Primax - Interim / Quarterly Report 2021

Stock Code:4915

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors’ Review Report for the Three Months Ended March 31, 2021 and 2020

Address: No. 669, Ruey Kuang Road, Neihu, Taipei Telephone: (02)2798-9008

The independent 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 independent auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statement of Comprehensive Income 6. Consolidated Statement of Changes in Equity 7. Consolidated Statement of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8～9 10～13 13 13～41 42 43 43 43 43 44 44～49 49～50 50～51 51 52

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

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Review Report

To the Board of Directors of PRIMAX ELECTRONICS LTD.:

Introduction

We have reviewed the accompanying consolidated balance sheets of PRIMAX ELECTRONICS LTD. (“the Company” ) and its subsidiaries (“ the Group” ) as of March 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standards (“IASs”) 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standards 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to NT$9,374,845 thousand and NT$5,932,463 thousand, constituting 17.8% and 11.6% of the consolidated total assets; and the total liabilities amounting to NT$5,315,237 thousand and NT$3,961,208 thousand, constituting 14.5% and 10.9% of the consolidated total liabilities as of March 31, 2021 and 2020, respectively; as well as the total comprehensive income (loss) amounting to NT$9,833 thousand and NT$(163,398) thousand, constituting 2.4% and (482.5)% of the consolidated comprehensive income (loss) for the three months ended March 31, 2021 and 2020, respectively.

Furthermore, as stated in note 6(g), the investments accounted for using equity method of the Group in its investee companies of NT$531,995 thousand and NT$902,180 thousand as of March 31, 2021 and 2020, and its related share of loss of associates accounted for using equity method of NT$20,641 thousand and NT$21,603 thousand for the three months ended March 31, 2021 and 2020, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews and the review report of another auditor (please refer to Other Matter paragraph), 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 of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IASs 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We did not review the financial statements of Tymphany Worldwide Enterprises Ltd., a subsidiary of the Group. Those financial statements were reviewed by another auditor, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for Tymphany Worldwide Enterprises Ltd., is based solely on the review report of another auditor. The financial statements of Tymphany Worldwide Enterprises Ltd. reflect the total assets amounting to NT$17,592,037 thousand and NT$20,931,720 thousand, constituting 33.4% and 41.0% of the related consolidated total assets as of March 31, 2021 and 2020, respectively; as well as the operating revenue amounting to NT$5,186,432 thousand and NT$5,029,293 thousand, constituting 30.2% and 37.2% of the related consolidated operating revenue for the three months ended March 31, 2021 and 2020, respectively.

The engagement partners on the reviews resulting in this independent auditors’ review report are MEI-PIN WU and CHI-LUNG YU.

KPMG

Taipei, Taiwan (Republic of China) May 6, 2021

Notes to Readers

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2021 and 2020

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31 and March 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

March 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 6,166,819 12 1110 Current financial assets at fair value through profit or loss (note 6(b)) 222,708 - 1137 Current financial assets at amortized cost (notes 6(d) and 8) 8,065,336 15 1170 Notes and accounts receivable, net (notes 6(e), (v) and 8) 12,144,641 23 1180 Accounts receivable from related parties, net (notes 6(e), (v) and 7) 162,344 - 1200 Other receivables (note 6(e)) 906,951 2 1310 Inventories (note 6(f)) 10,242,364 20 1470 Other current assets (note 8) 1,635,839 3 39,547,002 75 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 151,498 - 1550 Investments accounted for using equity method (note 6(g)) 531,995 1 1600 Property, plant and equipment (notes 6(i) and 8) 6,497,417 12 1755 Right-of-use assets (note 6(j)) 2,537,281 5 1760 Investment property (note 6(k)) 33,710 - 1780 Intangible assets (note 6(l)) 2,349,271 5 1840 Deferred tax assets 661,305 1 1990 Other non-current assets (note 8) 336,382 1 13,098,859 25 Total assets $ 52,645,861 100	December 31, 2020 Amount % 6,935,353 15 313,758 1 855,238 1 13,578,841 29 198,189 - 1,349,362 3 10,247,463 22 1,631,887 4 35,110,091 75 121,672 - 536,303 1 6,542,015 14 1,568,052 3 33,826 - 2,370,578 5 658,289 1 366,256 1 12,196,991 25 47,307,082 100	March 31, 2020 Amount % 15,639,323 31 155,156 - - - 11,016,051 22 144,786 - 957,097 2 8,839,633 17 1,386,939 3 38,138,985 75 117,124 - 902,180 2 6,447,225 13 1,744,054 3 34,173 - 2,475,125 5 778,051 1 374,768 1 12,872,700 25 51,011,685 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(m)) 2120 Current financial liabilities at fair value through profit or loss (note 6(b)) 2170 Notes and accounts payable 2200 Other payables 2201 Salaries payable 2280 Current lease liabilities (note 6(o)) 2300 Other current liabilities (note 6(v)) 2320 Long-term borrowings, current portion (notes 6(n) and 8) 2365 Current refund liabilities Non-Current liabilities: 2540 Long-term borrowings (notes 6(n) and 8) 2580 Non-current lease liabilities (note 6(o)) 2630 Long-term deferred revenue (note 6(i)) 2600 Other non-current liabilities Total liabilities Equity attributable to owners of parent: 3110 Ordinary shares (note 6(s)) 3200 Capital surplus (note 6(s)) 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings (note 6(s)) 3400 Other equity interest 36XX Non-controlling interests(note 6(h)) Total equity Total liabilities and equity	March 31, 2021		December 31, 2020		March 31, 2020 Amount % 9,151,670 18 161,160 - 15,973,906 31 3,511,839 7 682,577 1 279,962 1 595,889 1 - - 1,519,546 3 31,876,549 62 151,271 - 1,113,867 2 2,523,458 5 780,249 2 4,568,845 9 36,445,394 71 4,487,308 9 1,490,704 3 1,370,470 3 662,348 1 5,776,011 11 (1,322,313) (2) 2,101,763 4 14,566,291 29 51,011,685 100
			Amount %		Amount %
					905,059 2 432,171 1 19,001,057 40 3,949,527 8 1,131,626 2 271,483 1 753,750 2 74,833 - 1,421,407 3 27,940,913 59 680,626 1 981,436 2 1,499,072 3 704,445 2 3,865,579 8 31,806,492 67 4,508,983 10 1,567,628 3 1,578,473 3 1,058,941 2 5,733,458 12 (1,159,650) (2) 2,212,757 5 15,500,590 33 47,307,082 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

For the three months ended March 31, 2021 and 2020

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

4000 Operating revenue (notes 6(v) and 7) 5000 Operating costs (notes 6(f), (o), (q), (w) and 12) Gross profit from operation Operating expenses (notes 6(o), (q), (t), (w) and 12): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Reversal of expected credit loss (note 6(e)) Total operating expenses Net operating income Non-operating income and expenses: 7100 Interest income 7010 Other income (note 6(x)) 7020 Other gains and losses (notes 6(i) and (y)) 7060 Shares of loss of associates accounted for using equity method (note 6(g)) 7050 Finance costs (note 6(o)) Total non-operating income and expenses Profit before tax 7950 Less: Income tax expenses (note 6(r)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation of foreign operation’s financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income after tax Comprehensive income Profit attributable to: 8610 Owners of parent 8620 Non-controlling interests (note 6(h)) Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests (note 6(h)) Earnings per share (note 6(u)) 9710 Basic earnings per share (NT dollars) 9810 Diluted earnings per share (NT dollars)	For the three months ended March 31 2021 2020 Amount % Amount % $ 17,159,387 100 13,524,101 100 15,011,397 87 11,998,960 89 2,147,990 13 1,525,141 11 400,614 2 280,393 2 463,504 3 450,072 3 691,665 4 600,730 4 - - (11,404) - 1,555,783 9 1,319,791 9 592,207 4 205,350 2 27,369 - 37,337 - 2,801 - 3,666 - 69,756 - 100,763 - (20,641) - (21,603) - (37,427) - (59,900) - 41,858 - 60,263 - 634,065 4 265,613 2 132,741 1 58,358 - 501,324 3 207,255 2 29,326 - (2,089) - - - - - 29,326 - (2,089) - (124,263) (1) (171,300) (2) - - - - (124,263) (1) (171,300) (2) (94,937) (1) (173,389) (2) $ 406,387 2 33,866 $ 505,207 3 275,813 2 (3,883) - (68,558) - $ 501,324 3 207,255 2 $ 427,635 2 128,994 - (21,248) - (95,128) - $ 406,387 2 33,866 - $ 1.13 0.62 $ 1.12 0.61	For the three months ended March 31 2021 2020 Amount % Amount % $ 17,159,387 100 13,524,101 100 15,011,397 87 11,998,960 89 2,147,990 13 1,525,141 11 400,614 2 280,393 2 463,504 3 450,072 3 691,665 4 600,730 4 - - (11,404) - 1,555,783 9 1,319,791 9 592,207 4 205,350 2 27,369 - 37,337 - 2,801 - 3,666 - 69,756 - 100,763 - (20,641) - (21,603) - (37,427) - (59,900) - 41,858 - 60,263 - 634,065 4 265,613 2 132,741 1 58,358 - 501,324 3 207,255 2 29,326 - (2,089) - - - - - 29,326 - (2,089) - (124,263) (1) (171,300) (2) - - - - (124,263) (1) (171,300) (2) (94,937) (1) (173,389) (2) $ 406,387 2 33,866 $ 505,207 3 275,813 2 (3,883) - (68,558) - $ 501,324 3 207,255 2 $ 427,635 2 128,994 - (21,248) - (95,128) - $ 406,387 2 33,866 - $ 1.13 0.62 $ 1.12 0.61
	2021 Amount % $ 17,159,387 100 15,011,397 87 2,147,990 13 400,614 2 463,504 3 691,665 4 - - 1,555,783 9 592,207 4 27,369 - 2,801 - 69,756 - (20,641) - (37,427) - 41,858 - 634,065 4 132,741 1 501,324 3 29,326 - - - 29,326 - (124,263) (1) - - (124,263) (1) (94,937) (1) $ 406,387 2 $ 505,207 3 (3,883) - $ 501,324 3 $ 427,635 2 (21,248) - $ 406,387 2 $ 1.13 $ 1.12
		0.61

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

				Equity attributable to ow	Equity attributable to ow	Equity attributable to ow	ners of parent					Total equity attributable to owners of parent	Non- controlling interests	Total equity
Ordinary shares	Capital surplus		R	etained earnings			O	t	her equity intere	st
							Exchange differences on translation of financial statements		Unrealized gains (losses) from financial assets at fair value through other comprehensive income	Unearned employee compensation
		Legal reserve		Special reserve	Unappropriated retained earnings
$ 4,485,808 - - - - - (300) 1,800 $ 4,487,308 $ 4,508,983 - - - - - (140) 7,400 $ 4,516,243	1,483,045	1,370,470		662,348		5,500,198	(1,030,865) - (144,730) (144,730) - - - - (1,175,595) (1,004,528) - (106,898) (106,898) - - - - (1,111,426)		(28,076) - (2,089) (2,089) - - - - (30,165) (41,833) - 29,326 29,326 - - - - (12,507)		(134,926) - - - - 24,584 3,365 (9,576) (116,553) (113,289) - - - - 27,620 140 (41,292) (126,821)	12,308,002	2,195,638 (68,558) (26,570) (95,128) 1,253 - - - 2,101,763 2,212,757 (3,883) (17,365) (21,248) 1,226 - - - 2,192,735	14,503,640
	- -	- -		- -		275,813 -								207,255 (173,389)
	-	-		-		275,813								33,866
		- - - -		- - - -		- - - -								4,201 24,584 - -
		1,370,470		662,348		5,776,011								14,566,291
		1,578,473		1,058,941		5,733,458								15,500,590
		- -		- -		505,207 -								501,324 (94,937)
		-		-		505,207								406,387
		- - - -		- - - -		- - - -								4,242 27,620 - -
		1,578,473		1,058,941		6,238,665								15,938,839

