) 2,196,107 - $ 2,196,107

A. The details of the second domestic unsecured convertible bonds issued by the Company on December 11, 2018 are as follows:
(a) The terms of the second domestic unsecured convertible bonds issued by the Company are as follows:
- i. The competent authority has approved the Company’s second issuance of domestic unsecured corporate bonds. The bonds are for a total issuance amount of $3,015,000 thousand and a coupon rate of 0%, cover a 3-year period of issuance and a circulation period from December 11, 2018 to December 11, 2021, and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on December 11, 2018.
- ii. The creditors have the right to ask for conversion of the bonds into common shares of the Company by Taiwan Depository & Clearing Corporation through Securities Firms during the period from the date after three months of the bonds issue to the maturity date, except for (i) the stop transfer period for common shares as specified in the terms of the bonds or the laws/regulations; (ii) the Company’s book closure date of stock dividends, book closure date of cash dividends, the period between the date that is 15 business days before the book closure date of a capital increase to the ex-right date; (iii) the period between the record date of a capital reduction and the prior day before the commencement of share trading after shares are repurchased. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.
- iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price will be reset based on the pricing model in the terms of the bonds on each effective date regulated by the terms. As of September 30, 2021, the conversion price of convertible bonds was $126.6 per share.
- iv. The Company may repurchase all the bonds outstanding in cash at the bonds’ face value, based on the Company’s redemption rights to the bonds under Article 18 of the terms of issuance and conversion, after the following events occur: (i) the closing price of the Company common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three month of the bonds issue to 40 days before the maturity date, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount during the period from the date after three months of the bonds issue to 40 days before the maturity date.

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v. Under the terms of issuance and conversion, all bonds redeemed (including bonds repurchased from the securities trading markets), matured and converted are retired and not to be sold or reissued; the conversion rights attached to the bonds are also extinguished.
(b) As of September 30, 2021, the bonds amounting to $768,100 thousand (face value) had been converted into 5,299 thousand shares of common stock. After the issuance of the convertible bonds, if the number of common shares increases, the Company shall adjust the conversion price to $126.6 per share in line with the formula of the issuance article.
B. The details of the third domestic unsecured convertible bonds issued by the Company on August 11, 2021 are as follows:
(a) The terms of the third domestic unsecured convertible bonds issued by the Company are as follows
i. The competent authority has approved the Company’s third issuance of domestic unsecured corporate bonds. The bonds are for a total issuance amount of $3,015,000 thousand and a coupon rate of 0%, cover a 3-year period of issuance and a circulation period from August 11, 2021 to August 11, 2024, and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on August 11, 2021.
ii. The creditors have the right to ask for conversion of the bonds into common shares of the Company by Taiwan Depository & Clearing Corporation through Securities Firms during the period from the date after three months of the bonds issue to the maturity date, except for (i) the stop transfer period for common shares as specified in the terms of the bonds or the laws/regulations; (ii) the Company’s book closure date of stock dividends, book closure date of cash dividends, the period between the date that is 15 business days before the book closure date of a capital increase to the ex-right date; (iii) the period between the record date of a capital reduction and the prior day before the commencement of share trading after shares are repurchased; (iv) the period from the first day on which stock face value changes stop to the day before the transaction of new shares exchange . The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.
iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price will be reset based on the pricing model in the terms of the bonds on each effective date regulated by the terms. As of September 30, 2021, the conversion price of convertible bonds was $116.9 per share.
iv. The Company may repurchase all the bonds outstanding in cash at the bonds’ face value, based on the Company’s redemption rights to the bonds under Article 18 of the terms of issuance and conversion, after the following events occur: (i) the closing price of the Company common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three month of the bonds issue to 40 days before the maturity date, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount during the period from the date after three months of the bonds issue to 40 days before the maturity date.
v. Under the terms of issuance and conversion, all bonds redeemed (including bonds repurchased

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from the securities trading markets), matured and converted are retired and not to be sold or reissued; the conversion rights attached to the bonds are also extinguished.

C. Regarding the issuance of convertible bonds, the equity conversion options amounting to $196,048 thousand were separated from the liability component and were recognized in ‘capital surplus - share options’ in accordance with IAS 32 as of September 30, 2021. The call options embedded in bonds payable were separated from their host contracts and were recognized in ‘financial assets at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts.

- (17) Long term borrowings

ong-term borrowings
Type of borrowings Long-term bank borrowings Credit loan Credit loan Less: Expiring within one year or one operating cycle	Borrowing period and repayment term Borrowing period is from 2020/2/20 to 2025/2/20; interest is repayable monthly; principal is repayable starting from 2022 (Note 1 and 2) Borrowing period is from 2020/2/20 to 2027/2/19; interest is repayable monthly; principal is repayable starting from 2022	Interest rate range 0.30%~0.83% 0.35%~1.20%	Collateral None None	September 30, 2021 $ 720,000 774,543 1,494,543 (59,444) $ 1,435,099

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Type of borrowings Long-term bank borrowings Credit loan Credit loan Type of borrowings Long-term bank borrowings Credit loan	Borrowing period and repayment term Borrowing period is from 2020/2/20 to 2025/2/20; interest is repayable monthly (Note 1 and 2) Borrowing period is from 2020/2/20 to 2027/2/19; interest is repayable monthly Borrowing period and repayment term Borrowing period is from 2020/2/20 to 2027/2/19; interest is repayable monthly; principal is repayable starting from 2022	Interest rate range 0.30%~0.40% 0.35%~0.50% Interest rate range 0.30%~1.00%	Collateral None None Collateral None	December 31, 2020 $ 320,000 487,419 $ 807,419 September 30, 2020 $ 436,142

A. In November 2019, the Company entered into a long-term loan contract with Taipei Fubon Bank for the total amount of $800,000 thousand. As of September 30, 2021, the drawn amount was $620,000 thousand.

Aforementioned contract conditions:

During the credit period, the following financial ratios shall be maintained and the audited / reviewed financial statements by independent auditors shall be checked semi-annually:
(a) Current ratio shall not be lower than 100%;
(b) Debt ratio shall not be higher than 200%;
(c) Interest coverage ratio shall not be lower than 10;
(d) Tangible assets shall not be lower than $8 billion.
B. In February 2020, the Company entered into a long-term loan contract with JIHSUN BANK for the total amount of $300,000 thousand. As of September 30, 2021, the drawn amount was $100,000 thousand.

Aforementioned contract conditions:

During the credit period, the following financial ratios shall be maintained and the audited / reviewed financial statements by independent auditors shall be checked semi-annually:

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(a) Current ratio shall not be lower than 100%;
(b) Debt ratio shall not be higher than 250%;
(c) Tangible assets shall be maintained at least $8 billion.
C. The above-mentioned secured borrowings were guaranteed by the Company’s parent company.
(18) Pensions
A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 5.1% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. The Company also contributes monthly an amount equal to 8% of managers’ monthly salaries to the retirement fund. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.
(b) The pension costs under defined contribution pension plans of the Group for the three months and nine months ended September 30, 2021 and 2020 were $170 thousand, $290 thousand, $510 thousand and $870 thousand, respectively.
(c) The Company expects to pay contribution for pension plan amounting to $7,685 thousand in 2022.
B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The subsidiaries, MECL, MSCS, ASCX, ETCX, ASCZ, LACX, FUXM and FUSZ, in Mainland China have set up a defined contribution plan. Monthly contribution to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.
(c) The subsidiary, METC, in Thailand is required to pay pension of up to 10 months of employee salaries to the employees upon their retirement. The pension liability is estimated annually based on the employees’ total salaries and expected service years in accordance with the regulations of
- ~39~

the Thailand government.

(d) The subsidiary, MEVN, in Vietnam is subject to related local regulation, which is required to contribute a statutory percentage of the employees’ monthly salaries and wages to the employees’ pension funds, and to pay it to the competent authority. Other than the monthly contributions, the Group has no further obligations.
(e) The pension costs under defined contribution pension plans of the Group for the three months and nine months ended September 30, 2021 and 2020 were $33,874 thousand, $28,626 thousand, $105,990 thousand and $66,723 thousand, respectively.

(19) Share-based payment

A. For the nine months ended September 30, 2021 and 2020, the Group’s share-based payment arrangements were as follows:

Type of arrangement The 2~~nd~~restricted stocks to employees in 2016 The 1strestricted stocks to employees in 2017 The 2ndrestricted stocks to employees in 2017 The 1strestricted stocks to employees in 2019 The 2ndrestricted stocks to employees in 2019 The 1strestricted stocks to employees in 2020 The 2strestricted stocks to employees in 2020	Grand date 2017/06/16 2017/12/29 2018/10/26 2019/11/02 2020/08/05 2021/05/31 2021/07/30	Quantity granted 458 units 196 units 878 units 813 units 387 units 416 units 1,504 units	Contract period 3 years 3 years 3 years 3 years 3 years 3 years 3 years	Vesting condition Note Note Note Note Note Note Note

Note: Depending on the employee’s tenure in the Company (1 to 3 years), the employees can vest stocks at the ratio of 30%, 30% and 40% in three years based on the number of stocks written on the notification. The conditions for vesting restricted stocks are as follows:

(a) For the employees who are currently working in the Company, whose services have reached 1 year and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of vested share ratio is 30%.
(b) For the employees who are currently working in the Company, whose services have reached 2 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 60%.
(c) For the employees who are currently working in the Company, whose services have reached 3 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 100%.
(d) The Company will repurchase and retire the stocks that do not meet the conditions of vesting for the employees who resign during the vesting period or do not meet the condition of vesting by the issuance price.

The aforementioned restricted stocks issued by the Company cannot be transferred during the vesting

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period and the commissioned trust custodians execute the shareholders’ rights on behalf of the employees.

B. Details of the share-based payment arrangements are as follows:
(a) The second restricted stocks to employees in 2016

At January 1 Restricted stocks vested Restricted stocks retired At September 30		2021 No. of share (in thousands) Weighted-average exercise price (in dollars) 4 $ 10 ( 4) 10 - 10 - 10	2020 No. of share (in thousands) Weighted-average exercise price (in dollars) 160 $ 10 ( 146) 10 ( 4) 10 10 10
		No. of share (in thousands) 4 ( 4) - -	No. of share (in thousands) 160 ( 146) ( 4) 10

(b) The first restricted stocks to employees in 2017

			2021			2020	2020
			Weighted-average				Weighted-average
	No. of share		exercise price		No. of share			exercise price
	(in thousands)			(in dollars)	(in thousands)			(in dollars)
At January 1	1		$	-		108	$	-
Restricted stocks	( 1)			-		-		-
vested
Restricted
stocks retired		-		-	(	50)		-
At September 30		-		-		58		-

At January 1 Restricted stocks vested Restricted stocks retired At September 30		2021 No. of share (in thousands) Weighted-average exercise price (in dollars) 318 $ - ( 5) - ( 19) - 294 -	2020 No. of share (in thousands) Weighted-average exercise price (in dollars) 598 $ - ( 5) - ( 46) - 547 -
		No. of share (in thousands) 318 ( 5) ( 19) 294	No. of share (in thousands) 598 ( 5) ( 46) 547

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(d) The first restricted stocks to employees in 2019

The first restricted stocks to employees in 2019
2021 No. of share (in thousands) Weighted-average exercise price (in dollars) At January 1 545 $ - Restricted stocks retired ( 40) - At September 30 505 - The second restricted stocks to employees in 2019 2021 No. of share (in thousands) Weighted-average exercise price (in dollars) At January 1 382 $ - Restricted stocks Granted - - Restricted stocks retired ( 131) - At September 30 251 - The first restricted stocks to employees in 2020 2021 No. of share (in thousands) Weighted-average exercise price (in dollars) At January 1 - $ - Restricted stocks Granted 416 - At September 30 416 - The second restricted stocks to employees in 2020 2021 No. of share (in thousands) Weighted-average exercise price (in dollars) At January 1 - $ - Granted 1,504 - Restricted stocks retired ( 6) - At September 30 1,498 -	2020 No. of share (in thousands) Weighted-average exercise price (in dollars) 813 $ - ( 17) - 796 - 2020 No. of share (in thousands) Weighted-average exercise price (in dollars) - $ - 387 - - - 387 - 2020 No. of share (in thousands) Weighted-average exercise price (in dollars) - $ - - - - - 2020 No. of share (in thousands) Weighted-average exercise price (in dollars) - $ - - - - - - -
	No. of share (in thousands) - - - -

The first restricted stocks to employees in 2019

2021

No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
At January 1
545
$ -
Restricted
stocks retired
( 40)
-

At September 30
505
-
The second restricted stocks to employees in 2019
2021

No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
At January 1
382
$ -
Restricted stocks
Granted
-
-
Restricted
stocks retired
( 131)
-
At September 30
251
-
The first restricted stocks to employees in 2020
2021

No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
At January 1
-
$ -
Restricted stocks
Granted
416
-
At September 30
416
-
The second restricted stocks to employees in 2020
2021

No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
At January 1
-
$ -
Granted
1,504
-
Restricted
stocks retired
( 6)
-
At September 30
1,498
-

