UNEEC — Interim / Quarterly Report 2021

Nov 10, 2021

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Stock Code:3013

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors’ Review Report For the Six Months Ended June 30, 2021 and 2020

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

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Table of contents

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

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KPMG

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

Independent Auditors’ Review Report

To the Board of Directors of CHENMING ELECTRONIC TECHNOLOGY CORP.:

Introduction

We have reviewed the accompanying consolidated balance sheets of CHENMING ELECTRONIC TECHNOLOGY CORP. (the "Company") and its subsidiaries (the "Group") as of June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and six months then ended, as well as the changes in equity and cash flows for the six months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting”, endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2021 and 2020, and of its consolidated financial performance for the three months and six months then ended, as well as its consolidated cash flows for the six months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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

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The engagement partners on the reviews resulting in this independent auditors’review report are Yi Wen Wang and Hsin Fu Yen.

KPMG

Taipei, Taiwan (Republic of China) August 11, 2021

Notes to Readers

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

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of June 30, 2021 and 2020

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

Consolidated Balance Sheet

June 30, 2021, December 31, 2020, and June 30, 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note (6)(a)) 1110 Current financial assets at fair value through profit o loss (note (6)(b)) 1170 Trade receivables, net (notes (6)(c) and (q)) 1310 Inventories, net (note (6)(d)) 1476 Other current financial assets 1479 Other current assets Non-current assets: 1600 Property, plant, and equipment (notes (6)(f) and (8)) 1755 Right-of-use assets (note (6)(g)) 1760 Investment property, net (notes (6)(h) and (8)) 1780 Intangible assets 1840 Deferred income tax assets 1980 Other non-current financial assets (note (8)) 1990 Other non-current assets Total assets	June 30, 2021 Amount ％ $ 244,612 5 r 1,575 - 1,362,794 28 1,230,046 25 - - 62,008 1 2,901,035 59 1,503,618 31 233,838 5 195,781 4 10,133 - 11,261 - 24,738 1 18,773 - 1,998,142 41 $ 4,899,177 100	December 31, 2020 Amount ％ 366,138 7 - - 1,735,973 35 966,616 20 22,738 - 63,485 2 3,154,950 64 1,315,813 27 238,573 5 196,399 4 2,653 - 3,021 - 26,598 - 26,032 - 1,809,089 36 4,964,039 100	June 30, 2020 Amount ％ 286,546 6 2,993 - 2,090,881 43 928,474 19 496 - 119,623 2 3,429,013 70 931,352 19 241,402 5 197,018 4 620 - 4,850 - 24,749 1 35,627 1 1,435,618 30 4,864,631 100 Liabilities and Equity Current liabilities: 2100 Short-term loans (note (6)(i)) 2130 Current contract liabilities (note (6)(q)) 2170 Trade payables 2200 Other payables 2216 Dividends payable (note (6)(o)) 2220 Other payables-related parties (notes (6)(e) and (7)) 2230 Current tax liabilities 2280 Current lease liabilities (note (6)(k)) 2300 Other current liabilities Non-current liabilities: 2540 Long-term loans (note (6)(j)) 2570 Deferred income tax liabilities 2580 Non-current lease liabilities (note (6)(k)) 2645 Guarantee deposits Total liabilities Equity attributable to owners of parent (note (6)(o)): 3100 Ordinary shares 3200 Capital surplus 3300 Retained earnings 3410 Exchange differences on translation of foreign financial statements Total equity attributable to owners of parent 36XX Non-controlling interests Total equity Total liabilities and equity	June 30, 2021		December 31, 2020		June 30, 2020 Amount % 440,000 9 915 - 1,267,669 26 281,463 6 46,781 1 - - 30,907 1 7,915 - 452 - 2,076,102 43 300,000 6 4,931 - 5,559 - 7,057 - 317,547 6 2,393,649 49 1,559,350 32 79,403 2 735,173 15 (105,189) (2) 2,268,737 47 202,245 4 2,470,982 51 4,864,631 100
				Amount %		Amount %
						296,960 6 615 - 1,260,274 25 274,570 6 - - 24,208 - 4,704 - 5,448 - 553 - 1,867,332 37 622,000 13 - - 6,297 - 8,054 - 636,351 13 2,503,683 50 1,559,350 31 131,819 3 737,192 15 (59,020) (1) 2,369,341 48 91,015 2 2,460,356 50 4,964,039 100

See accompanying notes to consolidated financial statements.

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

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

For the six months ended June 30, 2021 and 2020

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

4000 Operating revenue (note 6(q)) 5000 Operating costs (notes (6)(d), (m) and (12)) 5900 Gross profit from operations 6000 Operating expenses (notes (6)(m) and (12)): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6900 Net operating income (expenses) 7000 Non-operating income and expenses: 7050 Finance costs, net (note (6)(k)) 7100 Interest income 7110 Rent revenue (notes (6)(l) and (7)) 7190 Other income 7230 Foreign exchange gains (losses) (note (6)(s)) 7590 Other expense and losses 7900 Profit (Loss) from continuing operations before tax 7950 Less: Income tax (benefits) expenses (note (6)(n)) Profit (Loss) 8300 Other comprehensive income: 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Total components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss) 8500 Comprehensive income Profit (Loss) attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (expressed in NTD) (note (6)(p)): 9750 Basic earnings per share 9850 Diluted earnings per share	For the three m June	onths ended 30 2020 Amount ％ 1,630,728 100 1,456,711 89 174,017 11 32,322 2 45,520 3 13,072 1 90,914 6 83,103 5 (2,253) - 494 - 3,886 - 10,306 1 (6,695) (1) (2,037) - 3,701 - 86,804 5 31,044 2 55,760 3 (16,806) (1) - - (16,806) (1) (16,806) (1) 38,954 2 42,311 2 13,449 1 55,760 3 28,516 2 10,438 - 38,954 2 0.27 0.27	For the six m Jun	onths ended e 30
	2021 Amount ％ $ 1,089,515 100 1,048,064 96 41,451 4 28,397 3 46,830 4 14,060 1 89,287 8 (47,836) (4) (3,247) - 310 - 3,861 - 4,871 - (13,419) (1) (76) - (7,700) (1) (55,536) (5) (12,924) (1) (42,612) (4) (8,946) (1) - - (8,946) (1) (8,946) (1) $ (51,558) (5) $ (42,611) (4) (1) - $ (42,612) (4) $ (51,250) (5) (308) - $ (51,558) (5) $ (0.27) $ (0.27)		2021 Amount ％ 2,148,243 100 2,019,619 94 128,624 6 54,134 3 93,867 4 27,344 1 175,345 8 (46,721) (2) (6,318) - 641 - 7,768 - 5,494 - (1,313) - (90) - 6,182 - (40,539) (2) (10,832) (2) (29,707) - (17,527) (1) - - (17,527) (1) (17,527) (1) (47,234) (1) (29,875) - 168 - (29,707) - (46,379) (2) (855) - (47,234) (2) (0.19) (0.19)	2020
				Amount ％ 2,991,576 100 2,718,835 91 272,741 9 61,075 2 90,430 3 25,284 1 176,789 6 95,952 3 (5,210) - 945 - 7,777 - 11,260 - 16,591 1 (7,740) - 23,623 1 119,575 4 41,456 1 78,119 3 (29,235) (1) - - (29,235) (1) (29,235) (1) 48,884 2 60,167 2 17,952 1 78,119 3 36,187 1 12,697 1 48,884 2 0.38
				0.38

See accompanying notes to consolidated financial statements.

