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Cosmo Electronics Corp. Interim / Quarterly Report 2022

Dec 21, 2022

52104_rns_2022-12-21_bf104328-ae8f-4929-b5c3-08f2d2d4c783.pdf

Interim / Quarterly Report

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COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT MARCH 31, 2022 AND 2021 

-----------------------------------------------------------------------

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two version, the Chinese-language auditors’ report and consolidated financial statements shall prevail. 

~1~

Independent Auditors’ Review Report Translated From Chinese

To the Board of Directors and Shareholders of Cosmo Electronics Corporation

Introduction

We have reviewed the accompanying consolidated financial statements of Cosmo Electronics Corporation and its subsidiaries, which comprise the consolidated balance sheets as at March 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these 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” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews and the reports of other independent auditors.

Scope of Review

We conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of 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 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As explained in Notes 4(3), the financial statements of certain insignificant consolidated subsidiaries were not reviewed by independent auditors. Those statements reflect total assets of NT$625,091 thousand and NT$647,032 thousand, constituting 15% and 16% of the consolidated total assets, and total liabilities of NT$58,727 thousand and NT$109,032 thousand, constituting 2.4% and 5% of the consolidated total liabilities as at March 31, 2022 and 2021, respectively, and total comprehensive income of NT$19,150 thousand and NT$(16,115) thousand, constituting 31% and 35% of the consolidated total comprehensive 

~2~

income for the three-month periods then ended, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, 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 Cosmo Electronics Corporation and its subsidiaries as at March 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the three-month periods then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Tsai, Yi Tai Liang, Chan Nyu

For and on behalf of PricewaterhouseCoopers, Taiwan May 11, 2022

The accompanying consolidated financial statements are not intended to present to financial position and results of operations and cash flow in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such consolidated financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two version, the Chinese-language auditors’ report and consolidated financial statements shall prevail. 

~3~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2022 and 2021 are reviewed, not audited)

Assets Notes March31,2022
Amount
%
$ 464,032
11
2,504
-
337,351
8
15,085
-
18,925
1
5,692
-
696,786
17
91,975
2
2,728
-
1,635,078
39
19,046
1
747,006
18
124,081
3
1,483,758
36
13,542
-
48,783
1
34,261
1
14,795
-
18,908
-
30,974
1
2,535,154
61
$ 4,170,232
100		 December31,2021
Amount
%
$ 586,246
15
-
-
336,289
8
16,575
-
18,348
1
4,941
-
464,054
12
50,795
1
1,736
-
1,478,984
37
19,050
1
740,479
19
122,369
3
1,465,874
37
13,581
-
55,088
1
36,485
1
15,029
-
18,395
-
24,210
1
2,510,560
63
$ 3,989,544
100		 March31,2021 March31,2021
Amount
$ 464,032
2,504
337,351
15,085
18,925
5,692
696,786
91,975
2,728
1,635,078
19,046
747,006
124,081
1,483,758
13,542
48,783
34,261
14,795
18,908
30,974
2,535,154
$ 4,170,232		 Amount

$ 586,246
-
336,289
16,575
18,348
4,941
464,054
50,795
1,736
1,478,984
19,050
740,479
122,369
1,465,874
13,581
55,088
36,485
15,029
18,395
24,210
2,510,560
$ 3,989,544		 Amount
$ 954,852
6,557
238,228
19,352
18,439
4,208
461,374
76,833
1,976
1,781,819
3,678
577,479
114,757
1,278,085
15,164
74,647
34,964
20,270
17,652
10,214
2,146,910
$ 3,928,729		 %
Current assets
1100
Cash and cash equivalents
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
1210
Other receivables from related
parties
1220
Current income tax assets
130X
Inventories
1410
Prepayments
1479
Other current assets
11XX
Total current assets
Non-current assets
1535
Financial assets at amortized
cost-non current
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1915
Prepayments for equipment
1920
Refundable deposits
1975
Net defined benefit assets-non
current
1990
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 6(1)
6(3)
6(3)
7
6(4)
7
6(2) and 8
6(5) and 8
6(6) and 8
6(7) and 8
6(8)
6(24)
6(12)		 24
-
6
1
-
-
12
2
-
45
-
15
3
33
-
2
1
1
-
-
55
100

(Continued) 

~4~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2022 and 2021 are reviewed, not audited)

March31,2022 December31,2021 December31,2021 March31,2021
Liabilities and Equity Notes Amount
 % Amount
 % Amount %
Current liabilities
2100 Short-term borrowings 6(9) $ 483,009 12 $ 480,754 12 $ 435,630 11
2110 Short-term bills payable 6(9) 49,985 1 49,887 1 49,870 1
2130 Contract liabilities-current 6(17) 1,572 - 2,943 - 2,347 -
2150 Notes payable 262 - 1,047 - - -
2170 Accounts payable 223,162 5 123,264 3 103,098 3
2180 Accounts payable to related parties 7 18,709 1 12,907 - 18,272 1
2219 Other payables 65,258 2 52,395 1 33,332 1
2220 Other payables to related parties 7 - - - - 82 -
2230 Current income tax liabilities 3,929 - 1,563 - 415 -
2280 Lease liabilities-current 6,540 - 6,305 - 1,685 -
2320 Long-term liabilities-current 6(10)(11) and
portion 7 307,528 7 898,205 23 241,000 6
2399 Other current liabilities 14,876 - 14,781 1 14,373 -
21XX Total current liabilities 1,174,830 28 1,644,051 41 900,104 23
Non-current liabilities
2530 Convertible bonds payable 6(10) - - 273,484 7 293,071 7
2540 Long-term borrowings 6(11) and 7 1,048,625 25 174,000 4 875,688 22
2570 Deferred income tax liabilities 6(24) 182,185 5 196,735 5 198,408 5
2580 Lease liabilities-non current 6,851 - 6,605 - - -
2620 Long-term notes payable to related 6(11) and 7
parties - - - - 33,205 1
2640 Net defined benefit liability-non 6(12)
current 30,067 1 28,096 1 33,977 1
2670 Others non-current liabilities 530 - 527 - 254 -
25XX Total non-current liabilities 1,268,258 31 679,447 17 1,434,603 36
2XXX Total liabilities 2,443,088 59 2,323,498 58 2,334,707 59
Equity
Share capital 6(13)
3110 Common stock 1,616,234 39 1,616,234 41 1,563,342 40
Capital surplus 6(14)
3200 Capital surplus 241,891 6 241,891 6 272,535 7
Retained earnings 6(15)
3310 Legal reserve 1,203 - 1,203 - 350 -
3320 Special reserve 12,484 - 12,484 - 4,810 -
3350 Unappropriated retained earnings 68,313 1 56,156 1 ( 13,667) -
Other equity interest 6(16)
3400 Other equity interest ( 212,981 ) ( 5) ( 261,922) ( 6) ( 233,348) ( 6)
31XX Equity attributable to owners of
the parent 1,727,144 41 1,666,046 42 1,594,022 41
3XXX Total equity 1,727,144 41 1,666,046 42 1,594,022 41
Significant contingent liabilities and 9
unrecognized contract commitments
Significant subsequent events 11
3X2X Total liabilities and equity $ 4,170,232 100 $ 3,989,544 100 $ 3,928,729 100

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

~5~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings(deficit) per share amounts) (REVIEWED, NOT AUDITED)

Items Forthe three-monthperiod endedMarch31,
2022
2021
Notes
Amount
%
Amount
%
6(17) and 7
$ 208,181
100
$ 216,035
100
6(4) and 7
(
135,490 ) (
65)(
179,358) (
83)
72,691
35
36,677
17
(
11,125 ) (
5) (
9,231) (
4)
(
49,223 ) (
24) (
48,147) (
22)
(
1,468 ) (
1) (
1,607) (
1)
3
- (
2)
-
(
61,813 ) (
30)(
58,987) (
27)
10,878
5 (
22,310) (
10)
6(18)
511
-
421
-
6(19)
2,205
1
1,106
-
6(20)
3,834
2 (
5,339) (
2)
6(21)
(
8,862 ) (
4)(
9,087) (
4)
(
2,312 ) (
1)(
12,899) (
6)
8,566
4 (
35,209) (
16)
6(24)
3,591
2
13,015
6
$ 12,157
6 ($ 22,194) (
10)
6(16)
$ 48,941
23 (
24,176) (
11)
$ 48,941
23 ($ 24,176) (
11)

$ 61,098
29 ($ 46,370) (
21)
$ 12,157
6 ($ 22,194) (
10)
$ 61,098
29 ($ 46,370) (
21)
6(25)
$ 0.08 ($ 0.14)
$ 0.08 ( $ 0.14)
4000
Operating revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Expected credit impairment
gain(loss)
6000
Total operating expenses
6900
Operating profit (loss)
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income and
expenses
7900
Profit(Loss) before income tax
7950
Income tax(expense)benefit
8200
Profit(Loss) for the period
Other comprehensive income(loss)
Components of other comprehensive
income(loss) that will be reclassified
to profit or loss
8361
Financial statements translation
differences of foreign operations
8300
Other comprehensive income(loss)
for the period
8500
Total comprehensive income(loss) for
the period
Profit attributable to:
8610
Owners of the parent
Comprehensive income(loss)
attributable to :
8710
Owners of the parent
Earnings per share
9750
Basic earnings(deficit) per share
9850
Diluted earnings(deficit) per share

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

~6~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

For the three-month period ended March 31, 2021 Notes Equity attributable Equity attributable Equity attributable Equity attributable to owners of the parent to owners of the parent to owners of the parent Totalequity
Share capital-
commonstock		 Capitalsurplus Retained earnings Financial
statements
translation
differences of
foreignoperations
Legal reserve Special reserve Unappropriated
retained earnings
$1,563,342
-
-
-
$1,563,342
$1,616,234
-
-
-
$1,616,234


$ 272,535
-
-
-
$ 272,535
$ 241,891
-
-
-
$ 241,891		 $ 350
-
-
-
$ 350
$ 1,203
-
-
-
$ 1,203		 $ 4,810
-
-
-
$ 4,810
$ 12,484
-
-
-
$ 12,484		 $ 8,527
(
22,194 )
-
(
22,194 )
(
$ 13,667 )
$ 56,156
12,157
-
12,157
$ 68,313		 ( $ 209,172 )
-
(
24,176 )
(
24,176 )
( $ 233,348 )
( $ 261,922 )
-
48,941
48,941
( $ 212,981 )		 $1,640,392
(
22,194 )
(
24,176 )
(
46,370 )
$1,594,022
$1,666,046
12,157
48,941
61,098
$1,727,144

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

~7~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars) (REVIEWED, NOT AUDITED)

Forthe three-month period endedMarch31, period endedMarch31,
Notes 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit(loss) before tax for the period $
8,566
( $		 35,209 )
Adjustments
Income and expenses having no effect on cash flows
Depreciation 6(5)(6)(22) 24,144 18,668
Amortization 6(8)(22) 515 526
Expected credit impairment (gain)losses ( 3 ) 2
Interest expense 6(21) 8,862 9,087
Interest income 6(18) ( 511 )
(		 421 )
(Reversal )Provision for inventory and obsolescence 6(4) ( 2,548 )
(		 7,330 )
Changes in assets and liabilities relating to operating
activities
Net changes in assets relating to operating activities
Notes receivable ( 2,504 ) 1,460
Accounts receivable ( 1,050 ) 81,243
Accounts receivable from related parties - 1,955
Other receivables 1,490 3,485
Other receivables from related parties ( 577 ) 140
Inventories ( 230,184 )
(		 19,859 )
Prepayments ( 41,180 )
(		 17,116 )
Net defined benefit assets ( 513 )
(		 474 )
Other current assets ( 992 )
(		 124 )
Net changes in liabilities relating to operating activities
Contract liabilities-current ( 1,371 ) 908
Notes payable ( 785 ) -
Accounts payable 99,898 17,972
Accounts payable to related parties 5,802
(		 13,599 )
Other payables 6,748
(		 14,616 )
Other payables to related parties -
(		 21 )
Other current liabilities 95
(		 56 )
Net defined benefit liability 1,971 1,169
Cash inflow (used in)/generated from operations ( 124,127 ) 27,790
Interest received 511 421
Income taxes paid 5,440
(		 11,186 )
Net cash flows (used in)/generated from operating
activities ( 118,176 ) 17,025
(Continued) 
~8~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property, plant and equipment

