THINKING - AGM Information 2021 | FinancialReports.eu

Stock Code: 2428

==> picture [126 x 83] intentionally omitted <==

`興勤電子工業股份有限公司`

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

Annual Meeting of Shareholders 2021 Handbook

June 25, 2021

Page No. I. Meeting Procedure ............................................................................. 1 II. Management Presentation (Company Reports) ............................... 2 III. Proposals ......................................................................................... 2 IV. Discussion ....................................................................................... 5 V. Questions and Motions ..................................................................... 5

Attachments

Attachment 1: Business report 2020 ............................................................................ 6 Attachment 2: Audit Committee’s audit report .......................................................... 12 Attachment 3: Investee's operations 2020 .................................................................. 13 Attachment 4: Independent auditor’s report and financial statements 2020 .............. 14 Attachment 5: Cross reference table for amendments to Articles of Incorporation ... 35

Appendix

Appendix 1: Articles of Incorporation........................................................................ 37 Appendix 2: Rules of Procedure for Shareholders’ Meeting...................................... 44 Appendix 3: Shares held by the whole directors ........................................................ 48 Appendix 4: The Impact of Stock Dividend Issuance on the Company's Business Performance, EPS, and Shareholder Return Rate ................................. 48

Thinking Electronic Industrial Co., Ltd.

Procedure for the 2021 Annual Meeting of Shareholders

I.Time: June 25, 2021, 9:00AM

II. Place: Zhuang Jing Hall, Nan-Zih Export Processing Zone, No. 600, Chia-Chang Rd., Nan-Zih Dist., Kaohsiung City

III.Report the number of shares in attendance.

IV. Call the meeting to order.
V.Chairperson takes chair.
VI. Chairperson remarks.
VII.Management Presentation (Company Reports):
(1) Business report 2020
(2) Audit Committee's review on the financial statements 2020
(3) Investee's operations 2020
(4) Distribution of remuneration to employees and directors 2020
(5) Other Management Presentation (Company Reports)

VIII. Proposals:

(1) Business report and financial statements 2020
(2) Motion for earnings distribution 2020
IX. Discussion:
(1) Amendment to the Company's Articles of Incorporation
X.Questions and Motions:
XI. Adjournment

Management Presentation (Company Reports)

No. 1: Business report 2020

Explanation: The Company's business report 2020 (please refer to Attachment 1)

No. 2: Audit Committee's review on the financial statements 2020

Explanation: Audit Committee’s Audit Report (please refer to Attachment 2)

No. 3: Investee's operations 2020

Explanation: Operations of the Company's investees in 2020 (please refer to Attachment 3)

No. 4: Distribution of remuneration to employees and directors 2020

Explanation: The Company's profit before tax was NT$1,722,765,461 in 2020. According to the Article 19 of the Articles of Incorporation, 1.29% thereof was provided as the remuneration to directors and 3.55% thereof as the remuneration to employees. The remuneration to directors totaled NT$23,400,000 and remuneration to employees NT$64,300,000 in 2020, which are considered satisfying the Articles of Incorporation. Said remuneration was paid in cash in whole.

Other Management Presentation (Company Reports): N/A

Proposals

No. 1: Business report and financial statements 2020

Submitted by the Board of directors

Explanation:

The Company's and consolidated entities’ financial statements 2020 have been audited and certified by Chiang Jia-Ling, CPA and Wu Chiu-Yen, CPA of Deloitte & Touche, who considered that the same should comply with relevant statutes or regulations in all respects and also issued the audit report.
The business report, parent company only financial statements and consolidated financial statements have been approved by the Board of Directors, and audited by the Audit Committee (please refer to Attachment 1 and Attachment 4 for details).
Please resolve them accordingly.

Resolution:

No. 2: Motion for earning distribution 2020

Submitted by the Board of directors

Resolution:

1.The following earnings distribution table is prepared in accordance with the Company act and the Company's Articles of Incorporation. The earnings 2020 shall be distributed as the first priority, and the earnings accumulated before 1997 (inclusive) will be distributed to make up the deficit, if any.
2.Please resolve them accordingly.

Thinking Electronic Industrial Co., Ltd.

Earnings Distribution Table 2020

Unit: NTD ＄

Unappropriated retained earnings, beginning:	3,183,723,828
Net profit for 2020:	1,385,015,653
Add: Remeasurement of defined benefit plans recognized into retained earnings
	3,537,991
Retained earnings from adjustment of investment under equity method:	272,438
Current net profit plus adjustment	1,388,826,082
Less: Provision of legal reserve	(138,882,608)
Add: Reversal of special reserve	83,218,785
Unappropriated retained earnings accumulated until the end of 2020	4,516,886,087
Dividends to shareholders - cash dividends	(704,619,993)
Unappropriated retained earnings, beginning	3,812,266,094

Notes:

The earnings 2020 shall be distributed as the first priority.
The cash dividends proposed to be distributed total NT$704,619,933, to be distributed at NT$5.50 per share subject to the outstanding stocks totaling 128,112,726 shares on March 21, 2021. In the event of any changes in the outstanding shares, the Board of Directors will be authorized by a shareholders’ meeting to deal with them with full power. Once resolved at a shareholders’ meeting, the Board of Directors is authorized to set the ex-dividend record date and date of distribution separately.
The cash dividends will be calculated and truncated to the nearest NTD. Fractions less than NT$1 shall be summed up and adjusted based on the decimal points arranged from the large to the small in the order of the account number from the front to the back, until the total cash dividends to be distributed is met.
If it is necessary to change any requirements defined for the distribution of earnings upon authorization of the competent authority, or due to treasury shares or conversion of bonds, the Board of Directors is authorized to deal with it.

Chairman of Board: Sui Tai- Chung General Manager: Ho Yi-Sheng Accounting Manager: Hung Yu-Fang Resolution:

Discussion

No. 1: Amendment to the Company's Articles of Incorporation

Submitted by the Board of directors

Explanation:

Amend the “Articles of Incorporation” in response to laws and practical needs.
Please refer to Attachment 5 for the cross reference table for amendments to Articles of Incorporation.
Please resolve the motion accordingly.

Resolution:

Questions and Motions

Adjournment

Attachment 1

Thinking Electronic Industrial Co., Ltd. Business Report 2020

The Company always uses the best effort to manage it products and keep serving as a goalkeeper for current protection, voltage protection and temperature protection, by upholding the enterprise spirit “Prosperity, Satisfaction, Diligence and Sustainability”. Fearless of fluctuation in the global economy, the Company respond to them by improving the Group's management, diversifying the market strategies, stabilizing financial structure and adopting reasonable cause and effect, in order to seize any new opportunities.

I.Business report:

(1) Results:

The consolidated turnover was NT$5,920,258 thousand, growing by 1.82% from the previous year. The consolidated net profit after tax was NT$1,380,603 thousand, growing by 23.79% from the previous year. The EPS was NT$10.81.

(2) Execution of budget: N/A.