2020
No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
813
$ -
( 17)
-
796
-
2020
No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
-
$ -
387
-
-
-
387
-
2020
No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
-
$ -
-
-
-
-
2020
No. of share
(in thousands)
Weighted-average
exercise price
(in dollars)
-
$ -
-
-
-
-
-
-

No. of share
(in thousands)
-
-
-
-

(e) The second restricted stocks to employees in 2019

(f) The first restricted stocks to employees in 2020

(g) The second restricted stocks to employees in 2020

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C. The fair value of stock options granted on grant date is measured using the closing price on the grant date. Relevant information is as follows:

Type of arrangement The 2~~nd~~restricted stocks to employees in 2016 The 1strestricted stocks to employees in 2017 The 2ndrestricted stocks to employees in 2017 The 1strestricted stocks to employees in 2019 The 2ndrestricted stocks to employees in 2019 The 1strestricted stocks to employees in 2020 The 2strestricted stocks to employees in 2020	Grand date 2017/06/16 2017/12/29 2018/10/26 2019/11/02 2020/08/05 2021/05/31 2021/07/30	Stock price 187.0 194.5 139.5 150.0 169.0 107.5 111.0	Exercise price 10 0 0 0 0 0 0	Fair value per unit 177 194.5 139.5 150.0 169.0 107.5 111.0

D. Expenses incurred on share-based payment transactions are shown below:

Equity-settled Equity-settled	Three months ended September 30	Three months ended September 30
	2021 2020 $ 28,212 $ 24,416 Nine months ended September 30
	2021 $ 72,859	2020 $ 64,398

(20) Share capital

A. As of September 30, 2021, the Company’s authorized capital was $4,000,000 thousand, consisting of 400,000 thousand shares of ordinary stock (including 5,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,111,976 thousand with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding are as follows (in thousands):

At January 1 Employee restricted shares retired Employee restricted shares granted Convertible bonds converted into common shares AtSeptember30	2021 2020 209,333 208,668 ( 196) ( 117) 1,920 387 - 414 211,057 209,352

(a) The Company retired 46 thousand and 71 thousand employee restricted shares as resolved at the meeting of the Board of Directors on February 27, 2020 and July 30, 2020 with the capital reduction effective date set on February 29, 2020 and August 4, 2020. The capital reduction

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through retirement of employee restricted shares resulted shares retirement amounting to 117 thousand shares, and it was completed.

(b) On April 25, 2019, the Board of Directors of the Company resolved to issue employee restricted shares (please refer to Note 6 (19)). The issuance was approved by the Competent Authority on September 16, 2019. The Company issued 1,200 thousand common shares with the effective date set on August 5, 2020. The subscription price is $0 per share and the common shares are issued in batch amounting to 387 thousand shares, respectively. The registration was completed on August 27, 2020. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.
(c) On December 11, 2018, the Company issued the 2nd unsecured convertible bonds, and the conversion into common shares amounted to 0 thousand shares and 414 thousand shares for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, the face value of those convertible bonds amounted to $768,100 thousand, which had been converted into 5,299 thousand common shares. Please refer to Note 6 (16) for further information.
(d) On April 30, 2020, the Board of Directors of the Company resolved to issue employee restricted shares (please refer to Note 6 (19)). The issuance was approved by the Competent Authority on September 29, 2020. The Company issued 2,000 thousand common shares with the effective date set on May 31, 2021 and July 30, 2021. The subscription price is $0 per share and the common shares are issued in batch amounting to 416 thousand shares and 1,504 thousand shares, respectively. The registration for all the shares was completed on June 16, 2021 and August 25, 2021. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.
(e) The Company retired 55 thousand employee restricted shares as resolved at the meeting of the Board of Directors on February 25, 2021 and April 29, 2021 with the capital reduction effective date set on March 8, 2021 and May 3, 2021. The capital reduction through retirement of employee restricted shares was completed.
(f) The Company retired 11 thousand employee restricted shares as resolved at the meeting of the Board of Directors on July 29, 2021. As of October 28, 2021, the registration was still in progress.
(g) The Company retired 134 thousand employee restricted shares as resolved at the meeting of the Board of Directors on October 28, 2021.
(h) The Company launched the cash capital increase amounting to 6,000 thousand shares as resolved at the meeting of the Board of Directors on June 15, 2021, with an unit issue price at $72 per share as resolved at the meeting of the Board of Directors on September 17, 2021. The total cash subscribed amounted to 432,000 thousand and has been fully collected, with the final record date on October 22, 2021. As of October 28, 2021, the registration was still in progress.

(21) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value

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on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

At January 1 Restricted stocks issued Restricted stocks vested Restricted stocks retired Convertible bonds issued Recognition of change in equity of associates in proportion to the Company’s ownership Acquisition of non- controlling interests in Subsidiary At September 30 At January 1 Restricted stocks issued Restricted stocks vested Restricted stocks retired Convertible bonds converted into common shares Recognition of change in equity of associates in proportion to the Company’s ownership Changes in ownership interests in subsidiaries At September 30			2021		Total $ 3,960,123 192,464 - ( 29,512) 96,857 1,699 115,106 $ 4,336,737 Total $ 3,870,105 61,533 - ( 18,259) 52,460 2,499 97 $ 3,968,435
	Share premium $ 3,665,902 - ( 6,711) - - - - $ 3,659,191	Share option $ 99,191 - - - 96,857 - - $196,048	Employee restricted stocks $ 170,825 192,464 6,711 ( 29,512) - - - $ 340,488 2020	Others $ 24,205 - - - - 1,699 115,106 $ 141,010
	Share premium $ 3,501,426 - 29,804 - 55,019 - - $ 3,586,249	Share option $101,750 - - - ( 2,559) - - $ 99,191	Employee restricted stocks $ 236,457 61,533 ( 26,540) ( 18,259) - - - $ 253,191	Others $ 30,472 - ( 3,264) - - 2,499 97 $ 29,804

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(22) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, after deduction of mandatory income tax, shall first be used to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. After the provision or reversal of special reserve, the appropriation of the remaining earnings along with the unappropriated earnings of prior years shall be proposed by the Board of Directors and approved by the shareholders. According to the dividend policy adopted by the Board of Directors, 30% to 80% of the Company’s accumulated distributable earnings shall be appropriated as dividends, and cash dividends shall account for at least 5% of the total dividends distributed.
B. The Company’s dividend policy is summarized below: as the Company operates in a volatile business environment and is in the stable growth stage, the residual dividend policy is adopted taking into consideration the Company’s financial structure, operating results and future expansion plans. In order to encourage employees and operation team, if the Company has any profit for the current year, the Company shall set aside 5% to 10% as employees’ compensation and no more than 2% as directors’ remuneration. The employees’ compensation shall be distributed in the form of stock and cash by a resolution adopted by a majority vote at a meeting of Board of Directors attended by twothirds of the total number of directors and report it in the shareholders’ meeting. Employees entitled to receive stock or cash as compensation include employees of subsidiaries of the company meeting certain specific requirement.
C. The Board of Directors may fully or partially appropriate dividends and bonuses in the form of cash by a resolution adopted by the majority vote at its meeting attended by two-thirds of the total number of directors, and then reported to the shareholders. Situations other than that shall be approved by the shareholders at their meeting.
D. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
E. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate- 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land. As of September 30, 2021, the balance of capital surplus as aforementioned was

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$269,144 thousand.

F. The Company distributed cash dividends amounting to $5.16 (in dollars) per share and $7.7 (in dollars) per share as resolved at the shareholders’ meeting on July 21, 2021 and June 19, 2020. The abovementioned distribution of earnings for the years ended December 31, 2020 and 2019 was in agreement with those amounts proposed by the Board of Directors on February 25, 2021 and February 27, 2020.

(Remainder of page intentionally left blank)

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(23) Other equity items

ther equity items
2021 At January 1 Restricted stocks issued Amortization of employee restricted stocks Restricted stocks retired Revaluation – gross Revaluation – tax Revaluation transferred to profit or loss – gross Currency translation differences: -Group -Tax on Group -Associates -Tax on associates At September 30 2020 At January 1 Restricted stocks issued Amortization of employee restricted stocks Restricted stocks retired Revaluation – gross Revaluation – tax Revaluation transferred to profit or loss – gross Revaluation transferred to retained earnings – gross Currency translation differences: -Group -Tax on Group -Associates -Tax on associates At September 30	Exchange differences on translation of foreign financial statements ($ 438,569) - - - - - - ( 180,416) 36,083 ( 83,089) 15,257 ($ 650,734) Exchange differences on translation of foreign financial statements ($ 456,833) - - - - - - ( 121,629) 24,326 ( 37,937) 7,012 ($ 585,061)	Unrealized gain (loss) from investments in debt instruments measured at fair value through other comprehensive income $ 4,220 - - - ( 5,217) - 5,580 - - - - $ 4,583 Unrealized gain (loss) from investments in debt instruments measured at fair value through other comprehensive income $ 867 - - ( 3,079) - 333 - - - - - ($ 1,879)	Unrealized gain (loss) from investments in equity instruments measured at fair value through other comprehensive income $ 601,816 - - - ( 386,208) ( 657) - - - - - $ 214,951 Unrealized gain (loss) from investments in equity instruments measured at fair value through other comprehensive income $ 1,688,726 - - ( 980,467) 931 - ( 145,400) - - - - $ 563,790	Cost of unearned employee compensation ($ 158,141) ( 211,664) 72,859 31,474 - - - - - - - ($ 265,472) Cost of unearned employee compensation ($ 204,926) ( 65,403) 64,398 19,389 - - - - - - - - ($ 186,542)	Total
					$ 9,326 ( 211,664) 72,859 31,474 ( 391,425) ( 657) 5,580 ( 180,416) 36,083 ( 83,089) 15,257 ($ 696,672) Total
					$ 1,027,834 ( 65,403) 64,398 19,389 ( 983,546) 931 333 ( 145,400) ( 121,629) 24,326 ( 37,937) 7,012 ($ 209,692)

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(24) Operating revenue

erating revenue
Revenue from contracts with customers Revenue from contracts with customers	Three months ended September 30
	2021 2020 $ 8,463,889 $ 10,136,154 Nine months ended September 30
	2021 $ 24,367,349	2020 $ 21,758,018

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions:

	Three months ended September 30, 2021	Three months ended September 30, 2021	Three months ended September 30, 2021	Three months ended September 30, 2021
Total segment revenue Revenue from internal segment transactions Revenue from external customer contracts Main Region Europe US Mainland China Taiwan Others		Electronic	devices		Total $ 13,025,141 ( 4,561,252) 8,463,889 3,696,841 3,961,868 447,332 225,908 131,940 $ 8,463,889
Total segment revenue Revenue from internal segment transactions ( Revenue from external customer contracts Main Region Europe US Mainland China Taiwan Others		Electronic	devices	Others $ 4,749,333 3,729,990) 1,019,343 221,421 469,540 294,985 4,874 28,523 $ 1,019,343	Total $ 35,999,306 ( 11,631,957) 24,367,349 11,568,360 9,955,928 1,973,353 627,730 241,978 $ 24,367,349
	Taiwan $ 17,612,767 10,193) 17,602,574 7,658,537 8,878,074 347,781 606,920 111,262 $17,602,574	Shenzhen $ 9,332,981 ( 7,891,774) 1,441,207 94,437 247 1,330,587 15,936 - $ 1,441,207	Singapore $ 4,304,225 - ( 4,304,225 3,593,965 608,067 - - 102,193 $ 4,304,225

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	Three months ended September 30, 2020	Three months ended September 30, 2020	Three months ended September 30, 2020	Three months ended September 30, 2020
Total segment revenue Revenue from internal segment transactions Revenue from external customer contracts Main Region Europe US Mainland China Taiwan Others		Electronic	devices		Total $ 14,597,747 ( 4,461,593) 10,136,154 5,327,685 4,083,685 415,263 223,954 85,567 $ 10,136,154
Total segment revenue Revenue from internal segment transactions Revenue from external customer contracts Main Region Europe US Mainland China Taiwan Others		Electronic	devices	Others $ 1,881,653 ( 1,103,106) 778,547 206,958 278,798 240,076 37,798 14,917 $ 778,547	Total $ 30,384,221 ( 8,626,203) 21,758,018 10,657,015 9,225,013 801,869 682,586 391,535 $ 21,758,018
	Taiwan $ 17,042,996 ( 5,398) 17,037,598 7,700,195 8,172,590 314,239 642,244 208,330 $17,037,598	Shenzhen $ 7,835,139 ( 7,490,576) 344,563 85,496 650 247,554 2,544 8,319 $ 344,563	Singapore $ 3,624,433 ( 27,123) 3,597,310 2,664,366 772,975 - - 159,969 $ 3,597,310

B. Contract assets and liabilities：

(a) The Group has recognized the following revenue-related contract assets (shown in other current assets) and liabilities (shown in other current liabilities):

Contract assets Contract liabilities Refund liabilities	September 30, 2021	December 31, 2020 $ 43,363 $ 627,002 $ 343,164	September 30, 2020	January 1, 2020 $ 31,585 $ 256,623 $ 81,791
	$ 58,110 $ 1,065,390 $ 210,027		$ 36,437 $ 446,683 $ 222,199

