Primax - Interim / Quarterly Report 2021

Stock Code:4915

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors’ Review Report for the Nine Months Ended September 30, 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 8～10 10～13 13 13～43 43～44 44 45 45 45 45～46 46～53 53～54 54～55 55 56

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
8～10
10～13
13
13～43
43～44
44
45
45
45
45～46
46～53
53～54
54～55
55
56

==> picture [168 x 19] intentionally omitted <==

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 September 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020, as well as the changes in equity and cash flows for the nine months ended September 30, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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$11,587,472 thousand and NT$7,605,548 thousand, constituting 21.5% and 15.2% of the consolidated total assets; and the total liabilities amounting to NT$6,317,784 thousand and NT$5,969,250 thousand, constituting 16.5% and 16.9% of the consolidated total liabilities as of September 30, 2021 and 2020, respectively; as well as the total comprehensive income (loss) amounting to NT$(43,028) thousand, NT$26,834 thousand, NT$(294,657) thousand and NT$(109,395) thousand, constituting (6.8)%, 2.7%, (19.7)% and (8.7)% of the consolidated comprehensive income (loss) for the three and nine months ended September 30, 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$364,480 thousand and NT$846,187 thousand as of September 30, 2021 and 2020, and its related share of loss of associates accounted for using equity method of NT$20,364 thousand, NT$21,270 thousand, NT$61,461 thousand and NT$64,467 thousand for the three and nine months ended September 30, 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 September 30, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three and nine months ended September 30, 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$17,816,286 thousand and NT$18,287,046 thousand, constituting 33.0% and 36.4% of the related consolidated total assets as of September 30, 2021 and 2020, respectively; as well as the operating revenue amounting to NT$5,689,333 thousand, NT$7,383,274 thousand, NT$15,724,099 thousand and NT$18,147,634 thousand, constituting 32.2%, 39.1%, 30.7% and 37.3% of the related consolidated operating revenue for the three and nine months ended September 30, 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) November 4, 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 September 30, 2021 and 2020

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

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

(Expressed in Thousands of New Taiwan Dollars)

September 30, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 5,175,530 10 1110 Current financial assets at fair value through profit or loss (note 6(b)) 160,720 - 1137 Current financial assets at amortized cost (notes 6(d) and 8) 5,800,387 11 1170 Notes and accounts receivable, net (notes 6(e), (v) and 8) 14,006,865 26 1180 Accounts receivable from related parties, net (notes 6(e), (v) and 7) 227,121 - 1200 Other receivables (note 6(e)) 1,162,960 2 1310 Inventories (note 6(f)) 12,709,081 24 1470 Other current assets (note 8) 1,045,242 2 40,287,906 75 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 226,909 - 1550 Investments accounted for using equity method (note 6(g)) 364,480 1 1600 Property, plant and equipment (notes 6(i) and 8) 7,332,888 14 1755 Right-of-use assets (note 6(j)) 2,351,613 4 1760 Investment property (note 6(k)) 33,479 - 1780 Intangible assets (note 6(l)) 2,286,946 4 1840 Deferred tax assets 649,213 1 1990 Other non-current assets (note 8) 400,070 1 13,645,598 25 Total assets $ 53,933,504 100	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	September 30, 2020 Amount % 10,839,319 22 359,499 1 - - 14,806,610 30 154,439 - 928,554 2 8,790,241 17 1,591,220 3 37,469,882 75 115,405 - 846,187 2 6,505,446 13 1,610,919 3 33,942 - 2,405,762 5 782,824 1 408,561 1 12,709,046 25 50,178,928 100 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	September 30, 2021		December 31, 2020		September 30, 2020 Amount % 6,530,051 13 228,542 - 17,114,424 34 3,575,036 7 1,246,021 3 274,442 1 738,256 1 - - 1,493,756 3 31,200,528 62 364,076 1 1,013,914 2 2,091,596 4 733,132 1 4,202,718 8 35,403,246 70 4,508,983 9 1,565,384 3 1,578,473 3 1,058,941 2 5,370,858 11 (1,421,835) (3) 2,114,878 5 14,775,682 30 50,178,928 100
			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 and nine months ended September 30, 2021 and 2020

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

For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2021 Amount % $ 17,668,912 100 15,284,924 87 2,383,988 13 412,723 2 520,366 3 714,235 4 (1,518) - 1,645,806 9 738,182 4 35,145 - 2,690 - 157,108 1 (20,364) - (44,323) - 130,256 1 868,438 5 182,081 1 686,357 4 53,101 - - - 53,101 - (105,078) - - - (105,078) - (51,977) - $ 634,380 4 $ 671,782 4 14,575 - $ 686,357 4 $ 635,501 4 (1,121) - $ 634,380 4 $ 1.50 $ 1.49	2020 Amount % 18,906,561 100 16,452,466 87 2,454,095 13 344,025 2 537,370 3 674,410 3 2,453 - 1,558,258 8 895,837 5 33,700 - 2,986 - 192,336 1 (21,270) - (40,095) - 167,657 1 1,063,494 6 235,083 2 828,411 4 920 - - - 920 - 173,080 1 - - 173,080 1 174,000 1 1,002,411 5 773,224 4 55,187 - 828,411 4 936,712 5 65,699 - 1,002,411 5 1.73 1.73	2021 Amount % 51,276,308 100 44,553,565 87 6,722,743 13 1,190,173 2 1,463,726 3 2,082,659 4 (1,777) - 4,734,781 9 1,987,962 4 99,896 - 7,849 - 391,406 1 (61,461) - (128,522) - 309,168 1 2,297,130 5 482,121 1 1,815,009 4 76,374 - - - 76,374 - (393,211) (1) - - (393,211) (1) (316,837) (1) 1,498,172 3 1,788,061 4 26,948 - 1,815,009 4 1,522,242 3 (24,070) - 1,498,172 3 4.00 3.96	2020
			Amount % 48,682,081 100 42,861,345 88 5,820,736 12 986,388 2 1,454,664 3 1,892,616 4 (12,041) - 4,321,627 9 1,499,109 3 122,608 - 9,843 - 519,110 1 (64,467) - (154,743) - 432,351 1 1,931,460 4 425,424 1 1,506,036 3 (7,360) - - - (7,360) - (244,556) - - - (244,556) - (251,916) - 1,254,120 3 1,552,132 3 (46,096) - 1,506,036 3 1,338,508 3 (84,388) - 1,254,120 3 3.48
			3.46

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 nine months ended September 30, 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 - - - - - - - - (1,225) 24,400 $ 4,508,983 $ 4,508,983 - - - - - - - - (1,200) 7,400 $ 4,515,183	1,483,045	1,370,470		662,348		5,500,198	(1,030,865) - (206,264) (206,264) - - - - - - - (1,237,129) (1,004,528) - (342,193) (342,193) - - - - - - - (1,346,721)		(28,076) - (7,360) (7,360) - - - - - - - (35,436) (41,833) - 76,374 76,374 - - - - - - - 34,541		(134,926) - - - - - - - 82,371 7,216 (103,931) (149,270) (113,289) - - - - - - - 74,661 7,646 (41,292) (72,274)	12,308,002	2,195,638 (46,096) (38,292) (84,388) - - - 3,628 - - - 2,114,878 2,212,757 26,948 (51,018) (24,070) - - - 3,663 - - - 2,192,350	14,503,640
	- -	- -		- -		1,552,132 -								1,506,036 (251,916)
	-	-		-		1,552,132								1,254,120
		208,003 - - - - - -		- 396,593 - - - - -										- - (1,076,876) 12,427 82,371 - -
		1,578,473		1,058,941										14,775,682
		1,578,473		1,058,941										15,500,590
		- -		- -										1,815,009 (316,837)
		-		-										1,498,172
		191,473 - - - - - -												- - (1,354,873) 12,638 74,661 - -
		1,769,946												15,731,188

