Nishoku - Interim / Quarterly Report 2021

Stock Code:3679

NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 and 2020

(With Independent Auditors’ Review Report Thereon)

Address: No. 36, Ln. 11, Huacheng Rd., Xinzhuang Dist., New Taipei City, Taiwan. Telephone: 886-2-29983578

The auditors’report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information		Page
	1 2 3 5 6 8 9 11 11 11～12 12～13 13 13～31 31 32 32 32 32 33 33～37 37 38 38 39

Independent Auditors’ Review Report

To the Board of Directors of Nishoku Technology Inc.:

Introduction

We have reviewed the consolidated financial statements of Nishoku Technology Inc. and its subsidiaries (”the Group”), which comprise the consolidated statement of financial position as of September 30, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the three months and nine months ended September 30, 2021 and 2020. Management are responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued by the Financial Supervisory Commission of the Republic of China. Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

Scope of Review

Except as described in basis of opinion, we conducted our reviews in accordance with Statement on Auditing Standard 65, “Engagements to Review Financial Statements”. A review consists principally of inquiries of the Group’s personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with the generally accepted auditing standards, the objective of which is the expression of an opinion regarding the consolidated interim financial statements taken as a whole. Accordingly, we do not express such an opinion.

Basis of opinion

Included in the accompanying consolidated interim financial statements are the financial statements of certain consolidated subsidiaries, which were not reviewed by independent accountants. These consolidated subsidiaries had total assets of $153,727 thousand and $740,515 thousand constituting 2% and 9 % of the Group’s consolidated total assets as of September 30, 2021 and 2020, respectively; total liabilities of $46,647 thousand and $256,978 thousand constituting 1% and 7% of the Group’s consolidated total liabilities as of September 30, 2021 and 2020, respectively; comprehensive income of $56 thousand and $19,194 thousand and $2,383 thousand and $21,144 thousand constituting 0% and 10% and 0.45% and 5%of the Group’s consolidated comprehensive income for the three months and nine months ended September 30, 2021 and 2020, respectively.

Conclusion

Based on our reviews, except for the effects of the adjustments, if any, as might have been determined to be necessary had the financial statements of some equity

Notes to Readers

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

The auditors’review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors review report and consolidated financial statements, the Chinese version shall prevail.

method investees as described in basis of opinion above been reviewed by independent accountants, we are not aware of any material modifications that should be made to the consolidated interim financial statements referred to in the first paragraph in order for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34 “ Interim Financial Reporting” endorsed by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the review resulting in this independent auditor’s report are Cheng-Chien Chen and Sheng-Ho Yu.

KPMG

Taipei, Taiwan (Republic of China) Oct. 28, 2021

Notes to Readers

Reviewed only, not audited in accordance with generally accepted auditing standards as of September 30, 2021 and 2020 NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

Consolidated Balance Sheets

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

(Expressed in Thousands of New Taiwan Dollars)

September30,2021	％ 37 7 14 6 1 1	December 31,2020 September30,2020 Amount ％ Amount ％ 2,626,650 30 2,373,278 29 665,743 8 615,530 8 1,817,252 21 1,637,156 20 523,074 6 449,760 6 54,105 1 54,351 1 57,520 1 60,143 1 5,744,344 67 5,190,218 65 126,439 1 - - 1,124,961 13 1,271,670 16 1,444,529 17 1,400,160 17 69,737 1 74,238 1 21,792 - 14,966 - 8,503 - 22,379 - 66,518 1 67,209 1 10,670 - 11,978 - 2,873,149 33 2,862,600 35 8617493 100 8052818 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(h)) 2111 Short term notes and bills payable (note 6(i)) 2170 Notes and Accounts payable 2280 Current lease liabilities (note 6(k)) 2300 Other current liabilities(note 6(q)) Non-Current liabilities: 2540 Long-term borrowings (note 6(j)) 2570 Deferred tax liabilities and others 2580 Non-current lease liabilities (note 6(k)) Total liabilities Equity attributable to owners of parent (note 6(n)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest Total equity Total liabilities and equity	December 31,2020 September30,2020 Amount ％ Amount ％ 2,626,650 30 2,373,278 29 665,743 8 615,530 8 1,817,252 21 1,637,156 20 523,074 6 449,760 6 54,105 1 54,351 1 57,520 1 60,143 1 5,744,344 67 5,190,218 65 126,439 1 - - 1,124,961 13 1,271,670 16 1,444,529 17 1,400,160 17 69,737 1 74,238 1 21,792 - 14,966 - 8,503 - 22,379 - 66,518 1 67,209 1 10,670 - 11,978 - 2,873,149 33 2,862,600 35 8617493 100 8052818 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(h)) 2111 Short term notes and bills payable (note 6(i)) 2170 Notes and Accounts payable 2280 Current lease liabilities (note 6(k)) 2300 Other current liabilities(note 6(q)) Non-Current liabilities: 2540 Long-term borrowings (note 6(j)) 2570 Deferred tax liabilities and others 2580 Non-current lease liabilities (note 6(k)) Total liabilities Equity attributable to owners of parent (note 6(n)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest Total equity Total liabilities and equity	December 31,2020 September30,2020 Amount ％ Amount ％ 2,626,650 30 2,373,278 29 665,743 8 615,530 8 1,817,252 21 1,637,156 20 523,074 6 449,760 6 54,105 1 54,351 1 57,520 1 60,143 1 5,744,344 67 5,190,218 65 126,439 1 - - 1,124,961 13 1,271,670 16 1,444,529 17 1,400,160 17 69,737 1 74,238 1 21,792 - 14,966 - 8,503 - 22,379 - 66,518 1 67,209 1 10,670 - 11,978 - 2,873,149 33 2,862,600 35 8617493 100 8052818 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(h)) 2111 Short term notes and bills payable (note 6(i)) 2170 Notes and Accounts payable 2280 Current lease liabilities (note 6(k)) 2300 Other current liabilities(note 6(q)) Non-Current liabilities: 2540 Long-term borrowings (note 6(j)) 2570 Deferred tax liabilities and others 2580 Non-current lease liabilities (note 6(k)) Total liabilities Equity attributable to owners of parent (note 6(n)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest Total equity Total liabilities and equity	September30,2021 Amount % $ 1,718,800 20 - - 490,584 6 31,409 - 393,440 4 2,634,233 30 1,250,000 14 638,120 7 11,892 - 1,900,012 21 4,534,245 51 625,612 7 6,776 - 975,809 11 610,265 7 310,459 4 2,059,167 24 2,979,891 35 (373,820) (4) 4,214,268 49 $ 8,748,513 100	September30,2021 Amount % $ 1,718,800 20 - - 490,584 6 31,409 - 393,440 4 2,634,233 30 1,250,000 14 638,120 7 11,892 - 1,900,012 21 4,534,245 51 625,612 7 6,776 - 975,809 11 610,265 7 310,459 4 2,059,167 24 2,979,891 35 (373,820) (4) 4,214,268 49 $ 8,748,513 100	December 31,	2020 % 12 - 9 - 5 26 14 8 - 22 48 7 - 11 7 4 27 38 (4) 52 100	September30,2020 Amount % 901,400 12 39,990 - 713,712 9 37,008 - 374,079 5 2,066,189 26 1,200,000 15 579,307 7 37,602 - 1,816,909 22 3,883,098 48 622,962 8 9,975 - 960,213 12 538,129 7 337,817 4 2,089,521 26 2,965,467 37 (388,897) (5) 4,169,720 52 8,052,818 100
Amount $ 3,248,120 644,724 1,244,095 496,699 57,644 56,850		Amount 2,626,650 665,743 1,817,252 523,074 54,105 57,520	％ 30 8 21 6 1 1	Amount 2,373,278 615,530 1,637,156 449,760 54,351 60,143	Amount $ 1,718,800 - 490,584 31,409 393,440		Amount 988,920 - 800,428 39,224 447,836		Amount 901,400 39,990 713,712 37,008 374,079 2,066,189 1,200,000 579,307 37,602 1,816,909 3,883,098 622,962 9,975 960,213 538,129 337,817 2,089,521 2,965,467 (388,897) 4,169,720 8,052,818