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(b) Revenue recognized that was included in the contract liability balance at the beginning of the period：

the period：
Revenue recognized that was included in the contract liability balance at the beginning of the period Revenue recognized that was included in the contract liability balance at the beginning of the period income Interest income from bank deposits Interest income from financial assets at fair value through other comprehensive income Interest income from bank deposits Interest income from financial assets at fair value through other comprehensive income	Three months ended September 30
	2021 2020 $ 36,876 $ 5,974 Nine months ended September 30
	2021 2020 $ 145,171 $ 173,689 Three months ended September 30
	2021 2020 $ 9,994 $ 6,186 1,313 274 $ 11,307 $ 6,460 Nine months ended September 30
	2021 $ 26,239 4,462 $ 30,701	2020 $ 31,109 1,733 $ 32,842

(25) Interest income

(26) Other income

ncome
Rent income Dividend income Sample income Government grants Other income Rent income Dividend income Sample income Government grants Other income	Three months ended September 30
	2021 2020 $ 1,457 $ 1,848 8,313 12,738 47,230 ( 30,725) 28,081 26,706 23,149 44,059 $ 108,230 $ 54,626 Nine months ended September 30
	2021 $ 5,285 9,409 61,005 144,051 41,828 $ 261,578	2020 $ 5,660 12,738 16,584 117,927 29,316 $ 182,225

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(27) Other gains and losses

ains and losses
Losses on disposals of property, plant and equipment Foreign exchange (loss) gain Gains on financial assets / liabilities at fair value through profit or loss Other gains and losses Losses on disposals of property, plant and equipment Loss on disposals of investments Foreign exchange loss Gains on financial assets / liabilities at fair value through profit or loss Other gains and losses es by nature Employee benefit expense Depreciation charge - property, plant and equipment Depreciation charge - right-of-use assets Amortization charge Employee benefit expense Depreciation charge - property, plant and equipment Depreciation charge - right-of-use assets Amortization charge	Three months ended September 30
	2021 2020 ($ 2,680) ($ 365) 203 ( 77,995) 6,262 24,720 ( 3,069) ( 2,141) $ 716 ($ 55,781) Nine months ended September 30
	2021 2020 ($ 6,354) ($ 954) ( 5,580) ( 333) ( 33,236) ( 98,117) 59,903 55,613 ( 14,454) ( 6,215) $ 279 ($ 50,006) Three months ended September 30
	2021 2020 $ 879,973 $ 980,733 99,704 80,470 34,231 48,211 32,397 32,753 $ 1,046,305 $ 1,142,167 Nine months ended September 30
	2021 $ 2,642,756 318,084 121,247 96,507 $ 3,178,594	2020 $ 2,193,675 246,861 85,289 100,556 $ 2,626,381

(28) Expenses by nature

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(29) Employee benefit expense

ee benefit expense
Wages and salaries Share-based payments Labor and health insurance fees Pension costs Other personnel expenses Wages and salaries Share-based payments Labor and health insurance fees Pension costs Other personnel expenses	Three months ended September 30
	2021 2020 $ 754,268 $ 876,157 29,435 24,416 16,442 14,554 34,044 28,916 45,784 36,690 $ 879,973 $ 980,733 Nine months ended September 30
	2021 $ 2,269,831 76,432 51,660 106,500 138,333 $ 2,642,756	2020 $ 1,929,065 64,398 45,274 67,593 87,345 $ 2,193,675

Note: For the nine months ended September 30, 2021 and 2020, the Group had 8,844 and 8,639 employees, respectively, with 6 and 5 non-employee directors for nine months ended September 30, 2021 and 2020, respectively.
A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees‘ compensation and directors’ remuneration. The ratio shall not be lower than 5~10% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.
B. The details of employees’ compensation and directors’ and supervisors’ remuneration of the Company are as follows:

ompany are as follows:
Employees’ compensation Directors’ and supervisors’ remuneration Employees’ compensation Directors’ and supervisors’ remuneration	Three months ended September 30
	2021 2020 $ 38,393 $ 29,580 12,797 9,860 $ 51,190 $ 39,440 Nine months ended September 30
	2021 $ 48,286 16,095 $ 64,381	2020 $ 60,534 20,178 $ 80,712

The abovementioned amounts were recognized in wages and salaries based on profit status of the current year. Employees’ compensation was estimated at 6% and 6% of the profit for the nine months ended September 30, 2021 and 2020, respectively. Directors’ remuneration was estimated at 2% and 2% of the profit for the nine months ended September 30, 2021 and 2020, respectively.

Employees’ compensation and directors’ remuneration of 2020 as resolved at the Board of Directors’ meeting were in agreement with those amounts recognized in the profit or loss of 2020.

Information about employees’ compensation and directors’ and supervisors’ remuneration of

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the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(30) Income tax

A. Income tax expense
(a) Components of income tax expense:

e Company as resolved by the Board of Directors will be posted in the “Market bservation Post System” at the website of the Taiwan Stock Exchange. me tax come tax expense ) Components of income tax expense:	rd of Directors will be posted in the “Market of the Taiwan Stock Exchange.	rd of Directors will be posted in the “Market of the Taiwan Stock Exchange.
Three months ended September 30 2021 2020 Current tax: Current tax on profits for the period $ 88,386 $ 88,806 Surtax on unappropriated earnings 12,645 - Prior year income tax overestimation ( 27,993) ( 7) Total current tax 73,038 88,799 Deferred tax: Origination and reversal of temporary differences 66,872 ( 29,550) Income tax expense $ 139,910 $ 59,249 Nine months ended September 30 2021 2020 Current tax: Current tax on profits for the period $ 68,560 $ 188,092 Surtax on unappropriated earnings 12,645 36,704 Prior year income tax (overestimation) underestimation ( 36,021) 260 Total current tax 45,184 225,056 Deferred tax: Origination and reversal of temporary differences 99,204 ( 23,055) Income tax expense $ 144,388 $ 202,001 ) The income tax (charge)/credit relating to components of other comprehensive income is a follows: Three months ended September 30 2021 2020 Exchange differences changes on translation of foreign financial statements - the Group ($ 9 ,863) ($ 700) Exchange differences changes on translation of foreign financial statements - associates ( 977) 13,621 Changes in fair value of financial assets at fair value through other comprehensive income ( 386) ( 403) ($ 11,226) $ 12,518	Three months ended September 30
	2021 2020 $ 88,386 $ 88,806 12,645 - ( 27,993) ( 7) 73,038 88,799 66,872 ( 29,550) $ 139,910 $ 59,249 Nine months ended September 30
	2021 ($ 9 ,863) ( 977) ( 386) ($ 11,226)	2020 ($ 700) 13,621 ( 403) $ 12,518

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

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Exchange differences changes on translation of foreign financial statements - the Group Exchange differences changes on translation of foreign financial statements - associates Changes in fair value of financial assets at fair value through other comprehensive income	Nine months ended September 30	Nine months ended September 30
	2021 ($ 36,083) ( 15,257) 657 ($ 50,683)	2020 ($ 24,326) ( 7,012) ( 931) ($ 32,269)

B. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.
C. Merry Healthcare Co., Ltd. Taiwan Branch (CAYMAN) income tax returns through 2019 have been assessed and approved by the Tax Authority.
D. Fulicare Co., Ltd. Taiwan Branch (SAMOA) income tax returns through 2019 have been assessed and approved by the Tax Authority.
E. Biotest Medical Corporation’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

(31) Earnings per share

approved by the Tax Authority. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Three	months ended September 30, 2021 Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) 207,691 $ 2.20 207,691 434 31,856 641 240,622 $ 1.94
	Amount after tax $ 457,599 457,599 - 9,673 - $ 467,272	Weighted average number of ordinary shares outstanding (share in thousands) 207,691 207,691 434 31,856 641 240,622

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Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Three months ended September 30, 2020 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 393,808 206,877 $ 1.90 393,808 206,877 - 200 5,951 16,575 - 518 $ 399,759 224,170 $ 1.78 Nine months ended September 30, 2021 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 589,736 207,687 $ 2.84 589,736 207,687 - 710 21,690 22,424 - 529 $ 611,426 231,350 $ 2.64	Three months ended September 30, 2020 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 393,808 206,877 $ 1.90 393,808 206,877 - 200 5,951 16,575 - 518 $ 399,759 224,170 $ 1.78 Nine months ended September 30, 2021 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 589,736 207,687 $ 2.84 589,736 207,687 - 710 21,690 22,424 - 529 $ 611,426 231,350 $ 2.64
	Amount after tax $ 589,736 589,736 - 21,690 - $ 611,426	Weighted average number of ordinary shares outstanding (share in thousands) 207,687 207,687 710 22,424 529 231,350

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Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Nine months ended September 30, 2020 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 743,957 206,695 $ 3.60 743,957 206,695 - 706 19,490 16,483 - 536 $ 763,447 224,420 $ 3.40	Nine months ended September 30, 2020 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Earnings per share (in dollars) $ 743,957 206,695 $ 3.60 743,957 206,695 - 706 19,490 16,483 - 536 $ 763,447 224,420 $ 3.40
	Amount after tax $ 743,957 743,957 - 19,490 - $ 763,447	Weighted average number of ordinary shares outstanding (share in thousands) 206,695 206,695 706 16,483 536 224,420

The number of weighted-average outstanding shares is included for assumed conversion of all dilutive potential ordinary shares at the calculation of diluted earnings per share, based on the assumption that employees’ compensation will be all distributed in the form of shares.

(32) Supplemental cash flow information

A. Investing activities with partial cash payments

Purchase of property, plant and equipment Add: Beginning balance of payable on equipment Ending balance of prepayments for equipment Less: Beginning balance of prepayments for equipment Ending balance of payable on equipment Cash paid during the period	Nine months ended September 30	Nine months ended September 30
	2021 $ 869,493 356,594 83,427 ( 84,488) ( 276,793) $ 948,233	2020 $ 1,141,718 77,958 292,689 ( 41,911) ( 188,576) $ 1,281,878

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Nine months ended September 30 2021 2020 Purchase of property, plant and equipment $ 41,346 $ 26,333 Add: Beginning balance of payable on equipment 4,344 - Ending balance of prepayments for equipment 75,400 31,061 Less: Beginning balance of prepayments for equipment ( 37,436) ( 30,952) Ending balance of payable on equipment ( 2,272) ( 1,549) Cash paid during the period $ 81,382 $ 24,893 Nine months ended September 30 2021 2020 Disposal of property, plant and equipment ($ 253,920) ($ 14,669) Add: Uncollected proceeds from disposal during the period 230,376 - Cash received during the period ($ 23,544) ($ 14,669) inancial assets at fair value through profit or loss Nine months endedSeptember30 2021 2020 Change in financial assets at fair value through profit or loss $ 297,448 $ 50,496 Add: Uncollected proceeds from disposal during the period 42,186 325,133 Payment for prior period purchase 306 - Less: Unpaid purchases during the period ( 42,259) ( 325,438) Net cash flows used (provided) during the period $ 297,681 $ 50,191 inancial assets at fair value through other comprehensive income Nine months endedSeptember30 2021 2020 Disposal of financial assets at fair value through other comprehensive income ($ 83,970) ($ 202,651) Less: Collected proceeds from prior period disposal - ( 4,336) Net cash flows provided during the period ($ 83,970) ($ 206,987)	Nine months ended September 30	Nine months ended September 30
	2021 2020 $ 41,346 $ 26,333 4,344 - 75,400 31,061 ( 37,436) ( 30,952) ( 2,272) ( 1,549) $ 81,382 $ 24,893 Nine months ended September 30
	2021 ($ 83,970) - ($ 83,970)	2020 ($ 202,651) ( 4,336) ($ 206,987)

B. Financial assets at fair value through profit or loss

C. Financial assets at fair value through other comprehensive income

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D. Financing activities with no cash flow effects:

Convertible bonds converted into common shares	Nine months endedSeptember30	Nine months endedSeptember30
	2021 $-	2020 $ 4,135

(33) Changes in liabilities from financing activities

At January 1, 2021 Changes in cash flow from financing Additions Impact of changes in foreign exchange rate Changes in other non- cash items At September 30, 2021 At January 1, 2020 Changes in cash flow from financing Additions Impact of changes in foreign exchange rate Changes in other non-cash items At September 30, 2020	Short-term borrowings $3,271,489 (685,784) - (21,161) - $2,564,544 Short-term borrowings $ 470,890 2,166,379 - (30,605) - $ 2,606,664	Short-term borrowings $3,271,489 (685,784) - (21,161) - $2,564,544 Short-term borrowings $ 470,890 2,166,379 - (30,605) - $ 2,606,664	Lease Liabilities $261,656 (136,584) - ( 2,312) 16,566 $ 139,326 Lease liabilities $118,813 (160,549) - 271 331,955 $290,490	Lease Liabilities $261,656 (136,584) - ( 2,312) 16,566 $ 139,326 Lease liabilities $118,813 (160,549) - 271 331,955 $290,490		Convertible bonds $2,203,801 3,015,000 - - ( 74,337) $5,144,464 Convertible bonds $2,229,959 - - - ( 33,852) $2,196,107	Long-term borrowings (including those matured within one year $ 807,419 689,476 - ( 2,352) - $1,494,543 Long-term borrowings (including those matured within one year $ 62,000 374,323 - ( 181) - $ 436,142		Dividends payables $ - (1,068,244) 1,068,244 - - $- Dividends payables $ - (1,608,376) 1,608,376 - - $-	Other non- current liabilities Total liabilities from financing activities $ 36,449 $ 6,580,814 ( 2,491) 1,811,373 - 1,068,244 ( 456) ( 26,281) ( 692) ( 58,463) $ 32,810 $9,375,687 Other non- current liabilities Total liabilities from financing activities $ 496,302 $ 3,377,964 27,490 799,267 - 1,608,376 ( 323) ( 30,838) ( 404,956) ( 106,853) $ 118,513 $5,647,916
		$