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation and Amortization expense Loss (gain) related to inventories Reversal of expected credit loss Interest expense Interest income Compensation cost of share-based payment Shares of loss of associates accounted for using equity method Loss (gain) on disposal of property, plant and equipment Reversal of impairment loss of property, plant and equipment Other Total adjustments to reconcile profit Changes in operating assets and liabilities: Financial assets at fair value through profit or loss Financial assets measured at amortized cost Notes and accounts receivable Accounts receivable from related parties Other receivables Inventories Other current assets Other operating assets Changes in operating assets Financial liabilities at fair value through profit or loss Notes and accounts payable Salaries payable Other payables Refund liabilities Other current liabilities Other operating liabilities Changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Acquisition of unamortized expense Proceeds from disposal of unamortized expense Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Increase (decrease) in long-term borrowings Increase (decrease) in guarantee deposits received Payment of lease liabilities Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the three month	s ended March 31 2020 265,613 589,944 105,016 (11,404) 58,557 (37,337) 28,785 21,603 (237) - -
	2021 $ 634,065 515,113 (8,563) - 35,847 (27,369) 31,862 20,641 13,217 (6,986) (272) 573,490 91,050 (7,210,098) 1,434,236 35,845 442,411 13,662 9,401 (21,658) (5,205,151) (54,148) (3,796,033) (292,889) (622,449) 185,451 146,953 (67,136) (4,500,251) (9,705,402) (9,131,912) (8,497,847) 27,369 (35,828) (66,068) (8,572,374) (1,710) 1,210 (535,169) 1,836 26,733 (9,754) 85 (516,769) 7,757,027 699,633 (989) (65,228) 8,390,443 (69,834) (768,534) 6,935,353 $ 6,166,819
		754,927
		31,860 - 8,600,846 35,685 91,919 1,548,597 128,659 (22)
		10,437,544
		(46,051) (7,770,983) (839,475) (606,666) (32,729) 283,128 (160,335)
		(9,173,111)
		1,264,433
		2,019,360
		2,284,973 37,337 (58,539) (175,288)
		2,088,483
		(12,678) - (995,366) 2,076 1,830 (42,625) -
		(1,046,763)
		8,059,544 (27,777) 17,328 (72,863)
		7,976,232
		(79,139)
		8,938,813 6,700,510
		15,639,323

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) As of March 31, 2021 and 2020 Reviewed only, not audited in accordance with generally accepted auditing standards PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

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

(1) Company history

PRIMAX ELECTRONICS LTD. (the “Company”), formerly known as Hong Chuan Investments Ltd., was incorporated on March 20, 2006, and registered under the Ministry of Economic Affairs, ROC. The Company changed its name to Hong Chuan Electronics Ltd. and Primax Electronics Ltd. in October 2007 and February 2008, respectively. The address of the Company’s registered office is No. 669, Ruey Kuang Road, Neihu, Taipei.

Primax Electronics Holdings, Ltd. (Primax Holdings, formerly known as Apple Holdings Ltd.) acquired all shares of the Company from YWAN PANG Management Limited on April 2, 2007. The investment was approved by the Investment Commission, Ministry of Economic Affairs. However, all shares of the Company were sold by Primax Holdings to its stockholders in October 2009.

Based on the resolution approved by the Company’ s board of directors on November 5, 2007, the Company resolved to acquire and merge with Primax Electronics Ltd. (“Primax”, a listed company) on December 28, 2007. The Company is the surviving company, and Primax was dissolved upon completion of the merger.

The consolidated financial statements of the Company as at and for the three months ended March 31, 2021, comprised the Company and subsidiaries (together referred to as “the Group”). The major business activities of the Group were the manufacture and sale of multi-function printers, scanners, digital camera modules, computer mice, keyboards, track pads, mobile phone accessories, consumer electronics products, shredders, amplifiers, speakers, audio systems and related parts, as well as other electronic components. Please refer to note 14 for further information.

The Company’ s common shares were registered with the Financial Supervisory Commission, ROC (“FSC”) on June 22, 2012, and listed on the Taiwan Stock Exchange (“TWSE”) on October 5, 2012.

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

The consolidated financial statements were authorized for issuance by the board of directors on May 6, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

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

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
－
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 April 1, 2021, would not have a significant impact on its consolidated financial statements:

●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(c) The impact of IFRS issued by the International Accounting Standards Board (IASB) but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by IASB, but have yet to be endorsed by the FSC:

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

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

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

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

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

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Report by Securities Issuers (“ the Regulation” ) and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect 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 and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated 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

(i) List of subsidiaries in the consolidated financial statements

The details of the subsidiaries included in the consolidated financial statements are as follows:

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company	Name of subsidiary	Principal activities Holding company Holding company Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Holding comapny	Percentage of shareholding March 31, 2021 December 31, 2020 March 31, 2020 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1)	Percentage of shareholding March 31, 2021 December 31, 2020 March 31, 2020 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 (note 1)
			March 31, 2021	December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
	Primax Industries (Cayman Holding) Ltd. (Primax Cayman) Primax Technology (Cayman Holding) Ltd. (Primax Tech.) Destiny Technology Holding Co., Ltd. (Destiny BVI.) Primax Destiny Co., Ltd. (Destiny Japan) Diamond (Cayman) Holdings Ltd. (Diamond) Gratus Technology Corp. (Gratus Tech.) Primax AE (Cayman) Holdings Ltd. (Primax AE) Primax Electronics (Singapore) Pte. Ltd. (Primax Singapore)		% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

			Percentage of shareholding	Percentage of shareholding	Percentage of shareholding	Percentage of shareholding	Percentage of shareholding
Name of		Principal	March 31,		December		March 31,
investor	Name of subsidiary	activities	2021		31, 2020		2020		Description
Primax Cayman	Primax Industries (Hong Kong)	Holding company	100.00	%	100.00	%	100.00	%
	Ltd. (Primax HK)	and customer
		service
Primax HK	Dongguan Primax Electronic &	Manufacturing and	100.00	%	100.00	%	100.00	%
and Primax Tech.	Telecommunication Products Ltd.	sale of computer
	(PCH2)	peripherals, mobile
		device components,
		and business
		devices
Primax HK	Primax Electronics (Kun Shan)	Production of	100.00	%	100.00	%	100.00	%	(note 1)
	Corp., Ltd. (PKS1)	computer peripheral
		products
Primax HK	Primax Electronics (Chongqing)	Production of	100.00	%	100.00	%	100.00	%	(note 1)
	Corp., Ltd. (PCQ1)	computer peripheral
		products
Primax Tech.	Polaris Electronics Inc. (Polaris)	Sale and purchase	100.00	%	100.00	%	100.00	%	(note 1)
		of computer
		peripherals, mobile
		device components,
		and business
		devices, as well as
		market development
		and customer
		service.
Destiny BVI.	Beijing Destiny Electronic	R&D of computer	100.00	%	100.00	%	100.00	%	(note 1)
	Technology Co., Ltd.	peripherals and
	(Destiny Beijing)	business devices
Primax Singapore	Primax Electronics (Thailand) Co.,	Manufacturing and	99.99	%	99.99	%	99.99	%	(note 1)
	Ltd. (Primax Thailand)	sale of computer
		peripherals, mobile
		device components,
		and business
		devices
Diamond	Tymphany Worldwide Enterprises	Holding company	100.00	%	100.00	%	100.00	%
	Ltd. (TWEL)
TWEL	Tymphany Acoustic Technology	Manufacturing,	71.43	%	71.43	%	71.43	%
	(Huizhou) Co., Ltd (Tymphany	R&D, design, and
	Huizhou)	sales of various
		speaker accessories,
		speakers, and their
		components
Tymphany Huizhou	Tymphany Acoustic Technology	R&D, design, and	100.00	%	100.00	%	100.00	%
	HK Ltd. (TYM Acoustic HK)	sales of various
		speaker accessories,
		speakers and their
		components, as well
		as holding business
Tymphany Huizhou	Dongguan Tymphany Acoustic	Manufacturing,	100.00	%	100.00	%	100.00	%
	Technology Co., Ltd. (Tymphany	R&D, design, and
	Dongguan)	sales of various
		speaker accessories,
		speakers, and their
		components
TYM Acoustic HK	TYMPHANY ACOUSTIC	R&D and design of	100.00	%	100.00	%	100.00	%
	TECHNOLOGY (UK) LIMITED	various speaker
	(TYM UK)	accessories as well
		as speakers and
		their components
								(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor TYM Acoustic HK TYM Acoustic HK TYM Acoustic HK TYM Acoustic HK TYM Acoustic HK TYM HK Tymphany Dongguan	Name of subsidiary	Principal activities Manufacturing, installation, and maintenance of various speaker accessories and their components Market development of and customer service for speakers and their components Holding company and market development of various speaker accessories, speakers and their components, as well as customer service R&D and design of various speaker accessories as well as speakers and their components Manufacturing and sales of various speaker accessories, speakers, and their components Sales of various audio accessories, speakers and their components R&D, design, and sales of various speaker accessories, speakers, and their components	Percentage of shareholding March 31, 2021 December 31, 2020 March 31, 2020 Description % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 99.99 % 99.99 % 99.99 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00	Percentage of shareholding March 31, 2021 December 31, 2020 March 31, 2020 Description % 100.00 % 100.00 % 100.00 (note 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 99.99 % 99.99 % 99.99 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
			March 31, 2021	December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 99.99 % 100.00 % 100.00
	Tymphany Acoustic Technology Europe, s.r.o (TYM Acoustic Europe) TYP Enterprise, inc. (TYP) Tymphany HK Ltd. (TYM HK) Tymphany Acoustic Technology Limited (TYM Acoustic) Tymphany Acoustic Technology (Thailand) Co., Ltd (TYTH) TYMPHANY LOGISTICS, INC (TYML) Dongguan Dongcheng Tymphany Acoustic Technology Co., Ltd. (TYDC)		% 100.00 % 100.00 % 100.00 % 100.00 % 99.99 % 100.00 % 100.00

Note 1: The company is a non-significant subsidiary, and its financial statements have not been reviewed.

Note 2: The company was a non-significant subsidiary as of March 31, 2021, and its financial statements for the three months ended March 31, 2021 have not been reviewed.

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of IAS 34 “Interim Financial Reporting”.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the 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.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Employee benefits

The pension cost in the consolidated financial statements was calculated and disclosed on a year-todate basis by using the actuarially determined pension cost rate at the end of the prior fiscal year adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

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

The preparation of the consolidated 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.

The preparation of the consolidated financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2020.

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements is as follow:

(a) Judgment of whether the Group has substantive control over its investees

The Group holds 37% of the outstanding voting shares of ALT International Co., Ltd. (AIC), but the Group did not obtain any director seats of AIC, and the chairman of AIC controls 45% of voting shares. Therefore, the Group does not have power of control over relevant activities of AIC, but remains significant influence.