					2,634,233	30	2,276,408	26
					1,250,000 638,120 11,892	14 7 -	1,200,000 652,948 30,891	14 8 -
5748132	66	5744344	67	5190218
,, 173,065 1,294,686 1,366,017 42,945 20,765 24,683 63,758 14462	2 15 16 - - - 1 -	,, 126,439 1,124,961 1,444,529 69,737 21,792 8,503 66,518 10670	1 13 17 1 - - 1 -	,, - 1,271,670 1,400,160 74,238 14,966 22,379 67,209 11978	1,900,012	21	1,883,839	22
					4,534,245	51	4,160,247	48
					625,612	7	624,462	7
					6,776	-	2,993	-
					975,809	11	968,882	11
					610,265 310,459 2,059,167	7 4 24	538,129 337,817 2,295,422	7 4 27
					2,979,891	35	3,171,368	38
					(373,820)	(4)	(310,459)	(4)
, 3,000,381	34	, 2,873,149	33	, 2,862,600	4,214,268	49	4,457,246	52
					$ 8,748,513	100	8,617,493	100
$ 8748513	100	8617493	100	8052818

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

Three months ended September 2021 2020 Amount % Amount $ 1,080,037 102 $ 1,507,560 18,047 2 17,970 1,061,990 100 1,489,590 774,809 73 982,712 287,181 27 506,878 15,269 1 13,352 76,560 7 76,153 22,270 2 23,115 64 - 1,675 114,163 10 114,295 173,018 17 392,583 9,209 1 9,769 (3,468) - (106,641) (5,954) (1) (5,091) (213) - (101,963) 172,805 17 290,620 31,457 3 48,939 141,348 14 241,681 (1,020) - 58,561	Three months ended September 2021 2020 Amount % Amount $ 1,080,037 102 $ 1,507,560 18,047 2 17,970 1,061,990 100 1,489,590 774,809 73 982,712 287,181 27 506,878 15,269 1 13,352 76,560 7 76,153 22,270 2 23,115 64 - 1,675 114,163 10 114,295 173,018 17 392,583 9,209 1 9,769 (3,468) - (106,641) (5,954) (1) (5,091) (213) - (101,963) 172,805 17 290,620 31,457 3 48,939 141,348 14 241,681 (1,020) - 58,561	Three months ended September 2021 2020 Amount % Amount $ 1,080,037 102 $ 1,507,560 18,047 2 17,970 1,061,990 100 1,489,590 774,809 73 982,712 287,181 27 506,878 15,269 1 13,352 76,560 7 76,153 22,270 2 23,115 64 - 1,675 114,163 10 114,295 173,018 17 392,583 9,209 1 9,769 (3,468) - (106,641) (5,954) (1) (5,091) (213) - (101,963) 172,805 17 290,620 31,457 3 48,939 141,348 14 241,681 (1,020) - 58,561	30,	Nine months ended 2021 Amount % 3,730,533 102 68,734 2 3,640,799 100 2,612,142 72 1,028,657 28 48,765 1 233,717 6 71,068 2 38 - 355,588 9 675,069 19 44,282 1 (67,484) (2) (15,856) - (39,058) (1) 636,011 18 201,876 6 434,135 12 (79,201) (2)	Nine months ended 2021 Amount % 3,730,533 102 68,734 2 3,640,799 100 2,612,142 72 1,028,657 28 48,765 1 233,717 6 71,068 2 38 - 355,588 9 675,069 19 44,282 1 (67,484) (2) (15,856) - (39,058) (1) 636,011 18 201,876 6 434,135 12 (79,201) (2)	September 30,	September 30,
	%	2020			% 102 2	2020
Amount			%	Amount 3,730,533 68,734 3,640,799 2,612,142 1,028,657 48,765 233,717 71,068 38 355,588 675,069 44,282 (67,484) (15,856) (39,058) 636,011 201,876 434,135 (79,201)		Amount 3,271,314 49,771 3,221,543 2,250,667 970,876 37,855 223,892 62,714 2,919 329,380 641,496 58,281 (106,559) (16,153) (64,431) 577,065 61,604 515,461 (63,850)	%
$ 1,080,037 18,047			101 1				102 2
1,061,990 774,809			100 66		100 72 28 1 6 2 - 9 19 1 (2) - (1) 18 6 12 (2)		100 70
287,181			34				30
15,269 76,560 22,270 64			1 5 2 -				1 7 2 -
114,163			8				10
173,018			26				20
9,209 (3,468) (5,954)			1 (7) -				1 (3) -
(213)			(6) 20 3				(2)
172,805 31,457							18 2
141,348			17				16
(1,020)			4				(2)

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020

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

	Three months ended September	Three months ended September	Three months ended September	30,	Nine months ended	Nine months ended	September 30,	September 30,	September 30,
	2021	%	2020 Amount (11,712) 46,849 288,530 241,681 288,530		2021	% -	2020
	Amount			%	Amount 15,840 (63,361) 370,774 434,135 370,774		Amount 12,770	% - (2) 14 16 14 8.27	%
	204	-		1					-
	(816)	-		3		(2)	(51,080)		(2)
$ 140,532		14		20		10	464,381		14
$ 141,348		14		17		12	515,461		16
$ 140,532		14		20		10 6.94	464,381		14
$		2.26		3.88
$		2.25		3.87		6.91		8.24

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

						Equity attributable	Equity attributable	to owners of parent	to owners of parent
								Total other
								equity interest
								Exchange
								differences on
		Share capital			Retained earnings			translation of	Total equity
								foreign	attributable to
		Ordinary	Advance receipts	Capital	Legal	Special	Unappropriated	financial	owners of
		shares	for ordinary share	surplus	reserve	reserve	retained earnings	statements	parent	Total equity
Balance at January 1, 2020	$	622,962	-	959,124	504,367	199,839	1,994,985	(337,817)	3,943,460	3,943,460
Profit for the period		-	-	-	-	-	515,461	-	515,461	515,461
Other comprehensive loss		-	-	-	-	-	-	(51,080)	(51,080)	(51,080)
Total comprehensive income (loss)		-	-	-	-	-	515,461	(51,080)	464,381	464,381
Appropriation and distribution of retained earnings
Legal Reserve Appropriated		-	-	-	33,762	-	(33,762)	-	-	-
Special ReserveAppropriated		-	-	-	-	137,978	(137,978)	-	-	-
Cash Dividends of Common Stock		-	-	-	-	-	(249,185)	-	(249,185)	(249,185)
Stock Option Compensation Cost		-	-	1,089	-	-	-	-	1,089	1,089
Issuance of shares exercise of employee stock options		-	9,975	-	-	-	-	-	9,975	9,975
Balance at September 30, 2020	$	622,962	9,975	960,213	538,129	337,817	2,089,521	(388,897)	4,169,720	4,169,720
Balance at January 1, 2021	$	624,462	2,993	968,882	538,129	337,817	2,295,422	(310,459)	4,457,246	4,457,246
Profit for the period		-	-	-	-	-	434,135	-	434,135	434,135
Other comprehensive loss		-	-	-	-	-	-	(63,361)	(63,361)	(63,361)
Total comprehensive income (loss)		-	-	-	-	-	434,135	(63,361)	370,774	370,774
Appropriation and distribution of retained earnings
Legal Reserve Appropriated		-	-	-	72,136	-	(72,136)	-	-	-
Cash Dividends of Common Stock		-	-	-	-	-	(625,612)	-	(625,612)	(625,612)
Special ReserveAppropriated		-	-	-	-	(27,358)	27,358	-	-	-
Stock Option Compensation Cost		-	-	429		-	-	-	429	429
Issuance of stock exercise of employee stock options		1,150	3,783	6,498				-	11, 431	11,431
Balance at September 30, 2021	$	625,612	6,776	975,809	610,265	310,459	2,059,167	(373,820)	4,214,268	4,214,268