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 nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation and amortization expense Losses related to inventories Reversal of expected credit losses Interest expense Interest income Compensation cost of share-based payment Impairment losses of associates amounted for using equity method Shares of losses of associates accounted for using equity method Losses on disposal of property, plant and equipment Reversal of impairment losses of property, plant and equipment Gains on disposal of right-of-use assets 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 Increase in refundable deposits Dividends received 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 in long-term borrowings Decrease in guarantee deposits received Payment of lease liabilities Cash dividends 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 nine months	ended September 30
	2021 $ 2,297,130 1,474,882 101,443 (1,777) 124,856 (99,896) 87,299 140,000 61,461 19,341 (6,986) (6,560) - 1,894,063 153,038 (4,945,149) (425,096) (28,932) 186,098 (2,563,061) 575,739 (10,276) (7,057,639) 70,974 (3,035,618) 162,548 (943,476) 224,313 (14,448) (242,508) (3,778,215) (10,835,854) (8,941,791) (6,644,661) 99,896 (124,799) (528,661) (7,198,225) (35,097) 6,234 (2,505,721) 16,205 (7,309) 304 (38,046) 1,680 (2,561,750) 9,069,519 644,796 (276) (188,598) (1,354,873) 8,170,568 (170,416) (1,759,823) 6,935,353 $ 5,175,530	2020 1,931,460 1,681,612 287,139 (12,041) 149,609 (122,608) 94,798 - 64,467 22,718 - (2) (1,037)
		2,164,655
		(172,483) - 4,412,778 26,032 120,271 1,415,866 (75,622) (51)
		5,726,791
		21,331 (6,630,465) (276,031) (468,625) (58,519) 198,126 (233,350)
		(7,447,533)
		(1,720,742)
		443,913
		2,375,373 122,608 (149,554) (299,743)
		2,048,684
		(16,230) - (2,408,244) 400,410 (4,612) 191 (102,891) -
		(2,131,376)
		5,437,925 185,770 - (216,399) (1,076,876)
		4,330,420
		(108,919)
		4,138,809 6,700,510
		10,839,319

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) As of September 30, 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

September 30, 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 nine months ended September 30, 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 November 4, 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

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”
(b) The impact of IFRS issued by the FSC but not yet effective

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

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
(c) The impact of IFRS issued by 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”

(Continued)

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

●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial 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	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	Percentage of shareholding September 30, 2021 December 31, 2020 September 30, 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	Percentage of shareholding September 30, 2021 December 31, 2020 September 30, 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
			September 30, 2021	December 31, 2020 % 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)		% 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	September		December		September
investor	Name of subsidiary	activities	30, 2021		31, 2020		30, 2020		Description
The Company	Gratus Technology Corp.	Market	100.00	%	100.00	%	100.00	%	(note 1)
	(Gratus Tech.)	development of and
		customer service for
		computer
		peripherals, mobile
		device components,
		and business
		devices
The Company	Primax AE (Cayman) Holdings	Holding company	100.00	%	100.00	%	100.00	%	(note 1)
	Ltd. (Primax AE)
The Company	Primax Electronics (Singapore)	Sale of computer	100.00	%	100.00	%	100.00	%	(note 1)
	Pte. Ltd.	peripherals and
	(Primax Singapore)	mobile device
		components
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
Destiny BVI.	Destiny Electronic Corp. (Destiny	R&D of computer	100.00	%	100.00	%	100.00	%	(note 1)
	Beijing)	peripherals and
		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
								(Continued)

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

Name of investor Tymphany Huizhou TYM Acoustic HK 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, R&D, design and sales of various speaker accessories, 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 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 speaker accessories, speakers, and their components Manufacturing, R&D, design, and sales of various speaker accessories, speakers, and their components	Percentage of shareholding September 30, 2021 December 31, 2020 September 30, 2020 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 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 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00	Percentage of shareholding September 30, 2021 December 31, 2020 September 30, 2020 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 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 1) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
			September 30, 2021	December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 99.99 % 100.00 % 100.00
	Dongguan Tymphany Acoustic Technology Co., Ltd. (Tymphany Dongguan) TYMPHANY ACOUSTIC TECHNOLOGY (UK) LIMITED (TYM UK) 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) Dong Guan Dong Cheng Tymphany Acoustic Technology Co., Ltd. (TYDC)		% 100.00 % 100.00 % 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.

(Continued)

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

(c) Income taxes

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.

(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.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the 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	September 30, 2021 $ 6,459 3,804,295 1,364,776 $ 5,175,530	December 31, 2020 September 30, 2020 7,750 7,598 4,417,720 3,007,022 2,509,883 7,824,699 6,935,353 10,839,319	December 31, 2020 September 30, 2020 7,750 7,598 4,417,720 3,007,022 2,509,883 7,824,699 6,935,353 10,839,319
			7,598 3,007,022 7,824,699
			10,839,319

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

(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	September 30, 2021 $ 28,251 132,469 $ 160,720 September 30, 2021 $ (488,443) (14,702) $ (503,145)	December 31, 2020 September 30, 2020 67,252 101,483 246,506 258,016 313,758 359,499 December 31, 2020 September 30, 2020 (399,762) (224,267) (32,409) (4,275) (432,171) (228,542)

(Continued)

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

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

	September 30, 2021	September 30, 2021
Derivative financial instruments	Nominal amount (in thousands)	Maturity date Predetermined rate October 5, 2021~ April 27, 2022 26.890~28.076 October 15, 2021 6.474 October 19, 2021~ December 3, 2021 6.478~6.544 October 28, 2021~ October 29, 2021 33.490~33.691 October 29, 2021 7.573~7.580 October 29, 2021 9.099 October 5, 2021~ April 27, 2022 27.535~28.546
Forward exchange contracts －buy USD / sell TWD Forward exchange contracts －buy USD / sell CNY Foward exchange contracts －buy CNY/ sell USD Forward exchange contracts －buy USD/ sell THB Forward exchange contracts －buy CNY/ sell EUR Forward exchange contracts －buy HKD/ sell EUR Forward exchange swap contracts －swap in TWD/ swap out USD	USD 735,000 USD 25,000 USD 90,000 USD 37,500 EUR 2,700 EUR 1,500 USD 585,000 December 31, 2020
Derivative financial instruments	Nominal amount (inthousands)	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
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

(Continued)

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

	September 30, 2020 Nominal amount (inthousands) Maturity date Predetermined rate USD 728,000 October 5, 2020~ March 29, 2021 28.016~29.671 USD 137,400 October 8, 2020~ January 19, 2021 6.790~7.1212 USD 606,000 October 5, 2020~ March 29, 2021 28.950~30.013 USD 3,000 October 19, 2020 6.838
Derivative financial instruments	Nominal amount (inthousands)
Forward exchange contracts －buy USD / sell TWD 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 728,000 USD 137,400 USD 606,000 USD 3,000

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

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	September 30, 2021 $ 53 6,902 350 139,887 55,175 24,542 $ 226,909		December 31, 2020 September 30, 2020 1,263 1,263 6,002 5,702 49 49 60,722 62,038 26,227 13,981 27,409 32,372 121,672 115,405	December 31, 2020 September 30, 2020 1,263 1,263 6,002 5,702 49 49 60,722 62,038 26,227 13,981 27,409 32,372 121,672 115,405
				1,263 5,702 49 62,038 13,981 32,372
				115,405

(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 $10,967 and $9,006 in the nine months ended September 30, 2021 and 2020, respectively.

(Continued)

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

(iii) Grove Ventures II, L.P. executed capital increases, where in the Group had participated and invested the amounts of $24,130 and $7,224 in the nine months ended September 30, 2021 and 2020, respectively.
(iv) WK Technology Fund IV Ltd. refunded the amount of $1,210 to the Group due to its capital reduction in March 2021.
(v) WK Global Investment III Ltd. refunded the amount of $5,024 to the Group due to its capital reduction in June 2021.
(vi) The Group did not provide any of the aforementioned financial assets as collateral.
(d) Financial assets at amortized cost

Time deposits Annual interest rates	September 30, 2021 $ 5,800,387 1.00%~1.75%	December 31, 2020 September 30, 2020 855,238 - 1.4% -	December 31, 2020 September 30, 2020 855,238 - 1.4% -
			-
			-

(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.
(ii) As of September 30, 2021 and December 31, 2020, the Group held time deposits maturing in October 2021 to March 2022 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	September 30, 2021 $ 2,565 14,043,153 227,121 (38,853) $ 14,233,986	December 31, 2020 September 30, 2020 5,618 923 13,615,378 14,846,100 198,189 154,439 (42,155) (40,413) 13,777,030 14,961,049

(i) The Group did not provide any of the aforementioned notes and accounts receivable (including related parties) as collateral.

