1
Stock Code:2364

TWINHEAD INTERNATIONAL CORP.
AND SUBSIDIARIES
Consolidated Financial Statements
With Independent Auditors’ Review Report
For the Nine Months Ended September 30, 2022 and 2021

Address:

11F., No.550, Ruiguang Rd., Neihu Dist., Taipei City 114,
Taiwan (R.O.C.)
Telephone: (02)5589-9999

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

2

Table of contents

Contents

Page

1. Cover Page

1

2. Table of Contents

2

3. Independent Auditors’ Review Report3

4. Consolidated Balance Sheets

4

5. Consolidated Statements of Comprehensive Income

5

6. Consolidated Statements of Changes in Equity

6

7. Consolidated Statements of Cash Flows

7

8. Notes to the Consolidated Financial Statements(1)

Company history

8(2)

Approval date and procedures of the consolidated financial statements

8(3)

New standards, amendments and interpretations adopted

8～9

(4)

Summary of significant accounting policies

10～11

(5)

Significant accounting assumptions and judgments, and major sourcesof estimation uncertainty(6)

Explanation of significant accounts

11～32

(7)

Related-party transactions

32～33

(8)

Pledged assets

33

(9)

Commitments and contingencies

3311(10) Losses Due to Major Disasters

33(11) Subsequent Events

33(12) Other

34(13) Other disclosures(a) Information on significant transactions

35～36(b) Information on investees

36～37(c) Information on investment in Mainland China

37(d) Major shareholders

38(14) Segment information

38

3
KPMG

台北市110615信義路5段7號68樓(台北101大樓)
68F., TAIPEI 101 TOWER, No. 7, Sec. 5,
Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

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Independent Auditors’ Review Report

To the Board of Directors
Twinhead International Corp.:
Introduction
We have reviewed the accompanying consolidated balance sheets of Twinhead International Corp. ("theCompany) and its subsidiaries ("the Group") as of September 30, 2022 and 2021, and the related consolidated
statements of comprehensive income for the three months and nine months ended September 30, 2022 and 2021,
as well as the changes in equity and cash flows for the nine months ended September 30, 2022 and 2021, andnotes to the consolidated financial statements, including a summary of significant accounting policies.
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers andInternational Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the
Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on
the consolidated financial statements based on our reviews.
Scope of Review
Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordancewith Statement of Auditing Standards 65, “ Review of Financial Information Performed by the Independent
Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarilyof persons responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with the generally
accepted auditing standards and consequently does not enable us to obtain assurance that we would becomeaware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Basis for Qualified Conclusion
As stated in Note 4 (b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the
total assets amounting to $154,665 thousand and $93,093 thousand, constituting 12.83% and 7.97% of theconsolidated total assets; and the total liabilities amounting to $22,210 thousand and $9,671 thousand,constituting 2.49% and 1.09% of the consolidated total liabilities as of September 30, 2022 and 2021,
respectively; as well as the total comprehensive income (loss) amounting to $(19,102) thousand, $3,101
thousand, $(34,916) thousand and $12,038 thousand, constituting (69.07)%, 30.68%, (67.11)% and 50.76% of
the consolidated total comprehensive income (loss) for the three months and nine months ended September 30,
2022 and 2021, respectively.

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

3-1
Qualified Conclusion
Except for the adjustments, if any, as might have been determined to be necessary had the financial statementsof certain consolidated subsidiaries described in the Basis for Qualified Conclusion paragraph above beenreviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us tobelieve that the accompanying consolidated financial statements do not present fairly, in all material respects,
the consolidated financial position of the Group as of September 30, 2022 and 2021, and of its consolidated
financial performance for the three months and nine months ended September 30, 2022 and 2021, as well as its
consolidated cash flows for the nine months ended September 30, 2022 and 2021 in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers and International AccountingStandard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory
Commission of the Republic of China.
The engagement partners on the audit resulting in this independent auditors’ report are Po-Shu Huang and
Yuan-Sheng Yin.

KPMG
Taipei, Taiwan (Republic of China)
November 11, 2022

Notes to Readers
The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position,
financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic ofChina and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements
are those generally accepted and applied in the Republic of China.
The independent auditors’ review report and the accompanying consolidated financial statements are the English translation of theChinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the
English and Chinese language independent auditors’ review report and consolidated financial statements, the Chinese version shallprevail.

