Stock Code:3033

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2022 and 2021

Address: 11F., No.308, Sec.1, Neihu Rd., Neihu Dist., Taipei City Telephone: (02)2659-0202

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

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statement of Comprehensive Income 6. Consolidated Statement of Changes in Equity 7. Consolidated Statement of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Assets pledged as security (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8～9 9～10 10 10～34 34～36 36 36 36 36 36～37 37～40 40 40～41 41 41

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)
Assets pledged as security
(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) 電話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網址 Web home.kpmg/tw

Independent Auditors’ Review Report

To the Board of Directors of Weikeng Industrial Co., Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of Weikeng Industrial Co., Ltd. and its subsidiaries as of March 31, 2022 and 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2022 and 2021, 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 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 Weikeng Industrial Co., Ltd. and its subsidiaries as of March 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2022 and 2021 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.

3-1

The engagement partners on the review resulting in this independent auditors’ review report are Yiu-Kwan Au and Kuan-Ying Kuo.

KPMG

Taipei, Taiwan (Republic of China) May 12, 2022

Notes to Readers

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2022 and 2021 WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2022, December 31, and March 31, 2021

(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 Notes and accounts receivable, net (notes (6)(d) and (7)) 1200 Other receivables (notes (6)(d) and (6)(e)) 1300 Inventories, net (note (6)(f)) 1470 Prepaid expenses and other current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note (6)(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(c)) 1600 Property, plant and equipment (note (6)(g)) 1755 Right-of-use assets (note (6)(h)) 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets Total assets	March 31, 2022 Amount % $ 2,889,524 10 r 570 - 13,166,158 44 311,264 1 12,022,931 41 252,870 1 28,643,317 97 110 - 40,030 - 133,122 1 287,666 1 29,144 - 225,652 1 76,736 - 792,460 3 $ 29,435,777 100	December 31, 2021 Amount % 2,266,607 8 607 - 13,548,981 49 376,347 1 10,286,868 38 197,132 1 26,676,542 97 375 - 40,065 - 133,459 1 317,375 1 30,480 - 262,057 1 74,877 - 858,688 3 27,535,230 100	March 31, 2021 Amount % 2,122,475 9 624 - 11,809,908 52 361,883 2 7,499,402 33 271,118 1 22,065,410 97 - - 46,860 - 133,214 1 174,250 1 50,397 - 199,706 1 75,056 - 679,483 3 22,744,893 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note (6)(i)) 2130 Current contract liabilities (note (6)(r)) 2170 Notes and accounts payable 2200 Other payables (notes (6)(j) and (7)) 2216 Dividends payable 2230 Current tax liabilities 2280 Current lease liabilities (note (6)(l)) 2300 Other current liabilities Non-current liabilities: 2500 Non-current financial liabilities at fair value through profit or loss (note (6)(b)) 2530 Convertible bonds payable (note (6)(k)) 2570 Deferred tax liabilities 2580 Non-current lease liabilities (note (6)(l)) 2640 Non-current net defined benefit liabilities (note (6)(n)) 2670 Other non-current liabilities Total liabilities Equity (note (6)(p)): 3100 Ordinary shares 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total equity Total liabilities and equity	March 31, 2022		December 31, 2021		March 31, 2021 Amount % 9,564,471 42 229,221 1 3,983,398 18 509,059 2 494,508 2 140,918 1 103,066 - 311,045 1 15,335,686 67 7,100 - 932,860 4 408,431 2 71,760 - 119,314 1 181 - 1,539,646 7 16,875,332 74 3,677,513 16 941,349 4 890,626 4 229,459 1 480,383 2 1,600,468 7 (268,294) (1) (81,475) - (349,769) (1) 5,869,561 26 22,744,893 100
				Amount %		Amount %
						10,996,048 40 305,931 1 5,308,148 19 952,772 4 - - 361,274 1 135,160 1 318,617 1 18,377,950 67 - - 126,336 - 697,487 3 188,566 1 122,222 - 181 - 1,134,792 4 19,512,742 71 4,159,342 15 1,275,927 5 960,709 4 365,705 1 1,715,388 6 3,041,802 11 (373,405) (2) (81,178) - (454,583) (2) 8,022,488 29 27,535,230 100

See accompanying notes to consolidated financial statements.

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

Consolidated Statement of Comprehensive Income

For the three months ended March 31, 2022 and 2021

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

4100 Net sales revenue (note (6)(r) and note (7)) 5000 Cost of sales (note (6)(f)) Gross profit Operating expenses (notes (6)(l), (6)(m), (6)(n), (7) and (12)): 6100 Selling expenses 6200 Administrative expenses 6450 Expected credit Losses (reversal gains) (note (6)(d)) Net operating income Non-operating income and expenses: 7100 Interest income 7010 Other income (note (7)) 7235 Gains(losses) on financial assets (liabilities) at fair value through profit or loss, net 7230 Foreign currency exchange gains, net (note (6)(t)) 7050 Finance costs (note (6)(k) and (6)(l)) 7590 Miscellaneous disbursements 7900 Profit before tax 7950 Income tax expenses (note (6)(o)) 8200 Profit Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealized gains from investments in equity instruments measured at fair value through other comprehensive income 8349 Less: income tax relating to components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income that may be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Less: income tax relating to components of other comprehensive income that may be reclassified to profit or loss (note (6)(o)) Other comprehensive income, net 8500 Comprehensive income Earnings per common share (expressed in dollars) (note (6)(q)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the three months ended March 31	For the three months ended March 31
	2022 Amount % $ 16,924,545 100 15,621,413 92 1,303,132 8 491,030 3 145,647 1 (4,939) - 631,738 4 671,394 4 610 - 2,437 - (51) - 73,261 - (45,928) - (150) - 30,179 - 701,573 4 195,680 1 505,893 3 (35) - - - (35) - 190,145 1 38,029 - 152,116 1 152,081 1 $ 657,974 4 $ 1.21 $ 1.18	2021
		Amount % 15,823,146 100 14,870,236 94 952,910 6 436,095 3 130,868 1 (11,829) - 555,134 4 397,776 2 744 - 10,140 - 2,500 - 14,027 - (43,678) - (144) - (16,411) - 381,365 2 107,311 1 274,054 1 2,038 - - - 2,038 - 17,373 - 3,474 - 13,899 - 15,937 - 289,991 1 0.75
		0.65

See accompanying notes to consolidated financial statements.

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

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the three months ended March 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Retained earnings Legal reserve Special reserve Unappropriated retained earnings 890,626 229,459 700,837 - - (494,508) - - 274,054 - - - - - 274,054 890,626 229,459 480,383 960,709 365,705 1,715,388 - - (1,270,232) - - 505,893 - - - - - 505,893 - - - 960,709 365,705 951,049	Retained earnings Legal reserve Special reserve Unappropriated retained earnings 890,626 229,459 700,837 - - (494,508) - - 274,054 - - - - - 274,054 890,626 229,459 480,383 960,709 365,705 1,715,388 - - (1,270,232) - - 505,893 - - - - - 505,893 - - - 960,709 365,705 951,049	Other equity interest Exchange differences on Unrealized gains (losses) from financial assets measured at fair value translation of foreign financial statements through other comprehensive income (282,193) (83,513) - - - - 13,899 2,038 13,899 2,038 (268,294) (81,475) (373,405) (81,178) - - - - 152,116 (35) 152,116 (35) - - (221,289) (81,213)	Total equity
		Exchange differences on translation of foreign financial statements (282,193) - - 13,899 13,899 (268,294) (373,405) - - 152,116 152,116 - (221,289)
Legal reserve 890,626 - - - - 890,626 960,709 - - - - - 960,709	Special reserve 229,459 - - - - 229,459 365,705 - - - - - 365,705
			6,074,078
			(494,508)
			274,054 15,937
			289,991
			5,869,561
			8,022,488
			(1,270,232)
			505,893 152,081
			657,974
			84,589
			7,494,819

See accompanying notes to consolidated financial statements.