(Continued)

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

(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:

September 30, 2021	September 30, 2021
Carrying amounts of notes and accounts receivable (including related parties) Lifetime ECL rate $ 13,170,131 0%~0.44% 1,020,679 0%~3% 63,178 0%~5% 6,953 0%~10% 5,048 0%~55% 6,166 0%~80% 684 0%~100% $ 14,272,839 December 31, 2020		Loss allowance provision of lifetime ECL
		14,667 14,174 3,169 598 2,777 3,441 27
		38,853

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%	Loss allowance provision of lifetime ECL
		5,505 31,282 2,202 814 325 - 2,027
		42,155

(Continued)

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

September 30, 2020	September 30, 2020
Carrying amounts of notes and accounts receivable (including related parties) $ 14,287,123 672,553 19,372 4,664 13,706 240 3,804 $ 15,001,462	Lifetime ECL rate 0%~0.09% 0%~3.5% 0%~5% 0%~10% 0%~25% 0%~80% 0%~100%	Loss allowance provision of lifetime ECL
		12,697 23,534 716 269 1,119 120 1,958
		40,413

(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 Amounts written off Effect of exchange rate changes Balance on September 30, 2021 and 2020	For the nine months ended September 30 2021 2020 $ 42,155 75,725 (1,777) (12,041) (374) (13,279) (1,151) (9,992) $ 38,853 40,413
	2021 $ 42,155 (1,777) (374) (1,151) $ 38,853

(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 September 30, 2021, December 31 and September 30, 2020, the details of transferred accounts receivable which conformed to the criteria for derecognition were as follows:

(Continued)

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

	September 30, 2021	September 30, 2021
Amount Purchaser Derecognized HSBC Bank $ 1,143,209 EnTie Bank 55,622 DBS Bank 1,091,646 Mega International Commercial Bank - $ 2,290,477	Amount A	dvanced Paid 1,028,849 - 982,481 - 2,011,330 ber 31, 2020	Amount Recognized in Other Receivables 114,360 55,622 109,165 - 279,147	Range of Interest Rate 0.591%~0.804% - 0.932%~0.937% -	Guarantee (Promissory note)
	Unpaid 35,294 - - - 35,294 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		Amount Recognized in Other Receivables 501,036 158,092 - - 659,128	Range of Interest Rate 0.795%~0.849% - - -	Guarantee (Promissory note)
					US$ 37,440 - NT$ 58,000 US$ 3,750
Amount Purchaser Derecognized Mega International Commercial Bank $ - HSBC Bank 1,223,382 Bank of Taiwan - EnTie Bank 166,368 $ 1,389,750	Amount A	dvanced Paid - 1,111,224 - - 1,111,224	Amount Recognized in Other Receivables - 112,158 - 166,368 278,526	Range of Interest Rate - 0.764%~0.809% - -	Guarantee (Promissory note)
	Unpaid - 23,865 - - 23,865
					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.

(f) Inventories

Raw materials Semi-finished goods and work in process Finished goods and merchandise	September 30, 2021 $ 5,627,202 2,148,443 4,933,436 $ 12,709,081	December 31, 2020 September 30, 2020 2,540,293 3,055,313 1,805,774 1,962,610 5,901,396 3,772,318 10,247,463 8,790,241	December 31, 2020 September 30, 2020 2,540,293 3,055,313 1,805,774 1,962,610 5,901,396 3,772,318 10,247,463 8,790,241
			3,055,313 1,962,610 3,772,318
			8,790,241

(Continued)

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

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:

Losses on inventory valuation Losses on disposal of inventories Unallocated manufacturing overhead resulting from the actual production being lower than the normal capacity Gains on physical inventories	For the three months ended September 30 2021 2020 $ (32,487) (43,968) (5,176) (39,420) (27,386) (12,789) 627 1,321 $ (64,422) (94,856)	For the nine months ended September 30 2021 2020 (10,187) (206,858) (10,669) (39,420) (84,231) (44,929) 3,644 4,068 (101,443) (287,139)
	2021 $ (32,487) (5,176) (27,386) 627 $ (64,422)	2021 (10,187) (10,669) (84,231) 3,644 (101,443)

(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:

		September	30,	December 31,	September 30,	September 30,
		2021		2020		2020
Carrying amount of individually insignificant
associates’ equity		$ 364,480		536,303		846,187
	For	the three months ended		For the nine	months ended
		September	30	September		30
		2021	2020	2021		2020
Attributable to the Group:
Loss	$	(20,364)	(21,270)	(61,461)		(64,467)
Other comprehensive income (loss)		16,768	(3,284)	29,638		5,901
Comprehensive loss	$	(3,596)	(24,554)	(31,823)		(58,566)

(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.
(iii) As of June 30, 2021, the revenue of AIC did not turn out as expected due to intensive industrial competition, resulting in the impairment of the intangible assets and carrying amounts related to this equity investment after the Group’s evaluation, the Group recognized impairment loss of $140,000 under other gains and losses.

(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 September 30, 2021 December 31, 2020 September 30, 2020 % 28.57 % 28.57 % 28.57
		September 30, 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 adjustments 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:

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Non-controlling interests	September 30, 2021 $ 14,051,620 6,036,384 (10,871,912) (1,541,919) $ 7,674,173 $ 2,192,350	December 31, 2020 September 30, 2020 13,510,184 14,140,347 6,161,757 6,589,729 (10,030,285) (11,273,434) (1,896,051) (2,053,656) 7,745,605 7,402,986 2,212,757 2,114,878

Non-controlling interests $ 2,192,350	2,212,757 2,114,878
For the three months ended September 30 2021 2020 Operating revenue $ 5,711,465 7,383,370 Profit (loss) $ 51,015 193,178 Other comprehensive income (loss) (54,880) 36,559 Comprehensive income (loss) $ (3,865) 229,737 Profit (loss) attributable to non- controlling interests $ 14,575 55,187 Comprehensive income (loss) attributable to non-controlling interests $ (1,121) 65,699	For the nine months ended September 30 2021 2020 15,780,912 18,147,730 94,330 (161,357) (178,425) (133,650) (84,095) (295,007) 26,948 (46,096) (24,070) (84,388)
	2021 15,780,912 94,330 (178,425) (84,095) 26,948 (24,070)

Non-controlling interests
$
2,192,350

2,212,757
2,114,878

For the three months ended
September 30
2021
2020
Operating revenue
$
5,711,465
7,383,370
Profit (loss)
$ 51,015
193,178
Other comprehensive income (loss)
(54,880)
36,559
Comprehensive income (loss)
$
(3,865)
229,737
Profit (loss) attributable to non-
controlling interests
$
14,575
55,187
Comprehensive income (loss) attributable
to non-controlling interests
$
(1,121)
65,699

For the nine months ended
September 30
2021
2020
15,780,912
18,147,730
94,330
(161,357)
(178,425)
(133,650)
(84,095)
(295,007)
26,948
(46,096)
(24,070)
(84,388)

2021
15,780,912
94,330
(178,425)
(84,095)
26,948
(24,070)

(Continued)

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

Cash flows used in operating activities Cash flows used in investing activities Cash flows from financing activities Effect of exchange rate changes Net increase (decrease) in cash and cash equivalents Dividends paid to non-controlling interests	For the nine months ended September 30 2021 2020 $ (1,302,275) (49,248) (3,258,388) (858,872) 3,642,911 1,889,803 (77,602) (89,460) $ (995,354) 892,223 $ - -	For the nine months ended September 30 2021 2020 $ (1,302,275) (49,248) (3,258,388) (858,872) 3,642,911 1,889,803 (77,602) (89,460) $ (995,354) 892,223 $ - -
		2020
		(49,248) (858,872) 1,889,803 (89,460)
		892,223
		-