(3) Analysis on financial receipts and expenditures, and profitability:

The Company's financial receipts and expenditures and profitability 2020 are analyzed

as follows: Unit: NT$ Thousand

as follows:			Unit: NT$ Thousand
Item	Year	2020	2019
Financial receipts and expenditures	Operating revenue, net	5,920,258	5,814,232
	Gross profit	2,714,605	2,340,329
	Current net profit	1,380,603	1,115,265
Profitability	ROA	14.03%	13.17%
	ROE	19.77%	17.73%
	Operating income to paid-in capital ratio	143.86%	113.09%
	EBT topaid-in capital ratio	145.75%	118.15%
	Netprofit margin	23.31%	19.18%
	EPS after tax(NT$)	10.81	8.71

(4) Research and development `：`

Complete the SMD 0201 small-size NTC Thermistor model development.
Complete the SMD 0201 small-size PTC Thermistor model development.
Complete the development of chips for high-precision medical treatment devices, including nucleic acid detection, infrared temperature sensors, and thermometers, etc.
Development of high-reliability NTC Thermistor for automobile, including components for charging pile and lithium battery monitoring, etc., to expand the application of products.
Complete the development of SMD TSM 0201 soft cutting process glass protective layer products.
Complete LCP small-size 0402 30V high-voltage products, and implement mass production.
Complete the preparation for mass production of SMD 0805 PTC Thermistor (1.0 Ω and other low-resistance series).
Complete the development of PTC Thermistor SMD 0603 low-resistance series (10Ω and 6.8Ω).
Complete the development of, and preparation for mass production of, certain models of TVM SMD 4B 6B series 5G high-pass Varistors..
10.Complete the development of certain models of SMD 1206 high-pass Varistors.
11.Complete the development of 0806 SMD high-pass Varistors. for LED, acquire UL certification, and start mass production and shipment.
12.Complete the development of 1210 SMD high-pass Varistors. for LED.
13.Complete the development of CPTC overcurrent/overvoltage-protection lead-free products.
14.Complete the development of 48V TVR product series for automotive grade.
Complete the development of CPTC high-pressure resistant product series.

II. Summary of 2021 business plan:

(1) Business policy
Continue to apply the management philosophy, “New Concept, New Management, New Technology and New Market”, to maintain the existing market, amplify the management results in the new markets including automobiles and industry, and move forward toward the new markets including 5G communication and health care.
Manage the production locations, practice the economy of scale, increase automated equipment, adjust the product portfolio, and launch into the high-end application

(2)

market.

Continue to boost the miniaturization of products, invest in corresponding equipment and technology, and win the market.
Improve the sales activities of quality products, focus on benchmarking markets and major customers, and promote the business gross profit.

Expected sales volume and basis thereof

The electric vehicles, which replace fuel vehicles, and electronization of car controls have been identified as the main force to drive the electronics industry. 5G base stations already successively activated in various countries and launch of the 5G smartphones that become the mainstream specifications in the world have become mainstream specifications have been launched all over the world boost the booming business opportunities in the communications market. The plans which are suspended due to the epidemic in the automated and intellectualized industrial application and infrastructure market must be inevitably reinstated in the coming year. COVID-19 drives certain new needs for medical electronic products. The market is rapidly expanding and growing. These factors bring an optimistic vision for the business. Notwithstanding, the Sino-US trade war is still persisting. The epidemic keeps spreading in Europe and the USA. The global economy might not be as successful as it appears to. All of these are considered negative factors affecting the Company's business development. The Company integrates major customers’ business forecast for the new year with the plan to develop new markets, and generates the sales forecast for the new year. The sales value 2021 are expected to be significantly higher than the sales in 2020. Apparently, the sales will keep growing as the major trend.

(3) Key production and sales policies

1.Production policy:

(1) Supply management:

(A)Improve the Group’s diversified and multi-point supply model and practice the Group factory’s multi-source production, hoping to mitigate the risk over shortage of materials for customers and better serve the needs in the delivery market, and generally upgrade the customer service speed as the starting point.
(B) Improve various factories’ information system operations, connect the information flow of the production execution system, MES, and strengthen the inventory management at various factories to optimize the inventory aging and

maximize the product turnover, in order to serve the purpose of “smooth flow of goods”.

(2) Production management: (three improvement actions and one stabilization policy)
(A)HR: Improve HR training and expertise & stabilization requirements toward key process personnel.
(B) Machine: Continue to improve the production automation.
(C) Materials: Recognize multiple customer sources of materials to mitigate the effect to be posed by variation of related factors to the supply of goods; adopt strategic procurement policy toward major materials to control the fluctuation in costs effectively and input and output strictly.
(D)Methods:
- D-1 IT-based management and digitized management.
- D-2 Pursue lean production, eliminate low-value work, and focus on high-yield actions.
- D-3 To exercise departments’ operational effectiveness, the Group's factories and entities work together to set and promote the KPI project.
(E) Environment:
- E-1. Promote the energy conservation project, check overall energy consumed by equipment, diagnose energy consumption, and activate the energy conservation project.
- E-2. Promote reuse of water resources, and construct process waste water recycling system to achieve the feature for reuse of water resource.
(3) Overview of Production and Marketing:

In response to the drastic changes in the market demand, the Company keeps holding the production and marketing meetings for teamwork to adjust the production scale to the best scale of economy. We hope that the production and marketing may keep flexible and active in order to deal with the pressure derived from changes in the market.

2.Sales Policy:

(1) Strengthen the development in the markets of electric vehicles and automotive electronics, 5G and communications, industrial controls, and medical electronics, etc., and sale of niche-type and customized products to increase profit.

  - (2) Aim at benchmarking customers in the advanced countries, such as European countries and the USA, to keep the development pace in line with the high-end markets; also, expand the emerging markets, such as India and South East Asia, etc., to increase the sales value and value at the same time for the balanced development.

  - (3) Exercise the existing brand strengths, scale of economy and distribution network to practice the consolidated effects and expand the operating revenue.

  - (4) Increase the promotional channels for digital marketing, and mitigate the interruption caused by COVID-19 to business activities.

III.Future development strategies:
(I) Uphold the spirit of innovation and keep developing new products to satisfy the market demand.
(II)Upgrade the process technology and product automation, and control various costs effectively via data and information analysis and management.
(III) Develop the sale markets and rapid after-sale services, and provide complete protective component series to satisfy the customers’ demand for “one-stop shopping”.
IV. Effects posed by external competitive environment, legal environment and macroeconomic environment:

As far as the external competitive environment is concerned, the industry in which the Company is engaged is expected to keep growing in response to the expanding market demand. For the competition with peer companies, the Company is expected to maintain its oligopolistic position but still struggle with the environment.

As far as the legal environment is concerned, the Company adjusts its internal rules and management regulations in a timely manner in response to the enactment of and amendments to various laws & regulations, and research and draft alternate policies. The Company is used to valuing the internal controls and corporate governance. Therefore, the enactment of/amendments to laws & regulations are expected to pose a minor impact to the Company.

As far as the macroeconomic environment is concerned, considering that the epidemic is becoming stable, the overall economy and liquidity are expected to develop positively. The Company keeps increasing its production capacity and adjusts product portfolio, and plan related capital expenditures to respond to the market demand.

Looking forward to the future, the Company will follow the management philosophy, “New Concept, New Management, New Technology and New Market”, keep focusing on the management of core business, and accelerate development of new technology, new products and new customers, in order to improve the Company's competitiveness, increase operating revenue and profit, and feed back to the permanent support from all of you. Thanks to the management team and whole employees for their dedication and efforts to pursue fruitful business growth to feed back to all of you in the past year. We also hope that each shareholder can keep his/her original intent and continue to support and encourage Thinking Electronic.

Chairman of Board: Sui Tai-Chung General Manager: Ho Yi-Sheng Accounting Manager: Hung Yu-Fang

Thinking Electronic Industrial Co., Ltd. Audit Committee’s Review Report

Attachment 2

The Board of Directors was approved to

prepare the Company's 2020 business report, financial statements (including parent company only and consolidated financial statements) and earnings distribution plan, in which the financial statements have been audited by Chiang Jia-Ling, CPA and Wu Chiu-Yen, CPA of Deloitte & Touche, who also issued the audit report accordingly. After reviewing said business report, financial statements, and earnings distribution plan, we consider that they comply with relevant statutes or regulations in all respects. Therefore, we issue this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review it accordingly.

To:

General Annual Meeting 2021

Thinking Electronic Industrial Co., Ltd.

Convener of Audit Committee: Chen Hsiu-Yen

h 2 2 , 2 0 2 1

a r

Attachment 3

Thinking Electronic Industrial Co., Ltd.