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

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

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the three months ended March 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expenses Amortization expenses Expected credit losses reversal gains Net losses(gains) on financial assets or liabilities at fair value through profit or loss Interest expenses Interest income Others Changes in operating assets and liabilities: Decrease (increase) in notes and accounts receivable Decrease in other receivables Decrease (increase) in inventories Increase in prepaid expenses and other current assets Increase in notes and accounts payable Decrease in other payable Increase in contract liabilities and other current liabilities Others Total changes in operating assets and liabilities Total adjustments Cash flows from (used in) operations Interest received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Others Net cash flows used in investing activities Cash flows from (used in) financing activities: Decrease in short-term loans Payments of lease liabilities Net cash flows 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 the beginning of period Cash and cash equivalents at the end of period	For the three months ended March 31, 2022 2021 $ 701,573 381,365 40,213 39,236 6,734 6,790 (4,939) (11,829) 51 (2,500) 45,928 43,678 (611) (744) (1) - 87,375 74,631 387,762 (1,119,056) 65,083 550,994 (1,736,063) 356,354 (55,723) (52,090) (1,338,941) (263,798) 1,608,210 407,538 (234,961) (734,892) 190,037 31,410 (5,791) (1,660) 1,557,495 (297,604) 218,554 (561,402) 305,929 (486,771) 1,007,502 (105,406) 611 744 (42,240) (40,582) (36,038) (10,452) 929,835 (155,696) (1,978) (1,767) (1,798) (1,340) (4,745) (5,570) (60) (150) (8,581) (8,827) (459,540) (180,844) (34,991) (35,817) (494,531) (216,661) 196,194 17,319 622,917 (363,865) 2,266,607 2,486,340 $ 2,889,524 2,122,475
	2022 $ 701,573 40,213 6,734 (4,939) 51 45,928 (611) (1) 87,375 387,762 65,083 (1,736,063) (55,723) (1,338,941) 1,608,210 (234,961) 190,037 (5,791) 1,557,495 218,554 305,929 1,007,502 611 (42,240) (36,038) 929,835 (1,978) (1,798) (4,745) (60) (8,581) (459,540) (34,991) (494,531) 196,194 622,917 2,266,607 $ 2,889,524

Cash flows from (used in) operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expenses
Amortization expenses
Expected credit losses reversal gains
Net losses(gains) on financial assets or liabilities at fair value through profit or loss
Interest expenses
Interest income
Others
Changes in operating assets and liabilities:
Decrease (increase) in notes and accounts receivable
Decrease in other receivables
Decrease (increase) in inventories
Increase in prepaid expenses and other current assets
Increase in notes and accounts payable
Decrease in other payable
Increase in contract liabilities and other current liabilities
Others
Total changes in operating assets and liabilities
Total adjustments
Cash flows from (used in) operations
Interest received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Acquisition of property, plant and equipment
Increase in refundable deposits
Acquisition of intangible assets
Others
Net cash flows used in investing activities
Cash flows from (used in) financing activities:
Decrease in short-term loans
Payments of lease liabilities
Net cash flows 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 the beginning of period
Cash and cash equivalents at the end of period

For the three months ended
March 31,
2022
2021
$ 701,573
381,365
40,213
39,236
6,734
6,790
(4,939)
(11,829)
51
(2,500)
45,928
43,678
(611)
(744)
(1)
-
87,375
74,631
387,762
(1,119,056)
65,083
550,994
(1,736,063)
356,354
(55,723)
(52,090)
(1,338,941)
(263,798)
1,608,210
407,538
(234,961)
(734,892)
190,037
31,410
(5,791)
(1,660)
1,557,495
(297,604)
218,554
(561,402)
305,929
(486,771)
1,007,502
(105,406)
611
744
(42,240)
(40,582)
(36,038)
(10,452)
929,835
(155,696)
(1,978)
(1,767)
(1,798)
(1,340)
(4,745)
(5,570)
(60)
(150)
(8,581)
(8,827)
(459,540)
(180,844)
(34,991)
(35,817)
(494,531)
(216,661)
196,194
17,319
622,917
(363,865)
2,266,607
2,486,340
$
2,889,524
2,122,475

2022
$ 701,573
40,213
6,734
(4,939)
51
45,928
(611)
(1)
87,375
387,762
65,083
(1,736,063)
(55,723)
(1,338,941)
1,608,210
(234,961)
190,037
(5,791)
1,557,495
218,554
305,929
1,007,502
611
(42,240)
(36,038)
929,835
(1,978)
(1,798)
(4,745)
(60)
(8,581)
(459,540)
(34,991)
(494,531)
196,194
622,917
2,266,607
$
2,889,524

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2022 and 2021

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2022 and 2021

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

(1) Company history

Weikeng Industrial Co., Ltd. (the Company) was incorporated in Taiwan as a company limited by shares in January 1977 and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company’ s registered office is 11F, No.308 Sec. 1, Neihu Rd., Neihu Dist., Taipei City. The major activities of the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) are the purchase and sale of electronic components and computer peripherals, technical service, and the import-export trade business. Please refer to note (4)(b) for related information. The Company’s common shares were listed on the Taiwan Stock Exchange (TSE).

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

These consolidated financial statements were reported to the board of directors and issued on May 12, 2022.

(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. 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, 2022:

●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”
(b) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

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

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the 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 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, 2021. For the related information, please refer to note (4) of the consolidated financial statements for the year ended December 31, 2021.

(b) Basis of Consolidation

(i) List of subsidiaries in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Nature of operation	Shareholding	Shareholding
			March 31, 2022	December 31, 2021 March 31, 2021 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100
The Company 〃〃 WKI 〃 WKS	Weikeng International Co., Ltd. (WKI) Weikeng Technology Co., Ltd. (WKZ) Weikeng Technology Pte. Ltd. (WTP) Weikeng International (Shanghai) Co., Ltd. (WKS) Weitech International Co., Ltd. (Weitech) Weikeng Electronic Technology (Shanghai) Co., Ltd. (WKE)	Electronic components computer peripherals products distribution and technical support Electronic components and technical support 〃 Electronic components computer peripherals products distribution and technical support Import and export trade of electronic components Electronic technology development and technical advisory	% 100 % 100 % 100 % 100 % 100 % 100

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Income taxes

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

Income tax expenses for the period are best estimated by multiplying the 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.

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

(d) Employee benefits

The pension cost in the 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 financial year adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

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

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

The preparation of the consolidated financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2021. For related information, please refer to note (5) of the consolidated financial statements for the year ended December 31, 2021.

(6) Explanation of significant accounts

Except for the following disclosures, there were no material differences in the disclosures of significant accounts between the interim consolidated financial statements for the current period and the 2021 consolidated financial statements. Please refer to note (6) of the 2021 annual consolidated financial statements.

(a) Cash and cash equivalents

March 31, 2022 Cash on hand $ 502 Checking accounts and demand deposits 2,889,022 $ 2,889,524	December 31, 2021 488 2,266,119 2,266,607	March 31, 2021
		497 2,121,978
		2,122,475

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Please refer to Note (6)(t) for the exchange rate, interest rate risk and sensitivity analysis of the financial assets of the Group.

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

March 31, 2022 Current financial assets at fair value through profit or loss: Non-derivative financial assets Stock listed on domestic markets $ 570 Non-current financial assets at fair value through profit or loss: Convertible bonds embedded options $ 110 Non-current financial liabilities at fair value through profit or loss: Convertible bonds embedded options $ -	December 31, 2021 607 375 -	March 31, 2021
		624
		-
		7,100

As of March 31, 2022, December 31 and March 31, 2021, the Group did not provide any financial assets and liabilities at fair value through profit or loss as collateral for its loans.

March 31, 2022 Equity investments at fair value through other comprehensive income: Domestic emerging market stock $ 481 Domestic unlisted stock 16,941 Overseas unlisted stock 22,608 $ 40,030	December 31, 2021 516 16,941 22,608 40,065	March 31, 2021 6,386 17,866 22,608
		46,860

(i) Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes.

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of March 31, 2022, December 31 and March 31, 2021.