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2020. Please refer to note 6 of the 2020 annual consolidated financial statements.

(a) Cash and cash equivalents

Cash on hand Demand accounts and checking deposits Time deposits Cash and cash equivalents in the consolidated statements of cash flows	March 31, 2021 $ 6,616 2,893,599 3,266,604 $ 6,166,819	December 31, 2020 7,750 4,417,720 2,509,883 6,935,353	March 31, 2020
			4,643 4,389,170 11,245,510
			15,639,323

Please refer to note 6(z) for the currency risk and the interest rate risk of the Group’s cash and cash equivalents.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Financial assets and liabilities at fair value through profit or loss
(i) Details of financial instruments were as follows:

Mandatorily measured at FVTPL: Derivative instruments not used for hedging Forward exchange contracts Foreign exchange swap contracts Financial liabilities held-for-trading: Derivative instrument not used for hedging Forward exchange contracts Foreign exchange swap contracts	March 31, 2021 $ 199,316 23,392 $ 222,708 March 31, 2021 $ (193,794) (184,229) $ (378,023)	December 31, 2020 67,252 246,506 313,758 December 31, 2020 (399,762) (32,409) (432,171)	March 31, 2020 115,286 39,870 155,156 March 31, 2020 (121,045) (40,115) (161,160)

(ii) The Group held the following derivative instruments as mandatorily measured at fair value through profit or loss and held-for-trading financial liabilities, without the application of edge accounting, as of March 31, 2021, December 31 and March 31, 2020:

March 31, 2021

	March 31, 2021
Derivative financial instruments	Nominal amount (inthousands)	Maturity date Predetermined rate April 1 2021~ October 28, 2021 26.980~28.177 April 8, 2021~ May 7, 2021 6.5100~6.5885 April 7, 2021~ May 19, 2021 6.4953~6.6324 April 1, 2021~ October 22, 2021 27.756~28.845
Forward exchange contracts －buy USD / sell TWD Forward exchange contracts －buy USD / sell CNY Foward exchange contracts －buy CNY/ sell USD Foreign exchange swap contracts －swap in TWD / swap out USD	USD 771,000 USD 61,000 USD 100,000 USD 621,000

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2020	Maturity date Predetermined rate January 6, 2021~ June 23, 2021 27.150~28.942 January 13, 2021~ January 28, 2021 28.490~28.501 January 4, 2021~ May 19. 2021 6.5273~6.6415 January 6, 2021~ June 23, 2021 28.075~29.424 Maturity date Predetermined rate April 1, 2020~ September 25, 2020 29.388~30.690 April 1, 2020~ June 3, 2020 29.891~30.0915 April 8, 2020~ April 17, 2020 7.0027~7.0355 April 8, 2020~ July 17, 2020 6.9000~7.1181 April 8, 2020~ September 25, 2020 29.654~30.755 May 19, 2020~ June 19, 2020 7.0269~7.0393
Derivative financial instruments	Nominal amount (inthousands)
Forward exchange contracts －buy USD / sell TWD Forward exchange contracts －buy TWD / sell USD Forward exchange contracts －buy CNY / sell USD Foreign exchange swap contracts －swap in TWD / swap out USD	USD 764,000 USD 11,500 USD 262,300 USD 593,000 March 31, 2020
Derivative financial instruments	Nominal amount (inthousands)
Forward exchange contracts －buy USD / sell TWD Forward exchange contracts －buy TWD / sell USD Forward exchange contracts －buy USD/ sell CNY Forward exchange contracts －buy CNY / sell USD Foreign exchange swap contracts －swap in TWD / swap out USD Foreign exchange swap contracts －swap in CNY/ swap out USD	USD 711,000 USD 108,000 USD 39,500 USD 103,500 USD 468,000 USD 23,500

(iii) Please refer to note 6(z) for the liquidity risk of the Group’s financial instruments.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Financial assets at FVOCI

Equity investments at FVOCI Stocks unlisted in domestic markets–WK Technology Fund IV Ltd. Stocks unlisted in domestic markets– Changing Information Technology Inc. Stocks unlisted in domestic markets– Syntronix Corp. Equities unlisted in foreign markets–Grove Ventures L.P. Equities unlisted in foreign markets–Grove Ventures II, L.P. Stocks unlisted in foreign markets–WK Global Investment III Ltd. Total	March 31, 2021 $ 53 6,702 49 86,734 26,249 31,711 $ 151,498	December 31, 2020 1,263 6,002 49 60,722 26,227 27,409 121,672	March 31, 2020
			1,476 2,102 49 60,811 14,522 38,164
			117,124

(i) The Group designated the investments above as equity securities as at FVOCI because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes and not for sale.

(ii) Grove Venture, L.P executed capital increases, wherein the Group had participated and invested the amounts of $1,710 and $5,454 in the three months ended March 31, 2021 and 2020, respectively.
(iii) Grove Ventures II, L.P. executed capital increases, where in the Group had participated and invested the amounts of $7,224 in the three months ended March 31, 2020.
(iv) WK Technology Fund IV Ltd. refunded the amount of $1,210 to the Group due to its capital reduction in March 2021.
(v) The Group did not provide any of the aforementioned financial assets as collateral.
(d) Financial assets at amortized cost

Time deposits Annual interest rates	March 31, 2021 $ 8,065,336 0.92%~1.75%	December 31, 2020 855,238 1.4%	March 31, 2020
			-
			-

(i) The Group has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) As of March 31, 2021 and December 31, 2020, the Group held time deposits maturing in April to September 2021 and in June 2021, respectively.
(iii) For credit risk, please refer to note (z).
(iv) Please refer to note 8 for further information on financial assets as collateral.
(e) Notes and accounts receivable (including related parties)

Notes receivable Accounts receivable Accounts receivable – related parties Less: allowance for doubtful accounts Total	March 31, 2021 $ 2,456 12,184,304 162,344 (42,119) $ 12,306,985	December 31, 2020 5,618 13,615,378 198,189 (42,155) 13,777,030	March 31, 2020 8,604 11,072,059 144,786 (64,612) 11,160,837

(i) The Group did not provide any of the aforementioned notes and accounts receivable (including related parties) as collateral.
(ii) The Group applies the simplified approach to provide for its ECL, the use of lifetime ECL provision for all notes and accounts receivables. To measure the ECL, notes and accounts receivable have been grouped based on shared credit risk characteristics and customer’s ability to pay all the amounts due based on the terms of the contract as well as incorporated forward looking information, including macroeconomic and relevant industry information. The ECL allowance provision analysis was as follows:

	March 31, 2021
Carrying amounts of notes and accounts receivable (including related parties) $ 11,826,590 451,157 25,447 9,504 33,492 - 2,914 $ 12,349,104	Lifetime ECL rate 0%~0.17% 0%~2.82% 0%~5% 0%~10% 0%~25% 0%~80% 0%~100%	Loss allowance provision of lifetime ECL
		19,718 12,715 1,205 888 5,352 - 2,241
		42,119

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020	December 31, 2020
Carrying amounts of notes and accounts receivable (including related parties) $ 12,834,801 924,894 44,042 8,682 4,067 - 2,699 $ 13,819,185	Lifetime ECL rate 0%~0.04% 0%~3.4% 0%~5% 0%~10% 0%~25% 0%~80% 0%~100% March 31, 2020	Loss allowance provision of lifetime ECL
		5,505 31,282 2,202 814 325 - 2,027
		42,155

Carrying amounts of notes and accounts receivable (including related parties) $ 10,582,151 551,250 42,339 10,307 11,141 5,137 23,124 $ 11,225,449	Lifetime ECL rate 0%~0.18% 0%~3.6% 0%~5% 0%~10% 0%~25% 0%~80% 0%~100%	Loss allowance provision of lifetime ECL
		18,774 19,484 1,771 186 529 1,610 22,258
		64,612

(iii) The movement in the allowance for notes and accounts receivable (including related parties) was as follows:

Balance on January 1, 2021 and 2020 Impairment losses reversed Effect of exchange rate changes Balance on March 31, 2021 and 2020	For the three months ended March 31 2021 2020 $ 42,155 75,725 - (11,404) (36) 291 $ 42,119 64,612
	2021 $ 42,155 - (36) $ 42,119

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) The Group entered into agreements with banks to sell its accounts receivable without recourse. According to the agreements, within the limit of its credit facilities, the Group does not need to guarantee the capability of its customers to pay for reasons other than commercial disputes when transferring its accounts receivable. The Group receives partial advances upon sales of accounts receivable and pays interest calculated based on the interest rates agreed for the period through the collection of the accounts receivable. The remaining amounts are received upon the collection of the accounts receivable, and are recorded as other receivables. In addition, the Group shall pay handling charges based on a fixed rate. The Group derecognized the above trade receivables because it has transferred substantially all of the risks and rewards of their ownership and it does not have any continuing involvement in them. As of March 31, 2021, December 31 and March 31, 2020, the details of transferred accounts receivable which conformed to the criteria for derecognition were as follows:

	Mar	ch 31, 2021
Amount Purchaser Derecognized HSBC Bank $ 1,931,417 EnTie Bank 116,189 Mega International Commercial Bank - $ 2,047,606	Amount A	dvanced Paid 1,802,619 - - 1,802,619 ber 31, 2020	Amount Recognized in Other Receivables 128,798 116,189 - 244,987	Range of Interest Rate 0.622%-0.864% - -	Guarantee (Promissory note)
	Unpaid 35,705 - - 35,705 Decem
					US$ 56,940 - US$ 3,750
Amount Purchaser Derecognized HSBC Bank $ 3,917,358 EnTie Bank 158,092 Bank of Taiwan - Mega International Commercial Bank - $ 4,075,450	Amount A	dvanced Paid 3,416,322 - - - 3,416,322 ch 31, 2020	Amount Recognized in Other Receivables 501,036 158,092 - - 659,128	Range of Interest Rate 0.795%~0.849% - - -	Guarantee (Promissory note)
	Unpaid 382,018 - - - 382,018 Mar
					US$ 37,440 - NT$ 58,000 US$ 3,750
Amount Purchaser Derecognized Mega International Commercial Bank $ - HSBC Bank 1,834,480 Bank of Taiwan - EnTie Bank 62,310 $ 1,896,790	Amount A	dvanced Paid - 1,494,454 - - 1,494,454	Amount Recognized in Other Receivables - 340,026 - 62,310 402,336	Range of Interest Rate - 1.572%~2.00% - -	Guarantee (Promissory note)
	Unpaid - 221,132 - - 221,132
					US$ 3,750 US$ 50,940 NT$ 58,000 -

(v) Please refer to note 8 for further information on accounts receivable provided as collateral.

(vi) Please refer to note 9 for guarantee notes provided by the Group to sell its accounts receivable.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Inventories

Raw materials Semi-finished goods and work in process Finished goods and merchandise	March 31, 2021 $ 3,560,922 1,936,056 4,745,386 $ 10,242,364	December 31, 2020 2,540,293 1,805,774 5,901,396 10,247,463	March 31, 2020
			2,656,901 2,069,433 4,113,299
			8,839,633

The Group did not provide any of the aforementioned inventories as collateral. Except for cost of inventories sold, the Group recognized the following items as cost of goods sold:

Gains (losses) on inventory valuation Unallocated manufacturing overhead resulting from the actual production being lower than the normal capacity Gains on physical inventories	For the three months ended March 31 2021 2020 $ 37,574 (94,811) (29,668) (10,765) 657 560 $ 8,563 (105,016)
	2021 $ 37,574 (29,668) 657 $ 8,563

(g) Investments accounted for using equity method

The Group’s investments accounted for using the equity method are individually insignificant. The related information included in the consolidated financial statements was as follows:

March 31, 2021 $ 531,995 $ $	December 31, 2020 March 31, 2020 536,303 902,180 For the three months ended March 31 2021 2020 (20,641) (21,603) 16,332 19,030 (4,309) (2,573)	March 31, 2020
		902,180

	2021 (20,641) 16,332 (4,309)
$ $

(i) The Group did not provide any investment accounted for using equity method as collateral.