		Thinking Electronic Industrial Co., Ltd.	Thinking Electronic Industrial Co., Ltd.	Thinking Electronic Industrial Co., Ltd.	Thinking Electronic Industrial Co., Ltd.	Attachment 3	Attachment 3
		Investee's operations 2020				Unit: NTD Thousand
Name of Company	Date of Establishment	Business Lines	Paid-in Capital	Capital Invested by the Company	Ratio of shareholding	2020
						Operating revenue	Profit (loss) after tax
Thinking (Changzhou) Electronic Co., Ltd.	March 22, 1996	Manufacturing and trade of thermistors, Varistor and sensors	USD21,260	USD21,260	100%	RMB609,072	RMB107,698
Thinking (Yichang) Electronic Co., Ltd.	July 2, 2004	Manufacturing and trade of thermistors, Varistor and sensors	USD6,000	USD6,000	100%	RMB216,552	RMB36,470
Yenyo Technology Co., Ltd.	August 15, 1997	Processing, manufacturing, and trade of diode	NTD403,580	NTD275,160	52.61%	NTD180,352	NTD (9,312)
Jiang Xi Thinking Electronic Co., Ltd.	November 20, 2009	Manufacturing and trade of thermistors and Varistor	USD10,000	USD10,000	100%	RMB134,308	RMB20,019
Guangdong Welkin Thinking Electronic Co., Ltd.	April 11, 2014	Wholesale of thermistors, Varistor, sensors and machine & equipment	USD5,000	USD5,000	100%	RMB348,579	RMB38,305
Dong Guan Welkin Electronic Co., Ltd.	October 19, 2001	Manufacturing and processing of thermistors, Varistor, sensors and machine & equipment	RMB84,050	- (Note 1)	100%	RMB324,792	RMB64,901
Welkin Electronic Co., Ltd.	December 18, 2020	Manufacturing and trade of thermistors and Varistor	RMB50,000	- (Note 2)	-	-	-

Note 1: Indirectly investment in mainland China through companies registered in the third area, View Full Samoa and Thinking Samoa and the subsidiary Thinking Changzhou.

Note 2: The board of directors had decided to establish the Company through the subsidiary (Dongguan Welkin), and has been registered at December, 2020. At the end of December 31, 2020, the Company has no outward remittance for investment.

【 Attachment 4 】

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Thinking Electronic Industrial Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of Thinking Electronic Industrial Co., Ltd. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies (collectively referred to as the “parent company only financial statement”).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the parent company only

financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Company’s parent company only financial statements for the year ended December 31, 2020 is discussed as follows:

Recognition of revenue from specific product

The Company’s principal business is manufacturing and selling of passive components. The Company recognized net sales of NT$3,219,769 thousand for the year ended December 31, 2020, and revenue from specific product had significantly increased than previous year. Therefore, the occurrence of sales of specific productis considered as a key audit matter. For the accounting policy on revenue recognition, refer to Note 4 (k) to the parent company only financial statements.

Our main audit procedures performed in response to the above key audit matter included the following:

We obtained an understanding of the design of the internal control on revenue recognition and tested the operating effectiveness of the control.
We selected samples from the sales ledger and inspected the delivery documents and receipt bouchers and validated the occurrence of sales of specific product.
We verified that the revenue amounts recognized in the sales ledger were the same as those data recorded in the accounts receivable ledger.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but

to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Jia-Ling Chiang and Chiu-Yen Wu.

Deloitte & Touche Taipei, Taiwan Republic of China

March 22, 2021

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at amortized cost - current (Notes 4 and 7) Notes receivable (Note 9) Accounts receivable, net (Notes 4, 5 and 9) Accounts receivable - related parties (Notes 9 and 28) Other receivables Other receivables - related parties (Note 28) Inventories (Notes 4, 5 and 10) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Investments accounted for using the equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 13, 28 and 30) Right-of-use assets (Notes 4 and 14) Other intangible assets (Note 4) Deferred tax assets (Notes 4 and 23) Prepayments for equipment Net defined benefit assets - non-current (Notes 4 and 19) Other financial assets - non-current (Notes 11 and 29) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4 and 15) Accounts payable (Note 16) Accounts payable - related parties (Notes 16 and 28) Other payables (Note 17) Other payables - related parties (Note 28) Current tax liabilities (Notes 4 and 23) Lease liabilities - current (Notes 4 and 14) Refund liabilities (Notes 4 and 18) Other current liabilities (Notes 4 and 25) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 4 and 15) Deferred tax liabilities (Notes 4 and 23) Lease liabilities - non-current (Notes 4 and 14) Deferred revenue non-current (Notes 4 and 25) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4 and 20) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		December 31, 2020 Amount % $ 1,622,395 16 - - 5,324 - 800,840 8 285,727 3 3,112 - 97 - 207,713 2 18,764 - 2,943,972 29 39,481 - 6,434,738 63 613,528 6 55,105 1 28,359 - 109,789 1 39,640 - 11,407 - 31,115 - 7,363,162 71 $ 10,307,134 100 $ 375,000 3 20,348 - 591,993 6 286,293 3 434 - 107,146 1 929 - 170,979 2 2,459 - 1,555,581 15 339,671 3 1,044,936 10 54,723 1 6,728 - 130 - 1,446,188 14 3,001,769 29 1,281,127 13 348,263 3 1,020,206 10 284,655 3 4,572,550 44 5,877,411 57 (201,436 ) (2 ) 7,305,365 71 $ 10,307,134 100		December 31, 2019	December 31, 2019
		Amount $ 1,622,395 - 5,324 800,840 285,727 3,112 97 207,713 18,764 2,943,972 39,481 6,434,738 613,528 55,105 28,359 109,789 39,640 11,407 31,115 7,363,162 $ 10,307,134 $ 375,000 20,348 591,993 286,293 434 107,146 929 170,979 2,459 1,555,581 339,671 1,044,936 54,723 6,728 130 1,446,188 3,001,769 1,281,127 348,263 1,020,206 284,655 4,572,550 5,877,411 (201,436 ) 7,305,365 $ 10,307,134		Amount $ 851,095 25,000 4,966 779,439 184,885 2,999 426 321,261 32,897 2,202,968 26,918 5,397,746 544,596 58,351 30,795 103,763 16,664 5,884 28,853 6,213,570 $ 8,416,538 $ 100,000 57,279 351,066 209,269 293,409 71,912 1,525 47,717 1,980 1,134,157 - 853,862 56,996 - 130 910,988 2,045,145 1,281,127 348,263 908,264 107,627 4,010,767 5,026,658 (284,655 ) 6,371,393 $ 8,416,538	% 10 - - 9 2 - - 4 1 26 - 64 7 1 1 1 - - - 74 100 1 1 4 2 3 1 - 1 - 13 - 10 1 - - 11 24 15 4 11 1 48 60 (3 ) 76 100

The accompanying notes are an integral part of the parent company only financial statements.

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 21 and 28) Sales Less: Sales returns and allowances Operating revenue, net OPERATING COSTS (Notes 10, 22 and 28) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES (Notes 4 and 28) REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES (Note 4) REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 4, 9, 22 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 12, 22, 25 and 28) Interest income Other income Other gains and losses Finance costs Share of profit of subsidiaries Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 23) NET PROFIT FOR THE YEAR		2020 Amount % $ 3,373,313 105 153,371 5 3,219,942 100 2,041,760 63 1,178,182 37 (4,773) - 3,748 - 1,177,157 37 103,836 3 180,239 6 105,417 3 (1,856 ) - 387,636 12 789,521 25 11,287 - 30,405 1 (55,647) (2) (2,174) - 949,374 30 933,245 29 1,722,766 54 337,750 11 1,385,016 43		2019
				Amount % $ 3,187,620 102 49,772 2 3,137,848 100 2,085,057 67 1,052,791 33 (3,748) - 17,477 1 1,066,520 34 104,074 3 155,502 5 103,092 3 427 - 363,095 11 703,425 23 11,846 1 9,478 - (19,425) (1) (1,729) - 696,852 22 697,022 22 1,400,447 45 284,457 9 1,115,990 36 (Continued)