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

(Expressed in Thousands of New Taiwan Dollars)
Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation and amortization Expected credit loss Interest expense Interest income Stock option compensation cost Net loss on financial assets at fair value through profit or loss Gain on disposal of property, plant and equipment Recognition losses (reversal of provision) on inventory valuation and obsolescence Other Total adjustments to reconcile profit : Changes in operating assets and liabilities: Changes in operating assets: Financial assets at fair value through profit or loss Notes and accounts receivable Inventories Other current assets and other financial assets Total changes in operating assets Changes in operating liabilities: Notes and accounts payable Other current liabilities Total changes in operating liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of Non-current financial assets at fair value through profit or loss Proceeds from disposal of Non-current financial assets at fair value through profit or loss Acquisition of Non-current financial assets at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in Refundable deposits Increase in other non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term notes and bills payable Proceeds of long-term borrowings Increase (decrease) in guarantee deposits received Payment of lease liabilities Cach dividends paid Proceeds from exercise of employee stock options Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents	For the nine months ended September 30,
	2021 $ 636,011 184,578 38 15,856 (28,308) 429 2,940 (7,332) (14,222) 402	2020 577,065 210,711 2,919 16,153 (43,684) 1,089 498 (3,531) 5,463 623 190,241 (166,599) (244,135) 20,405 (9,706) (400,035) 109,334 11,930 121,264 (88,530) 488,535 45,695 (16,350) (148,057) 369,823 - - (1,329,870) (55,073) 7,439 9,458 (2,198) (1,370,244) 76,610 (110,000) 200,000 (306) (43,456) (249,185) 9,975 (116,362) (49,738)
	154,381
	21,538 573,119 40,597 (10,624)
	624,630
	(309,844) (133,491)
	(443,335)
	335,676
	971,687 28,260 (15,330) (115,886)
	868,731
	(54,406) 4,320 (168,465) (141,522) 22,823 4,415 (4,565)
	(337,400)
	729,880 - 50,000 2,460 (30,063) (625,612) 11,431
	138,096
	(47,957)

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Net Increase (decrease )in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

For the nine months ended September 30,	For the nine months ended September 30,
2021 621,470 2,626,650	2020 (1,166,521) 3,539,799 2,373,278
$ 3,248,120

See accompanying notes to consolidated financial statements.

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

NISHOKU TECHNOLOGY INC. (the “Company”) was incorporated in year 1980, as a company limited by shares and registered under the Ministry of Economic Affairs, ROC. The Company conducted an IPO on the Taiwan Stock Exchange (TWSE) on October 5, 2011. The Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) primarily are involved in the manufacture and sale of plastic injection mold, tooling manufacturing and general import and export trade, please refer to note 14.

(2) Approval date and procedures of the consolidated financial statements:

These consolidated interim financial statements were authorized for issuance by the board of directors on October 28, 2021.

(3) New standards, amendments and interpretations adopted:

a. Impact of the International Financial Reporting Standards (“ IFRSs” ) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already taken effect.

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

●Amendments to IFRS 4“Extension of the Temporary Exemption from Applying IFRS 9”
“ －
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform Phase 2”
b. The impact of IFRS issued by the FSC but not yet effective

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

“ － ”
● Amendments to IAS 16 Property, Plant and Equipment Proceeds before Intended Use
“ － ”
● Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”
c. The impact of IFRS issued by IASB but not yet endorsed by the FSC

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”

(4) Summary of significant accounting policies:

a. Statement of compliance

The consolidated interim financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language consolidated interim financial statements, the Chinese version shall prevail.

These consolidated interim financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed by FSC and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by the FSC (hereinafter referred to IFRS endorsed by the FSC) for full annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated interim financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2020. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2020.

b. Basis of consolidation

Principles of preparation of the consolidated interim financial statements are the same as those of the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 4(c) of the consolidated financial statements for the year ended December 31, 2020. The financial statements of insignificant consolidated subsidiaries, NISHOKU BOUEKI and NISHOKU VIETNAM, were not reviewed by independent accountants, and the financial statements of insignificant consolidated subsidiaries, SAME SRART (Anguilla), were reviewed by independent accountants. NISHOKU VIETNAM’s financial statements were reviewed by independent accountants for the nine months ended September 30, 2021.

c. Income Tax

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period (and allocated to current and deferred taxes based on its proportionate size).

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

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

The preparation of the consolidated interim financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing the consolidated financial statements, critical accounting judgments and key sources of estimation uncertainty used by management in the application of accounting policies are consistent with those described in note 5 of the consolidated financial statements for the year ended December 31, 2020.

(6) Explanation of significant accounts:

In addition to the following, there is no significant difference between the notes on the significant accounting items of the consolidated interim financial statements and the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 6 of the consolidated financial statements for the year ended December 31, 2020

(a) Cash and cash Equivalents

Cash, and demand deposits Time deposits Bond acquired under repurchase agreemen Cash and cash equivalents in the consolidated statement of cash flows	September 30, 2021 $ 2,042,541 676,429 t 529,150	December 31, 2020 1,827,075 429,335 370,240	September 30, 2020 1,285,872 694,556 392,850 2,373,278
	$ 3,248,120	2,626,650

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

September 30, 2021 Financial assets at fair value through profit or loss: Fund investments-current $ 41,938 Fixed income financial instruments 602,786 Bond of oversea - Total $ 644,724	September 30, 2021 Financial assets at fair value through profit or loss: Fund investments-current $ 41,938 Fixed income financial instruments 602,786 Bond of oversea - Total $ 644,724	December 31, 2020		September 30, 2020 11,750 597,656 6,124 615,530
		46,663 612,833 6,247
	$ 644,724	665,743

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Fund investments non-current	September 30, 2021 $ 173,065	December 31, 2020	14 September 30, 2020 -
		126,439

Please refer to note 6(e) for fund investments non-current.

As of September 30, 2021 and 2020, and December 31,2020, the Group did not provide any financial assets as collateral.

Notes receivable Accounts receivable Less：allowance for impairment	September 30, 2021 $ 3,246 1,241,416 (567)	December 31, 2020	September 30, 2020 8,414 1,632,067 (3,325)
		6,083 1,811,698 (529)
	$ 1,244,095	1,817,252	1,637,156

The Group measures the loss allowance for notes and accounts receivable using the simplified approach with the lifetime expected credit losses. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporate forward-looking information.

Analysis of expected credit losses was as follows:

Not past due Past due less than 120 days Past due over 1 year Total	September 30, 2021 Carrying amount of accounts receivable Weighted- average loss rate Loss allowance for lifetime expected credit losses $ 1,209,983 -% - 30,943 0%~1% 77 490 100% 490 $ 1,241,416 567	September 30, 2021 Carrying amount of accounts receivable Weighted- average loss rate Loss allowance for lifetime expected credit losses $ 1,209,983 -% - 30,943 0%~1% 77 490 100% 490 $ 1,241,416 567	September 30, 2021 Carrying amount of accounts receivable Weighted- average loss rate Loss allowance for lifetime expected credit losses $ 1,209,983 -% - 30,943 0%~1% 77 490 100% 490 $ 1,241,416 567
		Weighted- average loss rate -% 0%~1% 100%	Loss allowance for lifetime expected credit losses - 77 490
			567

			December 31, 2020
		Carrying		Loss allowance
		amount of	Weighted-	for lifetime
		accounts	average loss	expected credit
		receivable	rate	losses
Not past due	$	1,804,736	-%	-
Past due less than 120 days		6,423	0%~1%	2
Past due 121~270 days		37	0%~30%	25
Past due over 1 year		502	100%	502
Total	$	1,811,698		529

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Not past due Past due less than 120 days Past due 121~270 days Past due 271~365 days Past due over 1 year Total
		Carrying amount of accounts receivable	Weighted- average loss rate -% 0%~1% 0%~30% 0%~100% 100%
	$ 1,603,807 27,695 53 21 491 $ 1,632,067

The movement of the loss allowance for notes and accounts receivable was as follows:

Beginning balance (IAS 39) Impairment loss Amounts written off Ending balance	Nine months ended September 30, 2021 2020 $ 529 19,099 38 2,919 - (18,693) $ 567 3,325
	2021
	$ 529 38 -
	$ 567

(d) Inventories

Raw materials Work in process Finished goods	September 30, 2021 $ 187,498 230,854 78,347	December 31, 2020 194,769 203,355 124,950	September 30, 2020 177,570 203,429 68,761 449,760
	$ 496,699	523,074

For the three months ended September 30, 2021 and 2020 and for the nine months ended September 30,2021 and 2020, raw material, consumables, and changes in the finished goods and work in progress recognized as cost of sale amounted to $774,809 thousand and $982,712thousand, and $2,612,142 thousand, and $2,250,667thousand ,respectively. For the three months ended September 30,2021 and 2020, and for the nine months ended September 30,2021 and 2020 the Group recognized the losses (reversal) on inventory valuation and obsolescence as cost of goods sold amounting to ($15,265) thousand and ($6,594) thousand and $(14,222) thousand, and $5,463 thousand, respectively.