(ii) The investments accounted for using equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Material non-controlling interests of subsidiaries

The material non-controlling interests of subsidiaries were as follows:

Name of subsidiaries	Main operation place Business/Registered Country	Proportion of Ownership and Voting Rights Held by Non-controlling Interests March 31, 2021 December 31, 2020 March 31, 2020 % 28.57 % 28.57 % 28.57
		March 31, 2021

The following information on the aforementioned subsidiaries have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Included in these information are the fair value adjustment made during the acquisition and relevant difference in accounting principles between the Group as at the acquisition date. Intra-group transactions were not eliminated in this information.

(i) Tymphany Huizhou and its subsidiaries’s collective financial information:

March 31, 2021 Current assets $ 13,797,200 Non-current assets 6,132,874 Current liabilities (10,258,030) Non-current liabilities (1,996,522 Net assets $ 7,675,522 Non-controlling interests $ 2,192,735 Operating revenue $ Loss $ Other comprehensive loss Comprehensive loss $ Loss attributable to non-controlling interests $ Comprehensive loss attributable to non-controlling interests$ Cash flows from (used in) operating activities Cash flows used in investing activities Cash flows from financing activities Effect of exchange rate changes Net increase in cash and cash equivalents Dividends paid to non-controlling interests	December 31, 2020 March 31, 2020 13,510,184 17,105,402 6,161,757 6,362,967 (10,030,285) (14,465,411) ) (1,896,051) (1,645,881) 7,745,605 7,357,077 2,212,757 2,101,763 For the three months ended March 31 2021 2020 5,198,914 5,029,293 (13,591) (239,983) (60,771) (92,588) (74,362) (332,571) (3,883) (68,558) (21,248) (95,128) For the three months ended March 31 2021 2020 $ (99,100) 1,035,872 (2,619,621) (596,756) 3,182,318 3,466,083 (27,419) (7,320) $ 436,178 3,897,879 $ - - (Continued)
	2021 $ (99,100) (2,619,621) 3,182,318 (27,419) $ 436,178 $ -

March 31,
2021
Current assets
$ 13,797,200
Non-current assets
6,132,874
Current liabilities
(10,258,030)
Non-current liabilities
(1,996,522
Net assets
$
7,675,522
Non-controlling interests
$
2,192,735
Operating revenue
$
Loss
$ Other comprehensive loss
Comprehensive loss
$
Loss attributable to non-controlling interests
$
Comprehensive loss attributable to non-controlling interests$
Cash flows from (used in) operating activities

Cash flows used in investing activities
Cash flows from financing activities
Effect of exchange rate changes
Net increase in cash and cash equivalents

Dividends paid to non-controlling interests

December 31,
2020
March 31,
2020
13,510,184
17,105,402
6,161,757
6,362,967

(10,030,285)
(14,465,411)
)
(1,896,051)
(1,645,881)
7,745,605
7,357,077
2,212,757
2,101,763
For the three months
ended March 31
2021
2020

5,198,914
5,029,293

(13,591)
(239,983)
(60,771)
(92,588)

(74,362)
(332,571)

(3,883)
(68,558)

(21,248)
(95,128)
For the three months
ended March 31
2021
2020
$ (99,100)
1,035,872
(2,619,621)
(596,756)
3,182,318
3,466,083
(27,419)
(7,320)
$
436,178
3,897,879
$
-
-
(Continued)

2021
$ (99,100)
(2,619,621)
3,182,318
(27,419)
$
436,178
$
-

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group for the three months ended March 31, 2021 and 2020, were as follows:

Cost or deemed cost: Balance on January 1, 2021 Additions Disposals Reclassifications Effect of changes in exchange rate Balance on March 31, 2021 Balance on January 1, 2020 Additions Disposals Reclassifications Effect of changes in exchange rate Balance on March 31, 2020 Depreciation and impairments loss: Balance on January 1, 2021 Depreciation Impairment loss (reversal) Disposals Reclassifications Effect of changes in exchange rate Balance on March 31, 2021 Balance on January 1, 2020 Depreciation Disposals Effect of changes in exchange rate Balance on March 31, 2020 Carrying amounts: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Land $ 320,069 - - - (6,956) $ 313,113 $ 134,701 - - - - $ 134,701 $ - - - - - - $ - $ - - - - $ - $ 320,069 $ 313,113 $ 134,701 $ 134,701	Buildings, leasehold improvement, and additional equipment 4,062,652 601 (57,798) 4,351 (25,629) 3,984,177 4,014,529 6,730 (230) 1,402 (42,099) 3,980,332 2,271,799 66,800 971 (51,929) (157) (14,318) 2,273,166 2,035,962 63,584 (230) (21,344) 2,077,972 1,790,853 1,711,011 1,978,567 1,902,360	Machinery and equipment 7,145,610 43,738 (517,523) 49,120 (47,526) 6,673,419 7,508,088 48,146 (148,469) 96,802 (86,687) 7,417,880 5,084,215 271,296 2,924 (450,311) (122,365) (29,904) 4,755,855 4,894,405 297,776 (35,297) (49,594) 5,107,290 2,061,395 1,917,564 2,613,683 2,310,590	Office and other equipment 1,161,191 29,248 (33,205) (7,591) (11,522) 1,138,121 2,089,856 4,935 (619,873) 27,293 (10,783) 1,491,428 652,245 41,145 (10,881) (16,449) (9,390) (5,890) 650,780 564,123 87,645 (43,577) (9,994) 598,197 508,946 487,341 1,525,733 893,231	Construction in progress and testing equipment 1,860,752 431,334 (217) (196,338) (27,143) 2,068,388 1,111,056 260,338 (560) (163,491) (1,000) 1,206,343 - - - - - - - - - - - - 1,860,752 2,068,388 1,111,056 1,206,343	Total 14,550,274 504,921 (608,743) (150,458) (118,776) 14,177,218 14,858,230 320,149 (769,132) (37,994) (140,569) 14,230,684 8,008,259 379,241 (6,986) (518,689) (131,912) (50,112) 7,679,801 7,494,490 449,005 (79,104) (80,932) 7,783,459 6,542,015 6,497,417 7,363,740 6,447,225

(i) The unamortized deferred revenue of equipment subsidy amounted to $1,260,970, $1,415,511 and $2,440,223 as of March 31, 2021, December 31 and March 31, 2020, respectively.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) The factory of the Group’s subsidiary in China is expected to be relocated to a new site in 2021, where parts of its property, plant and equipment will be disposed, resulting in the Group to measure the carrying amount by using the recoverable amount and recognized reversal of impairment loss of $6,986 under other gains and losses for the three months ended March 31, 2021.
(iii) The Group provided the aforementioned property, plant and equipment as collateral; please refer to note 8.
(j)
Right-of-use assets

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

Cost: Balance on January 1, 2021 Additions Disposals Lease modification Effect of changes in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Additions Effect of changes in exchange rates Balance on March 31, 2020 Depreciation: Balance on January 1, 2021 Depreciation Disposals Lease modification Effect of changes in exchange rates Balance on March 31, 2021 Balance on January 1, 2020 Depreciation Effect of changes in exchange rates Balance on March 31, 2020 Carrying amounts: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Land $ 406,195 - - - (3,143) $ 403,052 $ 402,455 - (5,487) $ 396,968 $ 25,790 3,784 - - (472) $ 29,102 $ 10,627 3,808 (301) $ 14,134 $ 380,405 $ 373,950 $ 391,828 $ 382,834	Buildings 1,773,581 11,218 (91,619) 1,045,772 (15,994) 2,722,958 1,718,180 19,811 (39,177) 1,698,814 596,500 74,153 (91,619) (4,703) (4,359) 569,972 277,503 80,519 (5,748) 352,274 1,177,081 2,152,986 1,440,677 1,346,540	Vehicles 30,703 2,735 (1,969) - (166) 31,303 17,685 8,169 (261) 25,593 21,645 2,395 (1,969) - (106) 21,965 8,753 3,486 (92) 12,147 9,058 9,338 8,932 13,446	Other equipment 5,349 - - - (7) 5,342 3,431 - (7) 3,424 3,841 501 - - (7) 4,335 1,715 482 (7) 2,190 1,508 1,007 1,716 1,234	Total 2,215,828 13,953 (93,588) 1,045,772 (19,310) 3,162,655 2,141,751 27,980 (44,932) 2,124,799 647,776 80,833 (93,588) (4,703) (4,944) 625,374 298,598 88,295 (6,148) 380,745 1,568,052 2,537,281 1,843,153 1,744,054

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Investment property

Carrying amounts: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Land $ 16,249 $ 16,249 $ 16,249 $ 16,249	Buildings and other equipment 17,577 17,461 18,040 17,924	Total
			33,826
			33,710
			34,289
			34,173

(i) There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the three months ended March 31, 2021 and 2020. Please refer to note 6(l) of the consolidated financial statements for the year ended December 31, 2020 for other further information.
(ii) The fair value of the investment property was not significantly different from those disclosed in the note 6(l) of the consolidated financial statements for the year ended December 31, 2020.

(iii) The Group did not provide any of the aforementioned investment property as collateral.

(l) Intangible assets

Carrying amounts: Balance on January 1, 2021 Balance on March 31, 2021 Balance on January 1, 2020 Balance on March 31, 2020	Goodwill $ 2,026,084 $ 2,025,721 $ 2,035,095 $ 2,036,805	Customer Relationships 217,380 199,410 289,260 271,289	Technology	Trademarks, Patents and Copyrights 311 7,819 8,068 8,779	Total
			126,803		2,370,578
			116,321		2,349,271
			168,733		2,501,156
			158,252		2,475,125

(i) There were no significant additions, disposal, or recognition and reversal of impairment losses of intangible assets for the three months ended March 31, 2021 and 2020. Please refer to note 6(m) of the consolidated financial statements for the year ended December 31, 2020 for other related information.
(ii) The Group did not provide any of the aforementioned intangible assets as collateral.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Short-term borrowings

The details were as follows:

Unsecured bank loans Unused credit lines Annual interest rates	March 31, 2021 $ 8,662,086 $ 14,755,162 0.50%~0.94%	December 31, 2020 905,059 22,857,597 0.70%~0.95%	March 31, 2020
			9,151,670
			13,928,171
			0.60%~2.33%

(n) Long-term borrowings

March 31, 2021

		Marc
Unsecured bank loans Secured bank loans Less: current portion Unused credit lines Unsecured bank loans Less: current portion Unused credit lines Secured bank loans Less: current portion Unused credit lines	Currency	Annual interest rate
	USD USD
	Currency	Annual interest rate
	USD
	Currency	Annual interest rate
	USD	2.2%~3.05%

(i) Please refer to note 9 for the details of the outstanding guarantee notes.