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 20 and 23) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of subsidiaries accounted for using the equity method Income tax related to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Share of the other comprehensive income (loss) of subsidiaries accounted for using the equity method Income tax related to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) Basic Diluted		2020 Amount % $ 4,423 - 12,563 1 272 - (885 ) - 16,373 1 (200,966) (6) 289,286 9 (17,664 ) (1 ) 70,656 2 87,029 3 $ 1,472,045 46 $ 10.81 $ 10.78		2019
				Amount % $ 3,737 - (260) - 435 - (747 ) - 3,165 - (166,285) (5) (54,675) (2) 44,192 1 (176,768 ) (6 ) (173,603 ) (6 ) $ 942,387 30 $ 8.71 $ 8.67




		$		$

The accompanying notes are an integral part of the parent company only financial statements. (Concluded)

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

BALANCE, JANUARY 1, 2019 Appropriation of 2018 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 BALANCE AT DECEMBER 31, 2020	Share Capital Capital Surplus $ 1,281,127 $ 348,263 - - - - - - - - - - - - - - 1,281,127 348,263 - - - - - - - - - - - - - - $ 1,281,127 $ 348,263		Retained Earnings	Total Retained Earnings $ 4,394,071 - - (486,828 ) (486,828 ) 1,115,990 3,425 1,119,415 5,026,658 - - (538,073 ) (538,073 ) 1,385,016 3,810 1,388,826 $ 5,877,411	Other Equity	Total Other Equity $ (107,627 ) - - - - - (177,028 ) (177,028 ) (284,655 ) - - - - - 83,219 83,219 $ (201,436 )	Total Equity $ 5,915,834 - - (486,828 ) (486,828 ) 1,115,990 (173,603 ) 942,387 6,371,393 - - (538,073 ) (538,073 ) 1,385,016 87,029 1,472,045 $ 7,305,365
					Exchange Differences on Translation of the Financial Statements of Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ (100,863 )$ (6,764 ) - - - - - - - - - - (176,768 ) (260 ) (176,768 ) (260 ) (277,631 ) (7,024 ) - - - - - - - - - - 70,656 12,563 70,656 12,563 $ (206,975 )$ 5,539
			Legal Reserve Special Reserve Unappropriated Earnings $ 809,987 $ 38,365 $ 3,545,719 98,277 - (98,277) - 69,262 (69,262) - - (486,828 ) 98,277 69,262 (654,367 ) - - 1,115,990 - - 3,425 - - 1,119,415 908,264 107,627 4,010,767 111,942 - (111,942) - 177,028 (177,028) - - (538,073 ) 111,942 177,028 (827,043 ) - - 1,385,016 - - 3,810 - - 1,388,826 $ 1,020,206 $ 284,655 $ 4,572,550

The accompanying notes are an integral part of the parent company only financial statements.

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit (reversed) loss Finance costs Interest income Share of profit of subsidiaries Loss on disposal of property, plant and equipment, net Loss on inventories Unrealized gain on transactions with subsidiaries Realized gain on transactions with subsidiaries Recognition of provisions Amortization of grants income Other non-cash items Changes in operating assets and liabilities Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Other current assets Net defined benefit assets Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities Refund liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Proceeds from disposal of investment accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment	2020 2019 $ 1,722,766 $ 1,400,447 68,555 64,120 4,002 6,709 (1,856) 427 2,174 1,729 (11,287) (11,846) (949,374) (696,852) 649 86 15,220 14,922 4,773 3,748 (3,748) (17,477) 125,250 24,000 (125) - (299) (31) (358) 1,565 (19,545) 91,908 (100,842) (60,399) (261) (29) 329 - 98,328 70,453 14,133 (16,773) (1,100) (3,278) (36,931) (9,516) 240,927 (118,003) 60,413 484 (292,975) (8,405) (273) (1,019) (1,988 ) (9,119 ) 936,557 727,851 11,435 11,604 (1,724) (1,846) (136,017 ) (167,167 ) 810,251 570,442 - (25,000) 25,000 - - 13,030 (142,657) (83,486) - 12 (Continued)

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expense
Amortization expense
Expected credit (reversed) loss
Finance costs
Interest income
Share of profit of subsidiaries
Loss on disposal of property, plant and equipment, net
Loss on inventories
Unrealized gain on transactions with subsidiaries
Realized gain on transactions with subsidiaries
Recognition of provisions
Amortization of grants income
Other non-cash items
Changes in operating assets and liabilities
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related parties
Inventories
Other current assets
Net defined benefit assets
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Refund liabilities

Cash generated from operations
Interest received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at amortized cost
Proceeds from disposal of financial assets at amortized cost
Proceeds from disposal of investment accounted for using equity
method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment

2020
2019
$ 1,722,766
$ 1,400,447
68,555
64,120
4,002
6,709
(1,856)
427
2,174
1,729
(11,287)
(11,846)
(949,374)
(696,852)
649
86
15,220
14,922
4,773
3,748
(3,748)
(17,477)
125,250
24,000
(125)
-
(299)
(31)
(358)
1,565
(19,545)
91,908
(100,842)
(60,399)
(261)
(29)
329
-
98,328
70,453
14,133
(16,773)
(1,100)
(3,278)
(36,931)
(9,516)
240,927
(118,003)
60,413
484
(292,975)
(8,405)
(273)
(1,019)

(1,988
)
(9,119
)
936,557
727,851
11,435
11,604
(1,724)
(1,846)

(136,017
)
(167,167
)

810,251

570,442
-
(25,000)
25,000
-
-
13,030
(142,657)
(83,486)
-
12
(Continued)

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

Decrease in other receivables - related parties Payment for intangible assets Increase in other financial assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Refund of guarantee deposits received Repayments of the principal portion of lease liabilities Cash dividends paid Net cash generated from (used in) financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT THE END OF YEAR	2020 $ - (1,566) (2,262 ) (121,485 ) 1,709,000 (1,434,000) 347,000 - - (1,393) (538,073 ) 82,534 771,300 851,095 $ 1,622,395	2019 $ 44,814 (3,580) (28,800 ) (83,010 ) 255,000 (155,000) - (150,000) 10 (1,389) (486,828 ) (538,207 ) (50,775) 901,870 $ 851,095

The accompanying notes are an integral part of the parent company only financial statements.(Concluded)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Thinking Electronic Industrial Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Thinking Electronic Industrial Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Group’s consolidated financial statements for the year ended December 31, 2020 is discussed as follows:

Recognition of revenue from specific product

The Group’s principal business is manufacturing and selling of passive components. The Group recognized net sales of NT$5,920,085 thousand for the year ended December 31, 2020, and revenue from specific product had significantly increased than previous year. Therefore, the occurrence of sales of specific product is considered as a key audit matter. For the accounting policy on revenue recognition, refer to Note 4 (l) to the parent company only financial statements.

Our main audit procedures performed in response to the above key audit matter included the following:

We obtained an understanding of the design of the internal control on revenue recognition and tested the operating effectiveness of the control.
We selected samples from the sales ledger and inspected the delivery documents and receipt vouchers and validated the occurrence of sales of specific product.
We verified that the revenue amounts recognized in the sales ledger were the same as those data recorded in the accounts receivable ledger.

Other Matter

We have also audited the parent company only financial statements of the Company for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion and unmodified opinion with emphasis of matter paragraph, respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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 the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the FSC, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing

standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Jia-Ling Chiang and Chiu-Yen Wu.