Proceeds from disposal of property, plant and equipment

Decrease in refundable deposits

Acquisitions of intangible assets

Payments for investment properties

Increase in other non-current assets

Increase in prepayments for equipment

Net cash flows used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in short-term borrowings

Decrease in short-term borrowings

Lease principal repayment

Decrease in long-term notes payable to related parties

Repayment for long-term borrowings

Proceeds from long-term borrowings

Interest paid

Net cash flows used in financing activities

Effect due to changes in exchange rate

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period		 Forthe three-monthperiod endedMarch31,
Notes
2022
2021
6(5)(26)
( $ 7,895 )
( $ 1,098 )

240
1,958

234
5,316
6(8)
(
150 )
(
415 )
6(7)
(
5,615 )
-

(
6,764 )
(
2,927 )

(
4,061 )
(
28,511 )

(
24,011 )
(
25,677 )

6(27)
594,707
346,892
6(27)
(
594,637 )
(
316,892 )

-
(
838 )

-
(
82,021 )
6(11)(27)
(
879,125 )
-
6(11)(27)
876,875
-

(
7,925 )
(
8,212 )

(
10,105 )
(
61,071 )

30,078
16,843

(
122,214 )
(
52,880 )

586,246
1,007,732
$ 464,032
$ 954,852		 Forthe three-monthperiod endedMarch31, Forthe three-monthperiod endedMarch31,
2021
( $ 1,098 )
1,958
5,316
(
415 )
-
(
2,927 )
(
28,511 )
(
25,677 )
346,892
(
316,892 )
(
838 )
(
82,021 )
-
-
(
8,212 )
(
61,071 )
16,843
(
52,880 )
1,007,732
$ 954,852

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

~9~

COSMO ELECTRONICS CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE -MONTH PERIODS ENDED MARCH 31, 2022 AND 2021 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (REVIEWED, NOT AUDITED)

1. History and Organization

Cosmo Electronics Corporation (“The Company”) was established in May 1981. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in manufacture and sales of relays, photocouplers and LEDs, biomass energy and land development business, etc. The Company's shares have been traded on the Taipei Exchange(OTC) since January 15, 2000, and were listed on the Taiwan Stock Exchange(TWSE) on September 17, 2001.

2. The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for

Authorization

These consolidated financial statements were authorized for issuance by the Board of Directors on May 11, 2022.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2022 are as follows:

follows:
New Standards,Interpretations and Amendments
Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts—
cost of fulfilling a contract’		 Effective date by
International Accounting
Standards Board
January 1, 2022
January 1, 2022
January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial

condition and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

None. 

~10~

(3) Effect of IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

IFRSs as endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments
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’
Amendments to IFRS 17, ‘Insurance contracts’
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –
comparative information’
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’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities
arising from a single transaction’		 Effective date by
International Accounting
StandardsBoard
To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial

condition and financial performance based on the Group’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2021, except for the compliance statement, basis of preparations, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

  • A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.

  • B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2021.

(2) Basis of preparation

Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

  • A. Financial assets and financial liabilities (including derivative instruments) at fair value 
~11~

through profit or loss.

  • B. Investment property at fair value.

  • C. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

  • (3) Basis of consolidation

  • A. Basis for preparation of consolidated financial statements:

    • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

    • (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

    • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

    • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

    • (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in 

~12~

relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of Investor
Name ofSubsidiary
Main BusinessActivities		 Ownership (%)
March
31,2022
December
31,2021
March
31,2021 Description
Cosmo Electronics
Corporation
Cosmo Electronics
Samoa
Investment activities
100
100
100
Note 2 and 3
Cosmo Electronics (HK)
Company Limited
Trading of electronic
products
100
100
100
Note 2 and 3
Grand Concept Group
Limited
Investment activities
100
100
100
Note 2 and 3
Grandway
International Limited.
Investment activities
100
100
100
Note 2 and 3
PT Cosmo
Technology
(PT Cosmo)
Manufacturing and
selling of LED lighting
14
14
14
Note 1
Cosmo Green Power
Limited
(Cosmo Green)
Manufacturing and
selling of material of
biomass energy
100
100
100
Note 2 and 3
Cosmo Electronics
Samoa
Cosmo Electronics
Technology Co.,
Ltd.
Investment activities
100
100
100
Note 2 and 3
Cosmo Electronics
Technology Co.,
Ltd.
Cosmo Electronics
Technology (KunShan)
Co., Ltd.
Manufacturing and
selling of new
electronic parts
100
100
100
Note 2 and 3
Cosmo Electronics
(HK) Company
Limited
Cosmo Lighting Inc.
Selling of LED lighting
100
100
100
Note 2 and 3
Cosmo Recycling Inc. Recycling and selling of
waste
100
100
100
Note 2 and 3
Grand Concept
Group Limited
True Glory
Investments Limited
Investment activities and
processing and trading of
PCBs
100
100
100
Note 2 and 3
Real Bonus Limited
Selling of LED lighting
100
100
100
Note 1
Grandway
International
Limited.
Truly Top
Investments Limited
Investment activities
100
100
100
Note 2 and 3
Renown Boom
Limited
Investment activities and
processing and selling of
routers
100
100
100
Note 2 and 3
True Glory
Investments
Limited
PT Cosmo
Technology
(PT Cosmo)
Manufacturing and
selling of LED lighting
13
13
13
Note 1
PT Cosmo Green
Technology
(PT Cosmo Green)
Manufacturing and
selling of material of
biomass energy
50
50
50
Note 2 and 3
PT Cijambe Indah
(PT Cijambe)
Land development
88
88
88
Note 1		 
~13~
Name of Investor
Name of Subsidiary
Main Business Activities		 Ownership (%)

March
31,2022
December
31,2021
March
31,2021 Description
Truly Top
Investments
Limited
PT Cosmo
Technology
(PT Cosmo)
Manufacturing and
selling of LED lighting
PT Cosmo Green
Technology
(PT Cosmo Green)
Manufacturing and
selling of material of
biomass energy
Renown Boom
Limited
Dong Guan Guan Zhen
Xing Trading Limited
Manufacturing and
selling of material of
biomass energy
PT Cijambe Indah
(PT Cijambe)
Land development
Dong Guan Guan
Zhen Xing Trading
Limited
Shaoguan Woncrown
Electronics Technology
Co.,Ltd.
Developing,
manufacturing and
selling of electronic
products
Guizhou Guanwang
International Digicrown
Electronic Technology
Co., Ltd.
Developing,
manufacturing and
selling of electronic
products
Dongguan Guanwang
Electronic Technology
Co., Ltd.
Developing,
manufacturing and
selling of electronic
products		 73
73
73
Note 1
50
50
50
Note 2 and 3
100
100
100
Note 2 and 3
12
12
12
Note 1
100
100
100
Note 2 and 3
100
100
100
Note 2 and 3
100
100
100
Note 2 and 3

  • Note 1: The total Group's investment in this subsidiary is 100%.

  • Note 2: The financial statements of the entity as of and for the three-month period ended March 31, 2022 was

not reviewed by independent auditors as the entity did not meet the definition of a significant subsidiary.

  • Note 3: The financial statements of the entity as of and for the three-month period ended March 31, 2021 was not reviewed by independent auditors as the entity did not meet the definition of a significant subsidiary.

  • C. Subsidiaries not included in the consolidated financial statements: None.

  • D. Adjustments for subsidiaries with different balance sheet dates: None.

  • E. Significant restrictions: None.

  • F. Subsidiaries that have non-controlling interests that are material to the Group: None.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

There have been no significant changes as of March 31, 2022. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2021. 

~14~

6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving
founds
Checking accounts and demand
deposits
Time deposits		 March 31, 2022
$ 4,560
319,754
139,718
$ 464,032		 December 31, 2021
$ 4,279

469,179
112,788
$ 586,246
 March 31, 2021
$ 3,936
931,116
19,800
$ 954,852

  • A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

  • B. Time deposits were pledged as collateral for custom duties of the imported materials and restricted bank accounts for reimbursement of bank loan , and were classified as financial assets at amortized cost. Details are provided in Note 8.

(2) Financial assets at amortized cost

) Financial assets at amortized cost
Items
Non-current items:
Pledged time deposits (Note 8)
Restricted bank accounts
Corporate bonds-CFE		 March 31, 2022
$ 3,682
9,802
5,562
$ 19,046		 December 31, 2021
$ 3,682

9,802
5,566
$ 19,050
 March 31, 2021
$ 3,678
-
-
$ 3,678
  • A. Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below:
ow:
Interest income For the three-month period ended March 31
2022
$ 129		 2021
$ 2

  • B. On November 4, 2021, the Group bought a corporate bond issued by CFE with a coupon rate of 3.875% and a maturity date of July 26, 2033 , at a par value of USD 200 thousand. The interest was paid on semi-annual basis.

  • C. Information relating to credit risk of financial assets at amortized cost is provided in Note 12. The counterparties of the Group’s investments in certificates of deposits are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote. 

~15~

(3) Notes and accounts receivable

Notes and accounts receivable
Notes receivable
Accounts receivable
Less: Allowance for uncollectible
accounts		 March 31, 2022
$ 2,504
$ 341,505
(
4,154)
$ 337,351		 December 31, 2021
$ -

$ 340,312

(
4,023)
$ 336,289
 March 31, 2021
$ 6,557
$ 242,256
(
4,028)
$ 238,228
  • A. The ageing analysis of accounts receivable and notes receivable is as follows:
Not past due
1 to 90 days
91 to 180 days
Over 181 days		 March 31,2022
Accounts
receivable
Notes
receivable
$ 157,122 $ 2,504
180,048
-
202
-

4,133
-
$341,505$ 2,504		 December 31,2021

Notes
receivable
$ -

-

-
-
$ -		 March 31,2021 March 31,2021
Accounts
receivable
$ 157,122
180,048
202

4,133
$341,505		 Accounts
receivable
$ 331,146
4,972
195
3,999
$340,312		 Accounts
receivable
$ 234,797

3,460

-

3,999
$ 242,256
Notes
receivable
$ 6,557

-

-
-
$ 6,557

The above ageing analysis was based on past due date.

  • B. As of March 31, 2022, December 31, 2021, and March 31, 2021, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2021, the balance of receivables from contracts with customers amounted to $327,490.

C. As of March 31, 2022, December 31, 2021, and March 31, 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable was $344,009 , $340,312 and $248,813, respectively.