(ii) Please refer to note 8 for further information on assets provided as collateral.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Lease liabilities

Current Non-current	March 31, 2021 $ 237,034 $ 2,002,054	December 31, 2020 271,483 981,436	March 31, 2020
			279,962
			1,113,867

For the maturity analysis, please refer to note6 (z).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases and leases of low-value assets	For the three months ended March 31	For the three months ended March 31
	2021 $ 17,331 $ 24,145	2020
		15,992
		24,348

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

Rental paid in operating activities Interest on lease liabilities paid in operating activities Payment made on lease liabilities in financing activities Total cash outflow for leases	For the three months ended March 31 2021 2020 $ (24,145) (24,348) (17,331) (15,992) (65,228) (72,863) $ (106,704) (113,203)
	2021 $ (24,145) (17,331) (65,228) $ (106,704)

(i) Real estate leases

The Group leases lands and buildings for its office, staff dormitory, factory facilities and warehouses. The leases typically run for a period of two to fifty years. Some leases require additional rental payments depending on the changes in fair value of the lease assets.

(ii) Other leases

The Group leases vehicles and some of other equipments with lease terms of one to five years.

The Group also leases machineries and some of other equipments with lease terms of one to five years. These leases are short-term or leases of low-value items. The Group decided to apply recognition exemptions, and had elected not to recognize its right-of-use assets and lease liabilities for these leases.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Operating lease

There were no significant changes in operating lease for the three months ended March 31, 2021 and 2020. Please refer to note 6(q) of the consolidated financial statements for the year ended December 31, 2020 for other related information.

(q) Employee benefits

(i) Defined benefit plans

There was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019.

(ii) Defined contribution plans

The Company contribute the pension cost on the defined contribution plans to the labor pension account at the Bureau of Labor Insurance. Subsidiaries other than the Company set up their defined contribution plans in accordance with the regulations of their respective countries.

(iii) The Group recognized its pension costs and recorded them as operating costs and operating expenses.

expenses.
Defined benefit plans Defined contribution plans Total	For the three months ended March 31
	2021 $ 105 90,994 $ 91,099	2020
		273 83,032
		83,305

(r) Income taxes

(i) Income tax expense for the period is best estimated by multiplying the profit before tax of the reporting period by the effective annual tax rate as forecasted by the management.
(ii) The details of the Group’s income tax expenses were as follows:

Income tax expense	For the three months ended March 31	For the three months ended March 31
	2021 $ 132,741	2020
		58,358

(iii) There were no income tax recognized in equity or other comprehensive income.
(iv) The Company’s income tax returns have been examined by the tax authority through the years to 2018.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the three months ended March 31, 2021 and 2020. For the related information, please refer to note 6(t) of the consolidated financial statements for the year ended December 31, 2020.

(i) Ordinary shares

As of March 31, 2021, December 31 and March 31, 2020, the nominal ordinary shares amounted to $5,500,000. Par value of each share is $10 (dollars), which means in total there were 550,000 thousand authorized common shares, of which 451,624, 450,898 and 448,731 thousand shares, respectively, were issued. All issued shares were paid up upon issuance.

Reconciliation of shares outstanding were as follows:

Balance on January 1 Issuance of restricted stock Retirement of restricted stock Balance on March 31		Ordinary shares (in thousands of shares) For the three months ended March 31	Ordinary shares (in thousands of shares) For the three months ended March 31

		2021 450,898 740 (14) 451,624	2020 448,581 180 (30) 448,731

(ii) Capital surplus

The balances of capital surplus were as follows:

Additional paid-in capital Employee stock options Restricted employee stock options Long-term investment	March 31, 2021 $ 784,225 259,401 178,277 382,633 $ 1,604,536	December 31, 2020 759,070 259,401 169,540 379,617 1,567,628	March 31, 2020
			704,956 259,401 155,584 370,763
			1,490,704

(iii) Retained earnings

According to the articles of the Company, when allocating the earnings for each year, the Company shall first offset its losses in previous year and set aside a legal capital reserve at 10% of the earing left over, until the accumulated legal capital reserve has equaled the total capital of the Company; then set aside a special capital reserve in accordance with relevant laws, the balance of the earnings shall combined into an aggregate amount of undistributed earnings, which shall become the aggregate distributable earnings to be distributed by the directors’ distribution proposals according to the resolution adopted at the shareholders’ meeting.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Company is at the growth stage and considers its future cash demand, long-term financial plans, benefits to shareholders, and balanced dividends. Earnings distribution is made by stock dividend and cash dividend. The cash dividend shall not be less than 10 percent of the total dividends and could be adjusted depending on the Company’s operating condition.

On February 26, 2021, the board of directors’ meeting resolved to appropriate the 2020 earnings. On June 23, 2020, the shareholders’ meeting resolved to distribute the 2019 earnings. The distributions were NT$3 (dollars) and NT$2.4 (dollars) per share, which amounted to $1,354,873 and $1,076,876, respectively.

(t) Share-based payment

Except for the following disclosure, there were no significant changes for share-based payment for the three months ended March 31, 2021 and 2020. Please refer to note 6(u) of the consolidated financial statements for the year ended December 31, 2020 for further information.

After the shareholders’ meeting on June 23, 2020, the Company decided to issue 3,000 thousand shares of restricted stock to those full-time employees who meet the Company’s requirements. The restricted stock has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’ meeting resolved to issue 2,260 and 740 thousand shares on July 30, 2020 and January 25, 2021, respectively.

Expenses attributable to share-based payment were as follows:

Expenses attributable to share-based payment were as follows:
Employee stock options Restricted stock Total	For the three months ended March 31
	2021 $ 4,242 27,620 $ 31,862	2020
		4,201 24,584
		28,785

(u) Earnings per share

The calculation of basic earnings and diluted earnings per share was as follows:

(i) Basic earnings per share

Profit attributable to owners of parent Weighted-average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars)	For the three months ended March 31	For the three months ended March 31
	2021 $ 505,207 447,029 $ 1.13	2020
		275,813
		445,407
		0.62

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Diluted earnings per share

Profit attributable to owners of parent Weighted-average number of ordinary shares (diluted) (thousand shares) Diluted earnings per share (NT dollars)	For the three months ended March 31	For the three months ended March 31
	2021 $ 505,207 449,911 $ 1.12	2020
		275,813
		448,599
		0.61

Weighted-average number of ordinary shares (diluted) (thousand shares)

Weighted-average number of ordinary shares on March 31 (basic) Estimated effect of employee stock bonuses Effect of restricted stock Weighted-average number of ordinary shares on March 31 (diluted)	For the three months ended March 31	For the three months ended March 31
	2021 447,029 1,048 1,834 449,911	2020
		445,407 2,263 929
		448,599

(v) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021
Computer Peripherals Non-computer Peripherals Total $ 8,662,850 7,998,446 16,661,296 15,247 482,844 498,091 $ 8,678,097 8,481,290 17,159,387 For the three months ended March 31, 2020		Total
		16,661,296 498,091
		17,159,387
	Non-computer Peripherals 7,672,428 438,712 8,111,140	Total
		13,043,201 480,900
		13,524,101

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Mainland China Europe America Other	For the three months ended March 31	For the three months ended March 31
	2021 $ 8,655,007 3,806,459 3,689,414 1,008,507 $ 17,159,387	2020
		6,041,086 3,459,693 3,224,669 798,653
		13,524,101

(ii) Contract balances

Notes and accounts receivable (including related parties) Less: allowance for doubtful accounts Contract liabilities (classified as other current liabilities)	March 31, 2021 $ 12,349,104 (42,119) $ 12,306,985 $ 204,265	December 31, 2020 13,819,185 (42,155) 13,777,030 226,063	March 31, 2020 11,225,449 (64,612) 11,160,837 100,142

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

The amount of revenue recognized for the three months ended March 31, 2021 and 2020 that were included in the contract liability balance at the beginning of the period were $130,751 and $88,081, respectively.

The contract liabilities primarily relate to the advance consideration received from contracts with goods sold, for which revenue is recognized when products are delivered to customers.

(w) Employee’s and directors’ and supervisors’ remuneration

In accordance with the Articles of incorporation, the Company should contribute 2 to 10 percent of the profit as employee remuneration and less than 2 percent as directors’ 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 recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Details of remuneration to employees and directors for the three months ended March 31, 2021 and 2020 were as follows:

		For the three months	For the three months
		ended March 31
		2021	2020
Employee remuneration	$	18,599	11,821
Directors’ remuneration		9,299	5,911
	$	27,898	17,732

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 expenses during each period. The differences between the amounts distributed and those accrued in the financial statements, if any, are accounted for as changes in accounting estimate and recognized as profit or loss in the distribution year.

The differences between the amounts approved in the directors’ meeting and those recognized in the financial statements for the distributions of earnings for 2020 and 2019 were as follows:

Employee remuneration–Cash Director’s remuneration Employee remuneration–Cash Director’s remuneration	2020 Actual earnings distributed Accrued in the financial statement Difference $ 72,645 72,645 - 36,322 36,323 1 2019 Actual earnings distributed Accrued in the financial statement Difference $ 75,520 75,526 6 26,430 37,763 11,333

The aforementioned differences were accounted for as changes in accounting estimates and recognized as profit or loss in the years 2021 and 2020. Information on the remuneration to employees and directors, approved in the board of directors’ meetings, can be accessed in the Market Observation Post System website.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(x) Other income

The details of other income were as follows:

The details of other income were as follows:
Rent income Other	For the three months ended March 31 2021 2020 $ 2,217 3,352 584 314 $ 2,801 3,666
	2021 $ 2,217 584 $ 2,801
		3,352 314
		3,666

(y) Other gains and losses

The details of other gains and losses were as follows:

Net losses on financial assets/liabilities measured at FVTPL Reversal of impairment losses of property, plant and equipment Foreign currency exchange gains, net Net gains (losses) on disposal of property, plant and equipment Other	For the three months ended March 31 2021 2020 $ (154,712) (3,630) 6,986 - 252,250 93,207 (13,217) 237 (21,551) 10,949 $ 69,756 100,763
	2021 $ (154,712) 6,986 252,250 (13,217) (21,551) $ 69,756

(z) Financial instruments

Except for the following paragraph, there were no significant changes in the fair value of the Group’s financial instruments and the degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. Please refer to note 6(aa) of the consolidated financial statements for the year ended December 31, 2020 for further information.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments:

March 31, 2021 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Long-term borrowings Guarantee deposits Derivative financial liabilities: Outflow Inflow December 31, 2020 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Long-term borrowings Guarantee deposits Derivative financial liabilities: Outflow Inflow	Carrying amount $ 8,662,086 15,205,024 2,344,187 838,737 2,239,088 1,606,858 1,455,092 11,236 378,023 - - $ 32,740,331 $ 905,059 19,001,057 3,013,224 1,131,626 1,252,919 1,421,407 755,459 12,225 432,171 - - $ 27,925,147	Contractual cash flows 8,668,654 15,205,024 2,344,187 838,737 2,761,349 1,606,858 1,494,324 11,236 - 14,658,927 (14,280,904) 33,308,392 905,704 19,001,057 3,013,224 1,131,626 1,569,900 1,421,407 781,146 12,225 - 4,601,941 (4,169,770) 28,268,460	Within 1 year 8,668,654 15,205,024 2,344,187 838,737 298,792 1,606,858 140,237 - - 14,658,927 (14,280,904) 29,480,512 905,704 19,001,057 3,013,224 1,131,626 314,226 1,421,407 85,851 - - 4,601,941 (4,169,770) 26,305,266	1~2 years - - - - 255,336 - 791,728 - - - - 1,047,064 - - - - 274,753 - 250,101 - - - - 524,854	2~5 years - - - - 600,419 - 562,359 - - - - 1,162,778 - - - - 403,365 - 445,194 - - - - 848,559	Over 5 years
						- - - - 1,606,802 - - 11,236 - - -
						1,618,038
						- - - - 577,556 - - 12,225 - - -
						589,781