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(34) Government grants

A. The subsidiary, MECL, applied for the first batch of the Longhua District Enterprise R&D Investment Funding from Longhua District Science and Technology Innovation Bureau and received the final subsidies amounting to RMB 1,313 thousand (NTD 5,689 thousand) in January 2020.
B. The subsidiary, MECL, received the electricity subsidy for enterprises in advanced and hightech manufacturing amounting to RMB 182 thousand (NTD 789 thousand) from Economy, Trade and Information Commission of Shenzhen Municipality in January 2020.
C. The subsidiary, MECL, received the patent subsidy amounting to RMB 440 thousand (NTD 1,907 thousand) from Market Supervision Administration of Shenzhen Municipality in March 2020.
D. The subsidiary, MECL, received the electricity subsidy for enterprises in advanced and hightech manufacturing amounting to RMB 293 thousand (NTD 1,270 thousand) from Economy, Trade and Information Commission of Shenzhen Municipality in January 2021.
E. The subsidiary, MECL, received the foreign invention expenditure subsidy amounting to RMB 450 thousand (NTD 1,950 thousand) from Longhua Branch, Market Supervision Administration of Shenzhen Municipality in February 2021.
F. The subsidiary, MECL, received the business intellectual property management subsidy amounting to RMB 300 thousand (NTD 1,300 thousand) from Longhua Branch, Market Supervision Administration of Shenzhen Municipality in February 2021.
G. The subsidiary, MECL, received the employment subsidy amounting to RMB 845 thousand (NTD 3,662 thousand) from Longhua Branch, Human Resource Bureau of Shenzhen Municipality in March 2021.
H. The subsidiary, MECL, received the bank loan and interest subsidy amounting to RMB 700 thousand (NTD 3,033 thousand) from Culture, Radio and Television and Sports Bureau of Shenzhen Municipality in March 2021.
I. The subsidiary, MECA, applied for “Paycheck Protection Program” subsidy from local government amounting to USD 262 thousand (NTD 7,342 thousand) in 2020 and received the subsidy in January 2021.
J. The subsidiary, MESG, applied for “Jobs Support Scheme” subsidy from local government amounting to SGD 565 thousand (NTD 11,826 thousand) in 2020 and received the subsidy amounting to SGD 62 thousand (NTD 1,298 thousand) in March 2021.
K. The subsidiary, SOCV, applied for “Emergency Wage Subsidy Program” subsidy from local government amounting to CAD 374 thousand (NTD 8,380 thousand) in 2020 and received the subsidy amounting to CAD 59 thousand (NTD 1,322 thousand) in March 2021.
L. The subsidiary, MECL, received the electricity subsidy for enterprises in advanced and hightech manufacturing amounting to RMB 517 thousand (NTD 2,240 thousand) from Economy, Trade and Information Commission of Shenzhen Municipality in April 2021.
M. The subsidiary, MECL, received the Shenzhen Enterprise R&D subsidy amounting to RMB 1,273 thousand (NTD 5,516 thousand) from Shenzhen Science and Technology Innovation Commission in June 2021.
N. The subsidiary, MECL, received the patent subsidy of Intellectual Property Office Patent Agency amounting to RMB 380 thousand (NTD 1,647 thousand) from Market Supervision Administration of Shenzhen Municipality in June 2021.
O. The subsidiary, MECL, received the employment subsidy amounting to RMB 2,476 thousand (NTD 10,729 thousand) from Longhua Branch, Human Resource Bureau of Shenzhen Municipality in June 2021.
P. The subsidiary, MECL, received the subsidy for stable growth in industry development amounting to RMB 5,000 thousand (NTD 21,666 thousand) from Industry and Information Technology Bureau of Shenzhen Municipality in June 2021.
Q. The subsidiary, MECL, received the capacity expansion subsidy amounting to RMB 9,363

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thousand (NTD 40,571 thousand) from Industry and Information Technology Bureau of Shenzhen Municipality in June 2021.

  - R. MEHO received the subsidy for AI smart noise cancellation MIC platform development amounting to NTD 12,200 thousand.

  - S. The subsidiary, MECL, received the subsidy for corporate technology center establishment and corporate technology improvement support amounting to RMB 2,420 thousand (NTD 10,486 thousand) from Industry and Information Technology Bureau of Shenzhen Municipality in August 2021.

  - T. The subsidiary, MECL, received the second batch subsidy for technology improvement amounting to RMB 1,590 thousand (NTD 6,890 thousand) from Industry and Information Technology Bureau of Shenzhen Municipality in August 2021.

  - U. The subsidiary, FUXM, received the first rental subsidy for biomedicine corporate amounting to RMB 2,169 thousand (NTD 9,399 thousand) from Industry and Information Technology Bureau of Haicang District, Xiamen  Municipality in August 2021.

RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship

Name Relationship Merry Electronics (Suzhou) Co., Ltd. (MECE) Affiliated company Merry Electronics (Huizhou) Co., Ltd. (MECH) Affiliated company Merry Electronics (Shanghai) Co., Ltd. (MECS) Affiliated company Guangdong Luxshare & Merry Electronics Co., Affiliated company Ltd. (MEDG)

Leohab Enterprise Co., Ltd. (LEOHAB) Merry Fuling Co., Ltd. Taiwan Branch (MHNCTW) BESKYTTE HUANG & CO Luxshare Precision Limited Luxshare Precision Industry Co., Ltd Luxshare-ICT (Vietnam) Limited (Luxshare-ICT (Vietnam)) Luxshare Electronic Technology (Kunshan) Co., Ltd.

Lanto Electronic Limited

Dongguan Luxshare Precision Industry Co., Ltd. Luxshare Precision Industry (Chuzhou) Co., Ltd

Luxshare Precision Limited (HK)

Affiliated company Other related party

Other related party Other related party (Note 1) Other related party (Note 1) Other related party (Note 1)

Other related party (Note 1)

Other related party (Note 1) Other related party (Note 1) Other related party (Note 1) Other related party (Note 1)

Note 1: A corporate director of the Group’s subsidiary, MEVN, and the entity both belong to Luxshare Group.

(2) Significant related party transactions

A. Operating revenue

icant related party transactions erating revenue
Sales of goods MECH Luxshare Precision Industry Co., Ltd Others	Three months endedSeptember30
	2021 $ 12,401 11,358 4,492 $ 28,251	2020 $ 24,100 - 1,673 $ 25,773

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Sales of goods MECH Luxshare Precision Industry Co., Ltd Others	Nine months endedSeptember30	Nine months endedSeptember30
	2021 $ 66,163 11,358 7,417 $ 84,938	2020 $ 38,531 - 4,828 $ 43,359

The prices of goods sold to related parties are based on the different product’s profitability and adjusted annually as there is no comparable transaction for the goods sold to the third parties, and the prices of purchases on behalf of related parties are based on the cost plus mark-ups of 2~ 3%. The credit terms to related parties are 60 to 65 days end of month and 30 to 120 days end of month to the third parties.

B. Purchases

chases
Purchases of goods MECE MECH Others Purchases of goods MECE MECH Others	Three months endedSeptember30
	2021 2020 $ 2,135,608 $ 2,493,506 1,435,101 1,979,529 13,376 - $ 3,584,085 $ 4,473,035 Nine months endedSeptember30
	2021 $ 6,326,532 3,876,351 103,746 $ 10,306,629	2020 $ 6,425,654 3,882,172 - $ 10,307,826

The associates are manufacturers for the Group’s products and the prices are based on the different product’s profitability and adjusted annually as there is no comparable transaction for the goods purchased from the third parties. The payment terms are 60 to 65 days end of month and 30 to 120 days end of month to the third parties.

C. Receivables from related parties

Accounts receivable: Luxshare Precision Industry Co., Ltd MECE MECH Luxshare Precision Limited (HK) Others Total	September 30, 2021 $ 11,358 10,821 8,200 - 2,691 $ 33,070	December 31, 2020 $ - 10,276 46,822 214,473 1,961 $ 273,532	September 30, 2020 $ - 9,948 26,867 - 28 $ 36,843

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Other receivable: MECH MECE Others Total	September 30, 2021 $ 466,826 162 217 $ 467,205	December 31, 2020 $ 703,400 2,155 - $ 705,555	September 30, 2020 $ 732,543 7,534 1,464 $ 741,541

Other receivables as of September 30, 2021, December 31, 2020 and September 30, 2020 mainly were the purchases of raw materials on behalf of MECH and MECE.

D. Payables to related parties

September 30, 2021 December 31, 2020 September 30, 2020

Accounts payable: MECE $ 1,495,118 MECH 1,350,397 Others 38,282 Total $ 2,883,797 Other payable: MECE $ 161,416 Others 939 Total $ 162,355	$ 2,505,588 1,469,889 192,000 $ 4,167,477 $ 54,169 100 $ 54,269	$ 1,876,664 1,951,136 99 $ 3,827,899 $ 58,070 10,893 $ 68,963

Other payables mainly were mold developing expense that MECE paid on behalf of the parent company.

E. Property transactions

(a) Acquisition of property, plant and equipment:

MECH MECE MECH MECE	Three months ended September 30	Three months ended September 30
	2021 2020 $ 12,838 $ 4,214 - - $ 12,838 $ 4,214 Nine months ended September 30
	2021 $ 15,627 1,981 $ 17,608	2020 $ 4,495 - $ 4,495

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(b) Disposal of property, plant and equipment:

b) Disposal of property, plant and equipment:	b) Disposal of property, plant and equipment:	b) Disposal of property, plant and equipment:
Three months ended September 30 2021 2020 Disposal proceeds Gain (loss) on disposal Disposal proceeds Gain (loss) on disposal MECH $ - $ - $ - $ - Nine months ended September 30 2021 2020 Disposal proceeds Gain (loss) on disposal Disposal proceeds Gain (loss) on disposal MECH $ 198 ($ 4) $ 4,632 $ 386 her current assets-temporary debits of other expenses September 30, 2021 December 31, 2020 September 30, 2020 BESKYTTE HUANG & CO $- $ 1,066 $ 1,100
BESKYTTE HUANG & CO	September 30, 2021 $-
		$ 1,100

F. Other current assets - temporary debits of other expenses

Other current assets mainly were temporary debits of brand royalties.

G.Other revenues

her revenues
BESKYTTE HUANG & CO management compensation Salaries and other short-term employee benefits Post-employment benefits Share-based payments Salaries and other short-term employee benefits Post-employment benefits Share-based payments	Nine months ended September 30
	2021 2020 $- $ 1,031 Three months ended September 30

		2021 2020 $ 10,766 $ 20,722 - 246 9,919 9,675 $ 20,685 $ 30,643 Nine months ended September 30

			2020 $ 49,245 369 20,659 $ 70,273

(3) Key management compensation

8. PLEDGED ASSETS

GED ASSETS
Pledged asset Time deposits (pledged) (as financial assets at amortized cost – current)		Book value	September 30, 2020 Purpose $ 3,562 Project guarantee
	September 30, 2021 $ 3,853	December 31, 2020 $ 12,200
	$

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

COMMITMENTS
Capital expenditures contracted	for at the balance sheet	date but not yet incurred is as follows:
	September 30, 2021	December 31, 2020	September 30, 2020
Property, plant and equipment	$ 258,520	$ 350,813	$ 138,670
Intangible assets	6,665	7,412	59,420
	$ 265,185	$ 358,225	$ 198,090

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

(1) Due to a rapidly changing market of electroacoustics, the Group had an evaluation with the joint investor, and came out a proposal to integrate the business resources by dissolving Guangdong Luxshare & Merry Electronics Co.,Ltd. This proposal was resolved at the meeting of the Board of Directors on October 28, 2021.

(2) In alignment with the power rationing policy from China’s local government, partial manufacturing process with high power consumption of some of the Group’s subsidiaries was suspended temporarily on the day of power rationing. The group has taken several countermeasures against it and committed to a continuous management as follows: Reschedule the shift for the production line with high power consumption into a night shift or weekend shift instead of weekday shift. It results no significant impact on the overall finance and business activity after the Group’s evaluation.

12. OTHERS

(1) Capital management

Due to the nature of the Group’s operating industry and the Group’s future development, and the consideration of the changing outside environment, the Company’s capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, research and development expense, obligation repayment and dividend distribution within the next year.