  • D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12. 
~16~

(4) Inventories

Inventories
Raw materials
Work in progress
Finished goods
Merchandise		 March 31, 2022
$ 222,331
208,749
241,785
23,921
$ 696,786		 December 31, 2021
$ 165,692

97,287
192,661
8,414
$ 464,054
 March 31, 2021
$ 168,454
151,636
130,074
11,210
$ 461,374

The cost of inventories recognized as expense for the period:

Cost of goods sold
Gains on reversal of decline in market value
Revenue from sale of scraps		 For the three-month period ended March 31, For the three-month period ended March 31,
2022
($ 138,286
($ 2,548)
($ 248)
($ 135,490		 2021
($ 188,374
($ 7,330 )
(
1,686)
($ 179,358

The Group reversed from a previous inventory write-down and accounted for as reduction of cost of goods sold because market price rose. 

~17~

(5) Property, plant and equipment

At January 1
Cost
Accumulated depreciation
and impairment
2022
Opening net book amount
Additions
Disposals
Transfers from prepayment
Depreciation
Transfer
Net exchange differences
Closing net book amount
At March 31, 2022
Cost
Accumulated depreciation
and impairment		 2022 2022
Land
$ 81,110
-
$ 81,110
$ 81,110
-
-

-
-
110,841
-
$ 191,951
$ 191,951
-
$ 191,951		 Buildings and
structures
$ 391,603
(
187,254)
$ 204,349
$ 204,349
-
-
2,584
(
5,747 )
44,199
3,949
$ 249,334
$ 446,849
(
197,515)
$ 249,334		 Machinery
$ 1,208,754
(
965,364)
$ 243,390
$ 243,390
9,675
(
240 )
3,701
(
13,297 )
-
3,392
$ 246,621
$ 1,232,711
(
986,090)
$ 246,621		 Transportation
equipment
$ 16,563
(
12,222)
$ 4,341
$ 4,341
-
-
-
(
230)
-
97
$ 4,208
$ 16,877
(
12,669 )
$ 4,208		 Office
equipment
$ 37,327
(
32,003)
$ 5,324
$ 5,324
1,590
-
-
(
409 )
-
130
$ 6,635
$ 39,657
(
33,022)
$ 6,635		 Other
equipment
$ 257,994
(
212,529)
$ 45,465
$ 45,465
260
-
-
(
1,983)
-
570
$ 44,312
$ 261,616
(
217,304)
$ 44,312		 Unfinished
construction
$ 156,500
-
$ 156,500
$ 156,500
2,485
-
-
-
(
155,040 )
-
$ 3,945
$ 3,945
-
$ 3,945		 Total
$ 2,149,851
(
1,409,372)
$ 740,479
$ 740,479
14,010
(
240 )
6,285
(
21,666 )
-
8,138
$ 747,006
$ 2,193,606
(
1,446,600)
$ 747,006 
~18~
At January 1
Cost
Accumulated depreciation and
impairment
2021
Opening net book amount
Additions
Disposals
Depreciation
Net exchange differences
Closing net book amount
At March 31, 2021
Cost
Accumulated depreciation and
impairment		 2021
Land
$ 58,178
-
$ 58,178
$ 58,178
-
-
-
-
$ 58,178
$ 58,178
-
$ 58,178		 Buildings and
structures
$ 393,167
(
172,658)
$ 220,509
$ 220,509
38
(
88 )
1,643
(
6,370)
$ 215,732
$ 392,751
(
177,019 )
$ 215,732		 Machinery
$ 1,206,086
(
947,834)
$ 258,252
$ 258,252
1,878
(
1,871 )
(
13,807 )
(
949)
$ 243,503
$ 1,171,412
(
927,909 )
$ 243,503		 Transportation
equipment
$ 16,777
(
12,143)
$ 4,634
$ 4,634
-
-
(
213 )
(
5)
$ 4,416
$ 16,760
(
12,344)
$ 4,416		 Office
equipment
$ 36,586
(
30,906)
$ 5,680
$ 5,680
175
-
(
367 )
3
$ 5,491
$ 36,775
(
31,284)
$ 5,491		 Other
equipment
$ 313,632
(
259,708)
$ 53,924
$ 53,924
21
1
(
3,099 )
(
688)
$ 50,159
$ 256,488
(
206,329 )
$ 50,159		 Total
$ 2,024,426
(
1,423,249 )
$ 601,177
$ 601,177
2,112
(
1,958 )
(
15,843 )
(
8,009)
$ 577,479
$ 1,932,364
(
1,354,885)
$ 577,479

Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8. 

~19~

－ (6) Leasing arrangements lessee

  • A. The Group leases various assets including land, buildings and structures. Rental contracts are typically made for periods of 2 to 55 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

  • B. Short-term leases with a lease term of 12 months or less and low-value assets comprise company dormitories and cars.

  • C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land
Buildings and structures		 March 31, 2022
Carryingamount
$ 109,798
14,283
$ 124,081		 December 31, 2021
Carryingamount

$ 106,947

15,422
$ 122,369
 March 31, 2021
Carryingamount
$ 112,703
2,054
$ 114,757

For the three-month period ended March 31,

Land
Buildings and structures		 2022
Depreciation		 2021
Depreciation
$ 802
1,676
$ 2,478		 $ 813
2,012
$ 2,825

  • D. For the three-month periods ended March 31, 2022 and 2021, there were no additions to right-of-use assets.

  • E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss
Interest expense on lease liabilities
Expense on short-term lease contracts
Expense on lease of low-value assets		 For the three-month period ended March 31, For the three-month period ended March 31,
2022
$ -
1,256
473		 2021
$ 18
819
454
  • F. For the three-month periods ended March 31, 2022 and 2021, the Group’s total cash outflow for leases were $1,729 and $2,015, respectively. 
~20~

(7) Investment property

nvestment property
At January 1
Additions－from subsequent expenditures
Net exchange differences
At March 31		 For the three-month period ended March 31,
2022
$ 1,465,874
5,615
12,269
$ 1,483,758		 2021
$ 1,301,016
-
(
22,931)
$ 1,278,085
  • A. Rental income from investment property is shown below:
Rental income from investment
property		 For the three-month period ended March 31, For the three-month period ended March 31,
2022
$ 969
 2021
$ 505

  • B. Information about the fair value of the investment property is provided in Note 12(3).

  • C. Information about the investment property that was pledged to others as collaterals is provided in Note 8.

  • D. PT Cosmo Technology, a subsidiary of the Group, signed a land right-of-use transfer contract with PT Cijambe Indah on September 28, 2020. The land is still in the process of transfer registration.

  • E. The fair value of the investment property held by the Group was measured on recurring basis. The fair value at December 31, 2021 was based on the valuation carried out on March 23, 2022 by the independent qualified professional valuers, Mr. Chou , Shih Yuan, Certified Real Estate Appraisers in the ROC, from Euro-Asia Real Estate Appraisers Firm and Mr. Chung, Shao Yu and Mr. Hsieh, Kun Lung, both Certified Real Estate Appraisers in the ROC, from Zone Tai Real Estate Appraisers Firm, respectively. The fair value at December 31, 2020 was based on the valuation carried out on March 23, 2021 and March 29, 2021 by the independent qualified professional valuers, Mr. Chou , Shih Yuan, a Certified Real Estate Appraisers in the ROC, from Euro-Asia Real Estate Appraisers Firm and Mr. Chung, Shao Yu and Mr. Hsieh, Kun Lung, both Certified Real Estate Appraisers in the ROC, from Zone Tai Real Estate Appraisers Firm, and Mr. Lin, Jin Sheng, a Certified Real Estate Appraisers in the ROC, from Prudential Cross-Strait Real Estate Appraisers Firm ,respectively. 

~21~

  • F. The fair value of the investment property held by the Group was valued by independent valuers. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy. Unrealized profit or loss from fair value adjustment on investment property for the three-month periods ended March 31, 2022 and 2021 are included in other gains and losses.

  • G. The fair value of investment properties, except for undeveloped land, was measured using the income approach. The significant assumptions used are stated as follows. An increase in estimated future net cash inflows or a decrease in discount rates would result in an increase in the fair value.

e fair value.
Expected future cash inflows
Expected future cash outflows
Expected future cash inflows, net
Discount rate		 December 31
2021
$ 133,349
6,307
$ 127,042
2.2%-3.25%		 2020
$ 57,748
3,235
$ 54,513
2.345%-3.5%

  • H. The expected future cash inflows generated by investment properties included rental income and disposal value. The rental income was extrapolated using the Company’s current rental rate, while taking into account the annual rental growth rate. The income analysis covers a 10-year period. The disposal value was determined using the direct capitalization method under the income approach and deducted land value increment taxes and agency fee. The expected future cash outflows incurred by investment properties included expenditures such as land value taxes, house taxes, insurance premiums, maintenance costs, replacement and agency fee for investment inviting. These expenditures were extrapolated on the basis of the current level of expenditures, taking into account future adjustments to the government-announced land value, the tax rate promulgated under the House Tax Act. The market rentals in the area where the investment property is located were between $350 to $850 per ping.

  • I. As at December 31, 2021 and 2020, the discount rate was determined using the interest rate for 2-year time deposits, as posted by Chunghwa Post Co., Ltd. plus 0.75% and 1-year time deposit, as posted by People's Bank of China, plus any asset-specific risk premiums between 0.1% to 1.75% and 0.75% to 1.5%, respectively. 

~22~

J. The fair value of undeveloped land located in area Indonesia was measured using a land development analysis. The significant assumptions used were as follows:

Estimated total sale price
Rate of return
Overall capital interest rate		 December 31 December 31
2021
$ 2,749,801
15%
11.09%		 2020
$ 2,487,813
15%
11.28%

The total sale price is estimated on the basis of the most effective use of the land or property available for sale after development is completed, while taking into account the related regulations, optimism of domestic macroeconomic prospects, local land use, and market rates.

(8) Intangible assets

angible assets
At January 1
Cost
Accumulated amortization and
impairment
Opening net book amount
Additions
Amortization
Net exchange differences
Closing net book amount
At March 31
Cost
Accumulated amortization and
impairment		 2022
Patent

$ 16,795
(
7,164)
$ 9,631
$ 9,631
-
(
215)
326
$ 9,742
$ 17,364
(
7,622)
$ 9,742		 Computer
software
$ 8,493
(
4,543)
$ 3,950
$ 3,950
150
(
300)
-
$ 3,800
$ 8,647
(
4,847)
$ 3,800		 Total
$ 25,288
($ 11,707)
$ 13,581
$ 13,581
150
($ 515)
326
$ 13,542
$ 26,011
($ 12,469)
$ 13,542 
~23~
At January 1
Cost
Accumulated amortization and
impairment
Opening net book amount
Additions
Amortization
Net exchange differences
Closing net book amount
At March 31
Cost
Accumulated amortization and
impairment		 2021
Patent

$ 17,274
(
6,489)
$ 10,785
$ 10,785
-
(
218)
20

$ 10,587
$ 17,307
(
6,720)
$ 10,587		 Computer
software
$ 7,871
(
3,400)
$ 4,471
$ 4,471
415
(
308)
(
1)
$ 4,577
$ 8,234
(
3,657)
$ 4,577		 Total
$ 25,145
($ 9,889)
$ 15,256
$ 15,256
415
($ 526)
19
$ 15,164
$ 25,541
($ 10,377)
$ 15,164

(9) Short-term borrowings

Type of borrowings
Bank borrowings
Unsecured borrowings

Secured borrowings

Short-term bills payable

Commercial paper
Less: Unamortized discounts on
bills payable

Type of borrowings
Bank borrowings
Unsecured borrowings

Secured borrowings

Short-term bills payable
Commercial paper

Less: Unamortized discounts on
bills payable
 March 31,
2022

$ 336,160
146,849
$ 483,009
$ 50,000
(
15)
$ 49,985
December 31,
2021
$ 336,090
144,664
$ 480,754

$ 50,000
(
113)
$ 49,887		 Interest rate
range
1.61%~1.98%
1.58%~2.13%
0.80%
Interest rate
range
1.56%~1.75%
1.54%~2.13%
0.80%		 Collateral
None.
Property, plant and
investment property
None.
Collateral
None.
Property, plant and
investment property
None.		 
~24~
Type of borrowings
Bank borrowings
Unsecured borrowings
Secured borrowings
Short-term bills payable
Commercial paper
Less: Unamortized discounts on
bills payable		 March 31,
2021
$ 289,000
146,630
$ 435,630

$ 50,000
(
130)
$ 49,870		 Interest rate
range
1.56%~1.90%
1.50%~2.13%
0.75%		 Collateral
None.
Property, plant and
investment property
None.