As of September 30, 2021, December 31, 2020, and September 30, 2020, the Group did not provide any inventories as collateral.

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(e) Non-current financial assets at amortized cost

Restricted bank deposit	September 30, 2021 $ 1,294,686	December 31, 2020 1,124,961	September 30, 2020
			1,271,670

In June, 2021 and in May and July, 2020, the Group applied to IRS for the application of “The Management, Utilization, and Taxation of Repatriated Offshore Funds Act” (hereinafter referred to as the “Act”), and the remittance was approved within one month. According to the Act, the funds need to be deposited in a special purpose account for five years, and 5% of the funds can be used without restriction, 25% can be used on financial investment, and 70%, at least, can be used for substantive investment; Otherwise, the funds can only be redeemed within 3 consecutive years on average after the five years maturity. Please refer to note 6(b) for financial assets.

(f) Property, plant and equipment

The cost, depreciation and impairment loss of the property, plant and equipment of the Group for the years ended September 30, 2021 and 2020, were as follows.

Land	Construction in progress and testing equipment 56,056 38,260 (12,264) - 19,168	Total
		3,719,430 117,486 750 (188,961) (38,120)
$ 179,672 1,044,592 1,825,121 459,980	101,220	3,610,585
$179,672 920,762 2,016,688 476,633 - 586 17,384 13,359 - 122,866 (21) 1,061 - - (68,476) (23,578) - (8,936) (31,561) (4,769)	101,928 16,507 (124,578) - 22,091	3,695,683 47,836 (672) (92,054) (23,175)
$ 179,672 1,035,278 1,934,014 462,706	15,948	3,627,618
$ - 453,394 1,435,367 386,140 - 29,737 89,440 31,487 - - 246 504	- - -	2,274,901 150,664 750

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Land	Building	Construction in progress and testing equipment - -	17 Total (173,470) (8,277)
- -
$ -	476,721 1,381,481 386,366	-	2,244,568
$ - - - -	391,905 1,413,474 358,463 35,494 92,516 34,415 - (66,367) (21,779) 8,769 (17,053) (2,379)	- - - -	2,163,842 162,425 (88,146) (10,663)
$ -	436,168 1,422,570 368,720	-	2,227,458
$179,672 567,871 443,640 73,614		101,220	1,366,017
$179,672 595,532 519,967 93,302		56,056	1,444,529
$179,672 599,110 511,444 93,986		15,948	1,400,160

As of September 30, 2021, December 31, 2020 and September 30, 2020, the property, plant and equipment of the Group had not been pledged as collateral.

( `g` ) Right-of-use assets

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

Carrying amount: Balance on September 30, 2021 Balance on December 31, 2020 Balance on September 30, 2020	Buildings and structures $ 33,991	Machinery and equipment 1,163	Transportat ion equipment 7,791	Total 42,945
	$ 63,480	4,728	1,529	69,737
	$ 67,995	3,855	2,388	74,238

The amounts of depreciation expense for the nine months ended September 30, 2021 and 2020 were $29,597 thousand and $42,766 thousand, respectively.

(h) Short-term borrowings

The details were as follows:

Secured loans Credit loans, no pledge	September 30, 2021 $ 44,000 1,674,800	December 31, 2020 45,000 943,920	September 30 , 2020 45,000 856,400

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Total Interest rate range	September 30, 2021 $ 1,718,800	September 30, 2021 $ 1,718,800	December 31, 2020 988,920	December 31, 2020 988,920	18 September 30 , 2020 901,400 0.40%~0.83%
	$
		0.4%~0.83%		0.40%~0.83%

For the collateral for short term borrowings, please refer to note 8.

(i) Short-term notes and bills payable

The details were as follows:

	September 30, 2021	- - -	December 31, 2020	- -	September 30, 2020 40,000 (10)
	$
	$			-	39,990
	-		-		0.602%
					September 30, 2020 1,200,000

					0.95%~1.04% September 30, 2020 37,008

$ 11,892		30,891			37,602

(j) Long-term borrowings

(k) Lease liabilities

The details were as follows:

The maturity information please refer to note 6(u).

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts recognized in profit or loss during the lease term were as follows:

Three months ended September 30, 2021 $ 139	Three months ended September 30,2020 246	Three months ended September 30,2020 246	Nine months ended September 30,2021 494	Nine months ended September 30,2021 494	Nine months ended September 30,2020
					965
$ 182	153		550		460
				Nine months ended September 30, 2020 44,881
		$ 31,107

(l) Employee benefits

The pension costs incurred from the contributions to the Labor Insurance were as follows:

Three months ended September 30, Nine months ended September 30,

Operating Costs Operating Expenses Total	2021	2020	2021	2020
	$ 8,913 6,818 2,239 1,662		25,575 14,629 6,514 4,332 32,089 18,961
	$ 11,152 8,480

(m) Income tax

(i) The amounts of income tax expense for the three months and nine months ended September 30, 2021 and 2020 were $31,457 thousand, $48,939 thousand, $201,876 thousand and $61,604 thousand respectively.
(ii) The amounts of income tax profit under other comprehensive income or loss for the three months and nine months ended September 30, 2021 and 2020 were as follows:

Three months ended September 30, Nine months ended September 30,

2021 2020 2021 2020

Foreign currency translation differences for foreign operations $ (204) 11,712 (15,840) (12,770)

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) The Company and NISHOKU BOUEKI income tax returns have been examined by the tax authority through the years up to 2019, respectively.
(n) Capital and other equity

In addition to the following, there is no material change in capital and other equity of the Group for the nine months ended September 30, 2021 and 2020. For the related information, please refer to Note 6(n) of the consolidated financial statements for the year ended December 31, 2020.

(i) Issuance of capital stock

The Company issued 180 thousand shares, with par value of $10 per share for the exercise of employee stock options for the nine months ended September 30, 2021. Therein 70 thousand shares were completed the legal registration procedures. As of September 30, 2021, there were still 110 thousand shares whose legal registration procedure are unfinished. The amount of advance receipts for ordinary share were $ 6,776 thousand.

(ii) Capital surplus

The balances of capital surplus as of September 30, 2021 and December 31, 2020 and September 30,2020 were as follows:

Additional paid-capital Employee share options Total	September 30, 2021		December 31, 2020	September 30, 2020
	$ 964,917 10,892 $ 975,809		958,419 10,463 968,882	949,944 10,269 960,213

(iii) Retained earnings

The Group’s article of incorporation stipulate that, when allocating the profit for each fiscal year, the Company shall first offset its losses in previous years. Of the remaining profit, 10% is to be appropriated as legal reserve, until the accumulated legal reserve equals the Company’s paid in capital. Aside from the aforesaid legal reserve, the Company shall appropriate or reverse another sum as special earnings reserve in accordance with relevant laws or regulations or requested by the authorities in charge. The remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

According to the amendment of the of Article 240 and Article 241 of the ROC Company Act, the Company authorized the distributable dividends and bonuses in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

Before the distribution of dividends, the Company shall first take into consideration its operating environment, industry developments, and the long term interests of stockholders, as well as its programs to maintain operating efficiency and meet its capital expenditure budget and financial goals in determining the stock or cash dividends to be paid. The dividend to be distributed shall be no less than 10% of the current year retained earnings available for distribution only if the current year retained earnings available for distribution does not reach $0.5 per share, the Company may decide not to distribute dividend. The dividend to be distributed may be in the

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

form of cash and stock, and cash dividend in the distribution should not be less than 30%.