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

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity For the six months ended June 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Attributable to owners of parent

Balance on January 1, 2020 Legal reserve Special reserve Cash dividends on ordinary shares Profit for the six months ended June 30, 2020 Other comprehensive income for the six months ended June 30, 2020 Total comprehensive income for the six months ended June 30, 2020 Purchase of treasury shares Retirement of treasury shares Balance on June 30, 2020 Balance on January 1,2021 Profit (Loss) for the six months ended June 30, 2021 Other comprehensive income for the six months ended June 30, 2021 Total comprehensive income for the six months ended June 30, 2021 Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in non-controlling interests Balance on June 30, 2021	Ordinary shares		Capital surplus				Retaine	d	earnings				Other component of equity		Treasury stock		Total equity attributable to owners of parent	Non-controlling interests	Non-controlling interests	Total equity
													Exchange differences on translation of foreign financial statements
					Legal reserve		Special reserve		Unappropriated retained earnings		Total retained earnings
	$ 1,629,350 - - - - - - - (70,000) $ 1,559,350 $ 1,559,350 - - - - - $ 1,559,350		82,967		284,492		45,219		407,034		736,745		(81,209) - - - - (23,980) (23,980) - - (105,189) (59,020) - (16,504) (16,504) - - (75,524)		(49,810) - - - - - - (38,712) 88,522 - - - - - - - -		2,318,043		189,548 - - - 17,952 (5,255) 12,697 - - 202,245 91,015 168 (1,023) (855) - (90,160) -	2,507,591
			- - - - -		13,290 - - - -		- 35,990 - - -													- - (46,781) 78,119 (29,235)
			-		-		-													48,884
					- -		- -													(38,712) -
					297,782		81,209													2,470,982
					297,782		81,209													2,460,356
					- -		- -													(29,707) (17,527)
					-		-													(47,234)
					- -		- -													41,744 (90,160)
					297,782		81,209													2,364,706

See accompanying notes to consolidated financial statements.

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

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the six months ended June 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (Loss) before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit losses (gains) Net losses (gains) on financial assets or liabilities at fair value through profit or loss Interest expenses Interest income Losses on disposal of property, plant and equipment, net Other Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease (increase) in financial assets at fair value through profit or loss Decrease (increase) in trade receivables Decrease (increase) in inventories Decrease (increase) in other current assets Decrease (increase) in other financial assets Increase (decrease) in contract liabilities Increase (decrease) in trade payables Increase (decrease) in other payables and other current liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from (used in) operations Interest received Income taxes refund (paid) Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of property, plant, and equipment Decrease (increase) in prepayment for business facilities Decrease (increase) in refundable deposits Acquisition of intangible assets Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase (decrease) in short-term loans Increase (decrease) in long-term loans Increase (decrease) in guarantee deposits Payment of lease liabilities Payments to acquire treasury shares Interest paid Acquisition of non-controlling interests Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

For the six months ended June 30 2021 2020 $ (40,539) 119,575 114,599 111,588 2,719 752 219 965 (75) 7 6,318 5,210 (641) (945) 4,681 7,634 - 118 127,820 125,329 (1,500) (3,000) 365,907 (58,187) (269,127) 38,642 1,476 (44,677) - 247 362 (306) (25,189) (101,060) (39,319) (25,961) 32,610 (194,302) 160,430 (68,973) 119,891 50,602 641 945 20,495 (39,357) 141,027 12,190 (298,444) (20,640) (13,410) (12,810) 1,860 (327) (10,234) - (320,228) (33,777) 44,585 50,000 74,000 (6,000) (476) (634) (5,851) (7,069) - (38,712) (6,256) (5,280) (39,192) (25,783) 66,810 (33,478) (9,135) (7,000) (121,526) (62,065) 366,138 348,611 $ 244,612 286,546

2021 $ (40,539) 114,599 2,719 219 (75) 6,318 (641) 4,681 - 127,820 (1,500) 365,907 (269,127) 1,476 - 362 (25,189) (39,319) 32,610 160,430 119,891 641 20,495 141,027 (298,444) (13,410) 1,860 (10,234) (320,228) 44,585 74,000 (476) (5,851) - (6,256) (39,192) 66,810 (9,135) (121,526) 366,138 $ 244,612

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of June 30, 2021 and 2020

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share Information and Unless Otherwise Specified)

(1) Company history

CHENMING ELECTRONIC TECHNOLOGY CORP. (the “Company”) was incorporated on June 1976 and the Company's common shares were listed on the Taiwan Stock Exchange (TWSE) on September 16, 2002. The business activities of the Group are the production of computer cases, and the manufacturing and development of mobile devices.

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

These consolidated financial statements for the six months ended June 30, 2021 and 2020 were authorized for issuance by the Board of Directors on August 11, 2021.

(3) New standards, amendments and interpretations adopted:

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

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

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• －

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”

• ●Amendments to IFRS 16 “COVID 19 Related Rent Concessions beyond June 30, 2021”

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

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

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• ●Amendments to IAS 37 “Onerous Contracts—Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

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CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

Content of amendment Effective date per IASB The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. January 1, 2023 The amendments narrowed the scope of the recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. January 1, 2023

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

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

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

(Continued)

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CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies

• (a) Statement of compliance

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

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

• (b) Basis of consolidation

List of subsidiaries in the consolidated financial statements.

Name of investor	Name of subsidiary	Principal activity		Shareholding	June 30, 2020 Description
			June 30, 2021 % 100 % 100 % 100 % 100 % 100 % 100	December 31, 2020 % 100 % 100 % 100 % 100 % 100 % 92
The Company The Company TOP CITY INTERNATIONAL LIMITED TOP CITY INTERNATIONAL LIMITED GERSHWIN INTERNATIONAL LIMITED PEAK SHREWD INC.	TOP CITY INTERNATIONAL LIMITED CHENMING ELECTRONIC TECHNOLOGY USA, Inc. PEAK SHREWD INC. GERSHWIN INTERNATIONAL LIMITED Dongguan Chenming Electronic Co., Ltd CHENMING ELECTRONIC (NINGBO) CO., LTD	Investment Import and export business of computer case Investment Investment Computer case and production of relative components Computer case and production of relative components			% 100 % 100 % 100 % 100 % 100 % 82 Note 1

Note 1: The Group acquired 10% interest of CHENMING ELECTRONIC (NINBO) CO., LTD in August 2020, resulting in its ratio of shareholding to increase from 82% to 92%. The Group acquired 8% interest of CHENMING ELECTRONIC (NINBO) CO., LTD in April 2021, resulting in its ratio of shareholding to increase from 92% to 100%

(c) Employee benefits

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

(Continued)

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CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Income taxes

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

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

For a change in tax rate that is substantively enacted in an interim period, the effect of the change should immediately be recognized in the interim period in which the change occurs.