Deloitte & Touche Taipei, Taiwan Republic of China

March 22, 2021

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

		(In Thousands	of	New Taiwan Dollars)	New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at amortized cost - current (Notes 4 and 8) Notes receivable (Notes 10 and 31) Accounts receivable, net (Notes 4, 5 and 10) Other receivables Current tax assets (Notes 4 and 25) Inventories (Notes 4, 5 and 11) Other financial assets - current (Notes 12 and 31) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 9) Financial assets measured at amortized cost - non-current (Notes 4 and 8) Property, plant and equipment (Notes 4, 14, 31 and 32) Right-of-use assets (Notes 4 and 15) Investment properties (Notes 4 and 16) Other intangible assets (Note 4) Deferred tax assets (Notes 4 and 25) Prepayments for equipment Net defined benefit assets (Notes 4 and 21) Other financial assets - non-current (Notes 12 and 31) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4, 17 and 31) Notes payable (Note 18) Accounts payable (Note 18) Other payables (Note 19) Other payables to related parties (Note 30) Current tax liabilities (Notes 4 and 25) Lease liabilities - current (Notes 4 and 15) Refund liabilities (Notes 4 and 20) Other current liabilities (Notes 4 and 27) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 4 and 17) Deferred tax liabilities (Notes 4 and 25) Lease liabilities - non-current (Notes 4 and 15) Deferred revenue (Notes 4 and 27) Guarantee deposits received Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable owners of the Company NON-CONTROLLING INTERESTS (Notes 4 and 22) Total equity TOTAL		December 31, 2020 Amount % $ 2,505,348 23 1,582,073 14 - - 588,283 5 1,844,020 17 32,870 - 24,136 - 1,266,112 12 158,349 1 83,198 1 8,084,389 73 39,481 - 87,206 1 2,174,967 20 253,744 2 52,910 1 43,982 1 137,992 1 92,947 1 7,930 - 38,092 - 17,020 - 2,946,271 27 $ 11,030,660 100 $ 505,809 5 195,865 2 449,921 4 550,358 5 485 - 135,401 1 31,487 - 170,979 2 11,121 - 2,051,426 19 339,671 3 1,074,907 10 92,661 1 20,942 - 1,091 - 5,175 - 1,534,447 14 3,585,873 33 1,281,127 12 348,263 3 1,020,206 9 284,655 3 4,572,550 41 5,877,411 53 (201,436 ) (2 ) 7,305,365 66 139,422 1 7,444,787 67 $ 11,030,660 100		December 31, 2019
		Amount $ 2,505,348 1,582,073 - 588,283 1,844,020 32,870 24,136 1,266,112 158,349 83,198 8,084,389 39,481 87,206 2,174,967 253,744 52,910 43,982 137,992 92,947 7,930 38,092 17,020 2,946,271 $ 11,030,660 $ 505,809 195,865 449,921 550,358 485 135,401 31,487 170,979 11,121 2,051,426 339,671 1,074,907 92,661 20,942 1,091 5,175 1,534,447 3,585,873 1,281,127 348,263 1,020,206 284,655 4,572,550 5,877,411 (201,436 ) 7,305,365 139,422 7,444,787 $ 11,030,660		Amount $ 1,774,594 1,239,151 55,029 387,839 1,658,714 22,530 580 822,298 28,196 78,878 6,067,809 26,918 - 2,031,402 259,781 58,804 44,884 132,248 75,731 1,515 34,628 16,795 2,682,706 $ 8,750,515 $ 104,302 158,479 375,274 427,248 142 106,565 24,851 47,717 10,158 1,254,736 - 870,579 88,198 14,341 2,503 5,175 980,796 2,235,532 1,281,127 348,263 908,264 107,627 4,010,767 5,026,658 (284,655 ) 6,371,393 143,590 6,514,983 $ 8,750,515	% 20 14 1 5 19 - - 9 - 1 69 - - 23 3 1 1 2 1 - - - 31 100 1 2 5 5 - 1 - 1 - 15 - 10 1 - - - 11 26 15 4 10 1 46 57 (3 ) 73 1 74 100

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 and 23) Sales Less: Sales returns and allowances Operating revenue, net OPERATING COSTS (Notes 11, 24 and 30) GROSS PROFIT OPERATING EXPENSES (Notes 4, 10, 24 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 24, 27 and 30) Interest income Other income Other gains and losses Finance costs Total non-operating income and expenses CONSOLIDATED PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 22 and 25) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans		2020 Amount % $ 6,080,461 103 160,203 3 5,920,258 100 3,205,653 54 2,714,605 46 223,193 4 421,329 7 225,072 4 1,869 - 871,463 15 1,843,142 31 78,714 2 69,261 1 (114,683) (2) (9,101 ) - 24,191 1 1,867,333 32 486,730 8 1,380,603 24 5,070 -		2019
				Amount % $ 5,887,253 101 73,021 1 5,814,232 100 3,473,903 60 2,340,329 40 233,549 4 455,203 8 199,013 3 3,663 - 891,428 15 1,448,901 25 63,610 1 44,902 1 (38,666) (1) (5,060 ) - 64,786 1 1,513,687 26 398,422 7 1,115,265 19 4,770 -

(Continued)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Income tax related to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax related to items that may be reclassified subsequently to profit or loss Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 26) Basic Diluted			2020 Amount % 12,563 - (1,015 ) - 16,618 - 88,320 1 (17,664 ) - 70,656 1 87,274 1 1,467,877 25 1,385,016 24 (4,413 ) - 1,380,603 24 1,472,045 25 (4,168 ) - 1,467,877 25 $ 10.81 $ 10.78		2019
		$			Amount % $ (260) - (954 ) - 3,556 - (220,960) (4) 44,192 1 (176,768 ) (3 ) (173,212 ) (3 ) $ 942,053 16 $ 1,115,990 19 (725 ) - $ 1,115,265 19 $ 942,387 16 (334 ) - $ 942,053 16 $ 8.71 $ 8.61




		$
		$
		$
		$			$
		$			$

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

(In Thousands of New Taiwan Dollars)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company
Ordinary Shares Capital Surplus $ 1,281,127 $ 348,263 - - - - - - - - - - - - - - 1,281,127 348,263 - - - - - - - - - - - - - - $ 1,281,127 $ 348,263	Retained Earnings	Total Retained Earnings $ 4,394,071 - - (486,828 ) (486,828 ) 1,115,990 3,425 1,119,415 5,026,658 - - (538,073 ) (538,073 ) 1,385,016 3,810 1,388,826 $ 5,877,411	Other Equity	Total Other Equity $ (107,627 ) - - - - - (177,028 ) (177,028 ) (284,655 ) - - - - - 83,219 83,219 $ (201,436 )
			Exchange Differences on Translation of the Financial Statements of Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ (100,863 ) $ (6,764 ) - - - - - - - - - - (176,768 ) (260 ) (176,768 ) (260 ) (277,631 ) (7,024 ) - - - - - - - - - - 70,656 12,563 70,656 12,563 $ (206,975 ) $ 5,539
	Legal Reserve Special Reserve Unappropriated Earnings $ 809,987 $ 38,365 $ 3,545,719 98,277 - (98,277) - 69,262 (69,262) - - (486,828 ) 98,277 69,262 (654,367 ) - - 1,115,990 - - 3,425 - - 1,119,415 908,264 107,627 4,010,767 111,942 - (111,942) - 177,028 (177,028) - - (538,073 ) 111,942 177,028 (827,043 ) - - 1,385,016 - - 3,810 - - 1,388,826 $ 1,020,206 $ 284,655 $ 4,572,550