Earnings distribution for 2020 and 2019 were decided via board of directors held on Aug 12, 2021 and Jun 16, 2020, respectively, and the approval of shareholders’ meeting. The relevant dividend distributions to shareholders were as follows:

Dividend to shareholders: Cash	2020	2020	2019	2019
	Payout per share $ 10.0	Amount	Payout per share $ 4.0	Amount
		625,612		249,185

(o) Share-based payment

For the nine months ended September 30, 2021 and 2020, there were no significant changes in sharebased payment except for the following: (Please refer to note 6(o) of the consolidated financial statements for the year ended December 31, 2020 for other related information).

(i) Information about the Company’s outstanding employee stock options is described as follows:

Outstanding at beginning of the period Options granted Options forfeited Options exercised Outstanding at end of the period Exercisable at end of the period The weighted average price of the stock options	Nine months ended September 30, 2021	Nine months ended September 30, 2021	Nine months ended September 30, 2020	Nine months ended September 30, 2020
	Weighted-average Exercise Price(NT$)	Number of Stock Options	Weighted-average Exercise Price(NT$)	Number of Stock Options
	$ 66.50(note) - - - 61.60(note)	235 - (50) (180) 5 - $ 18.15	$ 70.80(note) - - 66.50 66.50(note)	440 - - (150) 290 - 18.15

(Note) The Company adjusted the exercise price of stock options in accordance with the plans.

The details of the stock options of the Group as of September 30, 2021, and December 31, 2020 and September 30,2020 were as follows:

Weighted average of remaining contractual period (years)	September 30, 2021 0.82	December 31, 2020 1.57	September 30, 2020 1.82

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Exercise price (in dollars) Stock price of grant date (in dollars) Expected dividends Expected price volatility Risk-free interest rate Exercise option life	2017
	81.80 81.80 -% 26.78%~27.89% 0.67%~0.73% 5 years

(iii) Expenses incurred on share-based payment transactions for the three months and nine months ended September 30, 2021 and 2020 were $62 thousand and $267 thousand and $429 thousand and $1,089 thousand.
(p) Earnings per share

The calculation of basic earnings per share for three months and nine months ended September 30, 2021 and 2020 were calculated as follows:

	Three months ended September 30, 2021 2020 141,348 241,681 62,561 62,296 $ 2.26 3.88 141,348 241,681 62,561 62,296 248 188 62,809 62,484	Three months ended September 30, 2021 2020 141,348 241,681 62,561 62,296 $ 2.26 3.88 141,348 241,681 62,561 62,296 248 188 62,809 62,484	Nine months ended September 30, 2021 2020 434,135 515,461	Nine months ended September 30, 2021 2020 434,135 515,461	Nine months ended September 30, 2021 2020 434,135 515,461
	2021		2021
$	141,348	241,681	434,135	515,461
$	62,561 $ 2.26 141,348 62,561 248 62,809	62,296 3.88 241,681 62,296 188	62,521 6.94 434,135 62,521 345 62,866	62,296 8.27 515,461 62,296 293 62,589	62,296
					8.27

		62,484

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

			23
Diluted earnings per share (NTD)		Three months ended September 30, $ 2.25 3.87	Nine months ended September 30,
		$ 2.25	6.91 8.24

(q) Revenue from contracts with customers
(i) Details of revenue

Three months ended September 30, Nine months ended September 30,

2021 2020 Primary geographical markets United States $ 391,130 470,531 Asia 114,299 135,332 Euro 556,561 883,727 $ 1,061,990 1,489,590 Primary productions Plastic injection mold $ 998,698 1,381,601 Tooling mold 63,157 107,750 Others 135 239 $ 1,061,990 1,489,590	2021	2020	2021
United States Asia Euro Primary productions Plastic injection mold Tooling mold Others
	$ 1,061,990 1,489,590		3,640,799 3,221,543

(ii) Contract balances

For details on accounts receivable, please refer to note 6 (c).

Contract liabilities	September 30, 2021 $ 28,634	December 31, 2020 51,775	September 30 2021
			53,948

The major change in the balance of contract liabilities is the advance consideration received from customers for the contracts, in which revenue is recognized when products are delivered to customers. The amount of revenue recognized for the years ended September 30, 2021 and 2020, which was included in the contract liability balance at the beginning of the period, was $51,775 thousand and $31,622 thousand, respectively.

(r) Employee, board of directors', and supervisors' compensation

In accordance with the Articles of incorporation the Company should contribute no less than 1% of the profit as employee compensation and not exceed 5% as directors’ and supervisors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The amount of remuneration of each director and supervisor and of compensation for employees entitled to receive the abovementioned employee compensation is

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

approved by the board of directors. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

For the three months and nine months ended September 30, 2021 and 2020, the Company estimated its employee remuneration amounting to $6,750 thousand, $6,187 thousand, $20,250 thousand and $18,563 thousand, directors’ and supervisors’ remuneration amounting to $2,550 thousand, $2,001 thousand, $7,650 thousand and $6,001 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees, directors and supervisors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in the Company’s articles. These remunerations were expensed under operating costs or operating. If the actual amount of the annual distribution and the estimated amount of differences, according to the changes in accounting estimates, and the difference recognized as the next year annual profit (loss). Such as the resolution of the board of directors to take the stock of employee compensation, the numbers of shares to be distributed would be calculated based on the closing price of the Company’s ordinary shares one day before the date of the meeting of Board of Directors.

For the year ended December 31, 2020 and 2019, the Company estimated its employee remuneration amounting to $30,000 thousand and $22,100 thousand, respectively, and directors’ and supervisors’ remuneration amounting to $11,705 thousand and $7,925 thousand respectively. There is no difference in the actual distribution situation, please refer to Market Observation Post System for further information.

(s) Other revenue

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

Interest income Others	Three months ended September 30, 2021 2020 $ 4,494 3,493 4,715 6,276	Nine months ended September 30, 2021 2020 28,308 43,684 15,974 14,597
	$ 9,209 9,769	44,282 58,281

(t) Other gains and losses

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

Three months ended September 30, Nine months ended September 30,

2021 2020 2021 2020 Foreign currency exchange (loss) gain, net $ (3,336) (106,864) (71,713) (108,263) Gain (Losses) on financial assets at fair value through profit or loss (2,277) 684 (2,940) (498)	2021	2020 2021	2020

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Gain on disposal of property, plant and equipment Others	Three months ended September 30, 2021 2020 2,145 24 - (485)	25 Nine months ended September 30, 2021 2020 7,332 3,531 (163) (1,329)
	$ (3,468) (106,641)	(67,484) (106,559)

(u) Financial Instruments

In addition to the following, there is no material change in financial instruments of the Group for the nine months ended September 30, 2021 and 2020. For the related information, please refer to note 6(u) of the consolidated financial statements for the year ended December 31, 2020.

(i) Credit risk
1) Credit risk exposure

As of September 30, 2021 and 2020, the Group’s maximum exposure to credit risk was mainly from the carrying amount of financial assets recognized in the consolidated statements of financial position and amounted to $6,661,540 thousand and $5,957,777 thousand, respectively. The Groups had deposited these bank deposits in different financial institutions, and the Group believes that there is no significant credit risk from the above mentioned financial institutions.