(ii) As of March 31, 2022, December 31 and March 31, 2021, the Group did not provide any financial assets at fair value through other comprehensive income as collateral for its loans.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Notes and accounts receivable

March 31, 2022 Notes receivable $ 180,612 Accounts receivable-measured as amortized cost 11,078,690 Accounts receivable-fair value through other comprehensive income 1,994,853 13,254,155 Less: Loss allowance (87,997) $ 13,166,158	December 31, 2021 238,953 11,366,808 2,034,971 13,640,732 (91,751) 13,548,981	March 31, 2021 220,537 9,932,843 1,757,562 11,910,942 (101,034) 11,809,908

The Group has assessed a portion of its accounts receivable that was held within a business model whose objective is achieved by selling financial assets; therefore, such accounts receivable was measured at fair value through other comprehensive income.

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, notes and accounts receivable have been grouped based on shared credit risk characteristics of the customer's ability to pay all due amounts in accordance with contract terms, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision was determined as follows:

(i) The Company

Credit rating Listed company (assessed by group) Level A Level B Unlisted company Credit rating Listed company (assessed by group) Level A Level B Unlisted company		March 31, 2022	March 31, 2022
	Carrying amount $ 3,314,991 1,635,254 1,475,971 $ 6,426,216	Expected credit loss rate 0.50% 1.21% 1.25% December	Loss allowance provision Credit impaired 16,721 No 19,786 No 18,482 No 54,989 31, 2021
	Carrying amount $ 4,009,216 1,150,808 1,436,928 $ 6,596,952	Expected credit loss rate 0.52% 1.40% 1.16%	Loss allowance provision Credit impaired 20,909 No 16,108 No 16,663 No 53,680

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Credit rating Listed company (assessed by group) Level A Level B Unlisted company		March 31, 2021	March 31, 2021
	Carrying amount $ 3,458,869 838,224 1,157,775 $ 5,454,868	Expected credit loss rate 0.76% 1.13% 1.85%	Loss allowance provision Credit impaired 26,278 No 9,489 No 21,382 No 57,149

The aging analysis of the Company's notes and accounts receivable was determined as follows:

March 31, 2022 Not past due $ 6,324,041 Overdue 90 days or less 102,175 Overdue 91 to 180 days - Overdue 181 days or more - $ 6,426,216	December 31, 2021 6,429,577 163,041 2,595 1,739 6,596,952	March 31, 2021
		5,304,035 149,751 604 478
		5,454,868

(ii) Subsidiaries

March 31, 2022

	March 31, 2022	March 31, 2022
Not past due Overdue 90 days or less Overdue 91 to 180 days Overdue 181 days or more Not past due Overdue 90 days or less Overdue 91 to 180 days Overdue 181 days or more	Carrying amount Expected credit loss rate $ 6,468,395 0.05% 357,865 7.82% 323 80.50% 1,356 100.00% $ 6,827,939 December 31, 2021		Loss allowance provision
			3,401 27,991 260 1,356
			33,008

	Carrying amount $ 6,516,929 524,592 879 1,380 $ 7,043,780	Expected credit loss rate 0.02% 6.63% 92.61% 100.00%	Loss allowance provision
			1,107 34,770 814 1,380
			38,071

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2021
Carrying amount $ 5,882,281 568,940 34 4,819 $ 6,456,074	Expected credit loss rate 0.15% 5.41% 41.18% 100.00%	Loss allowance provision
		9,089 30,754 14 4,819
		44,676

For the three months ended March 31, 2022 and 2021, the movement in the allowance for notes and accounts receivable of the Group was as follows:

Balance at January 1 Impairment losses reversed Effect of changes in foreign exchange rates Balance at March 31	For the three months ended March 31, 2022 2021 $ 91,751 112,529 (4,939) (11,829) 1,185 334 $ 87,997 101,034
	2022 $ 91,751 (4,939) 1,185 $ 87,997

The Group entered into accounts receivable factoring agreements with banks. According to the factoring agreement, the Group does not bear the loss if the account debtor does not have the ability to make payments upon the transfer of the accounts receivable factoring. The Group has not provided other guarantees except for the promissory notes, which have the same amount with the factoring, used as the guarantee for the sales return and discount. The Group received the proceeds from the discounted accounts receivable determined by agreements on the selling date. Interest is calculated and paid based on the duration and interest rate of the agreement, and the remaining amounts are received when the accounts receivable are paid by the customers. In addition, the Group has to pay a service charge based on a certain rate.

The Group derecognized the above accounts receivable because it has transferred substantially all of the risks and rewards of their ownership, and it does not have any continuing involvement by them. The amounts receivable from the financial institutions were recognized as “other receivables” upon the derecognition of those accounts receivable.

As of March 31, 2022, December 31 and March 31, 2021, the Group sold its accounts receivable without recourse as follows:

March 31, 2022

Purchaser	Amount Derecognized $ 2,746,606	Amount Paid 2,479,342	Advanced Unpaid -	Amount Recognized in Other Receivables 267,264	Range of Interest Rate Significant Transferring Terms 0.63~2.06% None
Financial institutions

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		December 31, 2021	December 31, 2021
Purchaser	Amount Derecognized $ 3,341,896	Amount Paid Advanced Unpaid 3,010,559 - March 31, 2021		Amount Recognized in Other Receivables 331,337	Range of Interest Rate Significant Transferring Terms 0.53%~1.14% None
Financial institutions
Purchaser	Amount Derecognized $ 2,967,460	Amount Paid 2,673,054	Advanced Unpaid -	Amount Recognized in Other Receivables 294,406	Range of Interest Rate Significant Transferring Terms 0.58%~1.17% None
Financial institutions

As of March 31, 2022, December 31 and March 31, 2021, the Group did not provide any receivables as collaterals for its loans.

Please refer to note (6)(t) for further credit risk information.

(e) Other receivables

March 31, 2022 Other receivables－the receivables of the Group as an agent (note (6)(r)) $ - Other receivables－accounts receivable factored 267,264 Tax refund 34,240 Overdue receivables 22,125 Others 9,760 333,389 Less: Loss allowance (22,125) $ 311,264	December 31, 2021 - 331,337 32,623 22,121 12,387 398,468 (22,121) 376,347	March 31, 2021 26,309 294,406 28,917 22,124 12,251 384,007 (22,124) 361,883

For the three months ended March 31, 2022 and 2021, the movement in the allowance for other receivables was as follows:

Balance at January 1 Effect of changes in foreign exchange rates Balance at March 31	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 22,121 4 $ 22,125	2021
		22,124 -
		22,124

As of March 31, 2022, December 31 and March 31, 2021, the Group did not provide any other receivables as collaterals for its loans.

For further credit risk information, please refer to note (6)(t).

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Inventories

March 31, 2022 Merchandise inventories $ 11,163,087 Goods in transit 859,844 $ 12,022,931	December 31, 2021 9,688,311 598,557 10,286,868	March 31, 2021
		6,911,554 587,848
		7,499,402

The details of the cost of sales were as follows:

	For the three months ended	For the three months ended	For the three months ended
		March 31,
		2022	2021
Inventory that has been sold	$	15,605,067	14,788,047
Write-down of inventories		16,231	25,371
Loss on disposal of inventory		115	56,818
	$	15,621,413	14,870,236

As of March 31, 2022, December 31 and March 31, 2021, the Group did not provide any inventories as collaterals for its loans.

(g) Property, plant and equipment

Carrying amounts: Balance on January 1, 2022 Balance on March 31, 2022 Balance on January 1, 2021 Balance on March 31, 2021	Land $ 77,377 $ 77,377 $ 77,377 $ 77,377	Buildings and construction 29,202 28,987 30,065 29,850	Transportation equipment 4,316 4,189 3,854 3,515	Machinery equipment 8,581 8,510 4,817 5,797	Office and other facilities equipment 13,983 14,059 18,657 16,675	Total
						133,459
						133,122
						134,770
						133,214

The Group’s property, plant and equipment have no significant additions, disposals, impairments or reversals during for the three months ended March 31, 2022 and 2021. Information on depreciation for the period is disclosed in note (12)(a). For other related information, please refer to note (6)(g) of the 2021 annual consolidated financial statements.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Right-of-use assets

Carrying amount: Balance on January 1, 2022 Balance on March 31, 2022 Balance on January 1, 2021 Balance on March 31, 2021	Buildings $ 314,404 $ 285,110 $ 184,073 $ 168,978	Transportation equipment 2,971 2,556 6,106 5,272	Total
			317,375
			287,666
			190,179
			174,250

There were no significant additions, disposal, or recognition and reversal of impairment losses of buildings and transportation equipments that are held as right-of-use assets for the three months ended March 31, 2022 and 2021. Please refer to note (6)(h) of the 2021 annual consolidated financial statements for other related information.