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

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss Finance costs Interest income Loss on disposal of property, plant and equipment, net Loss on inventories Recognition of provisions Amortization of grants income Other non-cash items Changes in operating assets and liabilities Notes receivable Accounts receivable Other receivables Inventories Other current assets Net defined benefit asset Notes payable Accounts payable Other payables Other payables to related parties Other current liabilities Refund liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Net cash used in investing activities	2020 $ 1,867,333 277,583 6,393 1,869 9,101 (78,714) 3,221 70,486 125,250 (449) (248) (200,444) (187,335) (10,524) (516,087) (4,320) (1,345) 37,386 74,647 101,769 343 211 (1,988 ) 1,574,138 78,898 (8,651) (301,389 ) 1,342,996 (84,553) 54,685 (5,577,389) 5,257,442 (368,531) 4,493 (2,143) (133,617) - (225 ) (849,838 )	2019 $ 1,513,687 264,576 8,800 3,663 5,060 (63,610) 4,700 52,777 24,000 - (2,810) (15,056) 39,448 (504) 94,610 48,620 (3,457) (87,785) (14,132) (31,375) (39) 930 (9,119 ) 1,832,984 52,577 (5,177) (233,686 ) 1,646,698 (55,029) - (7,815,959) 7,097,561 (274,891) 11,571 (18,861) - 56,442 (5,455 ) (1,004,621 ) (Continued)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Refund of guarantee deposits received Repayments of the principal portion of lease liabilities Cash dividends paid Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT THE END OF YEAR	2020 $ 1,838,328 (1,438,337) 347,000 - (1,412) (14,013) (538,073 ) 193,493 44,103 730,754 1,774,594 $ 2,505,348	2019 $ 314,302 (235,000) - (150,000) (737) (24,125) (486,828 ) (582,388 ) (117,998 ) (58,309) 1,832,903 $ 1,774,594

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

(Concluded)

Attachment 5

Thinking Electronic Industrial Co., Ltd. Cross reference table for amendments to Articles of Incorporation

Provisions under amendment	Currentprovisions	Remarks:
Article 7: The Company may issue shares exempted from the requirements about printing of share certificates, but shall register the shares with the centralized securities depository institutions.The Company printing of share certificates, if any, shall be governed by the Company Act and other related laws of the R.O.C..	Article 7: The Company issues its shares to registered owners only. Share certificates are issued with the signatures or authorized seals of at least three directors, together with the Company's stamp, subject to certification pursuant to by the laws. The Company may issue shares exempted from the requirements about printing of share certificates, but shall register the shares with the centralized securities depository institutions.	Amended in response to laws and best-practice principles.
Article 21: The Articles were enacted on June 22, 1979. 1st amendments hereto were made on October 29, 1980. 2nd amendments hereto were made on December 6, 1985. 3rd amendments hereto were made on July 31, 1987. 4th amendments hereto were made on January 28, 1988. 5th amendments hereto were made on July 6, 1988. 6th amendments hereto were made on May 12, 1989. 7th amendments hereto were made on December 14, 1989. 8th amendments hereto were made on January 5, 1994. 9th amendments hereto were made on February 19, 1994. 10th amendments hereto were made on September 30, 1994. 11th amendments hereto were	Article 21: The Articles were enacted on June 22, 1979. 1st amendments hereto were made on October 29, 1980. 2nd amendments hereto were made on December 6, 1985. 3rd amendments hereto were made on July 31, 1987. 4th amendments hereto were made on January 28, 1988. 5th amendments hereto were made on July 6, 1988. 6th amendments hereto were made on May 12, 1989. 7th amendments hereto were made on December 14, 1989. 8th amendments hereto were made on January 5, 1994. 9th amendments hereto were made on February 19, 1994. 10th amendments hereto were made on September 30, 1994. 11th amendments hereto were	Addition of the date of latest amendments

Remarks:

Provisions under amendment

made on November 1, 1994. 12th amendments hereto were made on April 15, 1996. 13th amendments hereto were made on December 17, 1996. 14th amendments hereto were made on April 10, 1997. 15th amendments hereto were made on November 22, 1997. 16th amendments hereto were made on March 14, 1998. 17th amendments hereto were made on January 23, 1999. 18th amendments hereto were made on April 12, 1999. 19th amendments hereto were made on June 19, 2000. 20th amendments hereto were made on June 12, 2001. 21st amendments hereto were made on June 12, 2002. 22nd amendments hereto were made on June 12, 2002. 23rd amendments hereto were made on June 16, 2005. 24th amendments hereto were made on June 14, 2006. 25th amendments hereto were made on June 25, 2008. 26th amendments hereto were made on June 10, 2009. 27th amendments hereto were made on June 17, 2010. 28th amendments hereto were made on June 19, 2012. 29th amendments hereto were made on June 17, 2013. 30th amendments hereto were made on June 17, 2016. 31st amendments hereto were made on June 20, 2017. 32nd amendments hereto were made on June 22, 2018. 33rd amendments hereto were made on June 15, 2020. 34th amendments hereto were made on June 25, 2021.

Current provisions

Thinking Electronic Industrial Co., Ltd. Articles of Incorporation

Appendix 1 Chapter One. General Provisions

2020.06.15Amendment

Article 1: The Company has been duly incorporated in accordance with the Company Act and

named “ 興勤電子工業股份有限公司 ”, and “THINKING ELECTRONIC INDUSTRIAL CO., LTD” in English.

Article 2: The Company’s business lines are stated as follows:
(1) C901010 Ceramic and Ceramic Products Manufacturing
(2) CB01010 Machinery and Equipment Manufacturing.
(3) CC01020 Electric Wires and Cables Manufacturing
(4) CC01030 Electrical Appliances and Audiovisual Electronic Products Manufacturing
(5) CC01080 Electronic Parts and Components Manufacturing.
(6) CC01110 Computer and Peripheral Equipment Manufacturing
(7) CC01990 Other Electrical Engineering and Electronic Machinery Equipment Manufacturing
(8) CD01030 Motor Vehicles and Parts Manufacturing
(9) CE01010 General Instrument Manufacturing
(10) F401010 International Trade
(11) ZZ99999 All business items that are not prohibited or restricted by law, except
those subject to special approval.
Article 2-1: It necessary, the Company may make endorsements/guarantees for others. The
operating procedure thereof shall follow the Company's regulations governing making of endorsements/guarantees for others.
Article 2-2: If necessary, the Company may invest in other enterprises upon resolution by the Board of Directors. The total amount of investment made by the Company may be more than 40% of the Company’s paid-in capital, free from the restriction on investment referred to in Article 13 of the Company Act.
Article 3: The Company’s head office is situated in Kaohsiung City. The Company may establish factories or branches domestically or overseas under the resolution of the Board of Directors, where necessary.
Article 4: The Company’s announcements shall be made in accordance with Article 28 of the Company Act.

Chapter Two. Shares

Article 5: The Company’s authorized capital amounts to NT$2 billion, divided into 200 million shares at NT$10 per share. The Board of Directors is authorized to have unissued shares

issued at different time.

Article 6: The Company's shareholders service shall be processed according to related laws and the competent authority's requirements.
Article 7: The Company issues its shares to registered owners only. Share certificates are issued with the signatures or authorized seals of at least three directors, together with the Company's stamp, subject to certification pursuant to laws.
The Company may issue shares exempted from the requirements about printing of share certificates, but shall register the shares with the centralized securities depository institutions.
Article 8: The transfer of shares shall be suspended within 60 days before an annual meeting of shareholders, within 30 days before a special shareholders’ meeting, or within 5 days before the date of the Company’s decision made to distribute dividends and bonuses or other profits.

Chapter Three. Shareholders’ Meetings

Article 9: The shareholders’ meetings consist of annual meetings of shareholders, which shall be convened once per year within 6 months at the end of each fiscal year and notified by the Board of Directors to each shareholder within 30 days before the meeting, and the special shareholders’ meetings, which shall be convened pursuant to laws whenever necessary and notified to each shareholder in writing within 15 days before the meeting.
Article 9-1: If a shareholders' meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of Board. When the Chairman is on leave or for any reason unable to exercise the powers of the Chairman, the Chairman shall appoint one of the directors to act as chairperson. Where the Chairman does not make such a designation, the directors shall select from among themselves one person to serve as chairperson.
Article 10: Any shareholder who is unable to attend a shareholders’ meeting in person may appoint a proxy by presenting a power of attorney printed by the Company indicating the scope of authorization, in accordance with the Company Act, and the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” promulgated by the competent authority, and related laws & regulations.
Article 11: A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act.
Article 11-1: When the Company convenes a shareholders’ meeting, shareholders may exercise

their voting rights in writing or by electronic means.