As at March 31, 2022, the facility of short-term borrowings of the Group was $538,838.

The chairman of the Company, Tsai, Nai Chen and Tsai, Chi Hu, were the sureties of the above unsecured and secured borrowings agreements in their personal names.

  • (10) Convertible bonds payable
onvertible bonds payable

Convertible bonds payable
Less: Discount on convertible
bonds payable
Less: Current portion
 March 31, 2022
Carryingamount
$ 277,400
(
3,077)
$ 274,323
(
274,323)
$ -		 December 31, 2021
Carryingamount

$ 277,400
(
3,916)
$ 273,484
-
$ 273,484		 March 31, 2021
Carryingamount
$ 300,000
(
6,929 )
$ 293,071
-
$ 293,071

  • A. The issuance of domestic convertible bonds by the Company:

  • (a) The terms of the 3rd domestic secured convertible bonds issued by the Company are as follows:

    • i. The regulatory authority has approved the 3rd domestic secured convertible bonds issued by the Company. The total issuance amount is $300,000 with coupon rate of 0%, covering a 3-year period of issuance and a circulation period from February 27,2020 to February 27, 2023. The convertible bonds will be redeemed in cash at face value at the maturity date.

    • ii. The bondholders have the right to ask for conversion of the bonds into ordinary shares of the Company during the period from 3 months after the bonds issuance date to the maturity date, except for the suspended transfer period as specified in the terms of the bonds or the regulations. The rights and obligations of the new shares 

~25~

converted from the bonds are the same as the issued and outstanding ordinary shares. 

  - iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution triggered subsequently. Subsequently, on the base date set by the regulations, the conversion price will be re-determined according to the pricing model stipulated by the conversion regulations.

  - iv. the Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any time when the outstanding balance of the bonds is less than 10% of total initial issuance amount during the period from the date after 3 months of the bonds issuance to 40 days before the maturity date.

  - v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

  - vi. After the issuance of the convertible bonds, in the event of an increase in the number of issued ordinary shares of the Company or the distribution of cash dividends on ordinary shares, or re-issuance or private placement at a conversion or subscription price lower than the current price per share ,or a decrease in ordinary shares due to various securities or capital reduction not due to cancellation of treasury shares, the Company shall adjust the conversion price according to the formula listed in the Issuance Regulations.

  • (b) As of March 31, 2022, the bonds totaling $22,600 had been converted into 599 thousand shares of common stock.

  • B. Regarding the issuance of convertible bonds, the equity conversion options amounting to $19,287 were separated from the liability component and were recognized in ‘capital surplus—share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognized in ‘financial assets or liabilities at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts. The effective interest rates of the bonds payable after such separation is 1.227%. 

~26~

- (11) Long term borrowings

March 31, 2022
$ 519,000
357,875
171,750
1,048,625
33,205
1,081,830
(
33,205)
$ 1,048,625		 December 31, 2021
$ 519,000

346,000
174,000
1,039,000
33,205
1,072,205
(
898,205)
$ 174,000
 March 31, 2021
$ 760,000
356,688
-
1,116,688
-
1,116,688
(
241,000)
$ 875,688

  • A. Revolving unsecured borrowings

  • (a) On March 18, 2022, the Company and PT Cosmo entered into a 3-year syndicated loan agreement with bank group , O-Bank as the lead bank and obtained a credit line in the amount of $1,326,000, and the credit period was 3 years from the first drawdown date (March 25, 2022).

The condition of borrowings as follows:

  • i. Revolving unsecured borrowings

The borrower was the Company, and the credit line was $926,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. The credit line shall be reduced by 10% from the first drawdown date by 18 months; by 10% by the date of full 24 months; by 20% by the date of full 30 months; by 60% by the date of full 36 months. For each use, the expiry date of the credit period was the maturity date. Interest would be paid one month from drawdown date, and the interest rate would be re-negotiated every 3 months. As at March 31, 2022, the interest rate was 2.5680%.

  • ii. Revolving unsecured borrowings

The borrower was PT Cosmo, and the credit line was USD 12,500,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. Interest would be paid monthly, and the interest rate 

~27~

would be re-negotiated every 3 months. As at March 31, 2022, the interest rate was 2.8600%.

  • (b) On April 10, 2019, the Company and PT Cosmo entered into a 3-year syndicated loan agreement with bank group, Yuanta Bank as the lead bank and obtained a credit line in the amount of $1,250,000, and the credit period was 3 years from the first drawdown date (April 25, 2019).

The condition of borrowings as follows:

  • i. Revolving unsecured borrowings

The borrower was the Company, and the credit line was $865,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. The credit line shall be reduced by 5% from the first drawdown date by 18 months; by 5% by the date of full 24 months; by 30% by the date of full 30 months; by 60% by the date of full 36 months. For each use, the expiry date of the credit period was the maturity date. Interest would be paid one month from drawdown date, and the interest rate would be re-negotiated every 3 months. As at December 31 and March 31,2021, the interest rate was 2.3050% and 2.0928%, respectively.

  • ii. Revolving unsecured borrowings

The borrower was PT Cosmo, and the credit line was USD 12,500,000 that could be used revolving during the contract period. The period of each use was 3 months or 6 months, but the maximum limit was 6 months and shall not exceed the expiry date of the credit period. Interest would be paid monthly, and the interest rate would be re-negotiated every 3 months. As at December 31 and March 31,2021, the interest rate was 2.0283% and 1.8724%, respectively.

  • (c) The Company promised to maintain the following financial ratios in the annual and semi-annual consolidated financial statements of the Company before all borrowings were repaid during the duration of the syndicated loan which signed on March 18,2022.

  • i. Current ratio (current assets divided by current liabilities) shall not be lower than 100%.

  • ii. Tangible net equity shall not be lower than $1,500,000. Tangible net equity is calculated as shareholders' equity less intangible assets. 

~28~

  • iii. Net financial debt ratio shall not be higher than 100%. Net financial debt ratio is calculated as financial debt less cash and cash equivalent divided by tangible net equity. Net financial debt is calculated as the sum of long-term and short-term bank borrowings , short-term bills and domestic and foreign bonds (including convertible bonds).

  • iv. The interest coverage ratio shall not be lower than 120% in each first half of the year. The annual ratios shall not be lower than 150% ,180% and 200% in 2022 ,2023 and 2024. The interest coverage ratio is calculated as the ratio of the sum of net profit before tax, finance cost, depreciation and amortization divided by finance cost. The above financial ratios were calculated based on its annual consolidated financial statements audited by independent auditors and semi-annual consolidated financial statements reviewed by independent auditors and reviewed after agreement signed. If it did not meet the above financial ratios, the company shall as soon as possible provides specific improvement plans and related explanations from the date of notification by the management bank. If it did not meet one of the above financial ratios and agreements, only the above financial ratio restrictions were met before next review date, it did not breached of the agreement. Until the date of declaration which is stated the period breaches the financial promise and all financial promise has been met, the interest would be calculated according to the agreed interest rate plus 0.25% by the balance of outstanding principals.

  • (d) The Company promised to maintain the following financial ratios in the annual and semi-annual consolidated financial statements of the Company before all borrowings were repaid during the duration of the syndicated loan which signed on April 10,2019.

  • i. Current ratio (current assets divided by current liabilities) shall not be lower than 100%.

  • ii. Tangible net equity shall not be lower than $1,500,000. Tangible net equity is calculated as shareholders' equity less intangible assets.

  • iii. Net financial debt ratio shall not be higher than 100%. Net financial debt ratio is calculated as financial debt less cash and cash equivalent divided by tangible net equity. Net financial debt is calculated as the sum of long-term and short-term bank borrowings (including current portion) , short-term bills and domestic and foreign bonds (including convertible bonds). 

~29~

  - iv. The interest coverage ratio shall not be lower than 120%. The interest coverage ratio is calculated as the ratio of the sum of net profit before tax, finance cost, depreciation and amortization divided by finance cost. The above financial ratios were calculated based on its annual consolidated financial statements audited by independent auditors and semi-annual consolidated financial statements reviewed by independent auditors . If it did not meet the above financial ratios, there would be an improvement period of half a year from the current period of non-compliance. If the above financial ratio restrictions were met within the improvement period, it did not breached of the agreement; if the Company failed, it shall constitute an event of default in the syndicated loan. Until the day before the improvement of the above ratio, the interest would be calculated according to the agreed interest rate plus 0.25% by the balance of each credit line.

  • (e) The chairman of the Company, Tsai, Nai Chen and Tsai, Chi Hu, were the sureties of the above syndicated loan agreements in their personal names.

  • B. Secured borrowings

  • (a) On April 8, 2021, the Company entered into a 7-year secured loan agreement with KGI Bank and obtained a credit line in the amount of $180,000, and could not be used revolving during the contract period. The credit period was 7 years from the first drawdown date (April 8, 2021).

  • (b) The expiry date of the credit period was the maturity date. Interest would be paid one month from drawdown date, and the interest rate would be re-negotiated every 3 months. As at March 31, 2022, the interest rate was 1.3534% to 1.3537%.

  • (c) The Company provided land and buildings as collateral (please refer to Note 8 for pledge details).

  • (d) The chairman of the Company, Tsai, Nai Chen, was the surety of the above secured loan agreements in his personal names.

  • C. Loans from related parties

The acquisitions of loans from PT Cijambe since PT Cijambe was included in the Group’s

consolidated financial statements, related information is provided in Note 7.

(12) Pensions

  • A. Defined benefit pension plan

  • (a) The Company has a defined benefit pension plan in accordance with the Labor 

~30~

Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

PT Cosmo and PT Cosmo Green had a defined benefit pension plan.

(b) The pension costs under defined contribution pension plans of the Group for the three-months period ended March 31, 2022 and 2021, were $1,173 and $1,108, respectively.

  • (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $0.

  • B. Defined contribution pension plan

  • (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The Company’s subsidiaries, Cosmo Electronics Technology (KunShan) Co., Ltd. ,Cosmo Green Power Limited, Dong Guan Guan Zhen Xing Trading Limited., Dongguan Guanwang Electronic Technology Co., Ltd., and Guizhou Guanwang International Digicrown Electronic Technology Co., Ltd. had a 

~31~

defined contribution plan are based on certain percentage of employees’ monthly salaries and wages.

  • (b) Other overseas companies, in accordance with the retirement regulations stipulated by the local government, make provision for endowment insurance or retirement benefits based on the wages of local employees. Other than the monthly contributions, the Group has no further obligations.

  • (c) The pension costs under defined contribution pension plans of the Group for the three-month periods ended March 31, 2022 and 2021, were $1,044 and $976, respectively.

(13) Share capital

  • A. As of March 31, 2022, the Company’s authorized capital was $2,000,000, consisting of 200,000 thousand shares of ordinary stock, and the paid-in capital was $1,616,234 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

  • B. There were 3,000 thousand shares reserved for employee stock options in authorized capital.