(i) Short-term borrowings

March 31, 2022 Unsecured loans $ 9,618,043 Short-term notes and bills payable, net 918,465 $ 10,536,508 Unused short-term credit lines $ 5,696,978 Range of interest rates 0.52%~3.85%	December 31, 2021 10,077,546 918,502 10,996,048 4,473,838 0.52%~3.9%	March 31, 2021 8,895,542 668,929 9,564,471 4,061,113 0.52%~3.90%

(i) Issuance and repayment of borrowings

The Group’s additional amounts in loans for the three months ended March 31, 2022 and 2021 were $8,402,740 and $7,761,366, respectively, with maturities from April, 2022, to November, 2022 and from April, 2021, to September, 2021, respectively; and the repayments were $8,862,280 and $7,942,210, respectively.

(ii) For information on the Group’s interest risk, foreign currency risk and liquidity risk, please refer to note (6)(t).

(j) Other payables

March 31, 2022 Other payable — the payables of the Group’s as an agent (note(6)(r)) $ - Accrued expenses 273,900 Bonus payable 106,851 Remuneration to employees and directors 323,061 Interest payable 17,389 $ 721,201	December 31, 2021 - 319,556 340,548 278,657 14,011 952,772	March 31, 2021
		2,809 295,287 54,219 142,840 13,904
		509,059

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The accrued expenses include import and export fees, processing expense, professional services fees, pension, insurance, and payable for unused vacation time, etc.

(k) Convertible bonds payable
(i) Non-guaranteed convertible bonds:

March 31, 2022 Aggregate principal amount $ 1,000,000 Bond discount (2,338) Cumulative converted amount (955,800) Bonds payable at end of period $ 41,862 Embedded derivative – call and put options Included in non-current financial liabilities at fair value through profit or loss $ - Included in non-current financial assets at fair value through profit or loss $ 110 Equity component – conversion options (included in capital surplus – conversion options) $ 2,520	December 31, 2021 1,000,000 (7,564) (866,100) 126,336 - 375 7,634	March 31, 2021 1,000,000 (67,140) -
		932,860
		7,100
		-
		57,014

The effective interest rate of the fifth convertible bonds was 1.53%. The annual interest expenses on convertible bonds for the three months ended March 31, 2022 and 2021, were$366 and $3,538, respectively.

There were no issues, repurchases and repayments of bonds payable for the three months ended March 31, 2022 and 2021. Please refer to note (6)(k) to the 2021 annual consolidated financial statements for the related information.

In order to repay loans from financial institutions, the Board of Directors approved a resolution on March 25, 2022, to issue the sixth domestic unsecured convertible bonds. The bonds had been effectively registered by the Securities and Futures Bureau of the Financial Supervisory Commission on May 11, 2022.

The face value of each unsecured convertible bond was $100, and the total face value was $2,000,000, with a coupon rate of 0%, issued at par. The units for this offering were 20,000.

(l) Lease liabilities

March 31, 2022 Current $ 124,691 Non-current $ 171,662	December 31, 2021 135,160 188,566	March 31, 2021
		103,066
		71,760

For the maturity analysis, please refer to note (6)(t) of financial instruments.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in profit or loss were as follows:

	For	the three months ended	the three months ended
		March 31,
		2022	2021
Interests on lease liabilities	$	1,849	1,109
Expenses relating to short-term leases	$	1,508	1,598

The amounts recognized in the consolidated statements of cash flows were as follows:

Total cash outflow for leases	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 38,348	2021
		38,524

(i) Real estate leases

The Group leases buildings for its office space, warehouses and dormitories. The leases of office space typically run for a period of 1 to 5 years, of warehouses for 1 to 4 years, and of dormitories for 2 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases of office buildings contain extension or cancellation options exercisable by the Group before the end of the non-cancellable contract period. These leases are negotiated and monitored by local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Group and not by the lessors. When the lessee is not reasonably certain to use an optional extended lease term, payments associated with the optional period will not be included within lease liabilities.

(ii) Other leases

The Group leases transportation equipment and parking space with lease terms of one year. These leases are short-term. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(m) Operating lease — as lessor

There were no significant leases contracts for the three months ended March 31, 2022 and 2021. Please refer to note (6)(m) of the 2021 annual consolidated financial statements for other related information.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material onetime events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2021 and 2020.

The Company makes defined benefit plan contributions to the pension fund account at the Bank of Taiwan that provides pensions for employees upon retirement. The plans entitle a retired employee to receive an payment based on years of service and average salary for the six months prior to retirement.

The expenses recognized in profit or loss for the Group were as follows:

		For the three months ended	For the three months ended	For the three months ended
			March 31,
		2022		2021
Operating	expenses	$	279	274

(ii) Defined contribution plans

The Company and WKZ allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company and WKZ allocates a fixed amount to the Bureau of the Labor Insurance without additional legal or constructive obligations.

The Company and WKZ recognized the pension costs under the defined contribution method amounting to $5,967 and $5,629 for the three months ended March 31, 2022 and 2021, respectively. Payment was made to the Bureau of Labor Insurance.

Other subsidiaries recognized the pension expense, basic endowment insurance expense, and social welfare expenses amounting to $18,876 and $15,412 for the three months ended March 31, 2022 and 2021, respectively.

(o) Income taxes

(i) Income tax expenses

The amounts of income tax for the three months ended March 31, 2022 and 2021 were as follows:

follows:
	For the three months ended
	March 31,
	2022	2021
Current tax expenses	$ 195,680	107,311

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts of income tax recognized in other comprehensive income for the three months ended March 31, 2022 and 2021 were as follows:

		For the three months ended	For the three months ended
		March 31,
		2022	2021
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign financial
statements	$	38,029	3,474

(ii) The Company's and WKZ's income tax returns through 2020 have been examined and approved by the R.O.C. tax authorities.

(p) Capital and other equities

As of March 31, 2022, December 31 and March 31, 2021, the total number of authorized ordinary shares were 550,000 shares, 550,000 shares and 450,000 shares, respectively, with par value of TWD 10 per share. The total value of authorized ordinary shares amounted to $5,500,000, $5,500,000 and $4,500,000, respectively. As of that date, 420,943 shares, 415,934 shares and 367,751 shares of ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Common stock

For the three months ended March 31, 2022, 5,008 thousand new common shares, with a par value of TWD10, amounting to $50,083, were issued due to the conversion of convertible bonds. As of reporting date, the related registration procedures for 4,629 shares were completed.

(ii) Capital surplus

Balances on capital surplus of the Company were as follows:

March 31, 2022 Additional paid in capital $ 1,269,331 Treasury share transactions 37,617 Donation from shareholders 712 Convertible bonds – conversion options 2,520 Others 253 $ 1,310,433	December 31, 2021 1,229,711 37,617 712 7,634 253 1,275,927	March 31, 2021
		845,753 37,617 712 57,014 253
		941,349

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended March 31, 2022, the capital surplus deriving from those convertible bonds, which were converted to common stock, amounted to $34,506 (including the capital surplus-conversion options transferred to the capital surplus-additional paid-in capital of $5,114).

In accordance with the Company Act, realized capital reserves can be utilized for issuing new shares or being distributed as cash dividends only after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be utilized for issuing new shares shall not exceed 10 percent of paid-in capital every year. Capital reserve increased by transferring paid-in capital in excess of par value may not be capitalized until the fiscal year after the competent authority for company registrations approves registration of the capital increase.

(iii) Retained earnings

The Company's Article of Incorporation stipulates that Company's earnings should first be used to pay any taxes, offset the prior years' deficits, be set aside as legal reserve, and then set aside or reverse special reserve, any remaining profit, together with any undistributed retained earnings at the beginning, be distributed according to the distribution plan proposed by the Board of Directors to be submitted during the stockholders’ meeting for approval. Before the distribution of dividends, the Board of Directors shall first take into consideration its profitability, plan of capital expenditure, business expansion and capital, requirements for cash flow, regulations, and degree of dilution of earnings per share to determine the proportion of stock and cash dividends to be paid. After the above appropriations, current and prior-period earnings that remain undistributed will be proposed for distribution by the Board of Directors, and a meeting of shareholders will be held to adopt this resolution. The total distribution shall not be less than 50% of the current distributable earnings, and the cash dividends shall not be less than 20% of the total dividends.