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

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

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

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

(6) Explanation of significant accounts

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

(a) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits	June 30, 2021 $ 572 231,113 12,927 $ 244,612	December 31, 2020 416 365,722 - 366,138	June 30, 2020
			50 286,496 -
			286,546

Please refer to note(6)(s) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

(Continued)

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CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Beneficiary certificate-Funds	June 30, 2021 $ 1,575	December 31, 2020 -	June 30, 2020
			2,993

(c) Trade receivables

Trade receivables Less: Loss allowance Trade receivables, net	June 30, 2021 $ 1,363,698 (904) $ 1,362,794	December 31, 2020 1,736,665 (692) 1,735,973	June 30, 2020 2,092,333 (1,452) 2,090,881

The Group applies the simplified approach to provide for its expected credit losses, i.e., the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision was determined as follows:

Current 1 to 30 days past due 31 to 150 days past due Current 1 to 30 days past due 31 to 150 days past due		June 30, 2021
	Gross carrying amount Weighted- average expected credit loss rate $ 1,330,555 0.02% 11,346 0.18% 21,797 2.96% $ 1,363,698 December 31, 2020		Allowance lifetime expected credit loss
			239 20 645
			904
		Weighted- average expected credit loss rate 0.04% 0.18% 4.60%	Allowance lifetime expected credit loss
			615 3 74
			692

(Continued)

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CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Current 1 to 30 days past due 31 to 150 days past due		June 30, 2020
	Gross carrying amount $ 2,064,433 14,524 13,376 $ 2,092,333	Weighted- average expected credit loss rate 0.06% 0.13% 1.02%	Allowance lifetime expected credit loss
			1,296 19 137
			1,452

The movements in the allowance for trade receivables were as follows:

Balance on January 1 Impairment losses recognized (reversed) Foreign exchange gains / (losses) Balance on June 30	For the six months ended June 30, 2021 2020 $ 692 513 219 965 (7) (26) $ 904 1,452
	2021 $ 692 219 (7) $ 904

As of June 30, 2021, December 31, 2020, and June 30, 2020, the Group did not pledge any receivables as collaterals.

(d) Inventories

Raw materials Work in progress Finished goods and merchandise inventories	June 30, 2021 $ 303,719 272,204 654,123 $ 1,230,046	December 31, 2020 236,860 191,097 538,659 966,616	June 30, 2020
			284,923 232,157 411,394
			928,474

(Continued)

14

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’s composition details of operating cost for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 were as follows:

Cost of goods sold Revenue from sale of scraps Inventories valuation and obsolescence losses (gain from price recovery of inventory) Loss on scrapping of inventories Shortage of inventories	For the three months ended June 30, 2021 2020 $ 1,031,810 1,426,507 (11,891) (17,151) 4,578 15,837 23,546 31,518 21 - $ 1,048,064 1,456,711		For the six months ended June 30, 2021 2020 1,994,574 2,673,456 (21,952) (29,947) 3,715 13,565 43,261 61,761 21 - 2,019,619 2,718,835
	2021 $ 1,031,810 (11,891) 4,578 23,546 21 $ 1,048,064		2021 1,994,574 (21,952) 3,715 43,261 21 2,019,619

The write-down of the inventories to net realizable value amounted to $4,578, $15,837, $3,715 and $13,565 for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, respectively. The write-downs are included in operating costs.

As of June 30, 2021, December 31, 2020, and June 30, 2020, the Group did not pledge any inventories as collaterals.

(e) Changes in a parent's ownership interest in a subsidiary

To increase all shareholders' equity and enhance the corporate governance, the Group decided on August 5, 2020, to purchase 10% shares of CHENMING ELECTRONIC (NINGBO) CO., LTD. amounting to $60,260 (US$2,050 thousand) from CHENMING (H.K.) CORPORATION LIMITED, through its subsidiary PEAK SHREWD INC., a fully owned subsidiary of the Group. The contract was signed, and the related transfer procedures had been completed in August 2020. The Group increased its shares in CHENMING ELECTRONIC (NINGBO) CO., LTD from 82% to 92%. As of December 31, 2020, the remaining unpaid balance of $24,208 was recognized as other payablerelated parties. As of June 30, 2021, the Group has already made its payment.

The Group decided on March 17, 2021, to purchase 8% shares of CHENMING ELECTRONIC (NINGBO) CO., LTD. amounting to $48,416 (US$1,700 thousand) from CHENMING (H.K.) CORPORATION LIMITED, through its subsidiary PEAK SHREWD INC., a fully owned subsidiary of the Group. The contract was signed in March 2021, and the related transfer procedures had been completed in April 2021. The Group increased its shares in CHENMING ELECTRONIC (NINGBO) CO., LTD from 92% to 100%. As of June 30, 2021, the remaining unpaid balance of $33,432 was recognized as other payable-related parties. For the related information, please refer to note(7)(b) for details.

(Continued)

15

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Property, plant, and equipment

The cost and accumulated depreciation of the property, plant, and equipment of the Group for the six months ended June 30, 2021 and 2020 were as follows:

Cost: Balance on January 1, 2021 Additions Disposals Reclassifications Effect of changes in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Additions Disposals Reclassifications Effect of changes in exchange rates Balance on June 30, 2020 Depreciation: Balance on January 1, 2021 Depreciation Disposals Effect of changes in exchange rates Balance on June 30, 2021 Balance on January 1, 2020 Depreciation Disposals Effect of changes in exchange rates Balance on June 30, 2020 Book value: Balance on January 1, 2021 Balance on June 30, 2021 Balance on June 30, 2020	Land $ 613,714 3,955 - 11,524 - $ 629,193 $ 210,897 - - - - $ 210,897 $ - - - - $ - $ - - - - $ - $ 613,714 $ 629,193 $ 210,897	Properties 778,789 - - - (2,905) 775,884 776,469 - - - (4,871) 771,598 294,901 14,012 - (1,039) 307,874 260,358 17,037 - (1,369) 276,026 483,888 468,010 495,572	Machinery and equipment 408,568 13,377 - 10,796 (2,587) 430,154 512,811 48,592 (112,287) 20,496 (4,637) 464,975 206,220 60,320 - (1,461) 265,079 291,065 73,977 (105,868) (2,383) 256,791 202,348 165,075 208,184	Office equipment and others 30,770 21,285 - 918 (194) 52,779 92,048 6,050 (45,467) 290 (232) 52,689 14,907 5,575 - (80) 20,402 70,880 9,483 (44,252) (121) 35,990 15,863 32,377 16,699	Molds - 236,143 (5,375) - (785) 229,983 - - - - - - - 21,808 (694) (94) 21,020 - - - - - - 208,963 -	Total 1,831,841 274,760 (5,375) 23,238 (6,471) 2,117,993 1,592,225 54,642 (157,754) 20,786 (9,740) 1,500,159 516,028 101,715 (694) (2,674) 614,375 622,303 100,497 (150,120) (3,873) 568,807 1,315,813 1,503,618 931,352

(Continued)

16

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group entered into two separate real estate agreements with SHIN DE KNITTING CORP. and SHIN TA MACHINERY CORP. on July 31, 2020 for the acquisition of a parcel of land for its plant, at the total price of NTD 410,000, based on the resolution approved during the board meeting held on June 24, 2020. The related transfer procedures had been completed on October 30, 2020.

As of June 30, 2021, December 31, 2020, and June 30, 2020 the Group had provided parts of the property, plant, and equipment as collaterals for its long-term loans and credit lines. Please refer to note (8) for details.

(g) Right-of-use assets

The Group leases many assets including land and properties, machinery, transportation and others. Information about leases for which the Group as a lessee was presented below:

Cost: Balance at January 1, 2021 Additions Effect of changes in exchange rates Balance at June 30, 2021 Balance at January 1, 2020 Additions Write-off Effect of changes in exchange rates Balance at June 30, 2020 Accumulated depreciation and impairment losses: Balance at January 1, 2021 Depreciation of the period Effect of changes in exchange rates Balance at June 30, 2021 Balance at January 1, 2020 Depreciation of the period Write-off Effect of changes in exchange rates Balance at June 30, 2020 Book value: Balance at January 1, 2021 Balance at June 30, 2021 Balance at June 30, 2020	Land $ 245,034 - (1,452) $ 243,582 $ 243,496 - - (2,435) $ 241,061 $ 19,529 4,869 (130) $ 24,268 $ 9,703 4,827 - (120) $ 14,410 $ 225,505 $ 219,314 $ 226,651	Properties 10,906 8,912 (243) 19,575 1,914 8,693 - (165) 10,442 9,412 4,454 (184) 13,682 1,914 2,897 - (88) 4,723 1,494 5,893 5,719	Transportation 18,085 - - 18,085 11,785 1,876 (844) - 12,817 7,603 2,603 - 10,206 3,608 2,409 (799) - 5,218 10,482 7,879 7,599	others 2,476 - - 2,476 2,476 - - - 2,476 1,384 340 - 1,724 703 340 - - 1,043 1,092 752 1,433	Total 276,501 8,912 (1,695) 283,718 259,671 10,569 (844) (2,600) 266,796 37,928 12,266 (314) 49,880 15,928 10,473 (799) (208) 25,394 238,573 233,838 241,402

(Continued)

17

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Investment property

The details of investment property of the Group were as follows:

Book value: Balance on January 1, 2021 Balance on June 30, 2021 Balance on June 30, 2020	Land $ 152,640 $ 152,640 $ 152,640	Properties 43,759 43,141 44,378	Total
			196,399
			195,781
			197,018

There were no material addition, disposal, impairment, or reversal situation of investment properties for the six months ended June 30, 2021 and 2020. Please refer to note (12) for details. For other related information, please refer to note(6)(g) of the 2020 consolidated financial statements.