  • C. The annual stockholders’ meeting on June 6, 2014 had resolved to raise additional cash through private placement. The maximum number of shares to be issued through the private placement is 7,000 thousand shares, and the amount of the private placement was $208,600 which the relevant statutory registration procedures have not been completed as of March 31, 2022.

  • D. The annual stockholders’ meeting on July 20, 2021 had resolved that the capital surplus arising from paid-in capital in excess of par value on issuance of ordinary stocks used in the issuance of 4,690,027 ordinary shares, with par value of $10 per share, amounting to $46,900,270. The shares were issued on October 19, 2021, and the relevant statutory registration procedures have been completed.

  • E. For the three-month period ended March 31, 2022, the Company issued 599 thousand shares of ordinary shares because of conversion of convertible bonds.

(14) Capital surplus

  • Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of ordinary stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the 
~32~

paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

he legal reserve is insufficient.
May be used to offset a deficit,
distributed as cash dividends, or
transferred to share capital
Issuance of ordinary shares
Conversion of bonds
May only be used to offset a
deficit
Employee share options
Options expired
May not be used for any
purpose
Options		 March 31, 2022
$ 196,810
18,467
1,396
7,383
17,835
$ 241,891		 December 31, 2021
$ 196,810

18,467
1,396
7,383
17,835
$ 241,891
 March 31, 2021
$ 243,710
759
1,396
-
26,670
$ 272,535

(15) Retained earnings

  • A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remainder, if any, to be retained or to be appropriated shall be resolved by the stockholders at the stockholders’ meeting.

  • B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

  • C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • D. On March 29, 2022, the Board of Directors resolved that no dividends for the distribution of earnings for the year of 2021.

  • E. On July 20, 2021, the stockholders’ meeting resolved that no dividends for the distribution of earnings for the year of 2020. 

~33~

(16) Other equity items

(17) At January 1
Group
At March 31
Operating revenue		 Currencytranslation Currencytranslation
2022
($ 261,922)
48,941
($ 212,981)		 2021
($ 209,172)
(
24,176)
($ 233,348)
At January 1
Group
At March 31
perating revenue		 2022
2021
($ 261,922)
($ 209,172)
48,941
(
24,176)
($ 212,981)
($ 233,348)		 2022
2021
($ 261,922)
($ 209,172)
48,941
(
24,176)
($ 212,981)
($ 233,348)
Revenue from contract with customers
Operating revenue		 For the three-month period ended March 31,
2022
$ 208,181		 2021
$ 216,035

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods over time and at a point in time in the following major business. The related information is provided in Note 14.

B. Contract liabilities

The Group has recognized the following revenue-related contract liabilities:

Contract liabilities March 31,2022
$ 1,572		 December 31,2021
$ 2,943		 March 31,2021
$ 2,347

Revenue recognized that was included in the contract liability balance at the beginning of the period:

eriod:
Revenue recognized that was included in
the contract liability balance at the
beginning of the period		 For the three-monthperiod ended March 31,
2022
$ 2,943		 2021
$ 1,439

(18) Interest income

nterest income
Bank deposit
Financial assets measured at amortized cost
Other interest income		 For the three-month period ended March 31,
2022
$ 380
129
2
$ 511		 2021
$ 417
2
2
$ 421 
~34~

(19) Other income

For the three-month period ended March 31,

Rent income Handling charge income Other income, others

2022
$ 969
185
1,051
$ 2,205		 2021
$ 505
7
594
$ 1,106

(20) Other gains and losses

For the three-month period ended March 31,

Loss on disposal of property, plant and equipment Foreign exchange losses Other losses

2022
$ -
4,068

(
234)
$ 3,834		 2021
($ 1,534)
(
3,787)
(
18)
($ 5,339)

(21) Finance costs

For the three-month period ended March 31,

Bank borrowings
Short-term bills payable
Lease liabilities
Convertible bonds payable
Financial expense, others		 2022
$ 7,720
99
-
839
204
$ 8,862		 2021
$ 7,809
93
18
891
276
$ 9,087

(22) Depreciation and amortization

Property, plant and equipment Right-of-use assets Other intangible assets Operating costs and operating expenses

For the three-month period ended March 31, For the three-month period ended March 31,
2022
$ 21,666
2,478
515
$ 24,659		 2021
$ 15,843
2,825
526
$ 19,194

(23) Employee benefit expense

mployee benefit expense
Pension
Defined contribution pension plan
Defined benefit pension plan
Other personnel expenses		 For the three-month period ended March 31,
2022
$ 1,044
1,173
2,217
79,890
$ 82,107		 2021
$ 976
1,108
2,084
60,603
$ 62,687 
~35~
An analysis of employee benefit expense by
function
Operating costs
Operating expenses		 For the three-monthperiod ended March 31, For the three-monthperiod ended March 31,
2022
$ 49,364
32,743
$ 82,107		 2021
$ 29,528
33,159
$ 62,687

  • A. According to the Company’s Articles, the Company accrued employees’ compensation and remuneration of directors and supervisors at rates of 5% to 12% and no higher than 3%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors.

  • B. For the three-month periods ended March 31, 2022 and 2021, employees’ compensation was accrued at $325 and $0, respectively; while directors’ and supervisors’ remuneration was accrued at $65 and $0, respectively. The aforementioned amounts were recognized in salary expenses. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit of current year as of the end of reporting period. Employees’ compensation and directors’ and supervisors’ remuneration of 2021 as resolved by the Board of Directors were $6,378 and $1,276, respectively, and were in agreement with those amounts recognized in the 2021 financial statements.

  • C. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income tax

  • A. Income tax expense

Components of income tax expense:

ncome tax expense
omponents of income tax expense:
Current tax:
Current tax on profits for the period

Deferred tax:
Origination and reversal of temporary
differences
Income tax expense (benefit)
 For the three-monthperiod ended March 31,
2022
($ 1,848)
(
1,743)
($ 3,591)		 2021
$ 12,251
(
25,266)
($ 13,015)

The basis for computing the applicable tax rate is 25% for subsidiaries in China, others are the rates applicable in the respective countries where the Group entities operate. 

~36~
  • B. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

(25) Earnings(Deficit) per share

Earnings(Deficit) per share
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent
Basic deficit per share
Loss attributable to ordinary shareholders
of the parent		 For the three-monthperiod ended March 31,2022
Amount
after tax
Weighted average
number of ordinary
shares outstanding
(share in thousands)
Earnings per
share
(in dollars)
$ 12,157
161,623
$ 0.08
For the three-monthperiod ended March 31,2021		 Earnings per
share
(in dollars)
$ 0.08
Amount
after tax
($ 22,194)		 Weighted average
number of ordinary
shares outstanding
(share in thousands)
156,334		 Earnings per
share
(in dollars)
($ 0.14)

(26) Supplemental cash flow information

Investing activities with partial cash payments:

nvesting activities with partial cash payments:
Purchase of property, plant and equipment
Add: Opening balance of payable on equipment
Less: Ending balance of payable on equipment

Cash paid during the year		 For the three-monthperiod ended March 31,
2022
$ 14,010
1,841
(
7,956)
$ 7,895		 2021
$ 2,112
1,650
(
2,664)
$ 1,098

(27) Changes in liabilities from financing activities

At January 1
Changes in cash
flow from financing
activities
Impact of changes
in foreign exchange
rate
Changes in other
non-cash items
At March 31		 2022
Short-term
borrowings
$ 480,754

70
2,185
-
$ 483,009		 Short-term
billspayable
$ 49,887
98
-
-
$ 49,985		 Long-term
borrowings
$ 1,072,205

(
2,250 )
11,875
-
$ 1,081,830
 Long-term
payable to
related
parties
$ -
-
-
-
$ -		 Lease
liabilities
$ 12,910
-
481
-
$ 13,391		 Convertible
bonds
payable
$ 273,484
-
-
(
273,484)
$ -		 Liabilities from
financing
activities
$ 1,889,240
(
2,082)
14,541
(
273,484)
$ 1,628,215 
~37~
At January 1
Changes in cash
flow from financing
activities
Impact of changes
in foreign exchange
rate
Changes in other
non-cash items
At March 31		 2021
Short-term
borrowings
$ 405,504

30,000
126
-
$ 435,630		 Short-term
billspayable
$ 49,868
2
-
-
$ 49,870		 Long-term
borrowings
$ 1,116,000

-
688
-
$ 1,116,688
 Long-term
payable to
related
parties
$ 117,669
(
82,021)
(
2,443)
-
$ 33,205		 Lease
liabilities
$ 2,506
(
838)
35
(
18)
$ 1,685		 Convertible
bonds
payable
$ 292,180
-
-
891
$ 293,071		 Liabilities from
financing
activities
$ 1,983,727
(
52,857)
(
1,594)
873
$ 1,930,149

7. Related Party Transactions

(1) Names and relationship of related parties

Names of related parties Relationship with the Group Ding Wang Electronics Technology Substantive related parties Corporation City Orient Limited Substantive related parties Ever Merit Trading Limited Substantive related parties Evermerit Technology Electronic Co., Substantive related parties Ltd. Tinglin Co.,Ltd. Substantive related parties Fairsky International Limited Substantive related parties Tsai, Nai Chen Chairman of the Company Tsai, Chi Hu Substantive related parties

(2) Significant transactions and balances with related parties

A. Purchases of goods

urchases of goods
Sales of goods:
Associates
City Orient Limited
Ever Merit Trading Limited
Ding Wang Electronics Technology
Corporation		 For the three-monthperiod ended March 31,
2022
$ -

38,181
-
$ 38,181		 2021
$ 51,382
-
628
$ 52,010

Raw material and services are purchased from associates and an entity controlled by key management personnel on normal commercial terms and conditions. 

~38~

B. Receivables from related parties

eceivables from related parties
Other receivables from related
parties:
Evermerit Technology Electronic Co., Ltd.
City Orient Limited		 March 31,
2022
$ 18,925
-
$ 18,925		 December
31,2021
$ 18,348

-
$ 18,348
 March 31,
2021
$ 18,348
91
$ 18,439

The receivables from related parties arise mainly from sale transactions and other receivables transactions. Sales transaction payment is due two months after the date of sales. The receivables are unsecured in nature and bear no interest. There are no allowances for uncollectible accounts held against receivables from related parties.

  • C. Payables to related parties
ayables to related parties
Accounts payable:
City Orient Limited
Ever Merit Trading Limited
Other payables to related parties:
Evermerit Technology Electronic Co., Ltd.		 March 31,
2022
$ 2
18,707
$ 18,709
$ -		 December
31,2021
$ 8,593

4,314
$ 12,907

$ -
 March 31,
2021
$ 18,272
-
$ 18,272
$ 82

The payables to related parties arise mainly from purchase transactions and are due 2 months after the date of purchase. The payables bear no interest.

  • D. Prepayments
D. Prepayments
Evermerit Technology Electronic Co., Ltd.
E. Loans from related parties
Fairsky International Limited		 March 31,
2022
$ 8,369
March 31,
2022
$ 33,205		 December
31,2021
$ 8,131

December
31,2021
$ 33,205
 March 31,
2021
$ 8,632
March 31,
2021
$ 33,205

PT Cijambe began to be included in the Group’s consolidated financial statement from October 1, 2019. Since that date, the Company has acquired its loans which were recognized initially as ‘related party loans’. The maturity date was October 15, 2022, and the interest rate was 0%. The loans were expressed in "long-term liabilities-current portion " and "long-term notes payable to related parties". 