The Company authorize dividends, bonus and the legal reserve and capital surplus in whole or in part be paid in cash based on the resolution of the Board of Directors with over two-thirds directors present and approved by a majority vote of the present directors, then shall be reported to shareholders meeting.

1) Earnings distribution

The amounts for cash dividends of the Company’s earnings distribution for 2021 and 2020 were decided by the Board meeting held on March 25, 2022 and March 26, 2021.

Dividends distributed to ordinary shareholders: Cash dividends	2021 Amount per share (in dollars) Total amount $ 3.05392536 1,270,232	2020 Amount per share (in dollars) Total amount 1.33341226 494,508	2020 Amount per share (in dollars) Total amount 1.33341226 494,508
	Amount per share (in dollars) $ 3.05392536		Total amount
			494,508

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Earnings per share

The Company's basic earnings per share and diluted earnings per share are calculated as follows:

(i) Basic earnings per share
1) Profit attributable to ordinary shareholders of the Company

	For the three months ended	For the three months ended
	March 31,
	2022	2021
Profit attributable to ordinary shareholders of the
Company	$ 505,893	274,054

2) Weighted-average number of ordinary shares (thousands)

Weighted-average number of ordinary shares	For the three months ended March 31,	For the three months ended March 31,
	2022 417,718	2021
		367,751

(ii) Diluted earnings per share
1) Profit attributable to ordinary shareholders of the Company (diluted)

	For	the three months ended	the three months ended
		March 31,
		2022	2021
Profit attributable shareholders of the Company (basic)	$	505,893	274,054
Convertible bonds payable		379	1,038
Profit attributable to ordinary shareholders of the
Company (diluted)	$	506,272	275,092

2) Weighted-average number of ordinary shares (thousands, diluted)

Weighted-average number of ordinary shares (basic) Effect of convertible bonds Effect of employee stock remuneration Weighted-average number of ordinary shares (diluted) on March 31	For the three months ended March 31,	For the three months ended March 31,
	2022 417,718 5,693 6,905 430,316	2021
		367,751 52,854 4,780
		425,385

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Revenue from contracts with customers

(i) Disaggregation of revenue

Disaggregation of revenue
	For the three months ended
		March 31,
		2022	2021
Primary geographical markets:
Taiwan	$	1,864,119	1,627,267
China		13,776,155	13,157,920
Others		1,284,271	1,037,959
	$	16,924,545	15,823,146
Major products/services lines
Chipset/memory components	$	6,023,483	5,485,817
Mixed and other components		10,898,515	10,333,375
Others		2,547	3,954
	$	16,924,545	15,823,146

The Group was determined in some specific transactions as an agent that the other party sold some merchandises to end-customer by delivering them to the Group. In these cases, the Group did not obtain the control of the merchandises, therefore, the Group recognized the remaining sales amounts which have been offset against the payment to the other party from the transactions; or recognized the commission signed with the other party, as revenue.

For the three months ended March 31, 2022 and 2021, the Group was determined as an agent in the aforementioned transactions which revenue amounted to $0 and $3,643, respectively. Due to the above transactions, the other receivables amounted to $0 and $26,309 as of March 31, 2022 and 2021, respectively; and the other payables amounted to $0 and $2,809 as of March 31, 2022 and 2021, respectively. Please refer to note (6)(e) and (6)(j).

(ii) Contract balance

Notes and accounts receivable (included related parties) Less: allowance for impairment Contract liabilities	March 31, 2022 $ 13,254,155 (87,997) $ 13,166,158 $ 468,240	December 31, 2021 13,640,732 (91,751) 13,548,981 305,931	March 31, 2021 11,910,942 (101,034) 11,809,908 229,221

For the details on accounts receivable and allowance for impairment, please refer to note (6)(d).

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts of revenue recognized for the three months ended March 31, 2022 and 2021 that were included in the contract liability balance at the beginning of the periods were $200,630 and $133,835, respectively.

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

(s) Remuneration to employees and directors

The Company’s Articles of Incorporation require that earning shall first be offset against any deficit, then, 6% to 10% of profit before tax (before deducting remuneration to employees and directors) will be distributed as employee remuneration and a maximum of 2.5% will be allocated as directors’ remuneration. Employees who are entitled to receive the above-mentioned employee remuneration, in share or cash, include the employees of the subsidiaries of the Company who meet certain specific requirements. Actual distribution should be determined in the Board of Directors’ meeting, with no less than two-thirds of directors present, and approved by more than half of the directors attending the meeting, then shall be report to the meeting of shareholders.

For the three months ended March 31, 2022 and 2021, the accrued remuneration of the Company’s employees were $56,322 and $30,254; as well as directors were $14,081 and $7,563, respectively. These amounts were calculated by using the Company’ s profit before tax for the period before deducting the amount of the remuneration to employees and directors, multiplied by the distribution ratio of remuneration to employees and directors under the Company’s Articles of Incorporation, and expensed under operating expenses. If the Board of Directors resolved to distribute employees’ remuneration in the form of shares, the numbers of shares to be distributed were calculated based on the closing price of the Company’s ordinary shares one day before the date of the meeting of the board of directors.

The accrued remuneration of the Company’ s employees was $191,512 and $78,442 as well as remuneration of directors was $47,878 and $19,611 for the years ended December 31, 2021 and 2020, respectively. There were no differences between the distributed amounts and the accrued amounts in the consolidated financial statements. Related information would be available at the Market Observation Post System website.

(t) Financial Instruments

Except for those mentioned below, there were no significant changes in the fair value of the Group's financial instruments and degree of exposure to credit risk. Please refer to the note (6)(t) of the consolidated financial statements for the year ended December 31, 2021.

(i) Credit risk

For credit risk exposure of notes and accounts receivable, please refer to note (6)(d).

The amount of other financial assets at amortized cost include other receivables which had been impaired. For the three months ended March 31, 2022 and 2021 loss allowance provision, please refer to the note (6)(e).

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

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

March 31, 2022 Non-derivative financial liabilities Unsecured loans Short-term notes and bill payable Lease liabilities Notes and accounts payable Other payables and dividends payable Bonds payable December 31, 2021 Non-derivative financial liabilities Unsecured loans Short-term notes and bills payable Lease liabilities Notes and accounts payable Other payables Bonds payable March 31, 2021 Non-derivative financial liabilities Unsecured loans Short-term notes and bill payable Lease liabilities Notes and accounts payable Other payables and dividends payable Bonds payable Derivative financial liabilities Convertible bonds payable embedded derivatives	Carrying Amount $ 9,618,043 918,465 296,353 6,919,358 1,991,433 41,862 $ 19,785,514 $ 10,077,546 918,502 323,726 5,308,148 952,772 126,336 $ 17,707,030 $ 8,895,542 668,929 174,826 3,983,398 1,003,567 932,860 7,100 $ 15,666,222	Contractual cash flows (9,634,594) (920,000) (309,559) (6,916,358) (1,991,433) (44,200) (19,816,144) (10,099,600) (920,000) (339,394) (5,308,148) (952,772) (133,900) (17,753,814) (8,913,258) (670,000) (178,455) (3,983,398) (1,003,567) (1,000,000) - (15,748,678)	Within a year (9,634,594) (920,000) (129,753) (6,916,358) (1,991,433) - (19,592,138) (10,099,600) (920,000) (141,152) (5,308,148) (952,772) - (17,421,672) (8,913,258) (670,000) (105,759) (3,983,398) (1,003,567) - - (14,675,982)	Over 1 year
				- - (179,806) - - (44,200) (224,006) - - (198,242) - - (133,900) (332,142) - - (72,696) - - (1,000,000) - (1,072,696)