(i) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group for the nine months ended September 30, 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 September 30, 2021 Balance on January 1, 2020 Additions Disposals Reclassifications Effect of changes in exchange rate Balance on September 30, 2020 Depreciation and impairments loss: Balance on January 1, 2021 Depreciation Impairment loss (reversal) Disposals Reclassifications Effect of changes in exchange rate Balance on September 30, 2021 Balance on January 1, 2020 Depreciation Disposals Effect of changes in exchange rate Balance on September 30, 2020	Land $ 320,069 769,580 - - (24,561) $ 1,065,088 $ 134,701 281 - 187,451 (8,087) $ 314,346 $ - - - - - - $ - $ - - - - $ -	Buildings, leasehold improvement, and additional equipment 4,062,652 42,485 (171,284) 60,287 (69,060) 3,925,080 4,014,529 13,061 (35,737) 65,061 (37,626) 4,019,288 2,271,799 185,036 (7,403) (164,963) (3,716) (39,450) 2,241,303 2,035,962 189,925 (29,424) (17,930) 2,178,533	Machinery and equipment 7,145,610 162,416 (1,069,816) 454,484 (141,614) 6,551,080 7,508,088 170,512 (1,075,651) 401,517 (74,505) 6,929,961 5,084,215 776,495 4,863 (854,367) (126,472) (85,421) 4,799,313 4,894,405 865,847 (876,862) (42,622) 4,840,768	Office and other equipment 1,161,191 90,661 (130,894) 66,981 (30,014) 1,157,925 2,089,856 67,634 (718,065) 60,782 (24,192) 1,476,015 652,245 122,931 (4,446) (90,109) (7,227) (13,746) 659,648 564,123 202,006 (71,197) (8,459) 686,473	Construction in progress and testing equipment 1,860,752 1,376,282 (8,528) (793,150) (101,377) 2,333,979 1,111,056 1,178,200 (6,587) (789,815) (21,244) 1,471,610 - - - - - - - - - - - -	Total 14,550,274 2,441,424 (1,380,522) (211,398) (366,626) 15,033,152 14,858,230 1,429,688 (1,836,040) (75,004) (165,654) 14,211,220 8,008,259 1,084,462 (6,986) (1,109,439) (137,415) (138,617) 7,700,264 7,494,490 1,257,778 (977,483) (69,011) 7,705,774

(Continued)

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

Carrying amounts: Balance on January 1, 2021 Balance on September 30, 2021 Balance on January 1, 2020 Balance on September 30, 2020	Land $ 320,069 $ 1,065,088 $ 134,701 $ 314,346	Buildings, leasehold improvement, and additional equipment 1,790,853 1,683,777 1,978,567 1,840,755	Machinery and equipment 2,061,395 1,751,767 2,613,683 2,089,193	Office and other equipment 508,946 498,277 1,525,733 789,542	Construction in progress and testing equipment 1,860,752 2,333,979 1,111,056 1,471,610	Total
						6,542,015
						7,332,888
						7,363,740
						6,505,446

(i) The unamortized deferred revenue of equipment subsidy amounted to $909,846, $1,415,511 and $2,009,327 as of September 30, 2021, December 31 and September 30, 2020, respectively.
(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 nine months ended September 30, 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 September 30, 2021 Balance on January 1, 2020 Additions Disposals Effect of changes in exchange rates Balance on September 30, 2020	Land $ 406,195 - - - (8,968) $ 397,227 $ 402,455 - - (5,021) $ 397,434	Buildings 1,773,581 74,134 (261,402) 1,045,772 (37,183) 2,594,902 1,718,180 46,570 - (32,953) 1,731,797	Vehicles 30,703 5,897 (16,138) - (381) 20,081 17,685 12,119 (906) (190) 28,708	Other equipment 5,349 - (3,243) - - 2,106 3,431 2,922 - (24) 6,329	Total 2,215,828 80,031 (280,783) 1,045,772 (46,532)
					3,014,316
					2,141,751 61,611 (906) (38,188)
					2,164,268

(Continued)

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

Depreciation: Balance on January 1, 2021 Depreciation Disposals Lease modification Effect of changes in exchange rates Balance on September 30, 2021 Balance on January 1, 2020 Depreciation Disposals Effect of changes in exchange rates Balance on September 30, 2020 Carrying amounts: Balance on January 1, 2021 Balance on September 30, 2021 Balance on January 1, 2020 Balance on September 30, 2020	Land $ 25,790 11,088 - - (1,769) $ 35,109 $ 10,627 11,250 - (382) $ 21,495 $ 380,405 $ 362,118 $ 391,828 $ 375,939	Buildings 596,500 207,934 (174,074) (4,703) (11,954) 613,703 277,503 237,518 - (5,523) 509,498 1,177,081 1,981,199 1,440,677 1,222,299	Vehicles 21,645 6,720 (16,138) - (205) 12,022 8,753 9,755 (189) (80) 18,239 9,058 8,059 8,932 10,469	Other equipment 3,841 1,271 (3,243) - - 1,869 1,715 2,411 - (9) 4,117 1,508 237 1,716 2,212	Total 647,776 227,013 (193,455) (4,703) (13,928)
					662,703
					298,598 260,934 (189) (5,994)
					553,349
					1,568,052
					2,351,613
					1,843,153
					1,610,919

(k) Investment property

Carrying amounts: Balance on January 1, 2021 Balance on September 30, 2021 Balance on January 1, 2020 Balance on September 30, 2020	Land $ 16,249 $ 16,249 $ 16,249 $ 16,249	Buildings and other equipment 17,577 17,230 18,040 17,693	Total
			33,826
			33,479
			34,289
			33,942

(i) There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the nine months ended September 30, 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.

(Continued)

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

(l) Intangible assets

Goodwill	Technology	Total
$ 2,026,084 $ 2,021,410 $ 2,035,095 $ 2,029,954	126,803	2,370,578
	95,357	2,286,946
	168,733	2,501,156
	137,285	2,405,762

(i) There were no significant additions, disposal, or recognition and reversal of impairment losses of intangible assets for the nine months ended September 30, 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.

(m) Short-term borrowings

The details were as follows:

Unsecured bank loans Unused credit lines Annual interest rates	September 30, 2021 $ 9,974,578 $ 13,986,751 0.60%~3.80%	December 31, 2020 905,059 22,857,597 0.70%~0.95%	September 30, 2020
			6,530,051
			18,106,507
			0.60%~3.85%

(n) Long-term borrowings

September 30, 2021

Unsecured bank loans Secured bank loans Less: current portion Unused credit lines	Currency	Annual interest rate	Maturity year Amount 2023 $ 1,003,167 2023 397,088 (288,410) $ 1,111,845 $ 2,898,034
	USD USD	1.37%~1.60% 0.94%

(Continued)

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

Unsecured bank loans Less: current portion Unused credit lines Unsecured bank loans Unused credit lines		December 31, 2020 Annual interest rate Maturity year Amount 1.46%~1.67% 2023 $ 755,459 (74,833) $ 680,626 $ 2,237,873 September 30, 2020 Annual interest rate Maturity year Amount 1.5%~1.6% 2023 $ 364,076 $ 3,276,686
	Currency	Annual interest rate
	USD
	Currency	Annual interest rate
	USD	1.5%~1.6%

(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.

(o) Lease liabilities

The carrying amounts of lease liabilities of the Group were as follow:

Current Non-current	September 30, 2021 $ 225,829 $ 1,847,291	December 31, 2020 September 30, 2020 271,483 274,442 981,436 1,013,914	December 31, 2020 September 30, 2020 271,483 274,442 981,436 1,013,914
			274,442
			1,013,914

For the maturity analysis, please refer to note 6(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 Covid-19-related rent concessions (recognized as deduction of rent expenses)	For the three months ended September 30 For the nine months ended September 30 2021 2020 2021 2020 $ 16,734 14,566 51,895 45,430 $ 27,947 27,019 78,596 76,800 $ - 1,037 $ - 1,037	For the nine months ended September 30	For the nine months ended September 30
	2021 $ 16,734 $ 27,947 $ -		2020
			45,430
			76,800
			1,037

(Continued)

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

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 nine months ended September 30 2021 2020 $ (78,596) (76,800) (51,895) (45,430) (188,598) (216,399) $ (319,089) (338,629)
	2021 $ (78,596) (51,895) (188,598) $ (319,089)

(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 equipment with lease terms of one to five years.

The Group also leases machineries and some of other equipment 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.

(p) Operating lease

There were no significant changes in operating lease for the nine months ended September 30, 2021 and 2020. Please refer to note 6(q) of the consolidated financial statements for the year ended December 31, 2020 for 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.