2) Concentration of credit risk

The credit risk exposure of the Group comes from the credit of individual customers, and the industry of the customer also have effect on credit risk. For the years ended September 30, 2021 and 2020, sales to the individual customers whose revenue constituting over 10% of net revenue are 40% and 36% of total revenues respectively. As of September 30, 2021 and 2020, 24 % and 37%, respectively, of accounts receivable were for those customers.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

September 30, 2021 Non-derivative financial liabilities Short-term borrowings Long-term borrowings Notes and accounts payable Lease liabilities Other financial liabilities	Carrying amount	Contractual cash flows	within 1 year
	$3,556,587 3,573,046 2,307,683 1,265,363

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2020 Non-derivative financial liabilities Short-term borrowings Long-term borrowings Notes and accounts payable Lease liabilities Other financial liabilities September 30, 2020 Non-derivative financial liabilities Short-term borrowings Short-term notes and bills payable Long-term borrowings Notes and accounts payable Lease liabilities Other financial liabilities	Carrying amount	Contractual cash flows	within 1 year 1-2 years
	$ 988,920 989,735 989,735 - 1,200,000 1,220,867 11,492 1,209,375 800,428 800,428 800,428 - 70,115 70,115 39,224 30,891 55,202 55,202 55,202 -
	$ 3,114,665 3,136,347 1,896,081 1,240,266
	$ 901,400 902,281 902,281 - 39,990 40,000 40,000 - 1,200,000 1,216,372 12,002 1,204,370 713,712 713,712 713,712 - 74,610 74,610 37,008 37,602 48,863 48,863 48,863 -
	$ 2,978,575 2,995,838 1,753,806 1,241,972

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

(iii) Market risk
1) Exchange rate risk

The Group significant exposure to foreign currency risk on financial assets and liabilities was as follows:

Financial assets Monetary Items USD CNY Financial liabilities Monetary Items USD	September 30, 2021	September 30, 2021	December 31, 2020	September 30, 2020
		NTD	Foreign currency Exchange rate NTD

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, and trade and other payables that are denominated in foreign currency.

A weakening (strengthening) of 1% of the NTD against the USD and CNY at September 30, 2021 and 2020, would have increased or decreased the net profit before tax by $42,184 thousand and $37,848 thousand, respectively. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for both periods.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the nine months ended September 30, 2021 and 2020, foreign exchange loss (including realized and unrealized portions) amounted to $71,713 thousand and $108,263 thousand, respectively.

2) Interest rate analysis

The interest risk exposure from financial assets and liabilities has been disclosed in the note of liquidity risk management.

The following sensitivity analysis is based on the exposure to interest rate risk of the derivative and non-derivative financial instruments on the reporting date. If the interest rate had increased or decreased by 0.25%, the net profit before tax would have decreased or increased by $2,048 thousand and $723 thousand for the nine months ended September 30, 2021 and 2020, respectively, assuming all other variable factors were constant. This mainly resulted from borrowings and bank deposits at variable interest rates.

(iv) Fair value of financial instruments
1) Fair value of financial instruments

The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required:

	September 30, 2021	September 30, 2021	September 30, 2021
Carrying amounts $ 644,724		Fair Value
	Level 1		Level 3
$ 173,065	173,065 -		- 173,065
$ 3,248,120 1,244,095 1,150 10,684

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	September 30, 2021	September 30, 2021	September 30, 2021
Carrying amounts 55,700 1,294,686		Fair Value
	Level 1	Level 2	Level 3	Total

$ 5,854,435
$ 2,968,800 490,584 43,301 53,902
$ 3,556,587

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying amounts $ 665,743		Fair Value
	Level 1		Level 3
$ 126,439	126,439	-	- 126,439
$ 2,626,650 1,817,252 560 15,099 56,960 1,124,961
$ 5,641,482
$ 2,188,920 800,428 70,115 55,202
$ 3,114,665

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	September 30, 2021	September 30, 2021	September 30, 2021	September 30, 2021
Carrying amounts Carrying amounts $ 615,530		Fair Value
	Level 1				Total
					Total 615,530
	Level 1 11,750		Level 2 6,124	Level 3 597,656
$ 2,373,278 1,637,156 60,143 16,032 1,271,670
$ 5,358,279
$ 2,101,400 39,990 713,712 74,610 48,863
$ 2,978,575

2) Valuation techniques for financial instruments measured at fair value
a) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

b) Derivative financial instruments

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants. Fair value of forward currency is usually determined by the forward currency exchange rate.

3)

Reconciliation of Level 3 fair values

The following table shows a reconciliation of the beginning balances to the ending balances for the fair value measurements in Level 3 of the fair value hierarchy:

Balance in the beginning of the period Recognized in profit or loss Purchase Disposal Balance in the ending of the period	Financial assets measured at fair value through profit or loss	Financial assets measured at fair value through profit or loss	Financial assets measured at fair value through profit or loss
	Nine months ended September 30,2021 $ 612,833 15,515 602,786 (628,348)		Nine months ended September 30,2020 430,513 18,145 1,238,001 (1,089,003) 597,656

	$ 602,786

The aforementioned total gains and losses were recognized in “other income”. There have been no transfers from each level for the nine months ended September 30, 2021 and 2020.

4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s financial instruments that use Level 3 inputs to measure fair value are financial instrument” and derivative financial assets. The financial assets’ fair value are using the prior transaction price before adjustments or third-party pricing information. The unobservable inputs are not set up as the Group measures fair value, therefore the quantified information of significant unobservable inputs are not disclosed.

(v) Financial risk management

The Group’s risk management policies are no material change in financial instruments of the Group for the nine months ended September 30, 2021 and 2020. For the related information, please refer to note 6(v) of the consolidated financial statements for the year ended December 31, 2020.

(w) Capital management

As of September 30, 2021, there were no changes in the Group’s approach to capital management. For the related information, please refer to Note 6(w) of the consolidated financial statements for the year ended December 31, 2020.

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

The Group’s investing and financing activities which did not affect the current cash flow in the nine months ended September 30, 2021 and 2020, were as follows

(i) Obtain the right-of-use assets by lease, please refer to note 6 (g).
(ii) The reconciliation of liabilities from financing activities were as follows:

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

					31
				Foreign exchange
		January 1,		movement and	September 30,
		2021	Cash flows	others	2021
Short term borrowings	$	988,920	729,880	-	1,718,800
Long term borrowings		1,200,000	50,000	-	1,250,000
Lease liability		70,115	(30,063)	3,249	43,301
Total liabilities from financing
activities	$	2,259,035	749,817	3,249	3,012,101
				Foreign exchange
		January		movement and	September
		1,2020	Cash flows	others	30,2020
Short term borrowings	$	824,790	76,610	-	901,400
Short-term notes and bills payable		149,994	(110,000)	(4)	39,990
Long term borrowings		1,000,000	200,000	-	1,200,000
Lease liability		135,117	(43,456)	(17,051)	74,610
Total liabilities from financing
activities	$	2,109,901	123,154	(17,055)	2,216,000

(7) Related-party transactions:

(a) Key management personnel compensation

Key management personnel compensation comprised:


	2021

$ 10,895		10,759	32,839	32,434

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets Demand deposits (classified under other current financial assets)	Object	September 30, 2021 $ 55,700 25	December 31, 2020 56,960 25	September 30, 2020 58,200 25
	Guarantee for loan line Guarantee for Carbon emission
		$ 55,725	56,985	58,225

(9) Significant Commitments and contingencies:

(a) Unrecognized contractual commitments

(i) The Group’ s unrecognized contractual commitments to the purchase of plant and equipment are as follows:

Acquisition of property, plant and equipment	September 30, 2021		December 31, 2020 42,920	September 30, 2020 75,907
	$ 66,552

(ii) For the necessary to bank loan and operating capital, the Company and its subsidiaries provide guarantee and endorsement for other parties were as follows:

Outstanding guarantee notes Purchase guarantee Actual usage amount	September 30, 2021	December 31, 2020 1,398,688 - 1,398,688 153,920	September 30, 2020 1,330,930 14,550 1,345,480 170,950
	$ 1,367,680 - $ 1,367,680 $ 224,800