The Company monitors capital by reassessing debt ratios periodically. The debt ratios as on September 30 2021, December 31, 2020 and September 30, 2020 were as follows:

Total debts Total assets Debt ratio	September 30, 2021 $ 22,521,915 33,987,295 66%	December 31, 2020 $ 21,884,605 34,155,348 64%	September 30, 2020 $ 19,844,684 31,322,933 63%

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(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Qualifying equity instrument Financial assets at amortized cost/ Loans and receivables Cash and cash equivalents Financial assets at amortized at cost Accounts receivable (including due from related parties) Other receivables (including due from related parties) Guarantee deposits paid	September 30, 2021 $ 380,029 $ 1,152,824 143,833 $ 1,296,657 $ 6,266,608 3,853 7,859,488 1,140,428 62,301 $ 15,332,678	December 31, 2020 $ 105,387 $ 1,536,272 232,060 $ 1,768,332 $ 3,046,963 866,600 12,714,950 776,641 71,625 $ 17,476,779	September 30, 2020	September 30, 2020
				$ 92,545 $ 1,489,501 87,671 $ 1,577,172 $ 4,191,857 876,562 9,008,128 1,157,808 51,181 $ 15,285,536

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September 30, 2021 December 31, 2020 September 30, 2020

Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Short-term borrowings Notes payable Accounts payable (including payable to related parties) Other accounts payable (including payable to related parties) Lease liability Corporate bonds payable (including maturing within one year or one operating cycle) Long-term borrowings (including maturing within one year or one operating cycle) Guarantee deposits received	$ 3,409 2,564,544 11 8,860,343 1,416,720 139,326 5,144,464 1,494,543 25,217 $ 19,648,577	$ 30,047 3,271,489 - 10,634,407 1,655,453 261,656 2,203,801 807,419 29,329 $ 18,893,601	$ 12,418 2,606,664 74 10,036,250 1,690,297 290,490 2,196,107 436,142 9,276 $ 17,277,718

B. Financial risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.
(b) Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. Such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(c) Information about derivative financial instruments that are used to hedge certain exchange rate risk was provided in Note 6 (2).
C. Significant financial risks and degrees of financial risks

There was no significant change in the reporting period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2020, except for the items explained below:

(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currencies, primarily with respect to the USD, RMB and HKD. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities.
ii. The Group’s management has stipulated a policy stating each entity of the Group shall manage the foreign exchange risk comparing to its functional currency. Each entity shall hedge the overall exchange rate risk according to the instruction of the Group’s finance department. Foreign exchange risk is measured at the expected transaction of

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highly probable payment in USD under the foreign exchange agreement to reduce the impact of fluctuation in foreign exchange rate on expected cost of inventory purchased.

iii.The Group hedge the foreign exchange risk by foreign exchange trading and it is recognized under financial assets or liabilities at fair value through profit or loss. However, it is not accounted for under hedge accounting. Please refer to Note 6 (2).
iv.The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, RMB, HKD and CAD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Remainder of page intentionally left blank)

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(Foreign currency: functional currency) Financial assets Monetary items Cash in banks USD : NTD RMB : NTD USD : HKD HKD : NTD RMB : HKD USD : RMB Receivables USD : HKD USD : NTD USD : RMB SGD : USD Non-monetary items Current financial assets at fair value through other comprehensive income USD : NTD Investments accounted for under equity method USD : NTD HKD : NTD RMB : NTD				September30, 2021	September30, 2021
	Foreign currency amount (In thousands) $ 73,421 14,228 7,668 4,071 3,457 5,532 $ 1,557 263,649 80,412 3,410 $ 5,000 $ 113,530 295,694 86,545	Exchange rate	Book value (NTD) $ 2,044,775 61,252 213,554 14,558 14,882 154,066 $ 43,362 7,342,625 2,239,474 69,803 $ 139,250 $ 3,161,800 1,057,402 372,577		Sensitivity analysis
				Degree of variation 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
		27.85 4.31 7.79 3.58 1.20 6.47 7.79 27.85 6.47 0.74 27.85 27.85 3.58 4.31


under equity method USD : NTD HKD : NTD RMB : NTD

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			September30, 2021	September30, 2021
Foreign currency amount (In thousands) $ 50,642 2,600 18,816 $ 1,236 112,099 205,656 49,208	Exchange rate	Book value (NTD) $ 1,410,380 72,410 81,003 $ 4,420 482,586 5,727,520 1,370,443		Sensitivity analysis	Effect on other comprehensive income $ - - - $ - - - -
			Degree of variation 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
	6.47 0.79 4.31 0.83 4.31 27.85 6.47			$ 42,311 2,172 2,430 $ 133 14,478 171,826 41,113

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(Foreign currency: functional currency) Financial assets Monetary items Cash in banks USD : NTD RMB : NTD USD : HKD HKD : NTD USD : RMB USD : THB RMB : HKD Receivables USD : HKD USD : NTD USD : RMB USD : THB SGD : USD Non-monetary items Current financial assets at fair value through other comprehensive income USD : NTD Current financial assets at amortized cost USD : NTD Investments accounted for under equity method USD : NTD HKD : NTD RMB : NTD				December 31, 2020	December 31, 2020
	Foreign currency amount (In thousands) $ 11,164 2,882 8,736 201 9,412 1,390 2,534 $ 1,321 366,711 115,742 5,126 - $ 8,000 $ 3,000 $ 110,476 247,654 85,181	Exchange rate	Book value (NTD) $ 317,951 12,615 248,801 738 268,054 39,587 11,091 $ 37,622 10,443,929 3,296,332 145,988 - $ 227,840 $ 85,440 $ 3,146,355 909,632 372,839		Sensitivity analysis
				Degree of variation 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
		28.48 4.38 7.75 3.67 6.51 29.80 1.19 7.75 28.48 6.51 29.80 0.76 28.48 28.48 28.48 3.67 4.38


under equity method USD : NTD HKD : NTD RMB : NTD

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			December 31, 2020	December 31, 2020
Foreign currency amount (In thousands) $ 48,000 42,815 2,600 4,500 $ 234 213,075 230,702 61,494	Exchange rate	Book value (NTD) $ 1,367,040 1,219,371 74,048 19,697 $ 859 932,629 6,570,393 1,751,349		Sensitivity analysis
			Degree of variation 3% 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
	28.48 6.51 0.78 4.38 0.84 4.38 28.48 6.51			$ 41,011 36,581 2,221 591 $ 26 27,979 197,112 52,540

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(Foreign currency: functional currency) Financial assets Monetary items Cash in banks USD : NTD RMB : NTD USD : HKD HKD : NTD USD : RMB USD : THB RMB : HKD Receivables USD : HKD USD : NTD USD : RMB USD : THB SGD : USD Non-monetary items Current financial assets at fair value through other comprehensive income USD : NTD Investments accounted for under equity method USD : NTD HKD : NTD RMB : NTD				September30, 2020	September30, 2020
	Foreign currency amount (In thousands) $ 75,826 30,265 8,545 821 13,464 511 2,532 $ 1,481 260,208 98,581 10,885 2,879 $ 2,935 $ 97,266 219,616 86,170	Exchange rate	Book value (NTD) $ 2,206,537 129,201 248,660 3,082 391,802 14,870 10,809 $ 43,097 7,572,053 2,868,707 316,754 61,208 $ 85,409 $ 2,830,435 824,439 367,861		Sensitivity analysis	Effect on other comprehensive income $ - - - - - - - $ - - - - - $ 2,562 $ 84,913 24,733 11,036
				Degree of variation 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
		29.10 4.27 7.75 3.75 6.82 31.49 1.14 7.75 29.10 6.82 31.49 0.73 29.10 29.10 3.75 4.27			$ 66,196 3,876 7,460 92 11,754 446 324 $ 1,293 227,162 86,061 9,503 1,836 $ - $ - - -


under equity method USD : NTD HKD : NTD RMB : NTD

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			September30, 2020	September30, 2020
Foreign currency amount (In thousands) $ 33,000 32,900 2,600 6,500 $ 2,728 128,929 217,104 48,021	Exchange rate	Book value (NTD) $ 960,300 957,390 75,660 27,749 $ 10,241 550,398 6,317,726 1,397,411		Sensitivity analysis	Effect on other comprehensive income $ - - - - $ - - - -
			Degree of variation 3% 3% 3% 3% 3% 3% 3% 3%	Effect on profit or loss
	29.10 6.82 0.75 4.27 0.88 4.27 29.10 6.82			$ 28,809 28,722 2,270 832 $ 307 16,512 189,532 41,922

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Total exchange gain (loss), including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three months and nine months ended September 30, 2021 and 2020 amounted to a gain of $203 thousand, a loss of $77,995 thousand, a loss of $33,236 thousand, and a loss of $98,117 thousand, respectively.

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 3% with all other variables held constant, post-tax profit for the nine months ended September 30, 2021 and 2020 would have increased/decreased by $836 thousand and $729 thousand, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $34,585 thousand and $44,685 thousand, respectively, as a result of other comprehensive income classified as available-for-sale equity investment and equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

i. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.
ii. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit (loss), net of tax for the nine months ended September 30, 2021 and 2020 would have increased/decreased by $6,089 thousand and $4,564 thousand, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
iii.If the Current investments in debt instrument interest rate had increased/decreased by 0.25% with all other variables held constant, profit (loss), net of tax for the nine months ended September 30, 2021 and 2020 would have increased/decreased by $656 thousand and $13 thousand, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost, at fair value through profit or loss and at fair value through other comprehensive income.
ii. For banks and financial institutions, the Group transacts with a variety of banks and financial institutions, mainly domestic and overseas well-known financial institutions, to avoid concentration in any single counterparty and to minimize credit risk. The Group can only enter into the financial services and loan agreement provided by banks and financial institutions after being approved by the Board of Directors or authorized management according to the Company’s delegation of authorization policy. To prevent legal risks, all the Group signs with banks and financial institutions after all documents are examined by counsel or legal advisor profession. The Group periodically checks the credit rating, conditions and quality of service as well as transactions. According to the

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Group’s operating condition, the credit limits and utilization of credit limits are monitored on a regular basis and maintained within a reasonable range to ensure it meets the needs of the operation.

iii. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
iv.The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:
(i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
(ii) For investments in bonds that are traded over the counter, if any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.
v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vi.The Group classifies customers’ accounts receivable, contract assets in accordance with geographic area. The Group applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis.
vii.The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.
viii. The Group used the forecastability of adjust historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. As of September 30, 2021, December 31, 2020 and September 30, 2020, the provision matrix is as follows:

September 30, 2021	Expected loss rate	Total book value $ 7,657,011 160,083 29,304 719 12,286 $ 7,859,403	Loss allowance $ 4,775 4,868 10,337 719 12,286 $ 32,985
Not pass due Overdue up to 30 days Overdue between 31 to 90 days Overdue between 91 to 180 days Overdue over 180 days	0.06% 3.04% 35.28% 100.00% 100.00%

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December 30, 2020 Not pass due Overdue up to 30 days Overdue between 31 to 90 days Overdue between 91 to 180 days Overdue over 180 days September 30, 2020	Expected loss rate	Total book value $ 12,401,873 38,897 6,066 24,136 122 $ 12,471,094 Total book value $ 8,945,138 27,123 3,226 1,324 23,331 $ 9,000,142	Loss allowance $ 3,038 828 1,552 24,136 122 $ 29,676 Loss allowance $ 2,657 946 599 1,324 23,331 $ 28,857
	0.02% 2.13% 25.59% 100.00% 100.00% Expected loss rate
Not pass due Overdue up to 30 days Overdue between 31 to 90 days Overdue between 91 to 180 days Overdue over 180 days	0.03% 3.49% 18.57% 100.00% 100.00%

ix.Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are as follows:
At January 1 Provision for impairment Effect of foreign exchange At September 30 At January 1 Reversal of impairment loss Effect of foreign exchange At September 30		2021
		Accounts receivable
	$ 29,676 4,672 ( 1,363) $ 32,985 2020 Accounts receivable $ 29,507 ( 359) ( 291) $ 28,857	$ 29,676 4,672 ( 1,363) $ 32,985 2020 Accounts receivable

For provisioned loss during the nine months ended September 30, 2021 and 2020, the (reversal of) impairment losses arising from customers’ contracts were a loss of $4,672 thousand and a gain of $359 thousand, respectively.

x. For the nine months ended September 30, 2021 and 2020, there was no loss allowance for investments in debt instruments at fair value through other comprehensive income.

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xi.For investments in debt instruments at fair value through other comprehensive income, the credit rating levels are presented below:

Financial assets at fair value through other comprehensive income Group 1 Financial assets at fair value through other comprehensive income Group 1 Financial assets at fair value through other comprehensive income Group 1		September 30, 2021	Total $ 143,833 Total $ 232,060 Total $ 87,671
	12 months $ 143,833	Lifetime Significant increase in Credit risk Impairment of credit $ - $ - December 31, 2020
	12 months $ 232,060	Lifetime Significant increase in Credit risk Impairment of credit $ - $ - September 30, 2020
	12 months $ 87,671	Lifetime Significant increase in Credit risk Impairment of credit $ - $ -
		Significant increase in Credit risk $ -

Group 1: Debt instruments designated as investment grade.

(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. Group treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.
iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
iv. The Group has $12,125,895 thousand, $7,597,976 thousand and $8,692,432 thousand in undrawn borrowing facilities as of September 30, 2021, December 31, 2020 and September 30, 2020, respectively.