~39~

F. Endorsements and guarantees ： Please refer to Notes 6 (9) and 6 (11).

(3) Key management compensation

ey management compensation
Short-term employee benefits
Post-employment benefits		 For the three-month period ended March 31,
2022
$ 3,123
71
$ 3,194		 2021
$ 2,494
55
$ 2,549

The remuneration of directors and other key management levels is determined by the

Remuneration Committee in accordance with individual performance and market trends.

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Asset item
Pledged time deposits (shown as
financial assets at amortized cost)

Restricted bank accounts(shown as
financial assets at amortized cost)
Land use right
(shown as right-of-use asset)
Property, plant and equipment
Investment property
 Bookvalue March 31,
2021
$ 3,678
-
97,043
259,287
27,840
$ 387,848		 Purpose
March 31,
2022
$ 9,802

3,682
93,356
428,568
85,347
$ 620,755		 December
31,2021
$ 3,682
9,802
91,257
432,854
85,347
$ 622,942
Collateral for
import duties
Reimbursement
account of bank
loan
Credit facility
Credit facility
Credit facility

9. Significant Contingent Liabilities And Unrecognized Contract Commitments

None.

10. Significant Casualty Loss

None.

11. Significant Events After The Balance Sheet Date

None.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the 

~40~

gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the

consolidated balance sheet plus net debt. The gearing ratios were as follows:

Total borrowings
Less: Cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio		 March 31,
2022
$ 1,855,942
464,032
1,391,910
1,727,144
$3,119,054
44.63%		 December
31,2021
$ 1,876,330

586,246
1,290,084
1,666,046

$2,956,130

43.64%		 March 31,
2021
$ 1,895,259
954,852
940,407
1,594,022
$2,534,429
37.11%

(2) Financial instruments

A. Financial instruments by category

Financial instruments by category
Financial assets
Financial assets at amortized cost
Cash and cash equivalents
Financial assets at amortized cost
Notes receivable
Accounts receivable (including related parties)
Other receivables (including related parties)
Refundable deposits
Financial liabilities
Financial liabilities at amortized cost
Short-term borrowings
Short-term bills payable
Notes payable
Accounts payable (including related parties)
Other payables (including related parties)
Long-term borrowings (including current
portion and related parties)
Convertible bonds payable(including current
portion)
Lease liabilities		 March 31,
2022
$ 464,032
19,046
2,504
337,351
34,010
14,795
$ 871,738
March 31,
2022
$ 483,009
49,985
262
241,871
65,258
1,081,830
274,323
$2,196,538
$ 13,391		 December
31,2021
$ 586,246

19,050
-
336,289
34,923
15,029
$ 991,537

December
31,2021
$ 480,754

49,887
1,047
136,171
52,395
1,072,205
273,484
$2,065,943

$ 12,910
 March 31,
2021
$ 954,852
3,678
6,557
238,228
37,791
20,270
$1,261,376
March 31,
2021
$ 435,630
49,870
-
121,370
33,414
1,149,893
293,071
$2,083,248
$ 1,685 
~41~
  • B. Financial risk management policies

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. Risk management is carried out by the Group treasury under policies approved by the Board of Directors. The Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units.

  • C. Significant financial risks and degrees of financial risks

  • (a) Market risk

Foreign exchange risk

  • i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

  • ii. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

March 31, 2022

Foreign
currency amount
(in thousands)

Financial assets
Monetary items
USD:NTD
$ 2,831
USD:RMB
272
USD:IDR
166
USD:VND
277
Financial liabilities
Monetary items
USD:NTD
$ 285
USD:RMB
559
USD:IDR
(
2)		 Exchange rate
28.63
6.35
14,457.07
23,178.14
28.63
6.35
14,457.07
Book value
(NTD)
$ 81,037

7,786

4,752

7,959
$ 8,158

16,001
(
57)		 Sensitivityanalysis Sensitivityanalysis
Degree of
variation

5%


5%

5%

5%

5%


5%

5%
 Effect on
profit or loss
$ 4,052
389
238
396
$ 408
800
(
3)		 
~42~

December 31, 2021

December 31,2021 December 31,2021
Foreign
currency amount
(in thousands)

Financial assets
Monetary items
USD:NTD
$ 5,119
USD:RMB
377
USD:IDR
214
USD:VND
279
Financial liabilities
Monetary items
USD:NTD
$ 340
USD:RMB
245
USD:IDR
2
Foreign
currency amount
(in thousands)

Financial assets
Monetary items
USD:NTD
$ 13,951
USD:RMB
2,042
USD:IDR
61
USD:VND
252
Financial liabilities
Monetary items
USD:NTD
$ 146
USD:RMB
148		 Exchange rate
Book value
(NTD)
27.68 $ 141,694
6.37
10,435
13,979.80
5,924
23,066.67
7,723
27.68 $ 9,411
6.37
6,782
13,979.80
55
March 31,2021		 Sensitivityanalysis
Degree of
variation

5%


5%

5%

5%

5%


5%

5%		 Effect on
profit or loss
$ 7,085
522
296
386
$ 471
339
3
Exchange rate
28.54
6.57
14,411.62
25,477.68
28.54
6.57
Book value
(NTD)
$ 398,092

58,268

1,741

7,191
$ 4,166

4,223		 Sensitivityanalysis
Degree of
variation

5%


5%

5%

5%

5%


5%		 Effect on
profit or loss
$ 19,905
2,913
87
360
$ 208
211
  • iii. Total exchange gain (loss), including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the three-month periods ended March 31, 2022 and 2021 amounted to $4,068 and ($3,787), respectively.

Cash flow and fair value Interest rate risk

  • i. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

  • ii. As at March 31, 2022, December 31, 2021 and March 31, 2021, if the interest rate 

~43~

increases or decreases by 50 basis point, with all other variables held constant, profit, net of tax would have decreased or increased by $9,446, $9,382 and $9,642, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

(b) Credit risk

  • i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full accounts receivable ,notes receivable and financial assets at amortized cost, that based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost.

  • ii. The Group for banks and financial institutions, only well rated parties are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

  • iii. The Group assume if the contract payments are past due over 180 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. If there is evidence that the counterparty is facing serious financial difficulties and the Group cannot reasonably expect the recoverable amount, for example, the counterparty is in liquidation, the Group will directly write off the relevant accounts receivable, but will continue to pursue activities to recover the recovered amount are recognized in profit or loss.

  • iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i.) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

  • (ii.) The disappearance of an active market for that financial asset because of financial difficulties; 

~44~

  • (iii.) Default or delinquency in interest or principal repayments;

  • (iv.) Adverse changes in national or regional economic conditions that are expected to cause a default.

  • v. The Group classifies customer's accounts receivable in accordance with geographic area, product types and credit rating of customer. The Group applies the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

  • vi. The Group uses the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. On March 31, 2022, December 31, 2021 and March 31, 2021, the provision matrix and loss rate methodology is as follows:

March 31, 2022
Expected loss rate
Total book value
Loss allowance
December 31, 2021
Expected loss rate
Total book value
Loss allowance
March 31, 2021
Expected loss rate
Total book value
Loss allowance		 Notpast due
0.01%
$ 157,122
($ 15)
0.01%
$ 331,146
($ 24)
0.01%
$ 234,797
($ 27)		 1-90 days
past due
0.09%
$ 180,048
($ 160)
0.40%
$ 4,972
($ 20)
0.25%
$ 3,460
($ 9)		 90-180 days
past due
3.47%
$ 202
($ 7)
3.33%
$ 195
($ 6)
0.00%
$ -
$ -		 Over 180
dayspast due
96.13%
$ 4,133
($ 3,972)
99.34%
$ 3,999
($ 3,973)
99.83%
$ 3,999
($ 3,992)		 Total
$ 341,505
($ 4,154 )
$ 340,312
($ 4,023 )
$ 242,256
($ 4,028)
  • vii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:
At January 1
Impairment loss
Reversal of impairment loss
Write-downs during the year
Effect of foreign exchange
At March 31		 Accounts receivable Accounts receivable
2022
$ 4,023
-
(
3)
-
134
$ 4,154		 2021
$ 9,250
2
(
51)
(
5,196)
23
$ 4,028

  • (c) Liquidity risk

  • i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the 

~45~

Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

  • ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
March 31,2022
Non-derivative financial liabilities
Short-term borrowings
Short-term bills payable
Notes payable
Accounts payable
Other payables
Lease liabilities
Convertible bonds payable
Long-term borrowings (including
current portion and related parties)
December 31,2021
Non-derivative financial liabilities
Short-term borrowings
Short-term bills payable
Notes payable
Accounts payable
Other payables
Lease liabilities
Convertible bonds payable
Long-term borrowings (including
current portion and related parties)		 Less than 1year
$ 517,942
50,000
262
241,871
65,258
7,176
-

33,205
$ 481,904
50,000
1,047
136,171
52,395
6,918
-

904,185		 1 and5 years
$ -

-

-

-

-

7,176

277,400
1,124,159
$ -

-

-

-

-

6,918

277,400
199,240		 over5 years
$ -

-

-

-

-

-

-
-
$ -

-

-

-

-

-

-
-		 
~46~
March 31,2021
Non-derivative financial liabilities
Short-term borrowings
Short-term bills payable
Accounts payable
Other payables
Lease liabilities
Convertible bonds payable
Long-term borrowings (including
current portion)
Long term notes payable to related
parties		 Less than 1year
$ 436,650
50,000
121,370
33,414
1,700
-
243,874
-		 1 and5 years
$ -

-

-

-

-

303,848
1,140,819
33,205		 over5 years
$ -

-

-

-

-

-
-
-

(3) Fair value information

  • A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in beneficiary certificates is included in Level 1.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in convertible bonds is included in Level 2.

  • Level 3: Unobservable inputs for the asset or liability. The fair value of the Group ’ investment in investment property is included in Level 3.

  • B. Financial instruments not measured at fair value

  • (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, financial assets at amortized cost, other receivables, short-term borrowings, notes payable, accounts payable, other payables, long-term notes payable and long -term borrowings are approximate to their fair values. 

~47~
March 31,2022
Financial liabilities:
Convertible bonds
payable(including
current portion)
December 31,2021
Financial liabilities:
Convertible bonds
payable(including
current portion)
March 31,2021
Financial liabilities:
Convertible bonds
payable(including
current portion)		 Bookvalue
$ 274,323
Book value
$ 273,484
Bookvalue
$ 293,071		 Fair value
Level 1
$ -		 Level 2
$ 273,785
Fairvalue		 Total
$ -
Level 1
$ -		 Level 2
$ 273,484
Fair value		 Total
$ -
Level 1
$ -		 Level 2
$ 293,032		 Total
$ -

  • (b) The methods and assumptions of fair value estimate are as follows:

    • i. Corporate bonds: They are measured at present value, which is calculated based on the cash flow expected to be received from the objective asset and discounted using a market rate prevailing at balance sheet date.