A shareholder exercising voting rights in writing or by electronic means will be deemed to have attended the meeting in person. However, they are considered to have waived their rights to participate in any extemporary motions or amendments to the original motion that may arise during the shareholders' meeting. The matters related to such exercise shall be governed by the existing laws.

Article 12: Resolutions at a shareholders' meeting shall, unless otherwise provided for in the Company Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares, at the meeting.
Article 12-1: Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairperson and distributed to all shareholders of the Company within twenty (20) days after the meeting. Distribution of the meeting minutes may be done by public notice. The minutes of a shareholders' meeting shall record the date and place of the meeting, the name of the chairperson, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the Company. The attendance list bearing the signatures of shareholders present at the meeting and the powers of attorney of the proxies shall be kept by the Company for a minimum period of at least one year.

Chapter Four. Directors

Article 13: The Company shall appoint 7~9 directors for a term of office for 3 years via the candidate nomination system. They shall be elected by the shareholders’ meeting from the list of candidates for directors and may be reelected for a second term of office. The Board of Directors is authorized to decide said number of directors (7~9 directors).
Of all directors referred to in the preceding paragraph, there shall be at least 2 independent directors who shall be no less than one-fifths of the whole directors. The total nominal shares to be held by the whole directors shall be subject to the percentage referred to in the “Rules and Review Procedures for Director Share Ownership Ratio at Public Companies”.
Article 13-1: If the Board loses more than one-thirds of its directors, the Board of Directors shall
convene a special shareholders’ meeting within 60 days to elect new directors for the shortfall to serve the remaining term of office.
Article 13-2: The Company shall establish the Audit Committee in accordance with Article 14-4

of the Securities and Exchange Act. The Audit Committee shall be composed of the entire number of independent directors. The Audit Committee or its members are responsible for exercising the powers granted to supervisors according to the Company Act, Securities and Exchange Act and other laws.

Article 14: The Board of Directors shall consist of all directors. A Chairman of Board shall be elected among and from the directors upon resolution adopted by a majority of the directors present at a meeting attended by more than two-thirds of the whole directors, in order to act on behalf of the Company externally.

Article 14-1: The Board of Directors shall perform the following functions:

Review and approval of the corporate policy and the development plan in the mid to long term.
Review and supervision of the execution of annual business plan.
Review and approval of budget and account settlement.
Review and approval of the capital increase/decrease plan.
Review and approval of the proposal for earnings distribution or covering of loss carried forward.
Authorization of essential contracts with external parties.
Review and approval of the the Company's Memorandum and Articles of Association and important rules and regulations.
Review and approval of the establishment, reorganization, and revocation of branches.
Review and approval of major investment and capital spending plans.
Other matters required by the Company Act and related laws.

Article 15: In the absence of the Chairman or the Chairman is unable to perform its duties with

causes, the proxy shall act in accordance with Article 208 of the Company Act. Any director who is unable to attend a meeting in person may appoint another director to attend the meeting on behalf of him/her by personally presenting a power of attorney. Each director may appoint only one other director to act as his/her proxy at the meeting. If a Board meeting is convened by way video conference, those who participate in the meeting using video conferencing are considered to have attended the meeting in person.

Article 16: Remuneration to the Company’s directors for performance of job duties must be paid, irrelevant with profit or loss retained by the Company. The Board of Directors is authorized to determine the level of remuneration to directors based on their engagement in and contribution to the Company’s operations, and in reference to peer companies’ pay.
Article 16-1: The Company shall take out for directors the liability insurance with respect to liabilities resulting from exercising their duties pursuant to laws during their term of office.

Article 16-2: In calling a Board meeting, a notice specifying the cause of meeting shall be given to each director 7 days prior to the meeting. In the case of emergency, the meeting may be convened at any time.
The notice set forth in the preceding paragraph may be effected by means of electronic transmission, after obtaining a prior consent from the recipient(s) thereof.

Chapter Five. Managers

Article 17: The Company shall employ several managers. The appointment and dismissal thereof and remuneration to them shall be governed by Article 29 of the Company Act.

Chapter Six. Accounting

Article 18: The Board of Directors is responsible for preparing the following statements and reports at the end of each fiscal year. These statements and reports shall be submitted to the Audit Committee at least 30 days before an annual meeting of shareholders for approval and the Board of Directors for resolution, and presented during the annual meeting of shareholders for the final acknowledgment.
Business report
Financial statements
Motions for earnings distribution or covering of losses
Article 19: If the Company retains earnings at the end of the fiscal year, it is required to allocate 2% thereof as the remuneration to employees. The Board of Directors shall resolve to pay the remuneration in the form of stock or in cash. The recipients entitled to receive the remuneration include the employees of subsidiaries of the Company meeting certain specific requirements. The Company may allocate no more than 2% of said earnings as the remuneration to directors per resolution by the Board of Directors. The motion for distribution of remuneration to employees and directors shall be reported to a shareholders’ meeting.
However, when the Company still has accumulated losses, an amount equivalent to said losses shall be reserved to make up for the loss in advance. The remainder, if any, shall be allocated as the remuneration to
employees and directors on a pro rata basis as referred to in the preceding paragraph.
Article 19-1: Shall there be earnings after the annual settlement, the earnings shall offset the accumulated losses from the previous years, and pay all the taxes pursuant to laws, and 10% of the balance, if any, shall be provided as the legal reserve, unless the legal reserve reaches the total capital of the Company.

When the special reserve is provided or reversed based on laws, the remaining amount, if any, may be combined with the balance of the undistributed earnings, for the purpose of the Board of Directors’ proposal for the earnings distributions. It shall be submitted to a shareholders’ meeting for resolution about distribution of dividends and bonus.

The Company's dividend policy is defined in response to the current and future development plans and by taking into account the investment environment, capital needs, competition in domestic/overseas markets, as well as shareholders’ equity. The bonus to shareholders shall be allocated from the accumulated distributable earnings, which shall be no less than 30% of the distributable earnings for then year. The dividends to shareholders may be distributed in cash or in the form of stock. The cash dividend shall be no less than 20% of the total dividends.

Chapter Seven. Supplementary Clauses

Article 20: Any matters not covered herein shall be governed by the Company Act and other laws. Article 21: The Articles were enacted on June 22, 1979. 1st amendments hereto were made on

October 29, 1980. 2nd amendments hereto were made on December 6, 1985. 3rd amendments hereto were made on July 31, 1987. 4th amendments hereto were made on January 28, 1988. 5th amendments hereto were made on July 6, 1988. 6th amendments hereto were made on May 12, 1989. 7th amendments hereto were made on December 14, 1989. 8th amendments hereto were made on January 5, 1994. 9th amendments hereto were made on February 19, 1994. 10th amendments hereto were made on September 30, 1994. 11th amendments hereto were made on November 1, 1994. 12th amendments hereto were made on April 15, 1996. 13th amendments hereto were made on December 17, 1996. 14th amendments hereto were made on April 10, 1997. 15th amendments hereto were made on November 22, 1997. 16th amendments hereto were made on March 14, 1998. 17th amendments hereto were made on January 23, 1999. 18th amendments hereto were made on April 12, 1999. 19th amendments hereto were made on June 19, 2000. 20th amendments hereto were made on June 12, 2001. 21st amendments hereto were made on June 12, 2002. 22nd amendments hereto were made on June 12, 2002. 23rd amendments hereto were made on June 16, 2005. 24th amendments hereto were made on June 14, 2006. 25th amendments hereto were made on June 25, 2008. 26th amendments hereto were made on June 10, 2009. 27th amendments hereto were made on June 17, 2010. 28th amendments hereto were made on June 19, 2012. 29th amendments hereto were made on June 17, 2013. 30th

amendments hereto were made on June 17, 2016. 31st amendments hereto were made on June 20, 2017. 32nd amendments hereto were made on June 22, 2018. 33rd amendments hereto were made on June 15, 2020.