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Non-derivative financial liabilities

September 30, 2021 Less than 3 months Short-term borrowings $ 1,236,100 Notes payable 11 Accounts payable 5,050,926 Accounts payable - related parties 2,615,005 Other payables (including related parties) 1,235,068 Lease liabilities 26,504 Bonds payable 2,231,900 Long-term borrowings 2,532 Derivative financial liabilities Forward exchange contracts 3,409	Between 3 months and 1 year $1,331,027 - 925,620 268,792 181,652 41,254 - 113,461 -	Between 1 and 2 years $ - - - - - 20,562 - 478,986 -	Between 2 and 5 years $ - - - - - 24,869 3,000,000 889,624 -	Over 5 years $ - - - - - 28,521 - 31,281 -	Total $ 2,567,127 11 5,976,546 2,883,797 1,416,720 141,710 5,231,900 1,515,884 3,409

Non-derivative financial liabilities

December 31, 2020 Less than 3 months Short-term borrowings $ 2,591,817 Accounts payable 6,062,301 Accounts payable - related parties 4,043,135 Other payables (including related parties) 1,588,845 Lease liabilities 39,865 Bonds payable - Long-term borrowings 828 Derivative financial liabilities Forward exchange contracts 30,047	Between 3 months and 1 year $ 681,792 404,629 124,342 66,608 110,075 2,231,900 10,001 -	Between 1 and 2 years $ - - - - 57,231 - 84,284 -	Between 2 and 5 years $ - - - - 24,612 - 635,779 -	Over 5 years $ - - - - 35,049 - 87,718 -	Total $ 3,273,609 6,466,930 4,167,477 1,655,453 266,832 2,231,900 818,610 30,047

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Non-derivative financial liabilities

September 30, 2020 Less than 3 months Short-term borrowings $ 1,918,723 Notes payable 74 Accounts payable 5,121,475 Accounts payable - related parties 3,614,117 Other payables (including related parties) 1,673,783 Lease liabilities 39,516 Bonds payable 2,231,900 Long-term borrowings 420 Derivative financial liabilities Forward exchange contracts 12,418	Between 3 months and 1 year $ 690,177 - 1,086,876 213,782 16,514 110,613 - 1,264 -	Between 1 and 2 years $ - - - - - 84,790 - 43,352 -	Between 2 and 5 years $ - - - - - 24,864 - 352,694 -	Over 5 years $ - - - - - 34,111 - 44,404 -	Total $ 2,608,900 74 6,208,351 3,827,899 1,690,297 293,894 2,231,900 442,134 12,418

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, and derivative instruments with quoted market prices is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in certain derivative instruments and equity instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in certain derivative instruments, equity investment without active market and is included in Level 3.
B. Financial instruments not measured at fair value Financial instruments not measured at fair value include the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term and long-term borrowings, notes payable, accounts payable and other payables.

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	September 30, 2021	September 30, 2021	Level 3 $-
Book value $ 5,144,464		Fair value
	Level 1 Level 2 $- $5,125,096 December 30, 2020

			Level 3 $-
Book value $ 2,203,801		Fair value
	Level 1 Level 2 $- $2,214,379 September 30, 2020

			Level 3 $-
Book value $ 2,196,107		Fair value
	Level 1 $-	Level 2 $2,206,775

C. The related information of financial and non-financial instruments measured at
level on the basis of the nature, characteristics and risks of the assets and liabilities
September 30, 2021
Level 1
Level 2
Level 3
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
-Equity securities
$ - $ -
$ 27,863
-Forward exchange contracts
-
3,137
-
-Fund
55,065
-
-
-Call options of convertible bonds
-
-
300
-Bonds investments
-
293,664
-
Financial liabilities at fair value
through other comprehensive income
- Equity securities
1,011,195
-
141,629
- Debt securities
143,833
-
-
$ 1,210,093
$ 296,801
$ 169,792
Liabilities
Recurring fair value measurements
Financial liabilities at fair
value through profit or loss
-Forward exchange contracts
$-
$ 3,409
$-

fair value by
is as follows:
Total
$ 27,863
3,137
55,065
300
293,664
1,152,824
143,833
$ 1,676,686
$ 3,409

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December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss -Equity securities -Forward exchange contracts -Fund -Call options of convertible bonds Financial liabilities at fair value through other comprehensive income - Equity securities - Debt securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss -Forward exchange contracts September 30, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss -Equity securities -Forward exchange contracts -Fund -Call options of convertible bonds Financial liabilities at fair value through other comprehensive income - Equity securities - Debt securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss -Forward exchange contracts	Level 1 $ - - 52,157 - 1,402,262 232,060 $ 1,686,479 $- Level 1 $ - - 51,254 - 1,365,743 87,671 $ 1,504,668 $-	Level 2 $ - 26,316 - - - - $ 26,316 $ 30,047 Level 2 $ - 16,316 - - - - $ 16,316 $ 12,418	Level 3 $ 26,468 - - 446 134,010 - $ 160,924 $- Level 3 $ 24,305 - - 670 123,758 - $ 148,733 $-	Total $ 26,468 26,316 52,157 446 1,536,272 232,060 $ 1,873,719 $ 30,047 Total $ 24,305 16,316 51,254 670 1,489,501 87,671 $ 1,669,717 $ 12,418

D. The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

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Listed shares Open-end fund Closing price at Net asset value at Market quoted price evaluation date evaluation date

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods.
iii. Forward exchange contracts are usually valued based on the current forward exchange rate.
iv. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
E. For the nine months ended September 30, 2021 and 2020, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the nine months ended September 30, 2021 and 2020:

2020:
At January 1 Current increase Losses recognized in profit or loss Gains (losses) recognized in other comprehensive income At September 30	Nine months ended September 30
	2021 $ 160,924 6,131 ( 146) 2,883 $ 169,792	2020 $ 152,921 3,004 ( 1,620) ( 5,572) $ 148,733

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G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
Equity securities Private equity funds in venture capital Call options of convertible bonds	Fair value at September 30, 2021 $ 141,629 27,863 300	Valuation technique Market comparable companies Net asset value Binary tree convertible bond valuation model	Significant unobservable input	Range (weighted average) $ 9,429 27,863 0.2772% 88.4 27.35%	Relationship of inputs to fair value The higher the multiplier, the higher the fair value N/A The higher the risk-free interest rate, the lower the fair value The higher the stock price, the higher the fair value The higher the stock price volatility, the higher the fair value
			Price to book ratio multiple N/A Risk-free interest rate Stock price Volatility

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Equity securities Private equity funds in venture capital Call options of convertible bonds Equity securities Private equity funds in venture capital Call options of convertible bonds	Fair value at December 31, 2020 $ 134,010 26,468 446 Fair value at September 30, 2020 $ 76,837 24,305 670	Fair value at December 31, 2020		Valuation technique Market comparable companies Net asset value Binary tree convertible bond valuation model Valuation technique Market comparable companies Net asset value Binary tree convertible bond valuation model	Significant unobservable input Price to book ratio multiple N/A Risk-free interest rate Stock price Volatility Significant unobservable input	Significant unobservable input	Significant unobservable input	Range (weighted average) Relationship of inputs to fair value $ 15,818 The higher the multiplier, the higher the fair value 26,468 N/A 0.0544% The higher the risk-free interest rate, the lower the fair value 146.5 The higher the stock price, the higher the fair value 32.86% The higher the stock price volatility, the higher the fair value Range (weighted average) Relationship of inputs to fair value $ 5,818 The higher the multiplier, the higher the fair value 24,305 N/A 0.1133% The higher the risk-free interest rate, the lower the fair value 148.0 The higher the stock price, the higher the fair value 33.33% The higher the stock price volatility, the higher the fair value
					Price to book ratio multiple N/A Risk-free interest rate Stock price Volatility

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H. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

Financial assets Call options of convertible bonds Equity securities Financial assets Call options of convertible bonds Equity securities Financial assets Call options of convertible bonds Equity securities	Input Risk-free interest rate Stock price Volatility Cash flow Input Risk-free interest rate Stock price Volatility Cash flow Input Risk-free interest rate Stock price Volatility Cash flow	Change ±20bp ±10% ±5% ±10% Change ±20bp ±10% ±5% ±10% Change ±20bp ±10% ±5% ±10%	September 30, 2021	September 30, 2021	September 30, 2021
			Recognized in profit or loss Recognized in other comprehensive income Favorable change Unfavorable change Favorable change Unfavorable change $ - $ - $ - $ - - ( 300) - - 300 ( 300) - - - - 14,163 ( 14,163) $ 300 ($ 600) $ 14,163 ($ 14,163) December 31, 2020
			Favorable change $ - - 300 - $ 300
			Recognized in profit or loss Recognized in other comprehensive income Favorable change Unfavorable change Favorable change Unfavorable change $ - $ - $ - $ - 446 ( 223) - - 223 ( 223) - - - - 13,401 ( 13,401) $ 669 ($ 446) $ 13,401 ($ 13,401) September 30, 2020
			Favorable change $ - 446 223 - $ 669
			Recognized in profit or loss Favorable change Unfavorable change $ - $ - 893 ( 223) 446 ( 223) - - $ 1,339 ($ 446)		Recognized in other comprehensive income Favorable change Unfavorable change $ - $ - - - - - 7,684 ( 7,684) $ 7,684 ($ 7,684)
			Favorable change $ - 893 446 - $ 1,339		Favorable change $ - - - 7,684 $ 7,684

(4) Assessment of impact of COVID-19

Though there is COVID-19 pandemic and several epidemic prevention measures from the government, the Group’s overall business were not significantly impacted based on the Group’s assessment as of September 30, 2021. The Group has taken actions to prevent the spread of the pandemic which may affect the business operation, and has been monitoring the status of this

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matter.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to Note 4 (3).
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 3.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6 (2).
J. Significant inter-company transactions during the reporting periods: Purchases or sales of goods from or to related parties reaching $100 million or more: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 8.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in Mainland China: Please refer to table 9.

(4) Major shareholders information

Major shareholders information: None.

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. Business organization is divided into Taiwan, Shenzhen, Singapore and other segments based on the operating regions. The Company’s revenue is mainly from manufacturing and sales of microphones, receivers, speakers and other electronic components.

(2) Measurement of segment information

The Group evaluates the performance of the operating segments based on post-tax profit or loss.

(3) Information about segment profit or loss, assets and liabilities

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A. The segment information provided to the chief operating decision-maker for the reportable segments for the three months ended September 30, 2021 and September 30, 2020 is as follows:

For three months ended September 30, 2021 Taiwan Shenzhen Singapore Others Total $ 6,226,228 $ 282,132 $ 1,544,912 $ 410,617 $ 8,463,889 4,917 3,343,874 - 1,212,461 4,561,252 $ 6,231,145 $ 3,626,006 $ 1,544,912 $ 1,623,078 $ 13,025,141 $ 407,899 $ 249,915 $ 114,273 ($ 314,488) $ 457,599 For three months ended September 30, 2020 Taiwan Shenzhen Singapore Others Total $ 7,717,614 $ 220,817 $ 1,861,439 $ 336,284 $ 10,136,154 1,875 3,925,211 7,691 526,816 4,461,593 $ 7,719,489 $ 4,146,028 $ 1,869,130 $ 863,100 $ 14,597,747 $ 393,808 ($ 95,441) $ 169,394 ($ 73,953) $ 393,808	For three months ended September 30, 2021 Taiwan Shenzhen Singapore Others Total $ 6,226,228 $ 282,132 $ 1,544,912 $ 410,617 $ 8,463,889 4,917 3,343,874 - 1,212,461 4,561,252 $ 6,231,145 $ 3,626,006 $ 1,544,912 $ 1,623,078 $ 13,025,141 $ 407,899 $ 249,915 $ 114,273 ($ 314,488) $ 457,599 For three months ended September 30, 2020 Taiwan Shenzhen Singapore Others Total $ 7,717,614 $ 220,817 $ 1,861,439 $ 336,284 $ 10,136,154 1,875 3,925,211 7,691 526,816 4,461,593 $ 7,719,489 $ 4,146,028 $ 1,869,130 $ 863,100 $ 14,597,747 $ 393,808 ($ 95,441) $ 169,394 ($ 73,953) $ 393,808	For three months ended September 30, 2021 Taiwan Shenzhen Singapore Others Total $ 6,226,228 $ 282,132 $ 1,544,912 $ 410,617 $ 8,463,889 4,917 3,343,874 - 1,212,461 4,561,252 $ 6,231,145 $ 3,626,006 $ 1,544,912 $ 1,623,078 $ 13,025,141 $ 407,899 $ 249,915 $ 114,273 ($ 314,488) $ 457,599 For three months ended September 30, 2020 Taiwan Shenzhen Singapore Others Total $ 7,717,614 $ 220,817 $ 1,861,439 $ 336,284 $ 10,136,154 1,875 3,925,211 7,691 526,816 4,461,593 $ 7,719,489 $ 4,146,028 $ 1,869,130 $ 863,100 $ 14,597,747 $ 393,808 ($ 95,441) $ 169,394 ($ 73,953) $ 393,808	For three months ended September 30, 2021 Taiwan Shenzhen Singapore Others Total $ 6,226,228 $ 282,132 $ 1,544,912 $ 410,617 $ 8,463,889 4,917 3,343,874 - 1,212,461 4,561,252 $ 6,231,145 $ 3,626,006 $ 1,544,912 $ 1,623,078 $ 13,025,141 $ 407,899 $ 249,915 $ 114,273 ($ 314,488) $ 457,599 For three months ended September 30, 2020 Taiwan Shenzhen Singapore Others Total $ 7,717,614 $ 220,817 $ 1,861,439 $ 336,284 $ 10,136,154 1,875 3,925,211 7,691 526,816 4,461,593 $ 7,719,489 $ 4,146,028 $ 1,869,130 $ 863,100 $ 14,597,747 $ 393,808 ($ 95,441) $ 169,394 ($ 73,953) $ 393,808	For three months ended September 30, 2021 Taiwan Shenzhen Singapore Others Total $ 6,226,228 $ 282,132 $ 1,544,912 $ 410,617 $ 8,463,889 4,917 3,343,874 - 1,212,461 4,561,252 $ 6,231,145 $ 3,626,006 $ 1,544,912 $ 1,623,078 $ 13,025,141 $ 407,899 $ 249,915 $ 114,273 ($ 314,488) $ 457,599 For three months ended September 30, 2020 Taiwan Shenzhen Singapore Others Total $ 7,717,614 $ 220,817 $ 1,861,439 $ 336,284 $ 10,136,154 1,875 3,925,211 7,691 526,816 4,461,593 $ 7,719,489 $ 4,146,028 $ 1,869,130 $ 863,100 $ 14,597,747 $ 393,808 ($ 95,441) $ 169,394 ($ 73,953) $ 393,808
Taiwan $ 7,717,614 1,875 $ 7,719,489 $ 393,808	Shenzhen	Singapore $ 1,861,439 7,691 $ 1,869,130 $ 169,394	Others $ 336,284 526,816 $ 863,100 ($ 73,953)
	$ 220,817 3,925,211			$ 10,136,154 4,461,593 $ 14,597,747 $ 393,808
	$ 4,146,028
	($ 95,441)