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 31, 2020 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Long-term borrowings Guarantee deposits Derivative financial liabilities: Outflow Inflow	Carrying amount $ 9,151,670 15,973,906 2,751,840 682,577 1,393,829 1,519,546 151,271 257,382 161,160 - - $ 32,043,181	Contractual cash flows 9,182,611 15,973,906 2,751,840 682,577 1,747,412 1,519,546 163,981 257,382 - 13,806,307 (13,967,031) 32,118,531	Within 1 year 9,182,611 15,973,906 2,751,840 682,577 326,741 1,519,546 4,682 - - 13,806,307 (13,967,031) 30,281,179	1~2 years - - - - 281,565 - 159,299 - - - - 440,864	2~5 years - - - - 507,878 - - - - - - 507,878	Over 5 years
						- - - - 631,228 - - 257,382 - - -
						888,610

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

(ii) Currency risk

1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

F	M	arch 31, 2021	De	cember 31, 20		March 31, 2020
	Foreign currency $ 660,270 277,473 326,421 9,413 6,335 21,441 $ 605,711 230,600 424,665 7,942 23,494	Exchange rate 6.5713 7.7750 28.5310 25.9500 22.1400 31.2450 6.5713 7.7750 28.5310 25.9500 31.2450	Foreign currency 702,844 334,958 383,595 9,948 5,347 18,653 519,840 284,168 500,374 6,624 26,614	Exchange rate 6.5249 7.7526 28.5080 26.4220 21.4820 30.0500 6.5249 7.7526 28.5080 26.4220 30.0500	Foreign currency	Exchange rate TWD 7.0851 15,632,266 7.7543 10,596,543 30.2540 7,627,745 27.2856 203,926 24.7620 169,785 32.6670 1,429 7.0851 12,347,922 7.7543 9,700,604 30.2540 10,285,480 27.2856 177,185 32.6670 53,436
					516,701 350,253 252,124 6,116 5,612 47 408,142 320,639 339,971 5,314 1,766
F

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, notes and accounts receivable, other receivables, derivative financial instruments, loans and borrowings, notes and accounts payable, and other payables that are denominated in foreign currency. A weakening (strengthening) of 5% of the TWD, CNY, HKD, CZK and THB against the USD as well as CZK against the EUR as of March 31, 2021, December 31 and March 31, 2020, would have increased or decreased the net profit before tax by $13,116 and $85,954, respectively. 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 three months ended March 31, 2021 and 2020, foreign exchange gain (including realized and unrealized portions) amounted to $252,250 and $93,207, respectively.

(iii) Interest rate analysis

Please refer to the note on liquidity risk management and interest rate exposure of the Group’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of nonderivative financial instruments on the reporting date. Regarding assets and liabilities with variable interest rates, the analysis is based on the assumption that the amounts of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group management’ s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 0.25%, and assumed all other variables remain constant, the profit before tax would have increased or decreased by $2,631 and $4,038 for the three months ended March 31, 2021 and 2020, respectively. This is mainly due to borrowings, demand deposits and time deposits with variable interest rates.

(iv) Fair value

1) Kinds of financial instruments and fair value

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, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 31, 2021

Financial assets at FVTPL – current Financial assets at FVOCI – non-current Financial assets measured at amortized cost: Cash and cash equivalents Financial assets at amortized cost －current Notes and accounts receivable (including related parties) Other receivables Refundable deposits Total Financial liabilities at FVTPL – current Financial liabilities measured at amortized cost: Borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Guarantee deposits Total	Carrying amounts $ 222,708 $ 151,498 $ 6,166,819 8,065,336 12,306,985 906,951 92,359 $ 27,538,450 $ 378,023 $ 10,117,178 15,205,024 2,344,187 838,737 2,239,088 1,606,858 11,236 $ 32,362,308		Fair Value	Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 222,708 222,708 151,498 151,498 378,023 378,023

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PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets at FVTPL – current Financial assets at FVOCI – non-current Financial assets measured at amortized cost: Cash and cash equivalents Financial assets at amortized cost －current Notes and accounts receivable (including related parties) Other receivables Refundable deposits Total Financial liabilities at FVTPL – current Financial liabilities measured at amortized cost: Borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Guarantee deposits Total		December 31, 2020	December 31, 2020	December 31, 2020
	Carrying amounts $ 313,758 $ 121,672 $ 6,935,353 855,238 13,777,030 1,349,362 119,092 $ 23,036,075 $ 432,171 $ 1,660,518 19,001,057 3,013,224 1,131,626 1,252,919 1,421,407 12,225 $ 27,492,976		Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 313,758 313,758 121,672 121,672 432,171 432,171

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 31, 2020

Financial assets at FVTPL – current Financial assets at FVOCI – non-current Financial assets measured at amortized cost: Cash and cash equivalents Notes and accounts receivable (including related parties) Other receivables Refundable deposits Total Financial liabilities at FVTPL – current Financial liabilities measured at amortized cost : Borrowings Notes and accounts payable Other payables Salaries payable Lease liabilities Refund liabilities Guarantee deposits Total	Carrying amounts $ 155,156 $ 117,124 $ 15,639,323 11,160,837 957,097 113,093 $ 27,870,350 $ 161,160 $ 9,302,941 15,973,906 2,751,840 682,577 1,393,829 1,519,546 257,382 $ 31,882,021		Fair Value	Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 155,156 155,156 117,124 117,124 161,160 161,160

2) Fair value valuation techniques for financial instruments measured at fair value

If a financial instrument has a quoted price in an active market, the quoted price is used as fair value. The quoted price of a financial instrument obtained from major exchanges and over-the counter markets are the basis used to determine the fair value of a listed company’s stock and the quoted prices in an active market.

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. If these conditions can not be reached, then the market is non-active. In general, a market with low trading volume or high bid-ask spreads is an indication of a non-active market.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group uses the following methods in determining the fair value of its financial instruments without a quoted price in an active market:

a) The fair value of derivative instruments is based on quoted prices. When quoted prices are unavailable, the fair value is estimated on the basis of the contract’s spot exchange rate and swap point.
b) Financial assets at FVOCI – non-current are investments in domestic or foreign non-listed stock. The estimated fair value is based on the market approach of comparable business and adjusted for the lack of liquidity. When prices are unavailable, the fair value is estimated on the basis of unadjusted prior trade prices.
3) In the three months ended March 31, 2021 and 2020, there were no transfers between different Levels.
4) Reconciliation of Level 3 fair values

For the three months ended March 31, 2021 FVTPL FVOCI Total Balance on January 1 $ (118,413) 121,672 3,259 Recognized in profit or loss (154,712) - (154,712) Recognized in other comprehensive income - 29,326 29,326 Acquisition /disposal 117,810 500 118,310 Balance on March 31 $ (155,315) 151,498 (3,817)	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021		For the three months ended March 31, 2020 FVTPL FVOCI Total (20,195) 106,535 86,340 (3,630) - (3,630) - (2,089) (2,089) 17,821 12,678 30,499 (6,004) 117,124 111,120
	FVTPL		FVOCI 121,672 - 29,326 500 151,498	Total

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

The fair value measurements of the Group which are categorized within level 3 are classified as financial assets and liabilities at FVTPL – derivative financial instruments and financial assets at FVOCI – equity securities. The quantitative information about significant unobservable inputs was as follows:

Item Financial assets at FVOCI – equity investment without an active market Financial assets and liabilities at FVTPL	Valuation technique (note 1) (note 2)	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value (note 1) (note 1) (note 2) (note 2)

note 1: The fair value is based on the market value, and it has considered the recent financing activities, comparable business, market and other economic conditions etc., to determine the assumptions. Also, the significant unobservable inputs are marketability discount, but any changes of marketability discount would not result in significant potential financial impact, therefore there is no need to show the quantified information on it.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

note 2: The fair value is based on the quotation of a third party, therefore there is no need to show the sensitivity analysis of unobservable inputs.

(aa) Financial risk management

The Group’s objectives and policies on financial risk management are consistent with note 6(ab) of the consolidated financial statements for the year ended December 31, 2020.

(ab) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2020. Also, management believes that there were no significant changes in the Group’s capital management information as disclosed for the year ended December 31, 2020. Please refer to note 6(ac) of the consolidated financial statements for the year ended December 31, 2020 for further details.

(ac) Changes of liabilities from financing activities

Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Long-term borrowings Lease liabilities Total liabilities from financing activities Short-term borrowings Long-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 905,059 755,459 1,252,919 $ 2,913,437 January 1, 2020 $ 1,092,126 178,306 1,474,353 $ 2,744,785	Cash flows 7,757,027 699,633 (65,228) 8,391,432 Cash flows 8,059,544 (27,777) (72,863) 7,958,904	Non-cash changes - - 1,051,397 1,051,397 Non-cash changes - 742 (7,661) (6,919)	March 31, 2021
				8,662,086 1,455,092 2,239,088
				12,356,266
				March 31, 2020
				9,151,670 151,271 1,393,829
				10,696,770

(ad) Supplementary information of cash flow
(i) The Group’s cash flow used in acquisition of property, plant and equipment were $535,169 and $995,366, respectively, wherein cash payment for payables on equipment amounted to $30,248 and $675,217 for the three months ended March 31, 2021 and 2020, respectively.
(ii) For the three months ended March 31, 2021, the Group’ s disposal of property, plant and equipment included the written off of the unamortized deferred revenue of equipment subsidy amounted to $75,001. For the three months ended March 31, 2020, $688,189 among the Group’ s disposal of property, plant and equipment were the written off of the unamortized deferred revenue of equipment subsidy amounted to $279,760, and the recognition of receivables of equipment amounted to $408,429.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions:

(a) Names and relationship of the related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name Relationship Substantive related party

Specialty Technologies, LLC (Specialty)

(b) Significant transactions with related parties
(i) Sales

The amounts of significant sales by the Group to related parties and the outstanding balances were as follows:

Sales For the three months ended March 31 2021 2020 $ 229,991 34,505	Notes and accounts receivable March 31, 2021 December 31, 2020 March 31, 2020 162,344 198,189 144,786	Notes and accounts receivable March 31, 2021 December 31, 2020 March 31, 2020 162,344 198,189 144,786
	December 31, 2020 198,189	March 31, 2020
2021 $ 229,991
		144,786

There were no significant differences in the selling prices between the related parties and other customers. The trading terms offered to other related parties were 60 days, and the trading terms to other customers were 45 days to 120 days.