    • ii. Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

  • C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

follows:
March 31,2022
Assets
Recurring fair value
measurements
Investment property
December 31,2021
Assets
Recurring fair value
measurements
Investment property		 Level 1
$ -
Level 1
$ -		 Level 2
$ -
Level 2
$ -		 Level3
$ 1,483,758
Level3
$ 1,465,874		 Total
$ 1,483,758
Total
$ 1,465,874 
~48~
March 31,2021
Assets
Recurring fair value
measurements
Investment property		 Level 1
$ -		 Level 2
$ -		 Level 3
$ 1,278,085		 Total
$ 1,278,085

  • D. For the three-month periods ended March 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

  • E. The following chart is the movement of Level 3 for the three-month periods ended March 31, 2022 and 2021:

22 and 2021:
At January 1
Additions－from subsequent expenditures
Effect of exchange rate changes
At March 31		 Investment property
2022
($ 1,465,874
5,615
12,269
($ 1,483,758		 2021
($ 1,301,016
-
(
22,931)
($ 1,278,085

F. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-financial
instruments
Investment
property		 Fair value at
March
31,2022
$ 1,483,758
 Valuation
technique
Discounted
cash flow
method
Land
development
analysis
approach

 Significant
unobservable
input
Discount rate
Rate of return
Overall capital
interest rate		 Range
(Weighted
average)
2.2%
~3.25%
15%
11.09%
 Relationship
of inputs to
fair value
The higher
discount rate,
the lower fair
value
The higher
rate of return,
the higher the
fair value
The higher
overall capital
interest rate,
the lower the
fair value		 
~49~
Non-financial
instruments
Investment
property
Non-financial
instruments
Investment
property		 Fair value at
December
31,2021
$ 1,465,874
Fair value at
March
31,2021
$ 1,278,085		 Valuation
technique
Discounted
cash flow
method
Land
development
analysis
approach
Valuation
technique
Discounted
cash flow
method
Land
development
analysis
approach		 Significant
unobservable
input
Discount rate
Rate of return
Overall capital
interest rate
Significant
unobservable
input
Discount rate
Rate of return
Overall capital
interest rate		 Range
(Weighted
average)
2.2%
~3.25%
15%
11.09%

Range
(Weighted
average)
2.345%
~4.5%
15%
11.28%		 Relationship
of inputs to
fairvalue
The higher
the discount
rate, the
lower the fair
value
The higher
rate of return,
the higher the
fair value
The higher
overall capital
interest rate,
the lower fair
value

Relationship
of inputs to
fair value
The higher
the discount
rate, the
lower the fair
value
The higher
rate of return,
the higher the
fair value
The higher
overall capital
interest rate,
the lower fair
value

13. Supplementary Disclosures

(1) Significant transactions information

  • A. Loans to others: Please refer to table 1.

  • B. Provision of endorsements and guarantees to others: Please refer to table 2.

  • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): None. 

~50~

  • D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

  • E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

  • I. Trading in derivative instruments undertaken during the reporting periods: None.

  • J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

  • (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 6.

(3) Information on investments in Mainland China

  • A. Basic information: Please refer to table 7.

  • B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. Segment Information

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

The Group's corporate composition, the basis for segment determined and the basis for

measurement of segment information have not significant change during the current year.

The reportable operating segments are as follows:

  • A. Optoelectronics

  • B. Energy & Materials 

~51~

C. Others

D. Industrial Park Development

(2) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Optoelectronic parts
LED lighting
Energy & Materials
Others
Industrial Park
Development
Total from continuing
operations
Headquarters
management costs
Other income
Other gains and losses
Finance costs
Profit before income
tax		 For the three-monthperiod ended March 31, For the three-monthperiod ended March 31, For the three-monthperiod ended March 31,
Segment revenue
2022
2021
$ 134,680 $ 132,951
43,754
54,321
29,704
26,487
43
2,276
-
-
$ 208,181
$ 216,035		 Segment income(loss)
2022
$ 134,680
43,754
29,704
43
-
$ 208,181		 2022
$ 42,977

(
10,245)
2,374
(
123)
(
1,925)
33,058
(
22,180)
2,716
3,834
(
8,862)
$8,566		 2021
$ 11,676
(
10,393)
3,003
(
1,479)
(
7,275)
(
4,468)
(
17,842)

1,527
(
5,339)
(
9,087)
( $ 35,209)

(3) Reconciliation for segment income (loss)

The revenue and net profit before tax from external customers and segment income (loss)

provided to the chief operating decision-maker is measured in a manner consistent with financial statements. 

~52~

COSMO ELECTRONICS CORPORATION

Loans to others

For the three-month period ended March 31, 2022

Number
(Note 1)
Table 1		 Creditor Borrower General ledger
account		 Is a
related
party		 Maximum
outstanding
balance during
the three-month period
ended March 31,
2022		 Balance at
March 31,
2022		 Actual amount
drawn down		 Interest
rate		 Nature of
loan		 Amount of
transactions
with
the borrower		 Reason for
short-term
financing		 Allowance for
doubtful
accounts		 Collateral Collateral Expressed in thousands of NTD
(Except as otherwise indicated)
Limit on loans
granted to a Ceiling on total
singleparty
loansgranted
Footnote		 Expressed in thousands of NTD
(Except as otherwise indicated)
Limit on loans
granted to a Ceiling on total
singleparty
loansgranted
Footnote		 Expressed in thousands of NTD
(Except as otherwise indicated)
Limit on loans
granted to a Ceiling on total
singleparty
loansgranted
Footnote
Item Value
1
1
2
3		 True Glory
Investments Limited
True Glory
Investments Limited
Guizhou Guanwang
International
Digicrown
Electronic
Technology Co., Ltd.
Shaoguan
Woncrown
Electronics
Technology Co.,Ltd.		 PT Cijambe
Indah
Cosmo
Electronics (HK)
Company
Limited
Evermerit
Technology
Electronic Co.,
Ltd.
Evermerit
Technology
Electronic Co.,
Ltd.		 Other receivables
from related
parties
Other receivables
from related
parties
Other receivables
from related
parties
Other receivables
from related
parties		 Y
Y
Y
Y		 $ 40,075
57,250
19,032
18,925		 $ 31,488
57,250
-
18,925		 $ 31,488
57,250
-
18,925		 0.00%
0.00%
0.00%
0.00%		 Short-
term
financing
Short-
term
financing
Short-
term
financing
Short-
term
financing		 -
-
-
-		 Operations
Operations
Operations
Operations		 $ -
-
-
-		 -
-
-
-		 $ -
-
-
-		 345,429
345,429
55,682
23,279		 690,858
690,858
55,682
23,279		 Note 2
Note 2
Note 2
Note 2

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’. 。

  • (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Limit on total loans for financing granted by and to subsidiaries of which the ultimate parent directly or indirectly holds 100% of its voting shares is 200% of the lender's net assets based on the latest audited or reviewed financial statements, and limit on loans to each entity is 200% of the lender's net assets based on the latest audited or reviewed financial statements. However, inn accordance with the Operational Procedures for Loans to Others of the Company, the total loans for financing granted by and to subsidiaries of which the ultimate parent directly or indirectly holds 100% of its voting shares must not exceed 40% of the lender's net assets based on the latest audited or reviewed financial statements, and the loans to each entity for financing must not exceed 20% of the lender's net assets based on the latest audited or reviewed financial statements. Therefore, limit on loan is the smaller one of above conditions.

Table 1

COSMO ELECTRONICS CORPORATION

Provision of endorsements and guarantees to others

For the three-month period ended March 31, 2022

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Number
(Note1)		 Endorser/guarantor Party being endorsed/guaranteed Party being endorsed/guaranteed Limit on
endorsements/
guarantees
provided for a
single party		 Maximum
outstanding
Outstanding
endorsement/
endorsement/
guarantee amountguarantee amount
as of March
as of March
31,2022
31,2022		 Maximum
outstanding
Outstanding
endorsement/
endorsement/
guarantee amountguarantee amount
as of March
as of March
31,2022
31,2022
Actual amount
drawndown		 Ratio of
accumulated
Amount of
endorsement/
endorsements/ guarantee amount
guarantees
to net asset value
secured with
of the endorser/
collateral
guarantor		 Ratio of
accumulated
Amount of
endorsement/
endorsements/ guarantee amount
guarantees
to net asset value
secured with
of the endorser/
collateral
guarantor		 Ceiling on total
Provision of
amount of
endorsements/
endorsements/
guarantees by
guarantees
parent company
provided
to subsidiary		 Ceiling on total
Provision of
amount of
endorsements/
endorsements/
guarantees by
guarantees
parent company
provided
to subsidiary		 Provision of
endorsements/
guarantees by
subsidiary to
parent company		 Provision of
endorsements/
guarantees to
the party in
Mainland China		 Footnote
Companyname Relationship
with the
endorser/guarantor
(Note2)
0
0
1
2
3		 Cosmo Electronics
Corporation
Cosmo Electronics
Corporation
PT Cosmo
Technology
PT Cosmo
Technology
PT Cjambe Indah		 True Glory
Investments
Limited
PT Cosmo
Technology
True Glory
Investments
Limited
Cosmo
Electronics
Corporation
Cosmo
Electronics
Corporation		 (2)
(2)
(4)
(3)
(3)		 690,858
$ 690,858
1,727,144
1,727,144
863,572		 121,656
$ 400,000
121,656
926,000
300,000		 121,656
$ 400,000
121,656
926,000
300,000		 65,838
$ 400,000
65,838
519,000
300,000		 N
N
N
N
N		 3.81%
23.16%
3.81%
30.05%
17.37%		 863,572
$ 863,572
1,727,144
1,727,144
1,727,144		 Y
Y
N
N
N		 N
N
N
Y
Y		 N
N
N
N
N		 Note 3
and 6
Note 3
Note 4
and 6
Note 4
Note 5
and 7

  • Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

  • (1) The Company is ‘0’. 。

  • (2) The subsidiaries are numbered in order starting from ‘1’.

  • Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories: (1) Having business relationship.

  • (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

  • (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

  • (4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

  • (5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

  • (6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

  • (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

  • Note 3: Limit on total endorsements is 50% of the Company's net assets , and limit on endorsements to a single party is 40% of the Company's net assets . Note 4: When endorser is the Company, limit on total endorsements is 100% of the Company's net assets, and limit on endorsements to a single party is 100% of the Company's net assets. Note 5: When endorser is the Company, limit on total endorsements is 100% of the Company's net assets, and limit on endorsements to a single party is 50% of the Company's net assets. Note 6: The Company and PT Cosmo Technology were joint endorsements for True Glory Investments Limited. Note 7: PT Cjambe Indah endorsed for convertible bonds issued by the Company.

Table 2

COSMO ELECTRONICS CORPORATION

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the three-month period ended March 31, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller Counterparty Relationship with the
counterparty		 Transaction Transaction compared
Differences in		 to thirdparty
transaction terms		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Footnote
Purchases
(sales)		 Amount Percentage of
total purchases
(sales)		 Credit term Unitprice Credit term Balance Percentage of total
notes/accounts
receivable(payable)
Cosmo Electronics (HK)
Company Limited
Dong Guan Guan Zhen Xing
Trading Limited		 PT Cosmo Technology
Cosmo Electronics (HK)
Company Limited		 Group
Group		 Sales
Sales		 143,445)
($ 113,616)
(		 100.00%
92.75%		 According to the
terms agreed by
both parties
According to the
terms agreed by
both parties		 -
$ -		 -
-		 239,510
$ 88,310		 100.00%
84.14%		 Note
Note

Note : These transactions were eliminated in the preparation of consolidated financial statements.