(Continued)

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

(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 September 30 2021 2020 $ 105 273 101,499 78,597 $ 101,604 78,870	For the nine months ended September 30
	2021 $ 105 101,499 $ 101,604	2021 316 287,273 287,589	2020
			819 220,925
			221,744

(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 September 30 2021 2020 $ 182,081 235,083	For the nine months ended September 30	For the nine months ended September 30
	2021 $ 182,081	2021 482,121	2020
			425,424

(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.

(s) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the nine months ended September 30, 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 September 30, 2021, December 31 and September 30, 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 451,518, 450,898 and 450,898 thousand shares, respectively, were issued. All issued shares were paid up upon issuance.

(Continued)

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

Reconciliation of shares outstanding were as follows:

Balance on January 1 Issuance of restricted stock Retirement of restricted stock Balance on September 30		Ordinary shares (in thousands of shares) For the nine months ended September 30	Ordinary shares (in thousands of shares) For the nine months ended September 30

		2021 450,898 740 (120) 451,518	2020 448,581 2,440 (123) 450,898

(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	September 30, 2021 $ 830,866 259,401 125,190 388,592 $ 1,604,049	December 31, 2020 September 30, 2020 759,070 722,037 259,401 259,401 169,540 207,332 379,617 376,614 1,567,628 1,565,384	December 31, 2020 September 30, 2020 759,070 722,037 259,401 259,401 169,540 207,332 379,617 376,614 1,567,628 1,565,384
			722,037 259,401 207,332 376,614
			1,565,384

(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.

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.

The appropriation of earnings for 2020 reached legal requirement through the electronic voting on May 25, 2021, and was resolved during the shareholders’ meeting on July 13, 2021. 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.

(Continued)

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

(t) Share-based payment

Except for the following disclosure, there were no significant changes for share-based payment for the nine months ended September 30, 2021 and 2020. Please refer to note 6(u) of the consolidated financial statements for the year ended December 31, 2020 for 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:

For the three months ended September 30 2021 2020 $ 4,183 4,106 20,403 33,580 $ 24,586 37,686	For the nine months ended September 30	For the nine months ended September 30
2021 $ 4,183 20,403 $ 24,586	2021 12,638 74,661 87,299	2020
		12,427 82,371
		94,798

(u) Earnings per share

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

(i) Basic earnings per share

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 September 30 2021 2020 $ 671,782 773,224 447,867 445,852 $ 1.50 1.73	For the nine months ended September 30
	2021 $ 671,782 447,867 $ 1.50	2021 1,788,061 447,357 4.00	2020
			1,552,132
			445,663
			3.48

(ii) Diluted earnings per share

For the three months ended September 30 2021 2020 $ 671,782 773,224 450,945 448,080 $ 1.49 1.73	For the nine months ended September 30	For the nine months ended September 30
2021 $ 671,782 450,945 $ 1.49	2021 1,788,061 451,269 3.96	2020
		1,552,132
		448,625
		3.46

(Continued)

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

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

For the three months ended September 30 2021 2020 447,867 445,852 1,282 1,393 1,796 835 450,945 448,080	For the nine months ended September 30	For the nine months ended September 30
2021 447,867 1,282 1,796 450,945	2021 447,357 1,534 2,378 451,269	2020
		445,663 1,986 976
		448,625

(v) Revenue from contracts with customers
(i) Disaggregation of revenue

For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021
Computer Peripherals Non-computer Peripherals Total $ 8,365,352 8,847,784 17,213,136 43,203 412,573 455,776 $ 8,408,555 9,260,357 17,668,912 For the three months ended September 30, 2020		Total
		17,213,136 455,776
		17,668,912
Computer Peripherals Non-computer Peripherals Total $ 8,070,806 10,211,037 18,281,843 29,533 595,185 624,718 $ 8,100,339 10,806,222 18,906,561 For the nine months ended September 30, 2021		Total
		18,281,843 624,718
		18,906,561
Computer Peripherals $ 25,144,928 109,916 $ 25,254,844	Non-computer Peripherals 24,745,236 1,276,228 26,021,464	Total
		49,890,164 1,386,144
		51,276,308

(Continued)

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

Goods sold Service rendered Mainland China Europe America Other	For	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020
			Total
			47,084,863 1,597,218
			48,682,081

(ii) Contract balances

Notes and accounts receivable (including related parties) Less: allowance for doubtful accounts Contract liabilities (classified as other current liabilities)	September 30, 2021 $ 14,272,839 (38,853) $ 14,233,986 $ 242,169	December 31, 2020 September 30, 2020 13,819,185 15,001,462 (42,155) (40,413) 13,777,030 14,961,049 226,063 170,076

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 nine months ended September 30, 2021 and 2020 that were included in the contract liability balance at the beginning of the period were $205,313 and $102,379, 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.

(Continued)

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

(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.

Details of remuneration to employees and directors for the three and nine months ended September 30, 2021 and 2020 were as follows:

30, 2021 and 2020 were as follows:
Employee remuneration Directors’ remuneration	For the three months ended September 30 2021 2020 $ 24,864 29,616 12,433 14,808 $ 37,297 44,424	For the nine months ended September 30
	2021 $ 24,864 12,433 $ 37,297	2021 65,785 32,893 98,678	2020
			59,536 29,768
			89,304

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:

For the three months ended September 30 2021 2020 $ 2,047 2,011 304 191 339 784 $ 2,690 2,986	For the nine months ended September 30 2021 2020 6,323 7,373 304 191 1,222 2,279 7,849 9,843	For the nine months ended September 30 2021 2020 6,323 7,373 304 191 1,222 2,279 7,849 9,843
2021 $ 2,047 304 339 $ 2,690	2021 6,323 304 1,222 7,849
		7,373 191 2,279
		9,843

(y) Other gains and losses

The details of other gains and losses were as follows:

Net gains (losses) on financial assets/liabilities measured at FVTPL Reversal of impairment losses of property, plant and equipment Foreign currency exchange gains, net Net income (losses) on disposal of property, plant and equipment Impairment losses of investments accounted for using equity method Net gains on disposal of right-of-use assets Government grants Other	For the three months ended September 30 2021 2020 $ (109,986) 94,226 - - 207,991 59,043 494 (16,389) - - - - 33,469 56,970 25,140 (1,514) $ 157,108 192,336	For the nine months ended September 30 2021 2020 (341,825) 133,530 6,986 - 788,793 259,959 (19,341) (22,718) (140,000) - 6,560 2 81,483 108,227 8,750 40,110 391,406 519,110
	2021 $ (109,986) - 207,991 494 - - 33,469 25,140 $ 157,108	2021 (341,825) 6,986 788,793 (19,341) (140,000) 6,560 81,483 8,750 391,406

(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:

September 30, 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 $ 9,974,578 15,965,439 1,966,587 1,294,174 2,073,120 1,645,720 1,400,255 11,949 503,145 - - $ 34,834,967 $ 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 9,988,123 15,965,439 1,966,587 1,294,174 2,545,378 1,645,720 1,428,097 11,949 - 4,332,349 (3,829,204) 35,348,612 905,704 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 9,988,123 15,965,439 1,966,587 1,294,174 284,203 1,645,720 346,590 - - 4,332,349 (3,829,204) 31,993,981 905,704 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 - - - - 211,043 - 705,653 - - - - 916,696 - - - - 274,753 - 250,101 - - - - 524,854	2~5 years - - - - 533,322 - 375,854 - - - - 909,176 - - - - 403,365 - 445,194 - - - - 848,559	Over 5 years
						- - - - 1,516,810 - - 11,949 - - -
						1,528,759
						- - - - 577,556 - - 12,225 - - -
						589,781

(Continued)

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

September 30, 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 $ 6,530,051 17,114,424 2,510,320 1,246,021 1,288,356 1,493,756 364,076 12,685 228,542 - - $ 30,788,231	Contractual cash flows 6,536,586 17,114,424 2,510,320 1,246,021 1,605,811 1,493,756 375,368 12,685 - 2,434,970 (2,206,428) 31,123,513	Within 1 year 6,536,586 17,114,424 2,510,320 1,246,021 316,130 1,493,756 5,481 - - 2,434,970 (2,206,428) 29,451,260	1~2 years - - - - 282,897 - 186,314 - - - - 469,211	2~5 years - - - - 427,557 - 183,573 - - - - 611,130	Over 5 years
						- - - - 579,227 - - 12,685 - - -
						591,912