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Share-based payments		For the three months ended March 31	For the three months ended March 31
	2021 $ 42,773 350 14,337 $ 57,460		2020
			40,520 243 13,553
			54,316

Please refer to note 6(t) for information related to share-based payments.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(8) Pledged assets:

The carrying amounts of pledged assets were as follows:

Pledged assets Financial assets at amortized cost – current Other current assets – restricted assets Other current assets – restricted assets Other non-current assets – restricted assets Property, plant and equipment	Pledged to secure	March 31, 2021 $ 5,210 $ - $ 21,646 $ 57,764 $ 821,196	December 31, 2020 - - - 57,763 -	March 31, 2020 - 1,068 47,311 57,758 879,941
	Guarantee letters issued by bank Guarantee letters issued by bank Accounts receivable factoring Guarantee letters issued by bank Loan collateral

(9) Commitments and contingencies:

(a) For the detail of the Group’s guarantee, please refer to note 13.
(b) The following are savings accounts provided by the Group to the bank in order for the bank to issue a guarantee letter to customs and Power Supply Bureau as guarantee deposits and power supply guarantee, respectively.

Guarantee letters	March 31, 2021 $ 69,275	December 31, 2020 63,012	March 31, 2020
			136,656

(c) Guarantee notes provided as part of agreements with banks to sell accounts receivable and to acquire long-term borrowings were as follows:

Sales of accounts receivable Long-term borrowings	March 31, 2021 $ 1,731,546 $ 3,138,410	December 31, 2020 1,232,245 3,135,880	March 31, 2020
			1,712,592
			-

(d) The aggregate unpaid amounts of contracts pertaining to the purchase of equipment were as follows:

Property, plant and equipment	March 31, 2021 $ 721,036	December 31, 2020 877,391	March 31, 2020
			1,011,668

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(12) Other:

A summary of employee benefit, depreciation, and amortization expenses by function, was as follows:

By function By item	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Others Depreciation Amortization	911,998 30,912 53,217 32,156 384,016 5,853	940,843 53,846 37,882 38,621 76,058 49,070	1,852,841 84,758 91,099 70,777 460,074 54,923	753,059 28,145 51,263 52,237 496,336 4,038	754,304 57,547 32,042 49,859 40,964 48,490	1,507,363 85,692 83,305 102,096 537,300 52,528

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the Regulations for the Group:

(i) Loans to other parties:

Number 1	Name of lender	Name of borrower	Account name	Related party o	Highest balance f financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Coll	ateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
	PKS1	The Company	Other receivables	Y	293,440	-	-	0	Necessary to loan to other parties	-	Operating capital	-	-	-	807,941	807,941

Note 1: After the approval from the Board of Directors, the loan provided to an individual entity shall not exceed the net worth of PKS1 in the latest financial statements to its parent company, and also to subsidiaries wherein its parent owns 100%, directly and indirectly, of its voting shares. Also, the criterion for the amount available for financing is the same as that offered to an individual entity mentioned above.

Note 2: The above transactions have been eliminated during the preparation of the consolidated Financial statements.

(ii) Guarantees and endorsements for other parties:

											(In Thou	sands of New Taiwan Dollars)	sands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 1	The Company Tymphany Huizhou	PCH2 TYM UK	The subsidiary of Primax HK and Primax Tech. The subsidiary of TYM Acoustic HK	4,123,831 1,661,530	285,310 6,942	285,310 6,860	7,238 6,860	- -	% 2.08 % 0.12	10,996,883 4,430,748	Y N	N N	Y N

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 1: The amount of the guarantee to a company shall not exceed 30% of the Company’s net worth in the latest financial statements. The total amount of the guarantee to total company shall not exceed 80% of the Company’s net worth in the latest financial statements.

Note 2: The amount of the guarantee to a company shall not exceed 30% of the Tymphany Huizhou’s net worth in the latest financial statements. The total amount of the guarantee to total company shall not exceed 80% of the Tymphany Huizhou’s net worth in the latest financial statements. Note 3: The above counter-parties of guarantee and endorsement are subsidiaries included in the consolidated financial statements.

(iii) Securities held as of March 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

Company Ending balance holding securities	Security type and name	Relationship with company	Account		Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company Primax Tech.	Shares: Green Rich Technology Co., Ltd. WK Technology Fund IV LTD. Changing Information Technology Inc. Formosoft International Inc. Syntronix Corp. Ricavision International Inc. Grove Ventures, L.P. Grove Ventures II, L.P. Shares: Echo. Bahn. WK Global Investment III Ltd.	- - - - - - - - - -	Financial assets at FVOCI 〃〃〃〃〃〃〃 Financial assets at FVOCI 〃	359 40 202 11 7 917 - - 400 361	- 53 6,702 - 49 - 86,734 26,249 119,787 - 31,711 31,711	3.59 0.38 1.48 0.41 0.02 2.04 2.73 3.31 11.90 1.32	- 53 6,702 - 49 - 86,734 26,249 - 31,711

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD$300 million or 20% of the Company’s paid-in capital:

Name of company	Security type and name	Account	counter- party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sa	Sa	les		Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
PCQ1	Money market fund of RMB	Financial assets at FVTPL	Initial Offerings	None	-	-	-	363,150	-	363,449	363,105	299 (note 1)	-	-

Note 1: Gains on disposal include valuation and exchange differences on translation.

(v) Acquisition of individual real estate with amount exceeding the lower of TWD$300 million or 20% of the Company’s issued capital: None
(vi) Disposal of individual real estate with amount exceeding the lower of TWD$300 million or 20% of the Company’s issued capital: None

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of TWD$100 million or 20% of the Company’s issued capital:

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company 〃〃〃〃〃 Primax Singapore PCH2 PKS1 PCQ1 Primax Thailand Polaris Tymphany Huizhou Tymphany Dongguan TYDC TYM Acoustic HK TYM Acoustic Europe TYM HK 〃〃〃〃〃 TYML TYTH	Primax Singapore PCH2 PKS1 PCQ1 Polaris Primax Thailand The Company 〃〃〃〃〃 TYM HK 〃〃 TYM Acoustic Europe TYM Acoustic HK Tymphany Huizhou Tymphany Dongguan TYDC TYML TYTH Specialty TYM HK 〃	Subsidiary The subsidiary of Primax HK 〃〃 The subsidiary of Primax Tech. The subsidiary of Primax Singapore. Parent The parent of Primax Cayman 〃〃 The parent of Primax Singapore. The parent of Primax Tech. The subsidiary of TYM Acoustic HK 〃〃 Subsidiary Parent The parent of TYM Acoustic HK The subsidiary of Tymphany Huizhou The subsidiary of Tymphany Dongguan Subsidiary The subsidiary of TYM Acoustic HK Other related party Parent The subsidiary of TYM Acoustic HK	Sale Purchase Purchase Purchase Sale Purchase Purchase Sale Sale Sale Sale Purchase Sale Sale Sale Purchase Sale Purchase Purchase Purchase Sale Purchase Sale Purchase Sale	(1,730,181) 6,136,628 558,919 2,008,589 (768,740) 256,529 1,730,181 (6,136,628) (558,919) (2,008,589) (256,529) 768,740 (1,242,821) (2,176,880) (360,532) 511,285 (511,285) 1,242,821 2,176,880 360,532 (114,947) 268,020 (229,991) 114,947 (268,020)	% (16) % 63 % 6 % 21 % (7) % 3 % 100 % (88) % (100) % (75) % (99) % 100 % (88) % (94) % (85) % 84 % (80) % 29 % 51 % 8 % (3) % 6 % (5) % 100 % (100)	60 days 〃〃〃 90 days 60 days 〃〃〃〃〃 90 days 60 days 〃〃 90 days 〃 60 days 〃〃 90 days 60 days 90 days 〃 60 days	Price agreed by both side 〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃	The same as general selling The same as general purchasing 〃〃 The same as general selling The same as general purchasing 〃 The same as general selling 〃〃〃 The same as general purchasing The same as general selling 〃〃 The same as general purchasing The same as general selling The same as general purchasing 〃〃 The same as general selling The same as general purchasing The same as general selling The same as general purchasing The same as general selling	1,107,475 (3,373,727) (956,484) (1,231,790) 239,014 (195,017) (1,107,475) 3,373,727 956,484 1,231,790 195,017 (239,014) 1,474,252 666,110 245,397 (341,882) 341,882 (1,474,252) (666,110) (245,397) - (80,443) 162,344 - 80,443	14% (57)% (16)% (21)% 3% (3)% (100)% 80% 100% 67% 100% (100)% 90% 79% 73% (72)% 83% (59)% (27)% (10)% -% (3)% 6% -% 100%	note 1 〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃 note 1 〃

Note 1: Related transactions have been eliminated during the preparation of the consolidated financial statements.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of TWD$100 million or 20% of the Company’s paid-in capital:

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate		Overdue	Amounts received in subsequent period (note 1)	Allowance for bad debts
					Amount	Action taken
The Company 〃〃〃〃 PCH2 〃〃 PKS1 PCQ1 Primax Thailand Tymphany Huizhou Tymphany Dongguan 〃 TYDC TYM Acoustic Europe TYM HK 〃〃〃	Primax Singapore 〃 Polaris PCH2 〃 The Company Tymphany Dongguan Primax Thailand The Company 〃〃 TYM HK 〃〃 TYM HK TYM Acoustic HK Tymphany Dongguan 〃 Tymphany Huizhou Specialty	Subsidiary 〃 Subsidiary of Primax Tech. The subsidiary of Primax HK. 〃 The parent of Primax Cayman The subsidiary of Tymphany Huizhou The subsidiary of Primax Singapore The parent of Primax Cayman 〃 The parent of Primax Singapore The subsidiary of TYM Acoustic HK 〃〃 The subsidiary of TYM Acoustic HK Parent The subsidiary of Tymphany Huizhou 〃 The parent of TYM Acoustic HK Other related party	1,107,475 (note 5) 35,814 (note 5) 239,014 (note 5) 121,301 (note 2) (note 5) 21,998 (note 5) 3,373,727 (note 5) 138,817 (note 5) 164,498 (note 5) 956,484 (note 5) 1,231,790 (note 5) 195,017 (note 5) 1,474,252 (note 5) 666,110 (note 5) 37,384 (note 5) 245,397 (note 5) 341,882 (note 5) 100,061 (note 5) 4,380,640 (note 5) 132,951 (note 5) 162,344	12.50 (note 4) 9.93 3.34 (note 3) 4.48 (note 3) 〃 1.93 3.98 5.61 2.93 3.89 (note 3) 4.37 6.48 2.27 (note 3) 〃 5.10	- - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - -	158,973 - 140,270 51,682 13,052 2,790,575 48,630 47,323 291,875 625,697 - 818,196 168,013 5,773 45,766 213,296 49,588 806,342 85,695 56,855	- - - - - - - - - - - - - - - - - - - -

Note 1: Amounts collected as of April 23, 2021.

Note 2: The Company sells semi-finished products to its subsidiaries for processing and production. The finished products are then repurchased back by the Company and sold to the customers. The amount of semi-finished products sold in the three months ended March 31, 2021 was $114,641, which was written off with related cost of goods sold, and not regarded as sales for the Company.

Note 3: The receivables arise from service rendering for intercompany or material purchasing on behalf of intercompany or related parties. Note 4: The receivables arise from equipment receivable received on behalf of intercompany.

Note 5: Related transactions have been eliminated during the preparation of the consolidated financial statements.

(ix) Trading in derivative instruments: Please refer to note 6(b).