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

Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2022 and 2021
TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 2022, December 31 and September 30, 2021
(Expressed in Thousands of New Taiwan Dollar)

AssetsCurrent assets:
1100

Cash and cash equivalents (note 6(a))

1150

Notes receivable, net (notes 6(b) and 6(o))

1170

Accounts receivable, net (notes 6(b) and 6(o))

1180

Accounts receivable－related parties, net (notes 6(b), 6(o) and

September 30, 2022
Amount%$261,246
171

22

-

91

-

Other receivables

130x

Inventories (note 6(c))

276,4171470

Prepayments and other current assets

12,735628,948

Total current assets

236,48921

257,284

22

2100

Short-term borrowings (notes 6(h) and 8)

-

-

-

2150

Notes payable

2170

Accounts payable

142,957

12

75,461

7

124,841

11

2200

Other payables (note 6(p))

58,478

5

61,523

550,802

4-2250

Provisions－current

8,726

1

7,389

1

7,891

1

1,224

-

2280

Current lease liabilities (note 6(i))

17,307

1

16,774

1

16,685

1

2300

Other current liabilities (note 7)

25,4402

28,946

3

25,8392

Total current liabilities

873,14272

810,27072

846,269

72

-

-

-

-

6,724

116
6

194

1200

September 30, 2021
Amount%-78,0947)

December 31, 2021
Amount
%70,836-

6-

44,922
-

4

1,222

-

23

212,20919

249,21421

1

13,452

1

13,584

1

52534,32447

566,22848

Non-current assets:

Liabilities and Equity
Current liabilities:

September 30, 2022
Amount%$620,000
234

51

December 31, 2021
Amount%September 30, 2021
Amount%620,000

620,000

-

177

55
-

211

53
-

Non-Current liabilities:
2540

Long-term borrowings (note 6(h))

2550

Provisions－non-current

6,861

1

1517

Non-current financial assets at fair value through other
-

1,803

-

3,191

-

2580

Non-current lease liabilities (note 6(i))

4,497

1600

Property, plant and equipment (notes 6(e) and 8)

274,657

23

278,14625

280,233

24

2645

Guarantee deposits received

6,781

1755

Right-of-use assets (note 6(f))

31,212

2

43,142

4

47,216

4

2670

Other non-current liabilities

1,414

1760

Investment property, net (notes 6(g), (j) and 8)

194,338

16

194,84217

194,952

17

Total non-current liabilities

19,5532

31,0183

42,156

4

1840

Deferred income tax assets

44,5404

43,045

4

43,108

4

Total liabilities

892,69574

841,28875

888,425

76

1920

Refundable deposits

7,246

1

7,071

1

7,081

1

1995

Other non-current assets

23,453

2

24,5262

26,5592

576,22048

592,57553

602,34052

21

247,99322

247,993774

comprehensive income (note 6(d))

Total non-current assets

1
-

5,669

1

5,604

17,1481

21,501

6,676

1

6,639

1
-

1,525

-

1,688

2
1
-

Equity attributable to owners of parent (note 6(m)):
Share capital:
3110

Ordinary shares

247,9933120

Preference shares

11
248,0043200

Capital surplus

-

11

-

11

21
-

21

248,00422

248,004

21

35

-

-

-

-

-

-

-

-

-

-

Retained earnings:
3310

Legal reserve

2,818

3350

Retained earnings

70,018

6

28,182

3

21,0092

72,836

6

28,182

3

21,0092

28,393

2

42,201

4

43,4563(18,020)(1)(16,991)(3)(15,603)(1)

10,373

1

25,2101

27,8532

331,24828

301,39626

296,866

25

Other equities:
3410

Exchange differences on translation of foreign financial

3420

Unrealized gains (losses) on financial assets measured at fairstatements
value through other comprehensive income
Total equity attributable to owners of parent
36xx

Non-controlling interests
Total equity

Total assets

See accompanying notes to consolidated financial statements.