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	September 30, 20	September 30, 20	De	cember 31, 20	September 30, 2020	September 30, 2020
	Foreign currency $ 628,268 290,782 387,174 8,536 12,409 8,670 9,748 99,750 $ 553,299 240,979 506,786 - 53,348 6,303	Exchange rate 6.4854 7.7850 27.8660 25.1619 21.6830 33.8600 9.0331 0.3590 6.4854 7.7850 27.8660 - 33.8600 9.0331	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 6.8101 17,145,027 7.7500 8,377,209 29.1260 10,057,637 27.2313 336,627 23.1973 175,931 31.6800 635,538 - - - - 6.8101 13,773,962 7.7500 6,964,113 29.1260 12,380,185 27.2313 183,570 31.6800 652,860 - -
					588,650 287,620 345,315 9,845 6,040 21,820 - - 472,909 239,103 425,056 5,369 22,415 -
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; the HKD against CZK; as well as HKD and CZK against the EUR, as of September 30, 2021 and 2020, would have decreased or increased and increased or decreased the net profit before tax by $11,994 and $138,664, 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 and nine months ended September 30, 2021 and 2020, foreign exchange gain (including realized and unrealized portions) amounted to $207,991, $59,043, $788,793 and $259,959, 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 decreased or increased by $559 and increased or decreased $7,536 for the nine months ended September 30, 2021 and 2020, respectively. This is mainly due to borrowings, demand deposits and time deposits with variable interest rates.

(Continued)

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

(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:

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		September 30, 2021	September 30, 2021	September 30, 2021
	Carrying amounts $ 160,720 $ 226,909 $ 5,175,530 5,800,387 14,233,986 1,162,960 126,401 $ 26,499,264 $ 503,145 $ 11,374,833 15,965,439 1,966,587 1,294,174 2,073,120 1,645,720 11,949 $ 34,331,822		Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 160,720 160,720 226,909 226,909 503,145 503,145

(Continued)

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

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		September 30, 2020	September 30, 2020	September 30, 2020
	Carrying amounts $ 359,499 $ 115,405 $ 10,839,319 14,961,049 928,554 119,535 $ 26,848,457		Fair Value
		Level 1 - -	Level 2 - -	Level 3 Total 359,499 359,499 115,405 115,405

(Continued)

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

September 30, 2020

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 $ 228,542 $ 6,894,127 17,114,424 2,510,320 1,246,021 1,288,356 1,493,756 12,685 $ 30,559,689		Fair Value	Fair Value
		Level 1 -	Level 2 -	Level 3 Total 228,542 228,542

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.

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 nine months ended September 30, 2021 and 2020, there were no transfers between different Levels.

(Continued)

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

4) Reconciliation of Level 3 fair values

4) Reconciliation of Level 3 fair values	n of Level 3 fair values	n of Level 3 fair values	n of Level 3 fair values	n of Level 3 fair values
For the nine months ended September 30, 2021 FVTPL FVOCI Total Balance on January 1 $ (118,413) 121,672 3,259 Recognized in profit or loss (341,825) - (341,825) Recognized in other comprehensive income - 76,374 76,374 Acquisition /disposal 117,813 28,863 146,676 Balance on September 30 $ (342,425) 226,909 (115,516)	For the nine months ended September 30, 2021					For the nine months ended September 30, 2020 FVTPL FVOCI Total (20,195) 106,535 86,340 133,530 - 133,530 - (7,360) (7,360) 17,622 16,230 33,852 130,957 115,405 246,362
	FVTPL		FVOCI 121,672 - 76,374 28,863 226,909	Total		FVTPL		FVOCI 106,535 - (7,360) 16,230 115,405

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.

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.

(Continued)

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

(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 9,069,519 644,796 (188,598) 9,525,717 Cash flows 5,437,925 185,770 (216,399) 5,407,296	Non-cash changes - - 1,008,799 1,008,799 Non-cash changes - - 30,402 30,402	September 30, 2021
				9,974,578 1,400,255 2,073,120 13,447,953 September 30, 2020
				6,530,051 364,076 1,288,356 8,182,483

(ad) Supplementary information of cash flow
(i) The Group acquired property, plant and equipment amounting to $2,441,424 and $1,429,688, respectively, and the payables on equipment decreased $64,297 and $978,556, respectively, generating cash outflow of $2,505,721 and $2,408,244 for the nine months ended September 30, 2021 and 2020, respectively.
(ii) For the nine months ended September 30, 2021 and 2020, the Group’s disposal of property, plant and equipment included the write-off of the unamortized deferred revenue of equipment subsidy amounting to $235,537 and $435,429, respectively.

(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.

in the consolidated financial statements.
Name	Relationship
Specialty Technologies, LLC (Specialty)	Substantive related party

(Continued)

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

(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:

Sal	es For the nine months ended September 30 2021 2020 720,510 339,187	Notes a	nd accounts rece	ivable
For the three months ended September 30 2021 2020 $ 238,223 190,199		September 30, 2021 227,121	December 31, 2020 198,189	September 30, 2020
2021	2021 720,510
$ 238,223				154,439

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:

For the three months ended September 30 2021 2020 $ 33,525 44,372 349 242 12,649 13,201 $ 46,523 57,815	For the nine months ended September 30	For the nine months ended September 30
2021	2021 116,030 1,047 45,954 163,031	2020
$ 33,525 349 12,649 $ 46,523		125,651 737 38,835
		165,223

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

(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	September 30, 2021 $ 4,297 $ - $ - $ 16,908 $ 771,967	December 31, 2020 - - - 57,763 -	September 30, 2020 -
	Guarantee letters issued by bank Guarantee letters issued by bank Accounts receivable factoring Guarantee letters issued by bank Loan collateral
				1,069
				2
				57,761
				-

(Continued)

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

(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	September 30, 2021 $ 30,935	December 31, 2020 September 30, 2020 63,012 142,034

(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	September 30, 2021 $ 1,691,188 $ 3,065,260	December 31, 2020 September 30, 2020 1,232,245 1,650,901 3,135,880 3,203,871	December 31, 2020 September 30, 2020 1,232,245 1,650,901 3,135,880 3,203,871
			1,650,901
			3,203,871

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

Property, plant and equipment	September 30, 2021 $ 451,858	December 31, 2020 September 30, 2020 877,391 801,612

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(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 September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2020	For the three months ended September 30, 2020	For the three months ended September 30, 2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Others Depreciation Amortization	981,634 32,362 59,932 37,685 345,912 4,355	938,527 47,470 41,672 58,006 73,271 51,582	1,920,161 79,832 101,604 95,691 419,183 55,937	1,104,435 36,238 47,043 20,239 446,381 8,275	962,557 33,755 31,827 58,997 43,782 48,255	2,066,992 69,993 78,870 79,236 490,163 56,530

(Continued)

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

By function By item	For the nine months ended September 30, 2021	For the nine months ended September 30, 2021	For the nine months ended September 30, 2021	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Others Depreciation Amortization	2,809,012 98,972 169,618 92,504 1,091,276 11,724	2,758,723 147,191 117,971 149,158 220,199 151,336	5,567,735 246,163 287,589 241,662 1,311,475 163,060	2,917,396 80,461 128,672 120,558 1,377,147 17,238	2,593,452 135,328 93,072 145,436 141,565 145,315	5,510,848 215,789 221,744 265,994 1,518,712 162,553

(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	89,403	89,403	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 Primax Electronics. (Singapore) Pte. Ltd. TYM UK	The subsidiary of Primax HK and Primax Tech. Subsidiary The subsidiary of TYM Acoustic HK	4,061,651 4,061,651 1,676,626	285,310 2,700,000 6,942	278,660 2,700,000 6,601	6,413 635,628 6,601	- - -	% 2.06 % 19.94 % 0.12	10,831,070 10,831,070 4,471,004	Y Y N	N N N	Y N N

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.