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

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Market risk

1) Currency risk

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

March 31, 2022 Foreign currency Exchange rate TWD Financial assets Monetary items USD $ 280,980 USD/TWD 28.56 8,024,789 USD 473 USD/CNY 6.3463 13,509 Non-monetary items USD 745 USD/TWD 28.56 21,277 Financial liabilities Monetary items USD 183,010 USD/TWD 28.56 5,226,766 USD 25,192 USD/CNY 6.3463 719,493	March 31, 2022	March 31, 2022	March 31, 2022	December 31, Foreign currency Exchange rate	December 31,	December 31,	2021	March 31, 2021 Foreign currency Exchange rate TWD	March 31, 2021 Foreign currency Exchange rate TWD
	Foreign currency	Exchange rate	TWD			Exchange rate	TWD		Exchange rate TWD
		USD/TWD 28.56 8,024,789 USD/CNY 6.3463 13,509 USD/TWD 28.56 21,277 USD/TWD 28.56 5,226,766 USD/CNY 6.3463 719,493		294,374 388 745 196,128 24,714		USD/TWD 27.68 8,148,260 USD/CNY 6.3935 10,731 USD/TWD 27.68 20,622 USD/TWD 27.68 5,428,819 USD/CNY 6.3935 684,073		250,050 934 745 149,196 27,059	USD/TWD 28.51 7,128,937 USD/CNY 6.5782 226,637 USD/TWD 28.51 21,240 USD/TWD 28.51 4,253,571 USD/CNY 6.5782 771,463

2) Currency risk 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, account receivables, other receivables, financial assets at fair value through other comprehensive income, loans and borrowings, accounts payables and other payables that are denominated in foreign currency. A change of 5% in the exchange rate of TWD or CNY against foreign currency for the three months ended March 31, 2022 and 2021 would have increased (decreased) the other comprehensive income (before tax) $1,064 and $1,062, respectively. For the three months ended March 31, 2022 and 2021 would have increased (decreased) the net profit before tax as follows. The analysis is performed on the same basis for both periods.

For the three months ended March 31,

USD (against the TWD) Appreciating 5% Depreciating 5% USD (against the CNY) Appreciating 5% Depreciating 5%	2022 2021 $ 139,902 143,768 (139,902) (143,768) (35,299) (37,241) 35,299 37,241

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Exchange gains and losses of monetary items

As the Group deals in diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the three months ended March 31, 2022 and 2021, the foreign exchange gains, including realized and unrealized, amounted to $73,261 and $14,027, respectively.

4) Interest rate analysis

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

Variable rate instruments: Financial assets Financial liabilities	Carrying amount March 31, 2022 March 31, 2021 $ 2,199,058 1,391,760 (9,618,043) (8,895,542)

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

If the interest rate had increased or decreased by 0.25%, the Group's net profit before tax would have decreased or increased by $4,637 and $4,690 for the three months ended March 31, 2022 and 2021, respectively, which would be mainly resulting from demand deposits, and unsecured loans with variable interest rates.

(iv) Fair value

1) Categories and the fair value of financial instruments

The fair value of financial assets and liabilities at fair value through profit or loss, and financial assets at fair value through other comprehensive income 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 were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets mandatorily measured at fair value through profit or loss Stocks listed on domestic markets Convertible bonds payable embedded derivatives Subtotal Financial assets at fair value through other comprehensive income Notes and accounts receivable, net Emerging market stocks Stocks unlisted on domestic markets and overseas market Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable, net Other receivables Guarantee deposits Subtotal Financial liabilities measured at amortized cost Bank loans Lease liabilities Notes and accounts payable Other payables and dividends payable Bonds payable Subtotal		March 31, 2022	March 31, 2022	March 31, 2022
	Carrying amount $ 570 110 680 1,994,853 481 39,549 2,034,883 2,889,524 11,171,305 277,024 76,018 14,413,871 $ 16,449,434 $ 10,536,508 296,353 6,916,358 1,991,433 41,862 19,782,514 $ 19,782,514		Fair Value
		Level 1 570 - - 481 - - - - - - - - - -	Level 2 - 110 - - - - - - - - - - - -	Level 3 Total - 570 - 110 - - - 481 39,549 39,549 - - - - - - - - - - - - - - - - - -

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets mandatorily measured at fair value through profit or loss Stocks listed on domestic markets Convertible bonds payable embedded derivatives Subtotal Financial assets at fair value through other comprehensive income Notes and accounts receivable, net Emerging market stocks Stocks unlisted on domestic markets and overseas market Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable, net Other receivables Guarantee deposits Subtotal Financial liabilities measured at amortized cost Bank loans Lease liabilities Notes and accounts payable Other payables Bonds payable Subtotal		December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount $ 607 375 982 2,034,971 516 39,549 2,075,036 2,266,607 11,514,010 343,724 74,220 14,198,561 $ 16,274,579 $ 10,996,048 323,726 5,308,148 952,772 126,336 17,707,030 $ 17,707,030		Fair Value
		Level 1 607 - - 516 - - - - - - - - - -	Level 2 - 375 - - - - - - - - - - - -	Level 3 Total - 607 - 375 - - - 516 39,549 39,549 - - - - - - - - - - - - - - - - - -

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets mandatorily measured at fair value through profit or loss Stocks listed on domestic markets Financial assets at fair value through other comprehensive income Notes and accounts receivable, net Emerging market stocks Stocks unlisted on domestic markets and overseas market Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable, net Other receivables Guarantee deposits Subtotal Financial liabilities mandatorily measured at fair value through profit or loss Convertible bonds embedded options Financial liabilities measured at amortized cost Bank loans Lease liabilities Notes and accounts payable Other payables and dividends payable Bonds payable Subtotal		March 31, 2021	March 31, 2021	March 31, 2021
	Carrying amount $ 624 1,757,562 6,386 40,474 1,804,422 2,122,475 10,052,346 332,966 74,807 12,582,594 $ 14,387,640 $ 7,100 9,564,471 174,826 3,983,398 1,003,567 932,860 15,659,122 $ 15,666,222		Fair Value
		Level 1 624 - 6,386 - - - - - - - - - - -	Level 2 - - - - - - - - 7,100 - - - - -	Level 3 Total - 624 - - - 6,386 40,475 40,475 - - - - - - - - - 7,100 - - - - - - - - - -

There were no transfers of financial instruments between any levels for the three months ended March 31, 2022 and 2021.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. 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:

a) Financial assets measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation technique of financial instruments measured at fair value
a) Non-derivative financial instruments

If the financial instrument has a public quoted price in an active market, the public quoted price will be determined as the fair value. The measurements on fair value of the financial instruments without an active market are determined using the valuation technique or the quoted market price of its counterparts. Fair value measured using the valuation technique can be extrapolated from similar financial instruments, discounted cash flow method, or other valuation techniques which include the model used in calculating the observable market data at the consolidated balance sheet date.

The Group holds the unquoted equity investments of financial instruments without an active market. The measurement of fair value of the equity instruments is based on the Guideline Public Company method, which mainly assumes the evaluation by the price value and the price to book value ratio of similar public company and by the discount for lack of marketability. The estimation has been adjusted by the effect resulting from the discount for lack of marketability of the securities.

b) Derivative financial instruments

Measurement of fair value of derivative instruments is based on the valuation techniques that are generally accepted by the market participants. For instance, discount method or option pricing models. Fair value of forward currency exchange is usually determined by using the forward currency rate.

4) Reconciliation of Level 3 fair values

Reconciliation of Level 3 fair values
		Fair value through
		other comprehensive
		income
		Unquoted equity
		instruments
Opening balance, January 1, 2022	$	39,549
(the same as ending Balance, March 31, 2022)
Opening balance, January 1, 2021	$	40,474
(the same as ending Balance, March 31, 2021)

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group’s financial instruments that use Level 3 inputs to measure fair value include “ financial assets measured at fair value through other comprehensive income - equity investments”.