Table 3

COSMO ELECTRONICS CORPORATION

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

For the three-month period ended March 31, 2022

Table 4
Creditor		 Counterparty Relationship
with the counterparty		 Balance as at
March31,2022		 Turnover rate Overdue receivables Overdue receivables Expressed in thousands of NTD
Amount collected
subsequent to the
Allowance for
balance sheet date
doubtful accounts
(Except as otherwise indicated)		 Expressed in thousands of NTD
Amount collected
subsequent to the
Allowance for
balance sheet date
doubtful accounts
(Except as otherwise indicated)
Amount Action taken
Cosmo Electronics (HK) Company
Limited		 PT Cosmo Technology Group 239,510
$		 80.33% -
$		 -
$		 -
$

Table 4

Table 5

Expressed in thousands of NTD

COSMO ELECTRONICS CORPORATION

Significant inter-company transactions during the reporting periods

For the three-month period ended March 31, 2022

(Except as otherwise indicated)

Transaction

Transaction
Number
(Note 1)		 Companyname Counterparty Relationship
(Note 2)		 General ledger account Amount Percentage of
consolidated total
operating revenues
Transaction terms
or total assets
0
0
1
2
2
3
3
4
4
5
6		 Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Technology (KunShan)
Co., Ltd.
PT Cosmo Technology
PT Cosmo Technology
Cosmo Electronics (HK) Company Limited
Cosmo Electronics (HK) Company Limited
Dong Guan Guan Zhen Xing Trading
Limited
Dong Guan Guan Zhen Xing Trading
Limited
PT Cjambe Indah
Guizhou Guanwang International Digicrown
Electronic Technology Co., Ltd.		 Dongguan Guanwang Electronic Technology Co., Ltd.
Dongguan Guanwang Electronic Technology Co., Ltd.
Cosmo Electronics Corporation
Real Bonus Limited
Cosmo Lighting Inc.
PT Cosmo Technology
PT Cosmo Technology
Cosmo Electronics (HK) Company Limited
Cosmo Electronics (HK) Company Limited
PT Cosmo Technology
Dongguan Guanwang Electronic Technology Co., Ltd.		 (1)
(1)
(2)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)		 Sales
Accounts receivable
Process revenue
Sales
Sales
Accounts receivable
Sales
Accounts receivable
Sales
Other unearned revenue
Accounts receivable		 32,664
$ 72,052
25,158
3,345
5,193
239,510
143,445
88,310
113,616
75,600
69,278		 -
15.69%
Irregularly payment
1.73%
According to the terms agreed by
both parties
12.08%
-
1.61%
-
2.49%
Irregularly payment
5.74%
-
68.90%
Irregularly payment
2.12%
-
54.58%
-
1.81%
Irregularly payment
1.66%
  • Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows: (1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

  • (1) Parent company to subsidiary.

(2) Subsidiary to parent company.

  • (3) Subsidiary to subsidiary.

Table 5

Table 6

COSMO ELECTRONICS CORPORATION

The related information on investees are as follows (not including investees in Mainland China)

For the three-month period ended March 31, 2022

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor Investee Location Mainbusiness activities Initial investment amount Initial investment amount Sharesheld as atMarch31,2022 as atMarch31,2022 Net profit (loss)
of the investee for the
three-month period
endedMarch31,2022		 Investment income
(loss) recognised by
the Company for the
three-month period
endedMarch31,2022		 Footnote
Balance as at
March31,2022		 Balance as at
December31,2021
Numberofshares		 Ownership
(%)
Bookvalue
Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Corporation
Cosmo Electronics Samoa
Cosmo Electronics (HK)
Company Limited
Cosmo Electronics (HK)
Company Limited
Grand Concept Group Limited
Grand Concept Group Limited
Grandway International Limited
Grandway International Limited
True Glory Investments Limited
True Glory Investments Limited		 Cosmo Electronics Samoa
Cosmo Electronics (HK)
Company Limited
Grand Concept Group Limited
Grandway International
Limited
PT Cosmo Technology
Cosmo Green Power Limited
Cosmo Electronics Technology
Co., Ltd.
Cosmo Lighting Inc.
Cosmo Recycling Inc.
True Glory Investments
Limited
Real Bonus Limited
Truly Top Investments Limited
Renown Boom Limited
PT Cosmo Technology
PT Cosmo Green Technology		 Samoa
Islands
Hong Kong
Samoa
Islands
Samoa
Islands
Indonesia
Vietnam
Mauritius
Islands
U.S.A
U.S.A
Samoa
Islands
Samoa
Islands
Samoa
Islands
Samoa
Islands
Indonesia
Indonesia		 Investment activities
Trading of electronic
products
Investment activities
Investment activities
Manufacturing and
selling of LED lighting
Manufacturing and
selling of material of
biomass energy
Investment activities
Selling of LED lighting
Recycling and selling of
waste
Investment activities and
processing and trading of
PCBs
Selling of LED lighting
Investment activities
Investment activities and
processing and selling of
routers
Manufacturing and
selling of LED lighting
Manufacturing and
selling of material of		 193,912
$ 269,412
240,734
941,532
87,075
31,760
193,912
49,046
24,270
240,734
-
538,516
402,983
87,514
44,603		 193,912
$ 269,412
240,734
941,532
87,075
31,760
193,912
49,046
24,270
240,734
-
538,516
402,983
87,514
44,603		 5,500,038
$ 63,180,000
7,950,000
30,080,000
3,000,000
-
5,500,038
1,620,000
800,000
7,950,000
-
16,850,000
13,230,000
2,750,000
15,000		 100%
100%
100%
100%
14%
100%
100%
100%
100%
100%
100%
100%
100%
13%
50%		 207,531
$ 140,745
1,031,349
891,928
95,604
9,441
207,531
38,229
167
989,538
41,684
533,614
358,314
87,637
44,441		 3,577
$ 700)
(
10,595)
(
6,351)
(
13,984)
(
-
3,577
1,406)
(
123)
(
3,513)
(
7,082)
(
9,195)
(
2,844
13,984)
(
1,956		 3,577
$ 700)
(
10,595)
(
6,351)
(
1,988)
(
-
3,577
1,406)
(
123)
(
3,513)
(
7,082)
(
9,195)
(
2,844
1,823)
(
978		 Note 1
Note 2
Note 2
Note 1
Note 1

Table 6-1

Table 6

COSMO ELECTRONICS CORPORATION

The related information on investees are as follows (not including investees in Mainland China)

For the three-month period ended March 31, 2022

Investor
Table 6		 Investee Location Mainbusiness activities Initial investment amount Sharesheld as atMarch31,2022 Net profit (loss)
of the investee for the
three-month period
endedMarch31,2022		 Investment income
(loss) recognised by
the Company for the
three-month period
endedMarch31,2022
Footnote
(Except as otherwise indicated)
Expressed in thousands of NTD
Balance as at
March31,2022		 Balance as at
December31,2021
Numberofshares		 Ownership
(%)
Bookvalue
True Glory Investments Limited
Truly Top Investments Limited
Truly Top Investments Limited
Renown Boom Limited		 PT Cijambe Indah
PT Cosmo Technology
PT Cosmo Green Technology
PT Cijambe Indah		 Indonesia
Indonesia
Indonesia
Indonesia		 Land development
Manufacturing and
selling of LED lighting
Manufacturing and
selling of material of
Land development		 240,875
$ 493,651
44,865
266,944		 240,875
$ 493,651
44,865
266,944		 48,834
$ 15,350,000
15,000
6,579		 88%
73%
50%
12%		 777,488
$ 489,172
44,441
104,744		 2,784)
($ 13,984)
(
1,956
2,784)
(		 2,453)
($ 10,173)
(
978
331)
(		 Note 1
Note 1
Note 1
Note 1

Note 1: The difference between the profit and loss of the investee company and the investment income and loss recognized by the Company is the investment income and loss recognized according to the ownership ratio of the current period. Note 2: It is limited company.

Note 3: The relevant information of the invested companies in mainland China is provided in Table 7.

Table 6-2

COSMO ELECTRONICS CORPORATION

Information on investments in Mainland China For the three-month period ended March 31, 2022

Investee in
Mainland China
Table 7		 Main business activities Paid-in capital Investment
method (Note 1)		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2022		 Amount remit
March
three-month
to Mainland
remitted back		 ted from Taiwan
31,2022
period ended
China/Amount
to Taiwan for the		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of March 31,
2022		 Net income of
investee as of
December 31, 2022		 Ownership held by
the Company
(direct or indirect)		 Investment
income (loss)
recognised by the
Company for the
three-month period
ended March 31,
2022 (Note 2)		 Accumulated
Book value of
amount of
investments in
investment income
Mainland China as
remitted back to
of March 31,
Taiwan as of
2022
March 31, 2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)		 Accumulated
Book value of
amount of
investments in
investment income
Mainland China as
remitted back to
of March 31,
Taiwan as of
2022
March 31, 2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)		 Accumulated
Book value of
amount of
investments in
investment income
Mainland China as
remitted back to
of March 31,
Taiwan as of
2022
March 31, 2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)
Remitted to
MainlandChina		 Remitted back
to Taiwan
Cosmo Electronics
Technology (KunShan)
Co., Ltd.
Dong Guan Guan Zhen
Xing Trading Limited
Shaoguan Woncrown
Electronics Technology
Co.,Ltd.
Guizhou Guanwang
International Digicrown
Electronic Technology Co.,
Ltd.
Dongguan Guanwang
Electronic Technology Co.,
Ltd.
Companyname		 Manufacturing and
selling of new electronic
parts
Manufacturing and
selling of material of
biomass energy
Developing,
manufacturing and
selling of electronic
products
Developing,
manufacturing and
selling of electronic
products
Developing,
manufacturing and
selling of electronic
products
Accumulated amount
from Taiwan to Mainla
March31,2		 193,912
$ 187,563
90,751
158,446
26,958
of remittance
nd China as of
022		 (1)
193,912
$ (2)
85,367
(2)
-
(2)
-
(2)
-
by the Investment Commission of
the Ministry of Economic
Affairs(MOEA)(Note3)
Investment amount approved		 -
$ -
-
-
-
Ceiling on invest
China imposed
Commission o		 -
$ -
-
-
-
ments in Mainland
by the Investment
f MOEA(Note 4)		 193,912
$ 85,367
-
-
-		 3,577
$ 3,173
15
1,553)
(
3,718)
(		 100%
100%
100%
100%
100%		 3,577
$ 3,173
15
1,553)
(
3,718)
(		 207,514
$ 233,036
46,559
139,206
59,795)
(		 -
$ -
-
-
-
Cosmo Electronics
Corporation		 $ 279,279
 $ 472,395 $ 1,036,287

Note 1: Investment methods are classified into the following two categories:

(1)Through investing and establishment in Cosmo Electronics Co., Ltd.(Samoa) and Cosmo Electronics Technology Co., Ltd.(Mauritius) in the third area, which then invested in the investee in Mainland China.

(2)Through investing in an existing company, Renown Boom Limited, in the third area, which then invested in the investee in Mainland China.

Note 2: The company recognised investment income / loss based on the audited financial statements. Note 3: Investment amount approved by the Investment Commission of the Ministry of Economic Affairs was US$16,500 thousand. Note 4: It was calculated by the limit of the combined net asstes in accordance with Order No. MOEA-09704604680.

Note 5: Relevant figures in this table should be expressed in thousands of NTD.

Table 7

Table 8

COSMO ELECTRONICS CORPORATION

Major shareholders information

For the three-month period ended March 31, 2022

Name of major shareholders Shares Shares
No. of shares held Ownership (%)
Digicrown Technologies Ltd.
Wei Jia Investment Co., Ltd.
Da Liang Investment Ltd.
Hung Yi Investment Ltd.
Tsan Hua Investment Co., Ltd.
Kuan Che Investment Ltd.
Tai Sung Investment Co., Ltd.
Kuan Chia Investment Ltd.
Flyachieve Limited.		 15,002,531
13,837,943
13,600,400
13,204,532
12,506,249
12,194,722
11,688,124
11,580,937
10,580,537		 9.28%
8.56%
8.41%
8.16%
7.73%
7.54%
7.23%
7.16%
6.54%

Table 8

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