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(12) Other:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

By function By item	For the three month periods ended September 30	For the three month periods ended September 30	For the three month periods ended September 30	For the three month periods ended September 30	For the three month periods ended September 30	For the three month periods ended September 30
	2021			2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefit expenses Salaries Labor and health insurance Pension Others Depreciation Amortization	213,404 6,244 8,913 6,615 45,905 630	51,007 2,691 2,239 8,879 12,473 762	264,411 8,935 11,152 15,494 58,378 1,392	231,428 6,000 6,818 5,473 52,142 829	52,424 2,452 1,662 7,547 12,382 881	283,852 8,452 8,480 13,020 64,524 1,710

By function By item	For the nine month periods ended September 30	For the nine month periods ended September 30	For the nine month periods ended September 30	For the nine month periods ended September 30	For the nine month periods ended September 30	For the nine month periods ended September 30
	2021			2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefit expenses Salaries Labor and health insurance Pension Others Depreciation Amortization	658,252 17,842 25,575 17,579 140,807 1,965	150,541 7,587 6,514 27,483 39,454 2,352	808,793 25,429 32,089 45,062 180,261 4,317	529,333 14,312 14,629 15,020 165,851 2,653	152,212 6,651 4,332 21,039 39,340 2,867	681,545 20,963 18,961 36,059 205,191 5,520

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance (Note 3)	Actual usage amount during the period	Interest rate	Nature of financing	Transaction amounts	Reason for short-term financing	Allowanc for bad debt	Collateral e Item Value	Collateral e Item Value	Financing limit for each borrowing company	Maximum financing limit for the lender
														Value
0	The Company	NISHOKU VIETNAM	Other accounts receivable	Yes	285,350	278,500	222,800	0.63%	Necessary to loan other parties	-	Operating capital	-	-	-	421,427 (Note 1)	1,685,707 (Note 1)

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note 1: The individual amount and the total amount for lending to a company shall not exceed 10% and 40% of the lending company’s net worth in the latest financial statement, respectively. The Company for lending to the Company directly or indirectly holds 100% of their shares, with the loan amount not limited and the total amounts not exceeding the lending company’s net worth in the last financial statement.

Note 2: Related transaction have been eliminated during the preparation of the consolidated financial statements.

Note 3: Amount actually draw in foreign currencies were translated based on the exchange rate at the reporting date.

(ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise((Not e 1)	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date (Note 3)	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0 〃〃	The Company 〃〃	SAME START (Anguilla) NISHOKU VIETNAM NISHOKU BOUEKI	3 2 2	4,214,268 4,214,268 4,214,268	113,560 1,196,688 176,560	- 1,191,980 175,700	- 222,800 2,000	- - -	-% 28.28% 4.17%	4,214,268 4,214,268 4,214,268	`Y` `〃` `〃`	`N` `〃` `〃`	`N` `〃` `〃`

Note 1: The amount and the total amount of the guarantee to a company shall not exceed 30% and 100%, respectively, of the Company net worth in the latest financial statements. The total amount of the guarantee that the Company and its subsidiaries to a company shall not exceed 100%, of the Company’s net worth in the latest financial statement. The Company directly or indirectly holds 100% of their shares, the guarantee amounts not limited by the Company’s net worth in the latest financial statement. Note 2: The relationship of guarantor and endorsements to related parties were as follows:

1) Business relationship between the Company
2) The Company directly or indirectly holds over 50% of subsidiaries’ shares;
3) The parent company and its subsidiaries hold over 50% of investees’ shares;
4) A subsidiary jointed owned over 50% by the Company and the Company’s directly-owned subsidiary.

Note 3: Amount actually draw in foreign currencies were translated based on the exchange rate at the reporting date.

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

Name of holder	Nature and name of securities	Relationship with the securities issuer	Account name		Ending balance Ending balance	Ending balance Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of	Fair value
The Company `〃` `〃` `〃` `〃` NISHOKU BOUEKI NISHOKU SHENZHEN KUNSHAN NISHOKU PLASTIC The Company `〃` `〃`	JPMorgan Funds - Global Corporate Bond Fund BlackRock Global Funds PIMCO GIS Dynamic Multi-Asset Fund JPMorgan Investment Funds - Global High Yield Bond Fund ABITL Income Fund -Multi Asset Income Fund PineBridge preferred securities income fund Fixed income financial product Fixed income financial product Allianz Global Investors Income and Growth Fund PineBridge Global ESG Quantitative Bond Fund PineBridge Global Multi-Strategy High Yield Bond	None `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Financial assets at fair value through profit or loss- current `〃` `〃` `〃` `〃` `〃` `〃` `〃` Financial assets at fair value through profit or loss-non current `〃` `〃`	- - - - - - - - - - -	5,492 8,808 13,737 2,856 5,539 5,506 387,505 215,281 36,644 46,603 38,175	- % - % - % - % - % - % - % - % - % - % - %	5,492 8,808 13,737 2,856 5,539 5,506 387,505 215,281 36,644 46,603 38,175

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

35
Relationship with Ending balance Ending balance
Nature and name
Name of holder the securities Account name Shares/Units
of securities Carrying value Percentage of Fair value Note
issuer (thousands)
〃 [Nomura Global Financial Bond ] Fund 〃〃 - 8,449 - % 8,449
〃 [FSITC Global High Yield Bond ] Fund 〃〃 - 12,256 - % 12,256
ABITL Income Fund -Multi Asset
〃 Income Fund 〃〃 - 21,694 - % 21,694
Allianz Global Investors US Short
〃 Duration High Income Bond Fund 〃〃 - 9,244 - % 9,244
----- End of picture text -----

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Category and name of security	Account name	Name of counter-pa rty	Relationship with the company	Beginning Balance	Beginning Balance	Pu	rchases			Sales		Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
KUNSHAN NISHOKU PLASTIC NISHOKU SHENZHEN	Fixed income financial product Fixed income financial product	Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current	Wells Fargo Asset Manageme nt Wells Fargo Asset Manageme nt	None None	- -	218,869 393,964	- - -	215,281 387,505	- -	225,202 403,146	218,869 393,964	6,333 9,182	- -	215,281 387,505

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

==> picture [454 x 210] intentionally omitted <==

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

Transactions with Notes/Accounts receivable
Transaction details terms different from (payable)
others
Percentage of
total
Percentage of notes/account
Name of Related Nature of Purchase total Payment Payment Ending s receivable
company party relationship /Sale Amount purchases/sales terms Unit price terms balance (payable) Note
[The ] Company KUNSHAN NISHOKU Associate (Sale) (707,348) (72)% Net 90 days (Note1) (Note1) 175,786 76% (Note2)
PLASTIC
KUNSHAN The 〃 Purchase 707,348 52% 〃〃〃 (175,786) (33)% 〃
NISHOKU PLASTIC Company
[SAME ] START KUNSHAN NISHOKU 〃 Purchase 124,803 87% (43,715) (91)% 〃
(Anguilla) PLASTIC 〃〃〃
[KUNSHAN ] SAME 〃 Sale (124,803) (4)% 43,715 4% 〃
NISHOKU START
PLASTIC (Anguilla) 〃〃〃
----- End of picture text -----

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note 1: The subsidiaries did not purchase or sale same product from third parties, so the purchase (sale) price cannot be compared. In addition, the receipt terms of related parties were not significant different to third parties.

Note 2: Transactions within the Group were eliminated in the consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20%

of the capital stock:

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company	KUNSHAN NISHOKU PLASTIC	Associate	175,786	3.95	-	-	90,501	-

Note 1: Until Oct 20, 2021.