There were no significant differences between the fair values of investment properties and that of those disclosed in the 2020 consolidated financial statements. Please refer to note (6)(g) of the 2020 consolidated financial statement.

Please refer to note (8) for information on investment properties pledged as collateral as of June 30, 2021, December 31, 2020, and June 30, 2020.

(i) Short-term loans

The short-term loans were summarized as follows:

Credit loans Secured loans Unused credit line for short-term loans Annual interest rates	June 30, 2021 $ - 341,545 $ 341,545 $ 1,154,358 0.5%~4.35%	December 31, 2020 - 296,960 296,960 860,992 0.5%~1.3%	June 30, 2020
			220,000 220,000
			440,000
			613,712
			1.0%~1.3%

(i) For information on interest rate and liquidity risk exposure, please refer to note (6)(s).

(ii) As of June 30, 2021, December 31, 2020, and June 30, 2020, the Group provided part of its assets as collateral for short-term loans, please refer to note (8) for details.

(Continued)

18

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Long-term loans

The long-term loans were summarized as follows:

Secured bank loans Unsecured bank loans Less: Current portion Total Unused long-term credit lines Range of interest rate	June 30, 2021 $ 696,000 - - $ 696,000 $ 706,000 1.0%~1.3%	December 31, 2020 622,000 - - 622,000 786,000 1.0%~1.5%	June 30, 2020
			300,000 - -
			300,000
			180,000
			1.0%~1.5%

• (i) The main management are the guarantor of long-term loans. Please refer to note (7).

• (ii) The information of interest rate and liquidity risk exposure can refer to note (6)(s).

(iii) The Group provided part of its assets as collaterals for long-term loans. Please refer to note (8) for details.

(k) Lease liabilities

June 30, 2021 Current $ 10,590 Non-current financial assets $ 4,158 For the maturity analysis, please refer to note (6)(s). The amounts recognized in profit or loss were as follows: For the three months ended June 30, 2021 2020 Interest on lease liabilities $ 179 161 Variable lease payments not included in the measurement of lease liabilities $ - 244 Expenses relating to short-term leases $ 126 133 Expense relating to leases of low- value assets, excluding short-term leases of low-value assets $ 46 28	December 31, 2020 June 30, 2020 5,448 7,915 6,297 5,559 For the six months ended June 30,	June 30, 2020
		7,915
		5,559
	2021 261 - 253 92	2020
		280
		722
		257
		66

(Continued)

19

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Total cash outflow for leases	For the six months ended June 30,	For the six months ended June 30,
	2021 $ 6,457	2020
		8,394

• (i) Real estate leases

The Group leases right-of-use of land, with lease terms of 40~45 years.

(ii) Other leases

The Group leases warehouses and other equipment, with contract terms of 1~3 years. These leases are short-term or leases of low-value items. The Group has applied the exemption and elected not to recognize right-of-use assets and lease liabilities for these leases.

(l) Operating lease

There were no significant changes in operating lease for the six months ended June 30, 2021 and 2020. Please refer to note (6)(k) of the consolidated financial statements for the year ended December 31, 2020 for other related information.

(m) Employee benefits

• (i) Defined benefit plans

Given there was no significant volatility of the market or any significant reimbursement, settlement, or other one-time event in the prior fiscal year. The consolidated financial statements shall be measured and disclosed in accordance with the actuarial report measured on December 31, 2019.

The Group settled the old labor pension plan of all of its employees on August 7, 2020, and fully refunded the entire planned assets of $26,384 from the Bureau of Labor Funds, Ministry of Labor.

The pension costs of the defined benefit plans were as follows:

Operating expense (income)	For the three months ended June 30, 2021 2020 $ - (64)	For the six months ended June 30, 2021 2020 - (128)
	2021 $ -	2021 -

(Continued)

20

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Group recognized its pension costs under the defined contribution plans which were as follows:

Operating expense	For the three months ended June 30, 2021 2020 $ 1,011 938	For the three months ended June 30, 2021 2020 $ 1,011 938	For the six months ended June 30,
		2021 1,011	2021 2020 1,985 1,896
	$

Other subsidiaries included in compilation of consolidated financial statements pay the basic endowment insurance expenses at a certain percentage according to the assessed employee wage amount. The recognized pension expenses were as follows:

Operating cost Operating expense	For the three months ended June 30,	For the three months ended June 30,		For the six months ended June 30,	For the six months ended June 30,
	2021 $ 19,163 1,951 $ 21,114	2020		2021 37,394 3,940 41,334	2020
		11,301 1,082			23,542 2,323
		12,383			25,865

(n) Income taxes

(i) The components of income tax for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 were as follows:

Current tax expense (benefit)	For the three months ended June 30, 2021 2020 $ (12,924) 31,044	For the six months ended June 30,
	2021 $ (12,924)	2021 2020 (10,832) 41,456

• (ii) There is no income tax recognized directly in other comprehensive expense (benefit).

• (iii) Assessment of tax

The Company’s tax returns for the years through 2019 were assessed by the Taipei National Tax Administration.

(Continued)

21

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Capital and other equity

Except for the following disclosure, there was no significant change in capital and other equity for the periods from January 1 to June 30, 2021 and 2020. For the related information, please refer to note (6)(n) of the consolidated financial statements for the year ended December 31, 2020.

(i) Capital surplus

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

Additional paid-in capital Difference arising from subsidiary's share price and its carrying value	June 30, 2021 $ 10,551 163,012 $ 173,563	December 31, 2020 10,551 121,268 131,819	June 30, 2020
			10,551 68,852
			79,403

(ii) Retained Earnings

The Company’ s articles of incorporation stipulate that 10% of annual net income after covering the accumulated deficit, if any, must be set up as a legal reserve. The remaining balance after special reserves, that are appropriated in accordance with FSC regulations, if any, shall distribute to prior year’s un-distribution by the board of shareholders. The Group should consider financial, business, and operating factors to decide the distribution of earnings, which can be distributed by cash dividends or share dividends. Earning distribution sets cash dividends as priority, which cannot be lower than 10% of the total cash and stock dividends.

(iii) Earnings Distribution

The appropriations of earnings for the year of 2020 approved in the shareholders' meeting on July 30, 2021 and the appropriations of earnings for the year of 2019 approved in the shareholders’ meeting on June 12, 2020 were both $46,781 by cash dividends. Cash dividends have been recognized as dividends payable after the resolution of the shareholders’ meeting on July 30, 2021.