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	Valuation technique Guideline Public Company method Net Asset Value Method	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value measurement ‧ Enterprise value to sale ratio as of March 31, 2022 and December 31, 2021 were 1.37 and 1.61. ‧ Price-to-sale ratio as of March 31, 2021 was 1.03. ‧ Price-book ratio as of March 31, 2022, December 31 and March 31, 2021 were 0.81, 0.9 and 0.84, respectively. ‧ Market liquidity discount rate as of March 31, 2022, December 31 and March 31, 2021 were 17.45%, 17.45% and 17.25%, respectively. ‧ The higher the price- to-sales ratio,price- book ratio, and the enterprise value to sale ratio, the higher the fair value ‧ The higher the market liquidity discount rate,the lower the fair value ‧ Net asset value ‧ Not applicable

(u) Financial risk management

There was no significant changes in the Group’s financial risk management and policies as disclosed in the note (6)(u) of the consolidated financial statements for the year ended December 31, 2021.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Capital management

The Group’ s objectives, policies and processes of capital management are consistent with those disclosed in the consolidated financial statements for the year ended December 31, 2021. In addition, there were no significant differences between the summary quantitative data of the items of capital management in the consolidated financial statements and those disclosed in the consolidated financial statements for the year ended December 31, 2021. Please refer to note (6)(v) of the consolidated financial statements for the year ended December 31, 2021 for further details.

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

The Group’s investing and financing activities which did not affect the current cash flow for the three months ended March 31, 2022 and 2021, were as follows:

For the acquisition of right-of-use assets from leases, please refer to note (6)(h).

The reconciliations of liabilities arising from financing activities were as follows:

Short-term loans Lease liabilities Bonds payable Total liabilities from financing activities Short-term loans Lease liabilities Bonds payable Total liabilities from financing activities	January 1, 2022 $ 10,996,048 323,726 126,336 $ 11,446,110 January 1, 2021 $ 9,745,315 190,939 929,322 $ 10,865,576	Cash flows (459,540) (34,991) - (494,531) Cash flows (180,844) (35,817) - (216,661)	Non-cash changes Acquisition Reduction Foreign exchange movement - - - 146 (427) 7,899 - (84,474) - 146 (84,901) 7,899 Non-cash changes Acquisition Reduction Foreign exchange movement - - - 19,854 (1,188) 1,038 3,538 - - 23,392 (1,188) 1,038	March 31, 2022
				10,536,508 296,353 41,862
				10,874,723
				March 31, 2021
				9,564,471 174,826 932,860
				10,672,157

(7) Related-party transactions

(a) Name and relationships with related parties

The following are entities that have had transactions with the Group during the period covered in the consolidated financial statements:

The following are entities that have had consolidated financial statements:	transactions with the Group during the period
Related-party	Relationship
Weiji Investment Co., Ltd.	The same chairman
Genlog Industrial Co., Ltd.	Substantive related-party

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Other related party transactions

(i) Sale of goods to related parties

The amounts of sales transactions between the Group and related parties were as follows:

	For the three months ended	For the three months ended	For the three months ended
		March 31,
	2022		2021
Other related parties	$ -		13

There were no significant differences in terms of collection and pricing on sales to related parties and other customers. The collection period was approximately 30 days after the sales date.

(ii) Processing fee and consultancy fees from related Parties

Other related parties were commissioned to provide processing services and consulting services to the Group. The amounts were as follows:

	For the three months ended	For the three months ended
	March 31,
	2022	2021
Other related parties	$ 1,692	1,682

(iii) Lease

The Group leased a portion of its building to its related parties for office use purpose. The rentals collected monthly were as follows:

		For	the three months ended	the three months ended
			March 31,
			2022	2021
	Other related parties	$	229	298
(iv)	Receivables from related parties

The receivables from related parties were as follows:

Account Relationship March 31, 2022 Notes and accounts receivable Other related parties $ - Payable to related parties Account Related party categories March 31, 2022 Other payables Other related parties $ 587	December 31, 2021 - December 31, 2021 355	March 31, 2021 13 March 31, 2021 573 (Continued)

(v) Payable to related parties

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Key management personnel compensation

Key management personnel compensation comprised:

		For the three months ended	For the three months ended
		March 31,
		2022	2021
Short-term employee benefits	$	72,617	48,883
Post-employment benefits		210	207
	$	72,827	49,090

(8) Assets pledged as security: None

(9) Commitments and contingencies:

The balances of L/Cs for deferred payment of import value added tax and the purchase of merchandise were as follows:

March 31, 2022 $ 162,088	December 31, 2021 188,312	March 31, 2021 167,550

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

The sixth domestic unsecured convertible bonds had been effectively registered via Rule No.1110341067 issued by the Securities and Futures Bureau of the Financial Supervisory Commission on May 11, 2022, and would be traded on GTSM on June 1, 2022. Please refer to note (6)(k) for related information.

(12) Other:

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

	For the three months ended March 31,	For the three months ended March 31,
By function By item	2022	2021
	Operating expenses	Operating expenses
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	376,755 29,375 25,122 25,618 12,398 40,213 6,734	297,083 26,050 21,315 14,226 14,697 39,236 6,790

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Seasonality of operations:

The Group’s operation were not affected by seasonality or cyclically 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 for the three months ended March 31, 2022:

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties:

								(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)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary (note 2)	Subsidiary endorsements/ guarantees to third parties on behalf of parent company (note 2)	Endorsements/ guarantees to third parties on behalf of companies in Mainland China (note 2)
		Name	Relationship with the Company
0 〃〃	The Company 〃〃	WKI WTP WKS	100％owned subsidiary 100％owned subsidiary 100％owned subsidiary	11,242,227 11,242,227 11,242,227	6,598,016 628,320 1,024,978	6,598,016 628,320 1,024,978	5,079,162 454,265 459,592	- - -	% 88.03 % 8.38 % 13.68	22,484,454 22,484,454 22,484,454	Y Y Y	N N N	N N Y

Note 1：The total amount of the guarantee provided by the Company shall not exceed three hundred percent (300%) of the higher amount between the Company’s capital amount and net worth. However, for any individual entity whose voting shares are 50% or more owned, directly or indirectly, by the Company shall not exceed fifty percent (50%) of the maximum amount for guarantee on recent audited or reviewed financial statements.

Note 2：For those entities as the guarantor to the subsidiary, subsidiary as the guarantor to the company, or the guarantor that located in China, please fill in “Y”.

(iii) Securities held as of March 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

ventures):	ventures):	ventures):	ventures):
					(Shares/units (thousands))
Name of holder	Category and name of security	Relationship with company	Account title		Ending balance			Note
				Shares/Units (thousands)	Carrying amount	Percentage of ownership (%)	Fair value
The Company 〃〃〃〃〃〃	Securities of listed companies EBM Technologies Inc. Clientron Corp. Paradigm I Venture Capital Company (Paradigm I) Paradigm Venture Capital Corporation (PVC Corp.) InnoBridge Venture Fund ILP. (InnoBridge) Shin Kong Global Venture Capital Corp. Vision Wide Technology Co., Ltd. (VTEC)	- - - - - - -	Financial assets mandatorily measured at fair value through profit or loss- current Financial assets at fair value through other comprehensive income-non- current 〃〃〃〃〃	34 15 750 230 - 960 800	$ 570 $ 481 $ 7,458 2,301 15,150 4,800 9,840 $ 39,549	- 0.02 6.79 10.49 9.90 12.00 1.67	$ 570 $ 481 $ 7,458 2,301 15,150 4,800 9,840 $ 39,549

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock: None
(v) Acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None
(vi) Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

								(In thousands)	(In thousands)	(In thousands)	(In thousands)
Name of company	Related party	Nature of relationship	Transaction details				Transaction different f	s with terms rom others	Notes/Accounts receivable (payable)		Note
			Purchases/ (Sales)	Amount	Percentage of total purchases/ (sales)	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
WKI WKS	WKS WKI	Subsidiary Parent company	(Sales) Purchases	(1,175,447) (USD(42,005)) 1,175,447 (USD42,005)	(13.57)% 78.23 %	OA60 〃	No significant difference with other customers No significant difference with other suppliers	No significant difference with other customers No significant difference with other suppliers	Accounts Receivable 777,576 (USD27,226) Accounts Payable (777,576) (USD(27,226))	14.58 % (72.96) %

Note: The amounts of the transaction and the ending balance had been offset in the consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

									(In thousands)
Name of company	Counter- party	Nature of relationship	Ending balance	Turnover rate	Ove	rdue	Amounts received in subsequent period (Note)	Allowance for bad debts	Note
					Amount	Action taken
The Company WKI	WKI WKS	100% owned Subsidiary Subsidiary	Other receivables 142,374 (USD4,985) Accounts receivable 777,576 (USD27,226)	- 6.46	- -	- -	USD 350 -	- -	The amounts of the transaction and the ending balance had been offset in the consolidated financial statements. 〃

Note: Information as of May 6, 2022.