$

1,205,168

100

1,126,899

100

1,168,568

100

Total liabilities and equity$(18,775)(2)(15,785)(1)(16,723)(1)

312,47326

285,61125

280,14324

1,205,168

100

1,126,899

100

1,168,568100

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

Reviewed only, not audited in accordance with generally accepted auditing standards
TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the three months ended September 30, 2022 and 2021 and the nine months ended September 30, 2022 and 2021
(Expressed in Thousands of New Taiwan Dollar , Except for Earnings Per Ordinary Share)

For the three months ended
September 30

4000

Operating revenues (notes 6(o) and 7)$

For the nine months ended
September 30

2022
Amount%2021
Amount%2022
Amount%2021
Amount%227,466100

243,212100

663,372100

664,343

100

5000

Operating costs (notes 6(c), 6(i) and 6(k))

152,78967

174,48672

461,17570

467,408

70

5900

Gross profit

74,67733

68,72628

202,19730

196,935

30

6000

Operating expenses (notes 6(i), 6(k), 6(p) and 7):

6100

Selling expenses

14,6296

12,842

5

42,412

6

39,382

66200

Administrative expenses

33,06315

29,937

12

95,012

15

86,78913

6300

Research and development expenses
Total operating expenses

6900

Net operating income

7000

Non-operating income and expenses (notes 6(d), 6(i) and 6(q)):

21,374

10

18,912

8

62,289957,945

9

69,06631

61,691

25

199,71330

184,116

28

5,611

2

7,035

3

2,484

-

12,819

2

387

-

7100

Interest income

250

7010

Other income

9,080

4

7,175

3

30,175

4

26,6594

7020

Other gains and losses

23,33910(1,533)(1)

44,684

7(13,401)

(2)

7050

Finance costs

(1)

7950

8310

34

-

123

-

(2,991)(1)(2,724)(1)(8,356)(1)(8,238)

Total non-operating income and expenses

29,678

13

2,952

1

66,890

10

5,143

1

Income from continuing operations before tax

35,289

15

9,987

4

69,374

10

17,962

3

134

-

216

4

69,24010

17,746-(1,029)

-

1,896

-

-

-

Less: Income tax expense (note 6(l))
Net income

8300

-

1

-

156

35,288

15

9,831

(96)

-

(382)

-

3

Other comprehensive income (loss) (note 6(m)):
Components of other comprehensive income (loss) that will not bereclassified to profit or loss

8316

Unrealized gains (losses) from investments in equity instruments measured atfair value through other comprehensive income

8349

-

Less: Income tax related to components of other comprehensive income that--will not be reclassified to profit or loss

-

-

-

Components of other comprehensive income (loss) that will not be
(96)

-

(382)

-

(1,029)-1,896(7,536)

(3)

659

-

(16,180)

(2)

4,073

-

-

-

-

-

(7,536)

(3)

659

-

(16,180)

(2)

4,073

1

(7,632)

(3)

277

-

(17,209)

(2)

5,969

1

$

27,656

12

10,1084

52,031

8

23,715

4$

35,57515

10,8694

69,85810

21,009(287)-(1,038)(618)-(3,263)$35,288

15

9,831

4

69,24010

17,746$29,14013

11,141

4

55,021

8

26,649

(1,484)(1)(1,033)27,656

12

10,108

reclassified to profit or loss
8360-

Components of other comprehensive income (loss) that will be reclassified
to profit or loss

8361

Exchange differences on translation of foreign financial statements

8399

Less: Income tax related to components of other comprehensive income thatwill be reclassified to profit or loss

-

-

1
-

Components of other comprehensive income (loss) that will bereclassified to profit or loss
8300

Other comprehensive income (loss), net
Total comprehensive income (loss)
Net income (loss) attributable to:8610

Owners of parent

8620

Non-controlling interests-33

Comprehensive income (loss) attributable to:8710

Owners of parent

8720

Non-controlling interests$-(2,990)4

52,031-(2,934)
8

23,715449750

Basic earnings per share (in New Taiwan dollar) (note 6(n))

$

1.43

0.44

2.82

0.85

9850

Diluted earnings per share (in New Taiwan dollar) (note 6(n))

$

1.43

0.43

2.80

0.82

See accompanying notes to consolidated financial statements.

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

Reviewed only, not audited in accordance with generally accepted auditing standards
TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the nine months ended September 30, 2022 and 2021
(Expressed in Thousands of New Taiwan Dollar)

Equity attributable to owners of parent

Share capital
Ordinaryshares1,959,240

Preference
share

Net income (loss)-

Other comprehensive income (loss)-

Total comprehensive income (loss)-

Balance at January 1, 2021$

Capital reduction to offset accumulated deficits

Retained earnings
Retainedearnings(accumulated
deficits)(1,711,320)