(Continued)

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES Notes to the Consolidated 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 September 30, 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 40 223 11 7 917 - - 400 181	- 53 6,902 - 350 - 139,887 55,175 202,367 - 24,542 24,542	3.59 0.38 1.42 0.41 0.02 2.04 2.73 3.31 11.90 1.32	- 53 6,902 - 350 - 139,887 55,175 - 24,542

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 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 TWD300 million or 20% of the Company’s issued capital:

(In Thousands of New Taiwan Dollars)

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter- party	Relationship with the Company	If the counter-party is a related party, the previous transfer information must be disclosed	If the counter-party is a related party, the previous transfer information must be disclosed	If the counter-party is a related party, the previous transfer information must be disclosed	If the counter-party is a related party, the previous transfer information must be disclosed	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationshi with the Company	p Date of transfer	Amount
The Company	Land	August 24, 2021	760,000	760,00	0 Non-related person.	None.	N/A	N/A	N/A	-	Note 1	For operation.	None

Note 1: Obtain an appraisal report from a professional appraiser as required by Article 9 of the Regulations Governing the Acquisition and Disposal Assets by Public Companies.

(Continued)

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

(vi) Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the Company’s issued capital: None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the Company’s issued capital:

Name of company	Related party	Nature of relationship		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 〃〃〃	Primax Singapore PCH2 PKS1 PCQ1 Polaris Primax Thailand The Company PCH2 The Company Primax Thailand Primax Singapore The Company 〃〃 PCH2 The Company TYM Acoustic HK TYM HK TYM Acoustic Europe Tymphany Dongguan TYM HK 〃 Tymphany Huizhou TYM Acoustic Europe	Subsidiary The subsidiary of Primax HK 〃〃 The subsidiary of Primax Tech. The subsidiary of Primax Singapore. Parent The subsidiary of Primax HK The parent of Primax Cayman The subsidiary of Primax Singapore. The subsidiary of Primax HK. The parent of Primax Cayman. 〃 The parent of Primax Singapore. The subsidiary of Primax HK The parent of Primax Tech. Subsidiary The subsidiary of TYM Acoustic HK 〃 Subsidiary The subsidiary of TYM Acoustic HK 〃 Parent The subsidiary of TYM Acoustic HK	Sale Purchase Purchase Purchase Sale Purchase Purchase Purchase Sale Sale Sale Sale Sale Sale Purchase Purchase Sale Sale Sale Purchase Purchase Sale Sale Sale	(7,131,557) 20,198,466 1,550,287 6,337,511 (2,615,009) 993,029 7,131,557 113,572 (20,198,466) (237,053) (113,572) (1,550,287) (6,337,511) (993,029) 237,053 2,615,009 (533,134) (4,467,966) (255,279) 111,442 219,134 (5,257,439) (111,442) (248,825)	% (22) % 70 % 5 % 22 % (8) % 3 % 98 % 2 % (89) % (1) % (1) % (100) % (78) % (99) % 30 % 100 % (9) % (77) % (4) % 3 % 4 % (90) % (2) % (4)	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 〃〃	2,781,661 (4,955,297) (921,393) (1,798,465) 328,478 (160,495) (2,781,661) (83,316) 4,955,297 150,455 83,316 921,393 1,798,465 160,495 (150,455) (328,478) 402,123 1,178,050 97,395 (79,208) (56,600) 843,575 79,208 106,692	28% (63)% (12)% (23)% 3% (2)% (97)% (3)% 85% 3% 1% 100% 71% 97% (26)% (100)% 21% 62% 5% (4)% (3)% 74% 7% 9%	note 1 〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃

(Continued)

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

Name of company	Related party	Nature of relationship		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)
TYDC 〃 TYM Acoustic HK 〃〃 TYM Acoustic Europe 〃〃 TYM HK 〃〃〃〃〃〃〃 TYML TYTH 〃	TYM HK TYM Acoustic HK TYM Acoustic Europe Tymphany Huizhou TYDC TYM Acoustic HK Tymphany Huizhou Tymphany Dongguan Tymphany Huizhou Tymphany Dongguan 〃 TYDC TYML TYTH 〃 Specialty TYM HK 〃〃	The subsidiary of TYM Acoustic HK The subsidiary of Tymphany Huizhou Subsidiary Parent The subsidiary of Tymphany Dongguan Parent The parent of TYM Acoustic HK The subsidiary of Tymphany Huizhou 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 Sale Purchase Purchase Purchase Sale Purchase Purchase Purchase Purchase Sale Purchase Sale Purchase Sale Sale Purchase Purchase Sale	(1,027,195) (231,389) 1,814,609 533,134 231,389 (1,814,609) 255,279 248,825 4,467,966 5,257,439 (219,134) 1,027,195 (114,947) 992,050 (329,177) (720,510) 114,947 329,177 (992,050)	% (81) % (18) % 68 % 20 % 9 % (85) % 15 % 14 % 38 % 44 % (2) % 9 % (1) % 8 % (3) % (6) % 100 % 44 % (100)	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	281,538 136,350 (471,681) (402,123) (136,350) 471,681 (97,395) (106,692) (1,178,050) (843,575) 56,600 (281,538) - (38,367) 257,815 227,121 - (257,815) 38,367	67% 33% (46)% (39)% (13)% 89% (16)% (18)% (50)% (35)% 2% (12)% -% (2)% 9% 8% -% (26)% 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 TWD100 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 Acoustic HK TYM HK 〃〃 TYM Acoustic Europe TYM HK TYM Acoustic HK 〃 Tymphany Dongguan 〃 TYDC 〃 Tymphany Huizhou TYTH 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 Subsidiary The subsidiary of TYM Acoustic HK 〃〃〃〃 The subsidiary of Tymphany Huizhou Parent The subsidiary of Tymphany Huizhou 〃 The subsidiary of Tymphany Dongguan 〃 The parent of TYM Acoustic HK The subsidiary of TYM Acoustic HK Other related party	2,781,661 (note 5) 42,735 (note 5) 328,478 (note 5) 120,481 (note 2) (note 5) 12,328 (note 5) 4,955,297 (note 5) 100,944 (note 5) 150,455 (note 5) 831,990 (note 5) 89,403 (note 5) 1,798,465 (note 5) 160,495 (note 5) 402,123 (note 5) 1,178,050 (note 5) 843,575 (note 5) 39,595 (note 5) 106,692 (note 5) 281,538 (note 5) 136,350 (note 5) 471,681 (note 5) 56,600 (note 5) 3,144,915 (note 5) 6,147 (note 5) 347,035 (note 5) 330,484 (note 5) 257,815 (note 5) 227,121	6.84 (note 3) 9.84 3.48 (note 3) 4.30 (note 3) (note 3) 1.89 (note 4) 3.67 7.99 3.37 3.85 3.01 (note 3) 4.76 3.93 1.73 6.36 2.19 (note 3) 2.43 (note 3) (note 3) 2.82 4.52	- - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - -	851,787 30,992 240,617 58,364 12,328 1,033,639 27,278 34,589 11,902 89,403 300,515 154,010 117,040 362,637 657,077 39,595 16,737 135,604 19,776 155,193 56,600 1,476,030 6,147 99,018 406 - 55,493	- - - - - - - - - - - - - - - - - - - - - - - - - - -

(Continued)

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

Note 1: Amounts collected as of October 22, 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 nine months ended September 30, 2021 was $357,447, 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 other receivable arise from intercompany loans.

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).