(iv) Treasury shares

As of June 30, 2021, the Group has no treasury shares. For the six months ended June 30, 2020, in accordance with the requirements under section 28(2) of the Securities and Exchange Act, the Company repurchased 3,500 thousand shares as treasury shares in order to protect the Company’ s integrity and shareholders’ equity. All treasury shares repurchased had be cancelled in 2020.

(Continued)

22

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Movements of treasury share were as follows:

Balance on January, 1 Repurchase Retirement Balance on June 30	For the six months ended June 30, 2020 Share (thousands) Amount 3,500 $ 49,810 3,500 38,712 (7,000) (88,522) - $ -

In accordance with Securities and Exchange Act requirements as stated above, the number of shares repurchased should not exceed 10 percent of all shares outstanding. Also, the value of the repurchased shares should not exceed the sum of the Company’s retained earnings, share premium, and realized capital reserves.

In accordance with the requirements of the Securities and Exchange Act, treasury shares held by the Company should not be pledged, and should not hold any shareholder rights before their transfer.

(p) Earnings per share

For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the Company's earnings per share was calculated as follows:

Basic earnings per share: Profit attributable to ordinary shareholders of the Company Weighted-average number of ordinary shares (share in thousands) Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (after adjusted the influence of potential ordinary shares)	For the three months ended June 30, 2021 2020 $ (42,611) 42,311 155,935 155,935 $ (0.27) 0.27 $ (42,611) 42,311	For the six months ended June 30,	For the six months ended June 30,
	2021 $ (42,611) 155,935 $ (0.27) $ (42,611)	2021 (29,875) 155,935 (0.19) (29,875)	2020
			60,167
			157,494
			0.38
			60,167

(Continued)

23

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Weighted-average number of ordinary shares with potential influence of ordinary shares Weighted-average number of ordinary shares Effect of employee stock remuneration (share in thousands) Weighted-average number of ordinary shares (after adjusted the influence of potential ordinary shares)	For the three months ended June 30, 2021 2020 155,935 155,935 - 112 155,935 156,047 $ (0.27) 0.27	For the six months ended June 30,	For the six months ended June 30,
		2021 155,935 86 156,021 (0.19)	2020
			157,494 283
			157,777
			0.38

(q) Revenue from contracts with customers

• (i) Disaggregation of revenue

Primary geographical markets Taiwan China USA Japan Other Major products PC and server chassis Mobile device components Mold	For the three months ended June 30, 2021 2020 $ 202,120 352,639 584,967 1,005,518 214,917 92,712 72,261 134,399 15,250 45,460 $ 1,089,515 1,630,728 $ 825,322 1,264,493 172,986 194,164 91,207 172,071 $ 1,089,515 1,630,728	For the six months ended June 30,	For the six months ended June 30,
	2021 $ 202,120 584,967 214,917 72,261 15,250 $ 1,089,515 $ 825,322 172,986 91,207 $ 1,089,515	2021 399,100 1,096,785 416,944 190,231 45,183 2,148,243 1,579,950 405,017 163,276 2,148,243	2020
			655,670 1,650,734 185,122 387,231 112,819
			2,991,576
			2,329,924 349,167 312,485
			2,991,576

(Continued)

24

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Contract balances

Trade receivables Less: Loss allowance Contract liabilities	June 30, 2021 $ 1,363,698 (904) $ 1,362,794 $ 977	December 31, 2020 1,736,665 (692) 1,735,973 615	June 30, 2020 2,092,333 (1,452) 2,090,881 915

The amount of revenue recognized for the six months ended June 30, 2021 and 2020 that were included in the contract liability balance at the beginning of the period were $615 and $1,215, respectively.

The major change in the balance of contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(r) Remunerations to employees, directors and supervisors

The Company’s articles of incorporation require that earnings shall first be used to offset against any deficit, and no less than 2% will be distributed as employee remuneration and a maximum of 2% will be allocated as directors’ and supervisors’ remuneration. Employees who are entitled to receive the above-mentioned employee remuneration, in shares or cash, include the employees of the subsidiaries of the Group who meet certain specific requirements.

The Group’s remuneration to employees were $0, $450, $0 and $1,450; and the remuneration to directors and supervisors was $0, $375, $0 and $750 for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020. These amounts were calculated using the Company’s net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company’s proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholders’ meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. Shares distributed to employees as employee remuneration were calculated based on the closing price of the Company’s shares on the day before the approval from the Board of Directors. For the six months ended June 30, 2021, a net loss after tax has occurred, so there is no need to estimate employees and directors remuneration.

The remuneration to employees was $3,000 and $5,000, respectively; and the remuneration to directors and supervisors were both $1,500 in 2020 and 2019, respectively. The actual amount and the estimated amount, which was estimated in the financial statement on December 31, 2020, and December 31, 2019, had no difference. Related information would be available at the Market Observation Post System website.

(Continued)

25

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Financial Instruments

Except for the contention mentioned below, there was no significant change in the fair values of the Group's financial instruments and degree of exposure to credit risk, liquidity risk, and market risk arising from financial instruments. For the related information, please refer to note (6)(r) of the consolidated financial statements for the year ended December 31, 2020.

(i) Receivable securities

For the credit risk exposure of trade receivables, please refer to note (6)(c).

Other financial assets at amortized cost include cash and cash equivalents, other financial assets, and guarantee deposits, which are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low risk, please refer to note (4)(g).

(ii) Liquidity Risk

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

June 30, 2021 Secured loans Unsecured loans Trade payables Lease liabilities (including current and non-current) Other payables (including related parties) Guarantee deposits December 31, 2020 Secured loans Unsecured loans Trade payables Lease liabilities (including current and non-current) Other payables (including related parties) Guarantee deposits	Amount	Contractual cash flows (1,037,545) - (1,227,906) (15,083) (243,367) (7,578) (2,531,479) $ (918,960) - (1,260,274) (12,122) (298,778) (8,054) $ (2,498,188)	Within a year
	$ 1,037,545 - 1,227,906 14,748 243,367 7,578 $ 2,531,144 $ 918,960 - 1,260,274 11,745 298,778 8,054 $ 2,497,811

(Continued)

26

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

June 30, 2020 Secured loans Unsecured loans Trade payables Lease liabilities (including current and non-current) Other payables (including related parties) Guarantee deposits	Amount	Contractual cash flows (520,000) (220,000) (1,267,669) (13,474) (328,244) (7,057) (2,356,444)	Within a year
	$ 520,000 220,000 1,267,669 13,474 328,244 7,057 $ 2,356,444

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at a significantly different amount.

• (iii) Currency risk

• 1) Exposure to foreign currency risk

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

Financial assets Monetary items USD to NTD USD to CNY CNY to NTD Financial liabilities Monetary items USD to NTD USD to CNY CNY to NTD	J	une 30, 2021	TWD 677,499 419,042 363,649 126,011 15,351 717,785	Dec	ember 31, 202	0 TWD 753,495 773,830 501,048 151,571 39,815 883,633	J	une 30, 2020
	Foreign currency $ 24,318 15,041 84,393 4,523 551 166,578	Exchange rate 27.860 6.4601 4.309 27.860 6.4601 4.309		Foreign currency 26,457 27,171 114,473 5,322 1,398 201,881	Exchange rate 28.48 6.5249 4.377 28.48 6.5249 4.377		Foreign currency 27,942 30,030 143,545 4,191 2,644 200,616	Exchange rate TWD 29.630 827,921 7.0795 889,789 4.191 601,597 29.630 124,179 7.0795 78,342 4.191 840,782

• 2) Sensitivity analysis

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

(Continued)

27

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A weakening or strengthening 5% of each major foreign currency against Group entities’ functional currency as of June 30, 2021, would have affected the net profit before tax as follows:

USD (against the NTD) Strengthening5％ Weakening5％ USD (against the CNY) Strengthening5％ Weakening5％ CNY (against the NTD) Strengthening5％ Weakening5％	June 30, 2021 June 30, 2020 $ 27,574 35,187 (27,574) (35,187) 20,185 40,572 (20,185) (40,572) (17,707) (11,959) 17,707 11,959

• 3) Exchange gains and losses of monetary items

Foreign exchange profit or loss (including realized and unrealized) was as follows:

NTD CNY	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
	2021		2020 Exchange profit (loss) Average rate 7,643 - 2,107 4.2468
	Exchange profit (loss) $ 5,930 (1,667)	Average rate - 4.3447

(iv) Interest rate analysis

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Variable rate instruments: Financial assets Variable rate instruments: Financial assets Financial liabilities	Carrying amount
	June 30, 2021 June 30, 2020 $ 12,927 - $ 231,038 286,433 1,037,545 740,000

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

(Continued)

28

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

If the interest rate had increased or decreased by 0.25%, the net profit before tax would have decreased or increased by $1,008 and $567 for the six months ended June 30, 2021 and 2020, respectively, which would have mainly resulted from the bank savings and borrowings with variable interest rates.

• (v) Fair value

• 1) The kinds of financial instruments and fair value

The fair value of financial assets and liabilities at fair value through profit or loss, derivative financial instruments used for hedging, and available for sale financial assets, are measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy are stated below; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required.

Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss- Beneficiary certificate-Funds Financial assets measured at amortized cost Cash and cash equivalents Trade receivables, net Other financial assets Refundable deposits Financial liabilities measured at amortized cost Bank loans Trade payables Lease liabilities Other payables (including related parties) Guarantee deposits		June 30, 2021	June 30, 2021
	Book value	Fair Value
		Level 1 Level 2 1,575 - - - - - - - - - - - - - - - - - - -	Level 3 Total - 1,575 - - - - - - - - - - - - - - - - - -
	$ 1,575 244,612 1,362,794 - 24,738 1,632,144 $ 1,633,719 $ 1,037,545 1,227,906 14,748 243,367 7,578 $ 2,531,144

(Continued)

29

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets measured at amortized cost Cash and cash equivalents Trade receivables, net Other financial assets Refundable deposits Financial liabilities measured at amortized cost Bank loans Trade payables Lease liabilities Other payables (including related parties) Guarantee deposit Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss- Beneficiary certificate-Funds Financial assets measured at amortized cost Cash and cash equivalents Trade receivable, net Other financial assets Refundable deposits Financial liabilities measured at amortized cost Bank loans Trade payables Lease liabilities Other payables (including related parties) Guarantee deposits			December 31, 2020	December 31, 2020	December 31, 2020
	Book value			Fair Value
			Level 1 Level 2 Level 3 Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - June 30, 2020	Level 2
	$ 366,138 1,735,973 22,738 26,598 $ 2,151,447 $ 918,960 1,260,274 11,745 298,778 8,054 $ 2,497,811
	Book value		Fair Value
			Level 1 Level 2 2,993 - - - - - - - - - - - - - - - - - - -		Level 3 Total - 2,993 - - - - - - - - - - - - - - - - - -
	$ 2,993 286,546 2,090,881 496 24,749 2,402,672 $ 2,405,665 $ 740,000 1,267,669 13,474 328,244 7,057 $ 2,356,444

(Continued)

30

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Financial liability with amortized cost evaluation

Fair value measurement is based on the latest quoted price and agreed-upon price if these prices are available in an active market. When market value is unavailable, fair value of financial assets and liabilities are evaluated based on the discounted cash flow of the financial assets and liabilities.

• 3) Valuation techniques for financial instruments measured at fair value

Non-derivative financial instruments

Financial instruments traded in active markets are based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a basis to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If the Group can frequently acquire the financial instrument’s open quotation from either the stock exchange, brokers, underwriters, industrial trade union, or authorities, and the price is equal to that of fair market, then that financial instrument has active market value. On the other hand, if the condition above is not achieved, we define that instrument to have non-active market value. Generally, the significant difference between the bid-ask spread or the trading volume is very small, similar to the index of a nonactive market.

Except from the active market, the Group also acquires its financial instrument value from the valuation technique or reference to a rival’s quotation. The fair value through the valuation technique refers to other essentially prerequisite and similar financial instruments with current fair value, discount cash flow, and other valuation methods. The financial instruments from the non-active market are evaluated by the discount cash flow model, the main assumption is according to time value of money and investment risk to evaluate future cash flow.

(t) Financial risk management

There were no significant changes in the Group's financial risk management and policies as disclosed in note (6)(s) of the consolidated financial statements for the year ended December 31, 2020.

(Continued)

31

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Capital management

Management believes that the objectives, policies, and processes of the capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2020. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2020. Please refer to note (6)(t) of the consolidated financial statements for the year ended December 31, 2020 for further details.

• (v) Investing and financing activities not affecting current cash flow

Reconciliation of liabilities arising from financing activities for the six months ended June 30, 2021 and 2020 were as follows:

Long-term loans Short-term loans Lease liabilities Guarantee deposits Total liabilities from financing activities Long-term loans Short-term loans Lease liabilities Guarantee deposits Total liabilities from financing activities	January 1, 2021 $ 622,000 296,960 11,745 8,054 $ 938,759 January 1, 2020 $ 306,000 390,000 10,075 7,691 $ 713,766	Cash flows 74,000 44,585 (5,851) (476) 112,258 Cash flows (6,000) 50,000 (7,069) (634) 36,297	Non-cash flows Additions Write-off Foreign exchange movement - - - - - - 8,912 - (58) - - - 8,912 - (58) Non-cash flows Additions Write-off Foreign exchange movement - - - - - - 10,569 (45) (56) - - - 10,569 (45) (56)	Non-cash flows Additions Write-off Foreign exchange movement - - - - - - 8,912 - (58) - - - 8,912 - (58) Non-cash flows Additions Write-off Foreign exchange movement - - - - - - 10,569 (45) (56) - - - 10,569 (45) (56)	June 30, 2021
					696,000 341,545 14,748 7,578
					1,059,871
					June 30, 2020
			Additions - - 10,569 - 10,569	Write-off - - (45) - (45)
					300,000 440,000 13,474 7,057
					760,531

(7) Related-party transactions

(a) Names and relationships with related parties

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

Names of related parties CHENMING (H.K.) CORPORATION LIMITED UNEEC Culture and Education Foundation Lin, Mu-Ho

Relationships with the Group Same chairman with the Company Same chairman with the Company Chairman of the Company

(Continued)

32

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (b) Transaction among other relative parties

(i) Lease

The Group rents parts of its office and miscellaneous equipment to its related parties and collects monthly rental from them. The rental fee is determined based on nearby office rental rates. The rental revenue for the three months and six months ended June 30, 2021 and 2020 were $857, $857, $1,714, and $1,714, respectively.

• (ii) Equity trading

• On March 17, 2021, the Board of Directors decided to acquire 8% of shares of CHENMING ELECTRONIC (NINGBO) CO., LTD., which amounted to $48,416 (US$1,700) and increased its shares in CHENMING ELECTRONICS (NINGBO) CO., LTD from 92% to 100%. The contracts were signed, and the related transfer procedures had been completed. As of June 30, 2021, the remaining unpaid amount is $33,432.