Total other equity interest
Unrealized
gains (losses)
from financial
Exchange
assets measured
differences on
at fair valuetranslation ofthrough otherTotal retained
foreign financial
comprehensive
Total otherearnings
statements
incomeequity interest(1,711,320)
39,712(17,499)
22,213

Total sharecapital1,959,324

Capital surplus-

Legal reserve
-

-

-

-

-

-

-

-

-

-

-

-

-

21,00921,00984

21,009-21,009---Total equity
attributable toowners ofparent270,217

Non-controllinginterests(13,789)

Total equity
256,428
17,74621,009(3,263)

3,744

1,896

5,640

5,640

329

5,969

3,744

1,896

5,640

26,649(2,934)23,715--(1,711,247)(73)(1,711,320)--

1,711,320

1,711,320

Balance at September 30, 2021$

247,99311

248,004--

21,00921,00943,456(15,603)

27,853296,866(16,723)

280,143

Balance at January 1, 2022$

247,99311

248,004--

28,182

28,182

42,201(16,991)

25,210301,396(15,785)285,611

Appropriation and distribution of retained earnings:
Legal reserve appropriated

-

-

-

-

-

-

-

Cash dividends of ordinary share

-

-

-

-

-

(24,799)(24,799)---(24,799)-(24,799)

Cash dividends of preference share

-

-

-

-

-

(405)

(405)

-

-

-

(405)

-

(405)

Due to donated assets received

-

-

-

-

-

-

35

-

Net income (loss)

-

-

-

-

-

-

-

-

69,858(618)

69,240

Other comprehensive income (loss)

-

-

-

-

-

(17,209)

Total comprehensive income (loss)

-

-

-

-

-

Balance at September 30, 2022$

See accompanying notes to consolidated financial statements.

247,993

11

2,818

35

248,00435-(2,818)--69,8582,818

69,858
-

-

-

-

35

(13,808)(1,029)(14,837)(14,837)(2,372)

69,85869,858(13,808)(1,029)(14,837)

55,021(2,990)52,03170,01872,83628,393(18,020)

10,373331,248(18,775)

312,473

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

Reviewed only, not audited in accordance with generally accepted auditing standards
TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2022 and 2021
(Expressed in Thousands of New Taiwan Dollar)

For the nine months ended September 30
2022
2021
Cash flows from (used in) operating activities:
Net income before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation
Amortization
Interest expense
Interest income
Dividend income
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Net changes in operating assets:
Notes receivable
Accounts receivable
Accounts receivable－related parties
Other receivables
Inventories
Prepayments and other current assets
Total changes in operating assets, net
Net changes in operating liabilities:
Notes payable
Accounts payable
Other payables
Provisions
Other current liabilities
Other non-current liabilities
Total changes in operating liabilities, net
Total changes in operating assets and liabilities, net
Total adjustments
Cash inflow generated from operating activities
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities
Cash flows from (used in) investing activities:
Proceeds from capital reduction of financial assets at fair value through other comprehensive income
Acquisition of property, plant and equipment
Increase in refundable deposits
Increase in other non-current assets
Dividends received
Net cash flows used in investing activities
Cash flows from (used in) financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Proceeds from long-term debt
Decrease in guarantee deposits received
Payment of lease liabilities
Cash dividends paid
Interest paid
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

$

69,374

17,962

20,986
8,839
8,356
(387)
(480)
37,314

21,712
8,934
8,238
(123)

(55)
(7,258)(194)
1,222(64,208)
730(69,763)

38,761

15,656
2,848(1,209)(41,786)
1,096(23,395)

57
67,496(3,094)
2,529(3,475)(111)
63,402(6,361)
30,953
100,327296(7,791)(179)
92,65324(5,018)(6,811)
1,872(8,061)
318(17,676)(41,071)(2,310)15,652
108(7,600)
(474)
7,686

(2,701)(5)(7,766)480(9,992)

5,186(1,645)(5,554)(2,013)-$(12,501)(25,204)(481)(38,186)(19,718)
24,757
236,489
261,246

110,000(110,000)
6,891
(107)
(12,166)(754)(6,136)
5,179
4,716
252,568
257,2848(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
September 30, 2022 and 2021
(Expressed in Thousands of New Taiwan Dollar, Unless Otherwise Specified)(1)

Company history
TWINHEAD INTERNATIONAL CORP. (the Company) was incorporated on February 27, 1984, as acompany limited by shares under the laws of the Republic of China (ROC). The consolidated financial
statements comprise the Company and its subsidiaries (the Group). The Group is mainly engaged in thedesign, manufacture, sale and development of computers, computer components, peripherals, software,
ASIC chips and workstations, and operation of telecommunication-related business.