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

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(x) Business relationships and significant intercompany transactions:

No. (Note 1)	Name of company	Name of counter-party	Nature of relationship (Note 2)		Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 〃〃〃〃〃〃〃〃〃〃〃 1 〃〃 2 〃	The Company 〃〃〃〃〃〃〃〃〃〃〃 WKI 〃〃 WKS 〃	WKI 〃〃〃 WKS 〃 WTP 〃〃〃 WKZ 〃 The Company WKS 〃 WKI 〃	1 〃〃〃〃〃〃〃〃〃〃〃 2 3 〃〃〃	Sales Revenue Accounts Receivable Management and Credit Service Revenue Other Receivables Accounts Receivable Management and Credit Service Revenue Sales Revenue Accounts Receivable Management and Credit Service Revenue Other Receivables Sales Revenue Accounts Receivable Sales Revenue Sales Revenue Accounts Receivable Service Revenue Accounts Receivable	22,636 20,293 84,956 142,374 663 2,270 24,267 24,516 1,315 1,864 181 2,409 69,200 1,175,447 777,576 3,080 1,429	The price is marked up based on operating cost, and the receivables depend on OA30 after offsetting the accounts payable. 〃 The price is set by percentage of the contract and the receivable is received quarterly. 〃 The price is marked up based on operating cost, OA60. The price is set by percentage of the contract and the receivable is received quarterly. The price is marked up based on operating cost, and the receivables depend on OA30 after offsetting the accounts payable. 〃 The price is set by percentage of the contract and the receivable is received quarterly. 〃 The price is marked up based on operating cost, and the receivables depend on OA60 after offsetting the accounts payable. 〃 The price is marked up based on operating cost, and the receivables depend on OA30 after offsetting the accounts payable. The price is marked up based on operating cost, and the receivables depend on funding demand and OA60. 〃 The price is set by percentage of the contract, OA30. 〃	0.13% 0.07% 0.50% 0.48% -% 0.01% 0.14% 0.08% 0.01% 0.01% -% 0.01% 0.41% 6.95% 2.64% 0.02% -%

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Note 1: The numbers filled in as follows:

0 represents the Company.
Subsidiaries are sorted in a numerical order starting from 1. Note 2: Relationship with the transactions labeled as follows: 1 represents the transactions from the parent company to its subsidiaries. 2 represents the transactions from the subsidiaries to the parent company. 3 represents the transactions between subsidiaries.

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2022 (excluding information on investees in Mainland China):

										(In thousands)	(In thousands)
Name of investor	Name of investee	Location	Main businesses and products	Original invest	ment amount	Highest			Net income (losses) of investee	Investment income (losses) of investor	Note
				March 31, 2022	December 31, 2021	Shares (In Thousands)	Percentage of Ownership	Carrying amount
The Company 〃〃 WKI	WKI WKZ WTP Weitech	Hong Kong Taiwan Singapore Hong Kong	Electronic components computer peripherals products distribution and technical support Electronic components and technical support 〃 Import and export trade of electronic components	$ 1,322,295 12,983 293,327 $ 1,628,605 0.41 (HKD0.1)	1,322,295 12,983 293,327	473,950 1,589 12,413 -	100% 100% 100% 100%	$ 5,695,815 25,742 414,217	285,789 (189) 35,092 66 (USD2)	$ 285,789 (189) 35,092	Subsidiary 〃〃 Subsidiary's subsidiary
					1,628,605			$ 6,135,774		$ 320,692
					0.41 (HKD0.1)			2,206 (USD77)		66 (USD2)

(c) Information on investment in mainland China:

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

(In thousands)

												(In thousands)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2022	Inves flo	tment ws	Accumulated outflow of investment from Taiwan as of March 31, 2022	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) of investor	Book value (Note 3)	Accumulated remittance of earnings in current period
					Outflow (Note 3)	Inflow
WKS WKE	Electronic components computer peripherals products distribution and technical support Electronic technology development and technical advisory	786,647 (USD25,000) 5,067 (RMB1,000)	Note 1、4 Note 1、5	304,594 (USD9,800) -	- -	- -	304,594 (USD9,800) -	18,089 (USD646) (Note 2) (789) (USD(28))	100% 100%	18,089 (USD646) (Note 2) (789) (USD(28))	763,279 (USD26,725) 5,051 (USD177)	- -

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of March 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA (note 3)	Upper Limit on Investment
304,594 (USD9,800)	714,000 (USD25,000)	4,496,891

Note 1: Investment in Mainland China was through a company in the third area.

Note 2: The investment gains and losses of the current period are recognized according to the financial statements, which have been reviewed by the Company’ s independent auditors, and were translated into New Taiwan Dollars at the average exchange rates.

Note 3: The currency was translated into New Taiwan Dollars at the exchange rates at the end of reporting period.

(Continued)

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Note 4: The difference was due to Weikeng International Co. Ltd.'s investment of US15,200 thousand on Weikeng International (Shanghai) Co. Ltd. using its own funds.

Note 5: The difference was due to Weikeng International (Shanghai) Co. Ltd.'s investment of RMB1,000 thousand on Weikeng Electronic Technology (Shanghai) Co. Ltd. using its own funds.

(iii) Significant transactions:

Please refer to Information on significant transactions for the information on significant direct or indirect transactions, which were eliminated in the preparation of consolidated financial statements, between the Group and the investee companies in Mainland China in 2022.

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Weiji Investment Co., Ltd.	30,426,876	% 7.23

Note (i): The information of major shareholders is based on the last business day of the end of each quarter set by Taiwan Depository & Clearing Corporation, wherein the shareholders hold more than 5% of the Company's ordinary shares, which have been completely registered non-physically (including treasury shares). There may be differences between the share capital recorded in the Company's financial statements and the actual number of the delivered shares, which have been completely registered non-physically due to the different methods used in their calculation.
Note (ii):In the case of the above information, if the shareholder delivers the shares to the trust, the shares will be disclosed as a personal account under the trust account of the principal opened by the trustee. As for the shareholders’ declaration of more than 10% of the insider’s shareholdings under the Securities and Exchange Act, the shareholders’ stocks should be include in their own shareholdings, plus, the shares delivered to the trust, wherein the shareholders have the right of decision on using the trust property. For information on insider’s equity declaration, please refer to market observation post system.

(14) Segment information:

The Group has only one operating segment, which is the electronic components segment, of which, the major activities are the purchase and sales of electronic components and computer peripherals, technical service, as well as the import/export trade business. The Group’s details and reconciliations of operating segment are consistent with the consolidated financial statements. Please refer to the consolidated statements of comprehensive income and the consolidated balance sheet for the segment profit and assets, respectively.

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Weikeng — Interim / Quarterly Report 2022

52266_rns_2022-11-29_bc45d9b5-462b-4c74-9652-1d9f31d3d30f.pdf

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Conclusion

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2022 and 2021 WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2022, December 31, and March 31, 2021

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

Consolidated Statement of Comprehensive Income

For the three months ended March 31, 2022 and 2021

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

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

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the three months ended March 31, 2022 and 2021

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2022 and 2021

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

(b) Basis of Consolidation

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Income taxes

(d) Employee benefits

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

(6) Explanation of significant accounts

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Notes and accounts receivable

(i) The Company

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Subsidiaries

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Other receivables

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Inventories

(g) Property, plant and equipment

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Right-of-use assets

(i) Short-term borrowings

(j) Other payables

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Lease liabilities

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Real estate leases

(ii) Other leases

(m) Operating lease — as lessor

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Employee benefits

(i) Defined benefit plans

(o) Income taxes

(i) Income tax expenses

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Capital and other equities

(i) Common stock

(ii) Capital surplus

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retained earnings

1) Earnings distribution

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Earnings per share

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Revenue from contracts with customers

(ii) Contract balance

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Weikeng Interim / Quarterly Report 2022