Note: The Group does not use segment information relating to assets and liabilities to evaluate segment performance. As a result, such assets and liabilities to be disclosed amounted to $0.

B. The segment information provided to the chief operating decision-maker for the reportable

segments for the nine months ended September 30, 2021 and September 30, 2020 is as follows:

For nine months ended September 30, 2021	For nine months ended September 30, 2021	For nine months ended September 30, 2021	For nine months ended September 30, 2021	Total
Taiwan Shenzhen Singapore Others $ 17,602,574 $ 1,441,207 $ 4,304,225 $ 1,019,343 10,193 7,891,774 - 3,729,990 $ 17,612,767 $ 9,332,981 $ 4,304,225 $ 4,749,333 $ 589,737 ($ 97,837) $ 228,208 ($ 130,372) For nine months ended September 30, 2020
				$ 24,367,349 11,631,957 $ 35,999,306 $ 589,736 Total
Taiwan $ 17,037,598 5,398 $ 17,042,996 $ 743,957	Shenzhen	Singapore $ 3,597,310 27,123 $ 3,624,433 $ 340,503	Others $ 778,547 1,103,106 $ 1,881,653 ($ 219,124)
	$ 344,563 7,490,576			$ 21,758,018 8,626,203 $ 30,384,221 $ 743,957
	$ 7,835,139
	($ 121,379)

Note: The Group does not use segment information relating to assets and liabilities to evaluate

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segment performance. As a result, such assets and liabilities to be disclosed amounted to $0.

C. The Group’s reportable operating segments are classified based on the operating regions.
D. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 4. The Group’s segment profit (loss) is measured with the current profit (loss), which is used as a basis for the Group in assessing the performance of the operating segments.

(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.
A. A reconciliation of income after adjustment and total segment income from continuing operations is provided as follows:

ement of comprehensive income. A reconciliation of income after adjustment operations is provided as follows:	and total segment income from continuing	and total segment income from continuing
Adjusted revenue from reportable segments Adjusted revenue from other operating segments Total operating segments Elimination of inter-segment revenue Total consolidated operating revenue Adjusted revenue from reportable segments Adjusted revenue from other operating segments Total operating segments Elimination of inter-segment revenue Total consolidated operating revenue	Three months ended September 30
	2021 2020 $ 11,402,063 $ 13,734,647 1,623,078 863,100 13,025,141 14,597,747 ( 4,561,252) ( 4,461,593) $ 8,463,889 $ 10,136,154 Nine months ended September 30
	2021 $ 31,249,973 4,749,333 35,999,306 ( 11,631,957) $ 24,367,349	2020 $ 28,502,568 1,881,653 30,384,221 ( 8,626,203) $ 21,758,018

B. A reconciliation of adjusted current income before tax and the income before tax from continuing operations is provided as follows:

continuing operations is provided as follows:
Adjusted income from reportable segments after income tax Adjusted income from other operating segments after income tax Total operating segments Elimination of inter-segment income Income from continuing operations after income tax	Three months ended September 30
	2021 2020 $ 772,087 $ 467,761 (54,170) 180,737 717,917 648,498 ( 260,318) ( 254,690) $ 457,599 $ 393,808 Nine months ended September 30
	2021 2020

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Adjusted income from reportable segments after income tax Adjusted income from other operating segments after income tax Total operating segments Elimination of inter-segment income Income from continuing operations after income tax	$ 720,108 564,613 1,284,721 ( 694,985) $ 589,736	$ 963,081 294,965 1,258,046 ( 514,089) $ 743,957

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MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others Nine months ended September 30, 2021

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Party being Endorsed/guaranteed

Ratio of accumulated endorsement/ Limit on Maximum guarantee Ceiling on total Provision of Provision of Provision of endorsements/ outstanding Outstanding Amount of amount to net amount of endorsements endorsements endorsements/ Relationship guarantees endorsement/ endorsement/ endorsements/ asset value of endorsements/ / guarantees / guarantees guarantees to with the the endorser/ endorser/ provided for a guarantee guarantee Actual guarantees guarantees by parent by subsidiary the party in Number Endorser/ Company guarantor single party amount as of amount as of amount secured with guarantor provided company to to parent Mainland (Note 1) guarantor name (Note 2) (Note 3) September 30, 2021 September 30, 2021 drawn down collateral company (Note 4) subsidiary company China Footnote 0 MEHO SOCV 2 $ 8,784,834 $ 97,475 $ 97,475 $ 72,410 $ - 0.89% $ 10,981,042 Y N N 0 MEHO SENM 2 8,784,834 27,850 27,850 - - 0.25% 10,981,042 Y N N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/ guaranteed is classified into the following six categories; fill in the number of category each case belongs to: (1) Having business relationship.
(2) The Company holds over 50% of the voting rights directly or indirectly.
(3) This company holds over 50% of the voting rights of the Company directly or indirectly.
(4)The Company holds over 90% of the voting rights directly or indirectly.

Note 3: The guarantees and endorsements for a single party should not exceed 80% of the Company’s net assets.

Note 4: The ceiling on total amount of endorsements/guarantees provided to others by the Company is 100% of the Company's net assets.

Table 1, Page 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) September 30, 2021

			September 30, 2021
Table 2 Securities held by The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company MEST MEST ASCX	Marketable securities (Note 1) 76324296A KGI Taiwan Multi-Asset Income Fund A TWD SYNergy Private Placement (YDB8AA) TXC CORPORATION CB (30425) JAFCO 2881B.TW 2882B.TW 5871A Stock - 4943.TW Stock - 3290.TW Stock - FUJITER Semiconductor CO.,LTD. Stock - NETVOX TECHNOLOGY CO., LTD Stock - -EVER THAI AGRI-PRODUCT CO.,LTD. Stock - -SUNSINO SME Development Co., Ltd. Stock - -LINSATION Intelligent Technology Limited Stock - MERRY FULING CO., LTD., TAIWAN BRANCH (SAMOA) Bond - XS218687550 Stock - Perfect Fortune Inc Stock - LOYAL WIRE& CABLE COMPANY LTD Stock - Beijing Wanling Hearing Aids	Relationship with the securities issuer - - - - - - - - - - - - - - - - -	General ledger account Financial assets mandatorily measured at fair value through profit or loss Valuation adjustment Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Valuation adjustment Non-current financial assets mandatorily measured at fair value through profit or loss Equity instruments measured at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income Valuation adjustment Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Debt instruments measured at fair value through other comprehensive income Valuation adjustment Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Valuation adjustment		Expressed in thousands of NTD (Except as otherwise indicated) As of September 30, 2021 Book value (in thousands) Ownership (%) Fair value (in thousands) Note $ 50,000 - $ 55,065 5,065 $ 55,065 $ 280,000 - $ 280,000 12,322 13,664 1,342 293,664 293,664 $ 27,863 0.71% $ 27,863 $ 40,980 - $ 42,619 35,100 - 36,387 30,000 - 29,970 106,080 $ 108,976 2,896 $ 108,976 $ 648,164 8.85% $ 820,380 99,990 5.75% 81,839 27,811 9.79% 16,563 2,976 1.32% - 6,425 5.17% 6,425 2,123 0.36% 2,123 8,772 6.35% 8,772 10,437 19.00% 10,437 144,625 - 143,833 951,323 $ 1,090,372 139,049 $ 1,090,372 $ 7,604 18.33% $ 61,538 7,330 18.33% 31,035 4,736 19.64% 4,736 19,670 $ 97,309 77,639 $ 97,309
				Number of shares 5,015 280,000 12,200 925 683 585 300 13,905 5,723 2,126 324 683 169 75 356 5,000 2,126 1,159 -	Book value (in thousands) $ 50,000 5,065 $ 55,065 $ 280,000 12,322 1,342 293,664 $ 27,863 $ 40,980 35,100 30,000 106,080 2,896 $ 108,976 $ 648,164 99,990 27,811 2,976 6,425 2,123 8,772 10,437 144,625 951,323 139,049 $ 1,090,372 $ 7,604 7,330 4,736 19,670 77,639 $ 97,309	Ownership (%) - - 0.71% - - - 8.85% 5.75% 9.79% 1.32% 5.17% 0.36% 6.35% 19.00% - 18.33% 18.33% 19.64%

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9.

Table 2, Page 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Acquisition of real estate reaching $300 million or 20% of the Company's paid-in capital Nine months ended September 30, 2021

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Real estate acquired by MEVN	Real estate acquired Plant	Date of the event May 11, 2020	Transaction amount $ 483,488	Status of payment $ 443,827	Counterparty HOP LUC CONSTRUCTION JOINT STOCK COMPANY	Relationship with the counterparty None	If the counterparty is a related party, information as to the last transaction of the real estate is disclosed below Original owner who sold the real estate to the counterparty Relationship between the original owner and the acquirer Date of the original transaction Amount - - - -	If the counterparty is a related party, information as to the last transaction of the real estate is disclosed below Original owner who sold the real estate to the counterparty Relationship between the original owner and the acquirer Date of the original transaction Amount - - - -	If the counterparty is a related party, information as to the last transaction of the real estate is disclosed below Original owner who sold the real estate to the counterparty Relationship between the original owner and the acquirer Date of the original transaction Amount - - - -	Basis or reference used in setting the price Reason for acquisition of real estate and status of the real estate - For business use	Other commitment
							Original owner who sold the real estate to the counterparty -	Relationship between the original owner and the acquirer -	Date of the original transaction -
											-

Table 3, Page 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more Nine months ended September 30, 2021

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Purchase/seller The Company The Company The Company The Company METC MESG MESG MESG MECL	Counterparty MECE MECL MEVN MECH The Company MECH METC MECL The Company	Relationship with the counterparty Investment accounted for using the equity method A subsidiary of the Company A subsidiary of the Company Investment accounted for using the equity method Parent company Investment accounted for using the equity method A subsidiary of the Company A subsidiary of the Company Parent company		Transaction	Transaction	Credit term 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 125 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable 60 - 65 days end of month after offsetting with accounts receivable		Differences in transaction terms compared to third party transactions (Note 1) Unit price Credit term (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties (Note 1) 30~120 days end of month for the third parties	Notes/accounts receivable (payable) Balance (Note 2) Percentage of total notes/ accounts receivable payable ($ 1,477,397) 17% ( 2,137,380) 24% ( 431,125) 5% ( 776,963) 9% ( 544,708) 6% ( 572,165) 6% ( 185,127) 2% ( 335,246) 4% ( 228,977) 3%	Note
			Purchases (sales) Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	Amount $ 6,234,753 6,946,081 2,292,778 2,036,770 949,385 1,833,202 1,284,757 923,053 218,620	Percentage of total purchases (sales) 26% 29% 9% 8% 4% 8% 5% 4% 1%			Unit price (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)	Balance (Note 2) ($ 1,477,397) ( 2,137,380) ( 431,125) ( 776,963) ( 544,708) ( 572,165) ( 185,127) ( 335,246) ( 228,977)
										(Note 3) (Note 3) (Note 3) (Note 3) (Note 3) (Note 3)

Note 1: For purchase transactions with related parties, the price is based on the profitability of the product and will be adjusted annually. Note 2: The balance is the net amount after offsetting accounts receivable and payable due from/ to related parties. Note 3: Inter-company transactions between companies within the Group are eliminated.