(2)

Approval date and procedures of the consolidated financial statements
The consolidated financial statements were reported to the Board of Directors and issued on November 11,
2022.

(3) New standards, amendments and interpretations adopted:(a)

The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial
Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.
The Group has initially adopted the following new amendments, which do not have a significant
impact on its consolidated financial statements, from January 1, 2021:● Amendments to IAS 16 “Property, Plant and Equipment—Proceeds before Intended Use”
● Amendments to IAS 37 “Onerous Contracts－Cost of Fulfilling a Contract”● Annual Improvements to IFRS Standards 2018–2020● Amendments to IFRS 3 “Reference to the Conceptual Framework”(b)

The impact of IFRS issued by the FSC but not yet effective
The Group assesses that the adoption of the following new amendments, effective for annual period
beginning on January 1, 2023, would not have a significant impact on its consolidated financial
statements:● 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”(Continued)

9

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(c)

The impact of IFRS issued by IASB but not yet endorsed by the FSC
The following new and amended standards, which may be relevant to the Group, have been issued
by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:
Standards orInterpretations
Amendments to IAS 1“Classification of Liabilities
as Current or Non-current”

Effective date per
IASBContent of amendment
Under existing IAS 1 requirements, January 1, 2024
companies classify a liability as current
when they do not have an unconditionalright to defer settlement for at least 12
months after the reporting date. The
amendments has removed the requirement
for a right to be unconditional and instead
now requires that a right to defer settlement
must exist at the reporting date and havesubstance.
The amendments clarify how a company
classifies a liability that can be settled in its
own shares – e.g. convertible debt.

Amendments to IAS 1 “Noncurrent Liabilities with
Covenants”

After reconsidering certain aspects of the January 1, 2024
2020
amendments1,
new
IAS
1
amendments clarify that only covenantswith which a company must comply on or
before the reporting date affect theclassification of a liability as current or
non-current.
Covenants with which the company mustcomply after the reporting date (i.e. future
covenants) do not affect a liability’ sclassification at that date. However, when
non-current liabilities are subject to future
covenants, companies will now need todisclose information to help users
understand the risk that those liabilities
could become repayable within 12 months
after the reporting date.

The Group is evaluating the impact of its initial adoption of the abovementioned standards orinterpretations on its consolidated financial position and consolidated financial performance. The
results thereof will be disclosed when the Group completes its evaluation.
The Group does not expect the other new and amended standards, which have yet to be endorsed by
the FSC, to have a significant impact on its consolidated financial statements:(Continued)

10

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(4)

Summary of significant accounting policies
Except the following accounting policies mentioned below, the significant accounting policies adopted in
the consolidated financial statements are the same as those in the consolidated financial statement for theyear ended December 31, 2021. For the related information, please refer to note 4 of the consolidated
financial statements for the year ended December 31, 2021.
(a)Statement of compliance
These consolidated financial statements have been prepared in accordance with the preparation andguidelines of IAS 34 “ Interim Financial Reporting” which are endorsed and issued into effect by
FSC and do not include all of the information required by the Regulations and International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC
Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by
the FSC) for a complete set of the annual consolidated financial statements.

(b)

Basis of consolidation
Principles of preparation of the consolidated financial statements are the same as those of theconsolidated financial statements for the year ended December 31, 2021. For the related information,please refer to note 4(c) of the consolidated financial statements for the year ended December 31,
2021.
The consolidated entities were as follows:
Name ofinvestor
The Company
The Company
Twinhead(Asia) Pte Ltd.
Twinhead(Asia) Pte Ltd.
Twinhead(Asia) Pte Ltd.

Note 1:(c)Name of subsidiary
Durabook Americas Inc.
(Durabook)
Twinhead (Asia) Pte Ltd.
(Twinhead (Asia))
Twinhead Enterprises (BVI)
Ltd.
Twinhead Kunshan
Technology Co., Ltd.
(Twinhead Kunshan)
Kunshan Lun Teng System
Co., Ltd. (Kunshan Lun
Teng)

Principal activity
The trading of computers andcomputer peripheral equipment
Investment holding

Percentage of ownership
September December September
30, 2022
31, 2021
30, 2021
Remarks
80.000 %80.000 %80.000 % Note 1
100.000 %100.000 %100.000 %Note 1

Investment holding

100.000 %100.000 %100.000 %Note 1

Sales and production of PDAs,
calculators and their parts, andcomputer keyboards
Import and export of computers,
electronic components, and digital
cameras, and technical consultant
services

100.000 %100.000 %100.000 %Note 1100.000 %100.000 %100.000 %Note 1

Because they are non-significant subsidiaries, their financial statements were not reviewed by independent auditors.