(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 〃〃〃〃	The Company 〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃 PCH2 〃〃〃〃	Primax Singapore 〃〃 PCH2 〃〃〃 PKS1 〃〃 PCQ1 〃 Polaris 〃 Primax Thailand 〃 Tymphany Dongguan 〃 Primax Thailand 〃 Primax Singapore	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 Primax HK	Sales Accounts Receivable Other Receivable Purchase Accounts Payable Accounts Receivable Other Receivable Purchase Accounts Payable Other payables Purchase Accounts payable Sale Accounts Receivable Purchase Accounts Payable Service Revenue Other Receivable Sale Other Receivable Sale	7,131,557 2,781,661 42,735 20,198,466 4,955,297 120,481 12,328 1,550,287 831,990 89,403 6,337,511 1,798,465 2,615,009 328,478 993,029 160,495 224,260 100,944 237,053 150,455 113,572	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 3) Price agreed by both sides 60 days Price agreed by both sides 90 days Price agreed by both sides 60 days Price agreed by both sides (Note 2) Price agreed by both sides (Note 2) Price agreed by both sides	% 13.91 % 5.16 % 0.08 % 39.39 % 9.19 % 0.22 % 0.02 % 3.02 % 1.54 % 0.17 % 12.36 % 3.33 % 5.10 % 0.61 % 1.94 % 0.30 % 0.44 % 0.19 % 0.46 % 0.28 % 0.22

(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
				Account name	Amount	Trading terms	Percentage of consolidated total operating revenues or total assets
2 〃〃〃〃〃〃 3 〃〃〃〃〃〃〃 4 〃〃〃〃〃 5 〃	Tymphany Huizhou 〃〃〃〃〃〃 Tymphany Dongguan 〃〃〃〃〃〃〃 TYDC 〃〃〃〃〃 TYM Acoustic HK 〃	TYM Acoustic HK 〃 TYM HK 〃〃 TYM Acoustic Europe Tymphany Dongguan TYM HK 〃〃〃〃〃 TYM Acoustic Europe 〃 TYM HK 〃〃〃 TYM Acoustic HK 〃 TYM Acoustic Europe 〃	Subsidiary 〃 The subsidiary of TYM Acoustic HK 〃〃〃 Subsidiary The subsidiary of TYM Acoustic HK 〃〃〃〃〃〃〃〃〃〃〃 The subsidiary of Tymphany Huizhou 〃 Subsidiary 〃	Sale Accounts Receivable Sale Accounts Receivable Other Payable Sale Purchase Purchase Accounts Payable Sale Accounts Receivable Other Receivable Other payable Sale Accounts Receivable Sale Accounts Receivable Accounts Payable Other Payable Sale Accounts Receivable Purchase Accounts Payable	533,134 402,123 4,467,966 1,178,050 330,484 255,279 111,442 219,134 56,600 5,257,439 843,575 39,595 3,144,915 248,825 106,692 1,027,195 281,538 6,147 347,035 231,389 136,350 1,814,609 471,681	Price agreed by both sides 60 days Price agreed by both sides 60 days (Note 2) Price agreed by both sides 〃〃 60 days Price agreed by both sides 60 days (Note 2) 〃 Price agreed by both sides 60 days Price agreed by both sides 60 days 〃 (Note 2) Price agreed by both sides 60 days Price agreed by both sides 90 days	% 1.04 % 0.75 % 8.71 % 2.18 % 0.61 % 0.50 % 0.22 % 0.43 % 0.10 % 10.25 % 1.56 % 0.07 % 5.83 % 0.49 % 0.20 % 2.00 % 0.52 % 0.01 % 0.64 % 0.45 % 0.25 % 3.54 % 0.87

(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
6 〃〃〃〃	TYM HK 〃〃〃〃	TYAT TYML TYTH 〃〃	The subsidiary of TYM Acoustic HK Subsidiary The subsidiary of TYM Acoustic HK 〃〃	Service Expense Sale Sale Accounts receivable Purchase	531,483 114,947 329,177 257,815 992,050	Price agreed by both sides 〃〃 60 days Price agreed by both sides	% 1.04 % 0.22 % 0.64 % 0.48 % 1.93

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 other receivable arise from intercompany loans.

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 nine months ended September 30, 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 September 30, 2	Balance as of September 30, 2	021	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company 〃〃〃〃〃〃〃	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 Sale of computer peripherals and mobile device components	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	6,710,449 2,588,584 (7,391) 16,634 5,426,336 12,793 420,732 502,700 15,670,837	388,667 134,023 (4,467) 254 63,662 753 (205,366) (137,781) 239,745	401,268 132,535 (4,467) 254 63,066 753 (205,366) (148,313) 239,730	(note 3) (note 3) (note 3) (note 3) (note 3) (note 3) (note 3) (note 3)
Primax Singapore	Primax Thailand	Thailand	Manufacturing and sale of computer peripherals, mobile device components, and business devices	872,151	588,291	900	99.99	518,977	(137,446)	(137,446)	(note 3)
Primax Cayman	Primax HK	Hong Kong	Holding company and customer service	2,375,164	2,375,164	602,817	100.00	6,775,372	389,090	389,090	(note 3)
Primax Tech.	Polaris	USA	Sale and purchase of computer peripherals, mobile device components, and business devices	52,680	52,680	1,600	100.00	380,440	5,420	5,420	(note 3)
Diamond	TWEL	Cayman Islands	Holding company	4,083,950	4,083,950	192,251	100.00	5,514,807	119,412	64,056	(note 3)

(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 September 30, 2021	Balance as of September 30, 2021	Balance as of September 30, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
Primax AE	AIC	Cayman Islands	Holding company	1,356,995	1,356,995	30	37.00	364,480	(127,000)	(61,461)	(note 4)
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	2,379,955	102,316	102,316	(note 3)
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	1,238,064 17,257 29,828 774,653 72,224 470,831	(86,217) 1,855 7,594 27,908 (45,363) (13,254)	(86,217) 1,855 7,594 27,908 (45,363) (13,254)	(note 3) (note 3) (note 3) (note 3) (note 3) (note 3)
TYM HK	TYML	USA	Sales of various speaker accessories, speakers, and their components	6,628	6,628	200	100.00	9,764	301	301	(note 3)

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. Note 3: The subsidiary of the company

Note 4: The related company of the company.

(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 September 30, 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	1,916,067 37,956	Indirect investment through Primax Cayman and Primax Tech. Indirect investment through Destiny BVI.	1,566,806 29,933	- -	- -	1,529,701 29,259	397,823 (4,467)	100% 100%	397,823 (4,467)	6,423,072 (7,395)	- -

(Continued)

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

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)	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of September 30, 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
PKS1 PCQ1 Tymphany Huizhou Tymphany Dongguan TYDC	Production of computer peripheral products Production of computer peripheral products Manufacturing, R&D, design, and sales of various speaker accessories, speakers, and their components 〃〃	838,982 819,936 1,753,354 139,330 85,934	Indirect investment through Primax Cayman 〃 Indirect investment through Diamond 〃〃	627,176 570,160 3,677,532 14,254 -	- - - - -	- - - - -	613,052 557,320 3,594,714 13,933 -	(8,297) 130,033 171,838 (45,487) (73,822)	100% 100% 71.43% 71.43% 71.43%	(8,297) 130,033 122,747 (35,085) (52,733)	786,269 1,635,045 3,992,166 498,336 96,373	- - - - -

Note 1: The above information on the exchange rate is as follows: HKD:TWD3.5794 ; USD:TWD 27.866; CNY:TWD 4.2967.

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 September 30, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
The Company	6,749,708	7,900,917	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 nine months ended September 30, 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	24,751,062	% 5.48

(Continued)

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

(14) Segment information:

For the three and nine months ended September 30, 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:

Revenue External revenue Intra-group revenue Total segment revenue Profit before tax from segments reported Revenue External revenue Intra-group revenue Total segment revenue Profit before tax from segments reported Revenue External revenue Intra-group revenue Total segment revenue Profit before tax from segments reported Revenue External revenue Intra-group revenue Total segment revenue Profit before tax from segments reported	For the three months ended September 30, 2021	For the three months ended September 30, 2021
	Computer Peripherals Non-computer Peripherals Total $ 8,408,555 9,260,357 17,668,912 - - - $ 8,408,555 9,260,357 17,668,912 $ 634,228 234,210 868,438 For the three months ended September 30, 2020	Total
		17,668,912 -
		17,668,912
		868,438
		Total
		18,906,561 -
		18,906,561
		1,063,494

AI assistant

Primax — Interim / Quarterly Report 2021

52436_rns_2021-12-20_f3811f53-ab91-4b76-a623-c718d32ab704.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

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

PRIMAX ELECTRONICS LTD. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) As of September 30, 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

September 30, 2021 and 2020

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

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

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) Income taxes

(d) Employee benefits

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

(6) Explanation of significant accounts:

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

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

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

(j)

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

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

(l) Intangible assets

(m) Short-term borrowings

(n) Long-term borrowings

September 30, 2021

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

(o) Lease liabilities

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

(p) Operating lease

(q) Employee benefits

(ii) Defined contribution plans

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

(r) Income taxes

(s) Capital and other equity

(i) Ordinary shares

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

(ii) Capital surplus

(iii) Retained earnings

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

(t) Share-based payment

(u) Earnings per share

(ii) Diluted earnings per share

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

Primax Interim / Quarterly Report 2021