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(x) Business relationships and significant intercompany transactions:

No	Name of company	Name of counter-party	Nature of relationship		Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of consolidated total operating revenues or total assets
0 〃〃〃〃〃〃〃〃〃〃〃〃〃〃 1 〃 2 〃〃 3 〃〃〃〃	The Company 〃〃〃〃〃〃〃〃〃〃〃〃〃〃 PCH2 〃 Tymphany Huizhou 〃〃 Tymphany Dongguan 〃〃〃〃	Primax Singapore 〃〃 PCH2 〃〃〃 PKS1 〃 PCQ1 〃 Polaris 〃 Primax Thailand 〃 Tymphany Dongguan Primax Thailand TYM HK 〃〃 TYM HK 〃〃〃〃	Subsidiary 〃〃 The subsidiary of Primax HK 〃〃〃〃〃〃〃 The subsidiary of Primax Tech. 〃 The subsidiary of Primax Singapore 〃 The subsidiary of Tymphany Huizhou The subsidiary of Primax Singapore The subsidiary of TYM Acoustic HK 〃〃 The subsidiary of TYM Acoustic HK 〃〃〃〃	Sales Accounts Receivable Other Receivable Purchase Accounts Payable Accounts Receivable Other Receivable Purchase Accounts Payable Purchase Accounts payable Sale Accounts Receivable Purchase Accounts Payable Other Receivable 〃 Sale Accounts Receivable Other Receivable Sale Accounts Receivable Accounts Payable Other Receivable Other payable	1,730,181 1,107,475 35,814 6,136,628 3,373,727 121,301 21,998 558,919 956,484 2,008,589 1,231,790 768,740 239,014 256,529 195,017 138,817 164,498 1,242,821 1,474,252 132,951 2,176,880 666,110 100,061 37,384 4,380,640	Price agreed by both sides 60 days (Note 3) Price agreed by both sides 60 days 〃 (Note 2) Price agreed by both sides 60 days Price agreed by both sides 60 days Price agreed by both sides 90 days Price agreed by both sides 60 days (Note 2) 〃 Price agreed by both sides 60 days (Note 2) Price agreed by both sides 60 days 〃 (Note 2) 〃	% 10.08 % 2.10 % 0.07 % 35.76 % 6.41 % 0.23 % 0.04 % 3.26 % 1.82 % 11.71 % 2.34 % 4.48 % 0.45 % 1.49 % 0.37 % 0.26 % 0.31 % 7.24 % 2.80 % 0.25 % 12.69 % 1.27 % 0.19 % 0.07 % 8.32

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

No	Name of company	Name of counter-party	Nature of relationship	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of consolidated total operating revenues or total assets
4 〃 5 〃 6 〃〃	TYDC 〃 TYM Acoustic HK 〃 TYM HK 〃〃	TYM HK 〃 TYM Acoustic Europe 〃 TYAT TYML TYTH	The subsidiary of TYM Acoustic HK 〃 Subsidiary 〃 The subsidiary of TYM Acoustic HK Subsidiary The subsidiary of TYM Acoustic HK	Sale Accounts Receivable Purchase Accounts Payable Service Expense Sale Purchase	360,532 245,397 511,285 341,882 119,638 114,947 268,020	Price agreed by both sides 60 days Price agreed by both sides 90 days Price agreed by both sides 〃〃	% 2.10 % 0.47 % 2.98 % 0.65 % 0.70 % 0.67 % 1.56

Note 1: Disclosure of the amounts exceeding of NT$100 million.

Note 2: The receivables arises from service rendering for intercompany or material purchasing on behalf of intercompany or related party. Note 3: The receivables arise from equipment receivable received on behalf of intercompany. Note 4: Related transactions have been eliminated during the preparation of the consolidated financial statements.

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2021 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Location	Main businesses and products	Original i amo	nvestment unt	Balance as of March 31, 20	Balance as of March 31, 20	21	Net income (losses) of investee	Share of profits/losses of investee
				March 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company 〃〃〃〃〃〃〃	Primax Cayman Primax Tech. Destiny BVI. Destiny Japan Diamond Gratus Tech. Primax AE Primax Singapore Total	Cayman Islands Cayman Islands Virgin Island Japan Cayman Islands USA Cayman Islands Singapore	Holding company Holding company Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Holding company	2,540,588 897,421 30,939 7,032 3,889,798 9,330 1,431,540 904,150 9,710,798	2,540,588 897,421 30,939 7,032 3,889,798 9,330 1,431,540 619,150 9,425,798	8,147,636 285,067 1,050 0.50 129,050 300 48,200 30,100	100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	6,499,031 2,510,173 (1,324) 17,139 5,422,252 12,691 591,890 669,576 15,721,428	130,325 34,779 1,670 113 (10,998) 352 (20,902) (55,887) 79,452	117,854 20,454 1,670 113 (11,111) 352 (20,902) (41,863) 66,567
Primax Singapore	Primax Thailand	Thailand	Manufacturing and sale of computer peripherals, mobile device components, and business devices	872,151	588,291	900	99.99	661,041	(55,859)	(55,859)
Primax Cayman	Primax HK	Hong Kong	Holding company and customer service	2,375,164	2,375,164	602,817	100.00	6,588,806	130,527	130,527

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net income (losses) of investee	Share of profits/losses of investee
				March 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
Primax Tech.	Polaris	USA	Sale and purchase of computer peripherals, mobile device components, and business devices, as well as market development and customer service.	52,680	52,680	1,600	100.00	386,040	1,789	1,789
Diamond	TWEL	Cayman Islands	Holding company	4,083,950	4,083,950	192,251	100.00	5,517,731	7,613	(10,839)
Primax AE	AIC	Cayman Islands	Holding company	1,356,995	1,356,995	30	37.00	531,995	(42,750)	(20,641)
Tymphany Huizhou	TYM Acoustic HK	Hong Kong	R&D, design, and sales of various speaker accessories, speakers and their components, as well as holding business	1,592,954	1,592,954	418,090	100.00	2,350,154	(11,427)	(11,427)
TYM Acoustic HK 〃〃〃〃〃	TYM HK TYP TYM UK TYM Acoustic Europe TYAT TYTH	Hong Kong USA United Kingdom Czech Taiwan Thailand	Holding company and market development of various speaker accessories, speakers and their components, as well as customer service Market development of and customer service for speakers and their components R&D and design of various speaker accessories as well as speakers and their components Manufacturing, installation, and maintenance of various speaker accessories and their components R&D and design of various speaker accessories as well as speakers and their components Manufacturing and sales of various speaker accessories, speakers, and their components	76,280 (note 1) 15 (note 1) 15,631 653,796 48,318 583,614	76,280 (note 1) 15 (note 1) 15,631 653,796 48,318 455,877	144,395 0.50 400 187,800 5,000 6,000	100.00 100.00 100.00 100.00 100.00 99.99	1,375,500 16,370 25,834 769,627 47,142 528,354	19,245 577 2,451 16,473 (71,233) (7,477)	19,245 577 2,451 16,473 (71,233) (7,477)
TYM HK	TYML	USA	Sales of various audio accessories, speakers and their components	6,628	6,628	200	100.00	10,429	737	737

Note 1: The amount is the initial investment costs from the original stockholders prior to the acquisition of the Company through Diamond. Note 2: Related investments (except for AIC) have been eliminated during the preparation of 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:

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021 (note 2)	Investme	nt flows	Accumulated outflow of investment from Taiwan as of March 31, 2021 (note 2)	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
PCH2 Destiny Beijing	Manufacturing and sale of computer peripherals, mobile device components, and business devices R&D of computer peripherals and business devices	1,936,178 38,354	Indirect investment through Primax Cayman and Primax Tech. Indirect investment through Destiny BVI.	1,566,806 29,933	- -	- -	1,566,787 29,958	100,623 1,670	100% 100%	100,623 1,670	6,193,764 (1,328)	- -

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

==> picture [471 x 192] intentionally omitted <==

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

Accumulated
Accumulated outflow of
outflow of Investment flows investment from Net
Total investment from Taiwan as of income Accumulated
amount Method Taiwan as of March 31, 2021 (losses) Percentage Investment remittance of
Name of Main businesses of paid-in of January 1, 2021 (note 2) of the of income earnings in
investee and products capital investment (note 2) Outflow Inflow investee ownership (losses) Book value current period
PKS1 Production of 847,788 Indirect 627,176 - - 627,682 699 100% 699 803,610 -
computer peripheral investment
through Primax
products Cayman
PCQ1 Production of 828,542 〃 570,160 - - 570,620 62,038 100% 62,038 1,584,004 -
computer peripheral
products
Tymphany Manufacturing, R&D, 1,771,758 Indirect 3,677,532 - - 3,680,499 12,265 71.43% 8,761 3,956,221 -
Huizhou design, and sales of investment
through
various speaker Diamond
accessories, speakers,
and their components
Tymphany 〃 142,655 〃 14,254 - - 14,266 7,978 71.43% 2,665 541,565 -
Dongguan
TYDC 〃 86,836 〃 - - - - (25,696) 71.43% (18,355) 131,750 -
----- End of picture text -----

Note 1: The above information on the exchange rate is as follows: HKD:TWD3.6696 ; USD:TWD 28.531; CNY:TWD 4.3418.

Note 2: The differences between the accumulated out flow of investments and paid in capital was derived from the currency exchange on translation, capital increase from retained earning and working capital.

Note 3: Related investments have been eliminated during the preparation of the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

Name of Company	Accumulated Investment in Mainland China as of March 31, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
The Company	6,911,365	8,090,047	None(note)

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

The above investment income(losses) in Mainland China, except for PCH2, was reviewed by the Company’s auditors, Tymphany Huizhou, Tymphany Dongguan and TYDC were reviewed by other auditors, and other information related to subsidiaries came from financial reports prepared by the investees, not reviewed by auditors.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiaries in Mainland China, which were eliminated in the preparation of the consolidated financial statements for the three months ended March 31, 2021, are disclosed in “ Information on significant transactions” , and “Business relationships and significant intercompany transactions”.

(d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
ALPINE ASIA INVESTMENTS LIMITED	24,914,062	% 5.51

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

For thee three months ended March 31,2021 and 2020, the Group’s segment information has no significant change. Please refer to note 14 of the consolidated financial statement for the year ended December 31,2020 for the further information.

The Group’s segment financial information was as follows:

For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021
Computer Peripherals Non-computer Peripherals Total $ 8,678,097 8,481,290 17,159,387 - - - $ 8,678,097 8,481,290 17,159,387 $ 528,627 105,438 634,065 For the three months ended March 31, 2020		Total
		17,159,387 -
		17,159,387
		634,065
	Non-computer Peripherals 8,111,140 - 8,111,140 (13,127)	Total
		13,524,101 -
		13,524,101
		265,613

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Primax — Interim / Quarterly Report 2021

52436_rns_2021-12-20_dce41cc7-e05c-455c-9fc2-8b730426736f.pdf

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Other Matter

KPMG

Notes to Readers

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31 and March 31, 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

For the three months ended March 31, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the three months ended March 31, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) As of March 31, 2021 and 2020 Reviewed only, not audited in accordance with generally accepted auditing standards PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

(b) Basis of consolidation

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Employee benefits

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

(a) Judgment of whether the Group has substantive control over its investees

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Financial assets at FVOCI

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Inventories

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Property, plant and equipment

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Investment property

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Short-term borrowings

(n) Long-term borrowings

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Lease liabilities

(i) Real estate leases

(ii) Other leases

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Operating lease

(q) Employee benefits

(i) Defined benefit plans

(ii) Defined contribution plans

(r) Income taxes

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Capital and other equity

(i) Ordinary shares

(ii) Capital surplus

(iii) Retained earnings

Primax Interim / Quarterly Report 2021