Table 4, Page 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Receivables from related parties reaching $100 million or 20% of paid-in capital or more September 30, 2021

Table 5


Table 5 Creditor The Company MECL MECL METC MEVN The Company MECL	Counterparty METC The Company MESG MESG The Company MECL MECH	Relationship with the counterparty A subsidiary of the Company Parent Company A subsidiary of the Company A subsidiary of the Company Parent Company A subsidiary of the Company Investment accounted for using the equity method	Balance of accounts receivable due from related party General ledger account Amount Accounts receivable $ 544,708 Accounts receivable 2,137,380 Accounts receivable 335,246 Accounts receivable 185,127 Accounts receivable 431,125 Accounts receivable 228,977 Other receivable 466,741	Turnover rate 3.10 3.14 3.25 9.86 9.98 2.49 -	Overdue receivables Amount Action taken $ - - - - - - - - - - - - - -		Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date (Note2) Allowance for doubtful accounts Note $ - $ - (Note 1) 630,374 - (Note 1) - - (Note 1) 19,940 - (Note 1) 139,250 - (Note 1) 11,686 - (Note 1) 571 -
			General ledger account Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Other receivable		Amount $ - - - - - - -
						- - - - - - -

Note 1: Inter-company transactions between companies within the Group are eliminated. Note 2: The balance was as at October 28, 2021.

Table 5, Page 1

Table 6

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods Nine months ended September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1) 0 0 0 0 1 1 2 2 2 2 3 3	Company name MEHO MEHO MEHO MEHO METC METC MESG MESG MESG MESG MECL MECL	Counterparty MECL MECL MEVN MEVN MEHO MEHO MECL MECL METC METC MEHO MEHO	Relationship (Note 2) 1 1 1 1 2 2 3 3 3 3 2 2	General ledger account Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable		Transaction	Percentage of consolidated total operating revenues or total assets (Note 3) 29% 6% 9% 1% 4% 2% 4% 1% 5% 1% 1% 1%
					Amount $ 6,946,081 2,137,380 2,292,778 431,125 949,385 544,708 923,053 335,246 1,284,757 185,127 218,620 228,977	Transaction terms The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties The price is based on the profitability of the product The balance shown was net of receivables as agreed by both parties

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

Parent company is ‘0’.
The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counter party is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 6, Page 1

Table 7

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES Information on investees Nine months ended September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company DDBV DDBV MHKY INSA SOCV SOCA	Investee MEST DDBV LEOHAB ENTERPRISE CO.,LTD. MECA MESG METC MHKY INSA BTTT MEVN UCMU MTHK FUSA SOCV SOCA SENM	Location HONG KONG British Virgin IS. Taichung City U.S.A. SINGAPORE THAILAND CAYMAN SAMOA Taichung City VIETNAM MAURITIUS HONG KONG SAMOA CANADA CANADA NORWAY	Main business activities Sales of microphone, receiver and speaker General investment business Plastic injection molding and metal stamping Technique, marketing and after service Sales of microphone, receiver and speaker Microphone, components and product and sale of other electric products Sales of medical device General investment business Sales of medical device Manufacture of microphone and speaker General investment business General investment business General investment business Sale and development of speaker and power amplifier General investment business Manufacture and sales of speaker monomer	Initial investment amount Balance as on September 30, 2021 Balance as on December 31, 2020 $ 981,113 $ 981,113 1,479,925 1,479,925 96,666 96,666 28,887 28,887 92,132 92,132 484,358 484,358 887,287 887,287 1,199,977 865,832 14,640 14,640 366,710 366,710 151 151 1,392,956 1,392,956 818,916 818,916 30 30 11,112 11,112 23 23	Shares held as on September 30, 2021 Number of shares (in thousand shares) Ownership (%) Book value 25,658 100.00 $ 4,069,910 48,005 100.00 3,161,907 4,986 21.00 43,006 999 99.90 37,861 800 100.00 1,329,987 5,060 99.99 585,241 24,979 100.00 629,415 - 100.00 831,715 9,000 100.00 22,696 - 51.00 475,716 5 100.00 - 48,000 100.00 3,161,800 - 96.01 652,495 - 100.00 24,357 - 100.00 69,251 - 100.00 56,302	Shares held as on September 30, 2021 Number of shares (in thousand shares) Ownership (%) Book value 25,658 100.00 $ 4,069,910 48,005 100.00 3,161,907 4,986 21.00 43,006 999 99.90 37,861 800 100.00 1,329,987 5,060 99.99 585,241 24,979 100.00 629,415 - 100.00 831,715 9,000 100.00 22,696 - 51.00 475,716 5 100.00 - 48,000 100.00 3,161,800 - 96.01 652,495 - 100.00 24,357 - 100.00 69,251 - 100.00 56,302	Net profit (loss) of the investee for the year ended September 30, 2021 Investment income (loss) recognized by the Company for the year ended September 30, 2021 $ 73,050 $ 67,362 56,938 67,833 ( 7) ( 1) 11,172 11,161 228,208 228,208 108,618 109,425 ( 89,310) ( 89,310) ( 33,256) ( 26,198) 1,045 1,045 228,048 116,305 - - 56,938 - ( 87,471) - ( 14,333) - 3,952 - 4,139 -	Note (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)
				Balance as on September 30, 2021 $ 981,113 1,479,925 96,666 28,887 92,132 484,358 887,287 1,199,977 14,640 366,710 151 1,392,956 818,916 30 11,112 23	Number of shares (in thousand shares) 25,658 48,005 4,986 999 800 5,060 24,979 - 9,000 - 5 48,000 - - - -	Ownership (%) 100.00 100.00 21.00 99.90 100.00 99.99 100.00 100.00 100.00 51.00 100.00 100.00 96.01 100.00 100.00 100.00

Note 1: The investment income included unrealized gains or losses and realized gains arising from upstream transactions. Note 2: The investee is second subsidiary and investment income (loss) is not shown.

Table 7, Page 1

Table 8

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES Information on investees in Mainland China Nine months ended September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for nine months ended September 30, 2021

Investee in Mainland China MECL MECE MECS Perfect Fortune Inc. LOYAL WIRE& CABLE COMPANY LTD. MECH FUSZ MEDG MSCS ETCX	Main business activities Microphone, receiver, speaker, security system, induction cooker and other electronic component Manufacture and sales of microphone, receiver and speaker International trade, transit trade and trading consulting; trading amongst companies in bonded area and trading agency in the area Electric wire, electric cable and other wire processing Electric wire, electric cable and other wire processing Manufacture and sales of microphone, receiver, speaker and mobile phone Manufacture of medical device Research and development of sound equipment, earphones, mobile power supply, charging box, cable, connector, electronic components, plastic hardware, mold and antenna Manufacture of speaker and amplifier Retail sales of hearing products	Paid-in capital $ 410,456 2,693,806 7,145 41,482 119,335 430,500 276,309 861,000 148,835 19,373	Investment method (Note 2) (Note 2) (Note 2) (Note 2, 4) (Note 2, 4) (Note 2) (Note 2) (Note 1) (Note 1) (Note 2)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021 $ 453,191 1,369,285 6,055 107,624 - 420,687 310,763 452,564 79,728 19,009	Remitted to Mainland China $ - - - - - - - - 30,769 -	Remitted back to Taiwan $ - - - - - - - - - -	Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2021 $ 453,191 1,369,285 6,055 107,624 - 420,687 310,763 452,564 110,497 19,009	Net income of investee for nine months ended September 30, 2021	Ownership held by the Company (direct or indirect) 100.00% 49.00% 49.00% 18.33% 18.33% 49.00% 96.01% 49.00% 100.00% 96.01%	Investment income (loss) recognized by the Company for nine months ended September 30, 2021 ($ 97,837) 67,807 ( 6) - - 163,827 ( 1,750) 5,909 7,106 ( 22,699)	Book value of investments in Mainland China as of September 30, 2021 (Note 5) $ 2,656,977 3,161,800 ( 1,055) 61,535 31,034 1,058,456 243,319 372,577 114,727 ( 15,176)	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2021 $ 2,282,120 295,185 40,321 4,125 - - - - - -	Note
								($ 97,837) 116,147 ( 12) 17,504 7,914 337,457 ( 1,802) 12,060 10,936 ( 11,511)					Note 3 Note 3 Note 3

Table 8, Page 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES Information on investees in Mainland China Nine months ended September 30, 2021

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for nine months ended September 30, 2021

Investee in Mainland China ASCX LACX ASCZ FUXM	Main business activities Manufacture and sales of hearing aid, hearing device and acoustics equipment Research and development and technical sales of software for hearing aid use Manufacture of hearing aid and acoustics for rehabilitation device Sales of medical device	Paid-in capital 57,089 21,525 17,220 299,770	Investment method (Note 2) (Note 2) (Note 2) (Note 2)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021 275,537 22,180 17,744 302,995	Remitted to Mainland China - - - -	Remitted back to Taiwan - - - -	Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2021 275,537 22,180 17,744 302,995 $ 3,868,131	Net income of investee for nine months ended September 30, 2021	Ownership held by the Company (direct or indirect) 95.53% 95.53% 95.53% 96.01%	Investment income (loss) recognized by the Company for nine months ended September 30, 2021 ( 573) 1,450 1,189 ( 59,635)	Book value of investments in Mainland China as of September 30, 2021 (Note 5) 72,296 42,519 - 163,227	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2021 - - - -	Note
								( 593) 1,500 1,231 ( 61,403)

Note 1: Reinvesting in the investee in Mainland China through the parent company. Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China. Note 3: The financial statements that are audited and attested by R.O.C. parent company’s CPA. Note 4: The investee is the reinvestment company of MERRY ELECTRONICS (HK) CO., LTD. shown as non-current financial assets at fair value through other comprehensive income. Note 5: The amount in the table is translated into New Taiwan dollars at the closing exchange rates prevailing at the balance sheet date.

Investment amount Accumulated amount approved by the Ceiling on investments in of remittance from Investment Mainland China imposed Taiwan to Mainland Commission of the by the Investment China as of Ministry of Economic Commission (MOEA) Company name September 30, 2021 Affairs (MOEA) (Note 1) Merry Electronics Co., Ltd. $ 3,868,131 $ 3,757,859 $ 6,588,625

Note 1: (2001) Tai-Cai-Zheng (1) Letter No. 006130 of Securities and Futures Commission, Ministry of Finance, R.O.C

Table 8, Page 2

Table 9

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas Nine months ended September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China MECL MECL MECE MECH MECH	Counterparty MEHO MESG MEHO MEHO MESG	Sales (purchase) Amount % ($ 6,946,081) 29% ( 923,053) 3% ( 6,234,753) 26% ( 2,036,770) 8% ( 1,833,202) 8%	Property transaction Amount % - - - - - - - - - -	Accounts receivable (payable) Balance on September 30, 2021 % ( $2,137,380) 24% ( 335,246) 4% ( 1,477,397) 17% ( 776,963) 9% ( 572,165) 6%	Provision of endorsements/ guarantee or collaterals Balance on September 30, 2021 Purpose - - - - - - - - - -		Financing	Financing	Interest during the nine months ended September 30, 2021 - - - - -	Others
		Amount ($ 6,946,081) ( 923,053) ( 6,234,753) ( 2,036,770) ( 1,833,202)	Amount - - - - -	Balance on September 30, 2021 ( $2,137,380) ( 335,246) ( 1,477,397) ( 776,963) ( 572,165)	Balance on September 30, 2021 - - - - -	Maximum balance during the nine months ended September 30, 2021 - - - - -	Balance on September 30, 2021 - - - - -	Interest rate - - - - -
										- - - - -

Table 9, Page 1

AI assistant

MERRY — Interim / Quarterly Report 2021

52085_rns_2021-12-24_049c5cc8-dc5f-473a-b0d1-79d856de35eb.pdf

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

1. HISTORY AND ORGANISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(2) Impact on new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

(3) Impact on IFRS issued by IASB but not yet endorsed by the FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(2) Financial assets at fair value through profit or loss

(6) Inventories

(7) Other current assets

(8) Investments accounted for using the equity method

B. Share of profit (loss) of associates accounted for using the equity method：

C. Associates

Statement of comprehensive income

(9) Property, plant and equipment

(11) Intangible assets

(12) Other non-current assets

(14) Other payables

(15) Other current liabilities

- (17) Long term borrowings

(19) Share-based payment

(d) The first restricted stocks to employees in 2019

(e) The second restricted stocks to employees in 2019

(f) The first restricted stocks to employees in 2020

(g) The second restricted stocks to employees in 2020

D. Expenses incurred on share-based payment transactions are shown below:

(20) Share capital

(21) Capital surplus

(22) Retained earnings

(23) Other equity items

(24) Operating revenue

A. Disaggregation of revenue from contracts with customers

(25) Interest income

(26) Other income

(27) Other gains and losses

(28) Expenses by nature

(29) Employee benefit expense

(30) Income tax

(31) Earnings per share

(32) Supplemental cash flow information

D. Financing activities with no cash flow effects:

(33) Changes in liabilities from financing activities

(34) Government grants

(2) Significant related party transactions

A. Operating revenue

B. Purchases

C. Receivables from related parties

D. Payables to related parties

September 30, 2021 December 31, 2020 September 30, 2020

E. Property transactions

(a) Acquisition of property, plant and equipment:

MERRY Interim / Quarterly Report 2021