Note 2: Transactions within the Group were eliminated in the consolidated financial statements

(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions:

The following is the information for the nine months ended September 30, 2021, business relationships and significant intercompany transactions with the amounts exceeding NT$ 10 million:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of company	Name of counter-party	Nature of relationship (Note 2)	Intercompany transactions, 2021	Intercompany transactions, 2021	Intercompany transactions, 2021	Intercompany transactions, 2021
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 `〃` `〃` `〃` `〃` `〃` `〃` 1 〃〃〃	The Company `〃` `〃` `〃` `〃` `〃` `〃` SAME START (Anguilla) 〃〃〃	SAME START (Anguilla) 〃 KUNSHAN NISHOKU PLASTIC 〃 NISHOKU VIETNAM 〃〃 NISHOKU SHENZHEN KUNSHAN NISHOKU PLASTIC 〃 NISHOKU VIETNAM	`1` `1` `1` `1` `1` `1` `1` 3 3 3 3	Purchase Account Payable Sales Account receivable Sales Account receivable Other receivables Purchase Purchase Account Payable Sales	82,254 34,232 707,348 175,786 92,134 19,083 222,800 16,450 124,803 43,715 54,035	Note 3 `〃` `〃` `〃` `〃` `〃` Loans Note 3 `〃` `〃` `〃`	2% - % 19% 2% 2% -% 3% -% 3% -% 1%

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

==> picture [427 x 131] intentionally omitted <==

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

Intercompany transactions, 2021
Nature of
No.
(Note Name of Name of relationship Trading consolidated net revenue or Percentage of the
1) company counter-party (Note 2) Account name Amount terms total assets
〃〃〃 3 Account receivable 12,633 〃 -%
Note 1: “1” represents the transactions from parent company to subsidiary.
2” The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
Note 2: “1” represents the transactions from parent company to subsidiary.
----- End of picture text -----

“2” represents the transactions from subsidiary to parent company.
“3” represents the transactions between subsidiaries.

==> picture [425 x 18] intentionally omitted <==

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

Note 3: The trading price and product that purchase or sale from related parties that did not purchase or sale from third parties, so
cannot be compared, the receive (payment) term of related parties is net 90 days.
----- End of picture text -----

(b) Information on investees:

The following is the information on investees for the nine months ended September 30, 2021 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance	as of September 30, 2021	as of September 30, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30,2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company 〃〃 SUN NICE (SAMOA) 〃〃	SUN NICE (SAMOA) NISHOKU BOUEKI NISHOKU VIETNAM SAME START (Anguilla) NISHOKU HK SUNNICE (BVI)	SAMOA Taiwan Vietnam Anguilla HK BVI	Holding Purchase and sales of plastic raws and parts Manufacture and sale of tooling and plastic products Purchase and sale of mold and plastic products Holding 〃	1,096,194 1,000 508,434 (USD 16,500 thousands) - 1,800,361 (USD 57,915 thousands) 585,292 (USD 17,948 thousands)	1,096,194 1,000 508,434 (USD 16,500 thousands) - 1,800,361 (USD 57,915 thousands) 585,292 (USD 17,948 thousands)	34,469 6,300 - - 62,298 15,697	100% 100% 100% 100% 100% 100%	4,504,318 107,081 116,072 (31,810) 3,488,069 928,815	372,135 (2,383) 8,556 62,144 258,900 105,749	372,135 (984) 8,788 28,059 258,900 105,749

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(c) Information on investment in Mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

==> picture [462 x 138] intentionally omitted <==

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

Accumulated Accumulated
outflow of Investment flows outflow of
investment investment
Main Total Method from from Accumulated
businesses amount of Taiwan as of Taiwan as of Net Percentage Investment Book remittance of
Name of and of paid-in investmen January 1, September 30, income (losses) of income (losses) value earnings in
investee products capital t 2020 Outflow Inflow 2020 of the investee ownership (Note 1) (Note 1) current period
NISHOKU Manufacture USD23,288 Indirect 703,870 - - 703,870 (6,446) 100.00% (6,446) 1,138,135 475,841
SHENZHEN and sale of thousands investment (USD22,939 (USD22,939
mold and through thousands) thousands)
plastic third area
products
KUNSHAN Manufacture USD53,310 〃 1,674,270 - - 1,674,290 373,483 100.00% 371,189 3,249,558 473,544
NISHOKU and sale of thousands (USD52,524 (USD52,524
PLASTIC mold and thousands) thousands)
plastic
products
----- End of picture text -----

(ii) Limitation on investment in Mainland China:

==> picture [448 x 80] intentionally omitted <==

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

Accumulated Investment in Investment Amounts
Mainland China as of September Authorized by Investment Upper Limit on Investment
30, 2021 Commission, MOEA
2,378,140 2,378,140 (Note 2)
----- End of picture text -----

Note 1: The above investment income (loss) in mainland China was based on financial statements audited by the Company’s auditors.

Note 2: The Company has received the certificate issue by the Industrial Development Bureau, Ministry of Economic Affairs, allowing it to start operating of its headquarters.

Note 3: Above investment amount within the Group were eliminated in the consolidated financial statements.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”

(d) Major shareholders ：

Shareholding Shareholder’s Name	Shares	Percentage
Ji TengInvestment Limited	4,500,000	7.18%
Yun DingInvestment Limited	4,050,000	6.46%
CTBC Bank Trusted Custody investment account _Gold Talent Co.,Ltd.	3,897,856	6.22%
Hsieh Hsin I	3,883,968	6.20%
Jin HongInvestment Limited	3,600,000	5.74%

(Continued)

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(14) Segment information:

The Group’s identifies its operating segments based on decision of the chief operating decision marker (CODM). The Group’s operating segments are in United States, Asia and Europe, etc. Those operating segments are reportable segments. The Revenue from manufacture and supply electronic parts to clients. Since the strategy of each segment is different, it is necessary to separate them for management.

The operating segment’s profit or loss is measured by net operating income, and as the basis of performance evaluation. The operating segment accounting policies are similar to those described in note 4 “significant accounting policies”. The Group regards sales and transfers between operating segments as transactions with third parties.

The Group’s product revenues from geographical clients were as follows:

	Three months ended September 30, 2021	Three months ended September 30, 2021	Three months ended September 30, 2021
United States	Asia	Europe	Elimination	Total
$ 391,130 $ 116,220	114,299	556,561	-	1,061,990
	5,412	51,386	-	173,018

United States	Asia	Europe	Elimination	Total
$ 470,531	135,332	882,727	-	1,489,590
$ 171,637	20,365	200,581	-	392,583
	Nine months ended September 30, 2021
United States	Asia	Europe	Elimination	Total
$ 1,074,972	296,115	2,269,712	-	3,640,799
$ 342,290	14,391	318,388	-	675,069
	Nine months ended September 30, 2020
United States	Asia	Europe	Elimination	Total
$ 1,187,905	395,650	1,637,988	-	3,221,543
$ 366,933	30,291	244,272	-	641,496

AI assistant

Nishoku — Interim / Quarterly Report 2021

52364_rns_2021-12-23_c6cf3eb2-d94d-4f85-9369-1e1bf6012d2b.pdf

NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 and 2020

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis of opinion

Conclusion

Notes to Readers

KPMG

Notes to Readers

Reviewed only, not audited in accordance with generally accepted auditing standards as of September 30, 2021 and 2020 NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

Consolidated Balance Sheets

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

(Expressed in Thousands of New Taiwan Dollars)

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020

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

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Reviewed only, not audited in accordance with generally accepted auditing standards NISHOKU TECHNOLOGY INC. AND ITS SUBSIDIARIES Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

Notes to the Consolidated Financial Statements

September 30, 2021 and 2020

(1) Company history

(2) Approval date and procedures of the consolidated financial statements:

(3) New standards, amendments and interpretations adopted:

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

b. Basis of consolidation

c. Income Tax

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

(6) Explanation of significant accounts:

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(d) Inventories

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

( g ) Right-of-use assets

(h) Short-term borrowings

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(m) Income tax

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(o) Share-based payment

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Contract balances

(r) Employee, board of directors', and supervisors' compensation

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(s) Other revenue

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Liquidity risk

NISHOKU TECHNOLOGY INC. AND SUBSIDIARIES

Nishoku Interim / Quarterly Report 2021

( `g` ) Right-of-use assets