To increase all shareholders' equity and enhance the corporate governance, the Company decided on August 5, 2020 to purchase 10% shares of CHENMING ELECTRONIC (NINGBO) CO., LTD amounting to $60,260 (US$2,050) from CHENMING (H.K.) CORPORATION LIMITED, through its subsidiary PEAK SHREWD INC., a fully owned subsidiary of the Group. The contracts were signed, and the related transfer procedures had been completed. The Group increased its shares in CHENMING ELECTRONIC (NINGBO) CO., LTD from 82% to 92%. As of December 31, 2020, the remaining unpaid balance of $24,208, which was recognized as other payables related parties; as of June 30, 2021, the Group has already made its payment. Please refer to note (6)(e) for related information.

• (c) Key management personnel compensation

• (i) Key management personnel compensation was comprised of:

Short-term employee benefits Post-employment benefits	For the three months ended June 30 2021 2020 $ 2,232 2,275 81 76 $ 2,313 2,351	For the six months ended June 30	For the six months ended June 30
	2021 $ 2,232 81 $ 2,313	2021 5,120 162 5,282	2020
			5,043 152
			5,195

(ii) Guarantee

The main management was the guarantor of the syndication contract, and the amounts of syndication were $717,545, $622,000 and $300,000, as of June 30, 2021, December 31, 2020, and June 30, 2020, respectively.

(Continued)

33

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(8) Pledged assets

The carrying values of pledged assets were as follows:

Assets	Subject	June 30, 2021 $ 750,621 127,648 20,535 $ 898,804	December 31, 2020 June 30, 2020 750,621 347,804 131,732 133,520 20,235 20,234 902,588 501,558
PPE and investment properties －land －properties Other financial asset －non-current	Short-term loans and long-term loans Short-term loans and long-term loans Customs deposits

(9) Commitments and contingencies: None.

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

(12) Other

• (a) The summary statement of current period employee benefits, depreciation, and amortization expenses by function was as follows:

By function By item	Three months ended June 30, 2021	Three months ended June 30, 2021	Three months ended June 30, 2021	Three months ended June 30, 2020	Three months ended June 30, 2020	Three months ended June 30, 2020
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	315,161 - 19,163 16,815 59,762 1,679	48,715 1,736 2,962 4,365 2,932 200	363,876 1,736 22,125 21,180 62,694 1,879	332,197 - 11,301 18,582 49,690 170	49,123 1,545 1,956 4,249 2,502 200	381,320 1,545 13,257 22,831 52,192 370
By function By item	Six months ended June 30, 2021			Six months ended June 30, 2020
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	626,622 - 37,394 32,698 108,199 2,320	96,656 3,351 5,925 9,864 5,782 399	723,278 3,351 43,319 42,562 113,981 2,719	641,040 - 23,542 32,424 106,029 344	95,849 3,104 4,091 6,962 4,941 408	736,889 3,104 27,633 39,386 110,970 752

(Continued)

34

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• Note: The depreciation expense, which was deducted from the depreciation expense of investment properties, was $309, $309, $618, and $618 for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, respectively, which was recognized in the deduction of rent revenue.

• (b) Seasonality of operations

The Group’s operations were not affected by seasonality or cyclicality factors.

(13) Other disclosures

• (a) Information on significant transactions:

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

• (i) Loans to other parties:

												(In T	housands of	housands of	New Taiwan Dollars)	New Taiwan Dollars)
No	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1 2 Total	TOP CITY INTERNAT IONAL LIM ITED CHENMIN G ELECTR ONIC (NIN GBO) CO., LTD	GERSHWIN INTERNAT IONAL LIM ITED Dongguan Chenming Electronic Co., Ltd	Trade receivables due from related parties Trade receivables due from related parties	Yes Yes	167,160 301,630	167,160 301,630 468,790	111,440 236,995	0.8285%~ 0.932% 4.35%~ 4.67625%	Short-term financial Short-term financial	- -	Operating demand Operating demand	- -	- -	- -	2,272,447 (note 1) 438,118 (note 2)	2,272,447 (note 1) 438,118 (note 2)
							348,435

• Note 1: The total amount for lending to a subsidiary whose voting shares are 100% owned, directly or indirectly, by TOP CITY INTERNATIONAL LIMITED for funding for a short-term period shall not exceed the net worth of TOP CITY INTERNATIONAL LIMITED, which amounted to $2,272,447. And the total amount lendable to each of such borrowers still shall not exceed the net worth of TOP CITY INTERNATIONAL LIMITED, which amounted to $2,272,447.

• Note 2: The total amount for lending to a company for funding for a short-term period shall not exceed forty percent of the net worth of CHENMIN ELECTRONIC (NINGBO) CO., LTD, which amounted to $438,118 ($1,095,29640%). In addition, the total amount lendable to any one borrower shall be no more than forty percent of the borrower’s net worth, which amounted to $438,118 ($1,095,29640%).

(ii) Guarantees and endorsements for other parties:

										(In Thou	(In Thou	sands of New Taiwa	n Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsement s (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary / endorsements guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in mainland China
		Name	Relationship with the Company
0	The Company E I CHENMING ELECTRONI C (NINGBO) CO., LTD E	CHENMING LECTRON C (NINGB O) CO., LTD 9 s Dongguan Chenming lectronic Co., Ltd s o	2% owned ubsidiary Both are ubsidiaries f the Company	945,882 438,118	51,708 51,708	51,708 51,708	- 21,545	- -	% 2.19 % 4.72	1,891,765 (note 1) 876,237 (note 2)	Yes No	No No	Yes Yes

(Continued)

35

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

• Note 1: The total amount of endorsement guarantees of the Company and its subsidiaries shall not exceed 80% of the Company's net worth; the amount of endorsement guarantees for an entity shall not exceed 40% of the Company's net worth . The total endorsement guarantees of the Company shall not exceed 40% of the net worth of the Company which amounted to $945,882. ($2,364,70640%). In addition, the total endorsement guarantees of the Company shall be no more than 80% of the Company's net worth, which amounted to $1,891,765 ($2,364,70680%).

• Note 2: The total amount of endorsement guarantees of CHENMING ELECTRONIC (NINGBO) CO., LTD., shall not exceed 80% of its net worth; the amount of endorsement guarantees for an entity shall not exceed 40% of its net worth . The total endorsement guarantees of CHENMING ELECTRONIC (NINGBO) CO., LTD., shall not exceed 40% of the net worth of CHENMING ELECTRONIC (NINGBO) CO., LTD., which amounted to $438,118.($1,095,29640%). In addition, the total endorsement guarantees of CHENMING ELECTRONIC (NINGBO) CO., LTD., shall be no more than 80% of its net worth, which amounted to $876,237 ($1,095,29680%).

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

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Beneficiary certificate: KGI Global Trend Fund	-	Current financial assets at fair value through profit or loss	150	1,575	% -	1,575	-

• (iv) Individual securities acquired or disposed of with an accumulated amount exceeding the lower of NTD300 million or 20% of the capital stock: None.

• (v) Acquisition of individual real estate with amount exceeding the lower of NTD300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with an amount exceeding the lower of NTD300 million or 20% of the capital stock: None.

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NTD100 million or 20% of the capital stock:

								(In Thou	sands of New Taiwan Dollars)	sands of New Taiwan Dollars)	sands of New Taiwan Dollars)
Company Name	Counter party	Nature of relationship		Transaction details			Transactio different f	ns with terms rom others	Notes/trade receivables (payables)		Note
			Purchase/ (Sale)	Amount	Percentage of total purchases/(s ales)	Payment terms	Unit price	Payment Terms	Ending Balance	Percentage of total notes/ trade receivables (payables)
The Company Dongguan Chenming Electronic Co., Ltd	Dongguan Chenming Electronic Co., Ltd The Company	Subsidiaries of GERSHWIN INTERNATIONA L LIMITED Ultimate holding company	Purchases (Sale)	1,115,446 (1,115,446)	99 % (70)%	Net 60 days from the end of month of purchase Net 60 days from the end of month of delivery	No suppliers for comparison No customers for comparison	Net 60 days from the end of month of purchase and depending on the operating demand Net 60 days from the end of month of delivery and depending on the operating demand	Trade payables (478,245) Trade receivables 478,245	(98)% 58 %	Note None

Note: The transactions have been eliminated in the consolidated financial statements.