Thinking Electronic Industrial Co., Ltd. Chairman of Board: Sui Tai-Chung

Appendix 2

Thinking Electronic Industrial Co., Ltd. Rules of Procedure for Shareholders’ Meeting

2020.06.15 Amendment

Article 1: The shareholders’ meetings of the Company shall be governed by these Rules.

Article 2: The shareholders referred to herein shall mean the shareholders per se, institutional shareholders’ representatives, and proxies appointed by the shareholders to attend the meetings on behalf of them pursuant to laws.
Article 3: The present shareholders (or their proxies) shall wear the attendance certificate and hand in a sign-in card in lieu of signing in. The number of shares in attendance shall be calculated according to the shares indicated by said sign-in cards plus the number of shares whose voting rights are exercised by electronic means. Voting at a shareholders meeting shall be calculated based on the number of shares.
Article 4: When a shareholder attends a shareholders’ meeting in person or by proxy, the Company, whenever it deems necessary, may check the identity certificates that can afford to prove the personal identity.
Article 5: The shareholders’ meetings of the Company shall be held at the Company's location or any other locations that are suitable and convenient for shareholders to attend. Meetings must not commence anytime earlier than 9AM or later than 3PM.
Article 6: If a shareholders' meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of Board. When the Chairman is on leave or for any reason unable to exercise the powers of the Chairman, the Chairman shall appoint one of the directors to act as chairperson. Where the Chairman does not make such a designation, the directors shall select from among themselves one person to serve as chairperson.
Where any person other than the Board of Directors convenes a shareholders’ meeting, such person shall preside over the meeting.
Article 7: The Company may appoint its attorney-at-law, CPA, or related persons retained by it to attend a shareholders’ meeting.
Article 8: The minutes of a shareholders’ meeting shall be kept on record by voice recording or videotaping. Such minutes on record shall be retained for at least 1 year.
Article 9: The chairperson shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairperson may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. In the event that postponement has been made twice and the shareholders present

in the meeting cannot represent one-half but represent more than one-third of the total outstanding shares, Paragraph 1 of Article 175 of the Company Act shall be applicable whereby provisional resolution could be made.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chairperson may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article 174 of the Company Act.

Article 10: If a shareholders’ meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of a shareholders’ meeting. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene that is not the Board of Directors.

Before the parliamentary procedure is accomplished in accordance with the agenda (including extempore motions) as stated in the preceding two paragraphs, the chairperson cannot announce for the adjournment of the meeting unless with the resolution rendered by a shareholders’ meeting.

After the meeting is adjourned, shareholders cannot nominate another chairperson or seek another venue for the continuation of the meeting.

If the chairperson is found to have adjourned the meeting in violation of the parliamentary rules, the meeting may continue with a separate chairperson elected upon approval of a majority of the voting rights represented by the shareholders present at the meeting.

Article 11: Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number) and account name. The order in which shareholders speak will be set by the chairperson. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken.

In case the content of the speech delivered on the floor is irrelevant with the content in the speech memo, the latter shall prevail.

When a shareholder is having the floor, all other shareholders shall not interfere unless at the consent of the chairperson or the shareholder who is taking the floor. Any unrestrained action shall be discouraged by the chairperson.

Article 12. Shareholders cannot speak for more than twice, for 5 minutes each, on the same

motion without prior consent of the chairperson.

The chairperson shall prevent further speech of a particular shareholder who violates the aforementioned requirements or where the contents of the speech are irrelevant to the motion in point.

Article 13: Where a juristic person may be appointed as a proxy to attend a shareholders’ meeting, it may appoint only one representative to attend the meeting.

For institutional shareholders appointing two (2) or more representatives to a shareholder’s meeting, only one representative may express opinions on the same motion.

Article 14: After a present shareholder has spoken, the chairperson may respond in person or direct relevant personnel to respond.
Article 15: Any matters other than motions may be put under discussion or voting. When the chairperson is of the opinion that a motion has been discussed sufficiently to put it to a vote, the chairperson may announce the discussion closed and call for a vote. Where the chairperson announces that the closed discussion of any motion should be decided by ballot, ballots may be cast on several motions at the same time, but the motions shall be put to a vote separately.
Article 16: Resolutions at a shareholders' meeting shall, unless otherwise provided for in the Company Act and Articles of Incorporation, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares, at the meeting.
When there is an amendment or an alternative to a motion, the chairperson shall present the amended or alternative motion together with the original one and decide the order in which they will be put to a vote. If one of them is passed, the others shall be deemed vetoed and no further voting is necessary.
Article 17: A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act.
Article 18: The chairperson will appoint ballot examiners and ballot counters, provided that the ballot examiners credited shareholders. The results of the voting shall be announced and recorded on site at the meeting.
Article 19: The chairperson may call for a recess at appropriate times.
Article 20: The chairperson shall direct picketers (or security guards) to maintain the order of the shareholders’ meeting place. The picketers (or security guards) at the meeting place assisting with maintenance of order shall wear armbands marked “Marshal”.

Shareholders shall follow the command by the chairperson, picketers or security guards on maintenance of the order. When a shareholder obstructs the parliamentary procedure and defies the chairperson's correction, the chairperson, picketers or security guards may remove such shareholder from the meeting place.

Article 21: Any matters not covered herein shall be governed by the Company Act, Articles of Incorporation and other related laws & regulations.
Article 22: The Rules shall be enforced upon approval from a shareholders’ meeting. The same shall apply where the Rules are amended.

Appendix 3

Shares held by the whole directors:

According to Paragraph 2 of Article 26 of the Securities and Exchange Act, the minimum required shares to be held by the whole directors of the Company should be 10,000,000 shares.
The number of shares held by directors recorded in the roster of shareholders until the date of suspension of share transfer for the shareholders’ meeting (until April 27, 2021) is stated as following:

ollowing:
		April 27, 2021
Position	Name	Current shareholding
		Shares	Ratio of shareholding
Chairman	Representative of Boh Chin Investment Co., Ltd.: Sui Tai-Chung	27,178,247	21.21%
Director	Representative of Boh Chin Investment Co., Ltd.: Ho Yi-Sheng
Director	Chen Yen-Hui	63,443	0.05%
Director	Chang Shan-Hui	20,051	0.02%
Independent Director	Huang Cheng-Nan	0	0.00%
Independent Director	Chou, Chi-Wen	0	0.00%
Independent Director	Chen Hsiu-Yen	0	0.00%

Appendix 4 The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate

N/A, as no stock dividends were issued by the Company this year.

AI assistant

THINKING — AGM Information 2021

52076_rns_2021-07-29_58cc6636-c83f-463e-9e7d-c068ac219b81.pdf

興勤電子工業股份有限公司

Annual Meeting of Shareholders 2021 Handbook

Table of Contents

Attachments

Appendix

Thinking Electronic Industrial Co., Ltd.

Procedure for the 2021 Annual Meeting of Shareholders

Management Presentation (Company Reports)

Proposals

Thinking Electronic Industrial Co., Ltd.

Earnings Distribution Table 2020

Notes:

Discussion

Questions and Motions

I.Business report:

(1) Results:

(3) Analysis on financial receipts and expenditures, and profitability:

(4) Research and development ：

II. Summary of 2021 business plan:

1.Production policy:

(1) Supply management:

Thinking Electronic Industrial Co., Ltd. Audit Committee’s Review Report

Attachment 2

Thinking Electronic Industrial Co., Ltd.

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of revenue from specific product

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

THINKING ELECTRONIC INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of revenue from specific product

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

THINKING ELECTRONIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Thinking Electronic Industrial Co., Ltd. Cross reference table for amendments to Articles of Incorporation

Thinking Electronic Industrial Co., Ltd. Articles of Incorporation

Appendix 1

Chapter One. General Provisions

Chapter Two. Shares

Chapter Three. Shareholders’ Meetings

Chapter Four. Directors

THINKING AGM Information 2021

`興勤電子工業股份有限公司`

(4) Research and development `：`