(Continued)

36

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

• (viii) Receivables from related parties with amounts exceeding the lower of NTD100 million or 20% of the capital stock:

of the capital stock:	of the capital stock:
					(In Thousands of New Taiwan Dollars)
Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue		Amounts received in subsequent period (Note 1)	Allowance for bad debts	Note
					Amount	Action taken
ongguan Chenming lectronic Co., Ltd	The Company	Subsidiaries	Trade receivables 478,245	4.18	-	-	295,424	-	Note 2

Note 1: Balance of July 26, 2021.

Note 2: The transactions have been eliminated in the consolidated financial statements.

• (ix) Trading in derivative instruments: None.

• (x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

No.	Name of company	Name of counter-party	Nature of relationship		Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
1 2 2 3	TOP CITY INTERNATIONAL LIMITED Dongguan Chenming Electronic Co., Ltd Dongguan Chenming Electronic Co., Ltd CHENMING ELECTRONIC (NINGBO) CO., LTD	GERSHWIN INTERNATIONAL LIMITED The Company The Company Dongguan Chenming Electronic Co., Ltd	2 1 1 2	Other current financial assets Sales Trade receivables Other current financial assets	111,440 1,115,446 478,245 236,995	Rate 0.8285%~0.932% The price is based on the fixed ratio of final selling price, and the credit period is net 60 days from the end of month of delivery 〃 Rate 4.35%~4.67625%	2% 52% 10% 5%

Note 1: The numbers filled in as follows:

1. 0 represents the Company.

2. Subsidiaries are sorted in a numerical order starting from 1.

Note 2: Relationship with the transactions labeled as follows:

• 1 represents the transactions between the subsidiaries and the parent company.

• 2 represents the transactions between subsidiaries.

• 3 represents the transactions from the parent company to its subsidiaries.

(Continued)

37

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the six months ended June 30, 2021 (excluding information on investees in mainland China):

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Name of investor	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of June 30, 2021			Net income (losses) of the investment	Investment income (losses)	Note
				June 30, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company The Company TOP CITY INTERNATION AL LIMITED TOP CITY INTERNATION AL LIMITED	TOP CITY INTERNATIONAL LIMITED CHENMING ELECTRONIC TECHNOLOGY USD, Inc. GERSHWIN INTERNATIONAL LIMITED PEAK SHREWD INC	Samoa U.S.A. Samoa Samoa	Investment Import and export business of computer case Investment Investment	2,099,183 6,236 1,471,994 735,006	2,061,572 6,236 1,471,994 697,395	62,858 200 45,988 20,710	% 100 % 100 % 100 % 100	2,272,447 2,452 1,066,959 1,061,974	(27,070) (260) (3,135) (24,123)	(27,070) (260) The profit or loss on investments were recognized by TOP CITY INTERNATIONAL LIMITED The profit or loss on investments were recognized by TOP CITY INTERNATIONAL LIMITED	Subsidiaries Subsidiaries A grandson company A grandson company

Note: The investment income (losses) of the current period are recognized according to the financial statements which have been reviewed and certified by the Company's independent external auditors.

• (c) Information on investment in mainland China:

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

							(In T	housands of U	nited States D	ollars/In Thousan	ds of New Tai	wan Dollars )
Name of investee	Main businesses and products	Total amount of paid-in capital (note 3)	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021 (note 3)	Investment flows		Accumulated outflow of investment from Taiwan as of June 30, 2021	Net income (losses) of the investment	Percentage of ownership	Investment income (losses) (note 2and 3)	Carrying amount as of June 30, 2021 (note 3)	Accumulated remittance of earnings as of June 30, 2021
					Outflow	Inflow
CHENMING ELECTRONIC (NINGBO) CO., LTD Dongguan Chenming Electronic Co., Ltd	Computer case and production of relative components Computer case and production of relative components	1,796,97 (USD64,500 807,327 (USD28,978 (note 4 and 5	0 ) note 1 and 7 ) ) note 1 and 8	553,300 (USD19,860) 693,714 (USD24,900)	37,611 (USD1,350) (note 6) -	- -	590,911 (USD21,210) 693,714 (USD24,900)	(24,925) 7,959	% 100 % 100	(25,094) 7,959	1,095,296 828,003	- -

• (ii) Limitation on investment in mainland China:

(In Thousands of USD)

Accumulated Investment in Mainland China as of June 30, 2021 I	Investment Amounts Authorized by nvestment Commission of Ministry of Economic Affairs (note 3)	Limitation on investment in Mainland China by Investment Commission of Ministry of Economic Affairs
1,284,625 (USD46,110)	1,435,069 (USD51,510)	Unlimited(note 9)

Note1: Investment in Mainland China through existing company from third region.

Note2: The investment gains and losses of the current period are recognized according to the financial statements which have been reviewed and certified by the Company's independent external auditors.

(Continued)

38

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

• Note3: The USD was translated into New Taiwan Dollars at the exchange rate of $27.86 as of June 30, 2021.

• Note4: Invested the amount of $USD 3,000 thousand in Dongguan Chenming Electronic Co., Ltd. through GERSHWIN INTERNATIONAL LIMITED by TOP CITY INTERNATIONAL LIMITED.

• Note5: Invested the amount of $USD 1,078 thousand on equipment in Dongguan Chenming Electronic Co., Ltd by GERSHWIN INTERNATIONAL LIMITED.

• Note6: Investment through PEAK SHREWD INC by the Company and TOP CITY INTERNATIONAL LIMITED.

• Note7: Investment in Mainland China through TOP CITY INTERNATIONAL LIMITED and PEAK SHREWD INC.

• Note8: Investment in Mainland China through TOP CITY INTERNATIONAL LIMITED and GERSHWIN INTERNATIONAL LIMITED.

• Note9: According to the “REGULATIONS GOVERNING THE APPROVAL OF INVESTMENT OR TECHNICAL COOPERATION IN MAINLAND CHINA” amended in August 29, 2008, by the MOEAIC, the Company has acquired related documents. Therefore, there is no restriction to the Company’s investing amount in Mainland China.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China are disclosed in “Information on significant transactions”.

• (d) Major shareholders:

(Unit: Share)

		(Unit: Share)
Shareholding Shareholder’s Name	Shares	Percentage
Lin, Mu-Ho	25,000,230	% 16.03
Hui Chi Investment Co., Ltd.	16,000,000	% 10.26

• Note 1:The above table discloses the information on stockholders with over 5% ownership of Chenming on the last business day as of the end of the reporting period. The percentage of ownership was calculated by the Taiwan Depository & Clearing Corporation (TDCC) based on the number of common stock and preferred stock, including treasury stock, registered by Chenming through the delivering of non-physical securities to TDCC. The number of issued capital stock recorded in the consolidated financial statements may be different from the actual number of stocks registered by Chenming through the delivering of non-physical securities to TDCC due to the difference in the calculation basis.

• Note 2: If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account. The shareholders holding more than 10% of the total shares of the company should declare insider's equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider's equity announcement please refer to the TWSE website.

(Continued)

39

CHENMING ELECTRONIC TECHNOLOGY CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

The Group has only one segment, which mainly produce computer and mobile device components. Operating segment information is consistent with the balance sheet report, and for the profit and loss segment refer to income statement, and for the assets segment refer to the balance sheet.