Income taxes
Tax expense in the consolidated financial statements is measured and disclosed according toparagraph B12 of IAS 34 "Interim Financial Reporting".
Income tax expense for the period is best estimated by multiplying pretax income of the reporting
period by the effective annual tax rate which was forecasted by the management. The outcome isthen fully recognized as current tax expense.

(Continued)

11

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and their respective tax bases shall be measured based on the tax rates that have beenenacted or substantively enacted at the time the asset or liability is recovered or settled, and berecognized directly in equity or other comprehensive income as tax expense.
(5)

Significant accounting assumptions and judgments, and major sources of estimation uncertainty
The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (inaccordance with IAS 34 "Interim Financial Reporting" and endorsed by the FSC) requires management tomake judgments, estimates and assumptions that affect the application of the accounting policies and thereported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The preparation of the consolidated financial statements, estimates and underlying assumptions arereviewed on an ongoing basis which are in conformity with the consolidated financial statements for theyear ended December 31, 2021. For the related information, please refer to note 5 of the consolidated
financial statements for the year ended December 31, 2021.

(6)

Explanation of significant accounts
Except for the following disclosures, there is no significant difference as compared with those disclosed in
the consolidated financial statements for the year ended December 31, 2021. Please refer to note 6 of theconsolidated financial statements for the year ended December 31, 2021.
(a)Cash and cash equivalents

Petty cash
Checking and demand deposits
Time deposits
Cash and cash equivalents per
consolidated statements of cash flows(b)

September 30,
2022
$
302
197,444
63,500$December 31,
2021
289
236,200-

September 30,
2021
297
256,987-

236,489

257,284

December 31,
2021
116
70,83670,952September 30,
2021
44,922
44,922

261,246

Accounts receivables and notes receivable (including related parties)

Notes receivable
Accounts receivable
Accounts receivable－related parties

September 30,
2022
$
171
78,094
194$
78,459(Continued)

12

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

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

Normal customers

Current
1 to 30 days past due
91 to 180 days past due
181 to 365 days past due

September 30, 2022
WeightedGross carrying
Loss allowanceaverage loss
amountprovision
rate$
64,99812,8501
416$

Current
1 to 30 days past due
31 to 60 days past due

70,952-September 30, 2021
Weightedaverage loss
Gross carrying
Loss allowancerate
amountprovision$
41,955
2,514
453

$
(ii)

-

December 31, 2021
Weightedaverage loss
Gross carrying
Loss allowancerate
amountprovision$
47,74522,323884$

Current
1 to 30 days past due
31 to 60 days past due

78,26544,922-

Related parties

1 to 30 days past due

September 30, 2022
Weightedaverage loss
Gross carrying
Loss allowancerate
amountprovision$
194-(Continued)

13

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

As of December 31 and September 30, 2021, the Group had no accounts receivable－relatedparties.
The Group did not hold any collateral for the collectible amounts.
(c)

Inventories
The components of the Group's inventories were as follows:

Merchandise
Finished goods
Work in progress
Raw materials and supplies
Goods in transit
Total

September 30,
2022
$
8,173
54,92538,287
172,8922,140$
276,417

December 31,
2021
4,660
57,960
4,572
143,114
1,903
212,209

September 30,
2021
6,793
50,59325,850163,667
2,311
249,214

As of September 30, 2022, December 31 and September 30, 2021, the Group's inventories were notprovided as pledged assets.
Except for operating costs arising from the ordinary sale of inventories, other losses directly
recorded under operating costs were as follows:
For the three months
ended September 30
2022
2021
Loss on decline in market value of
inventory
(d)

$

981

For the nine months
ended September 30
2022
2021

1,828

8,828

3,424

Non-current financial assets at fair value through other comprehensive income
September 30,
2022

December 31,
2021

September 30,
2021

720

1,744

3,130

54

59

61

774

1,803

3,191

Equity investments at fair value throughother comprehensive income:Unlisted stocks (domestic)$

Unlisted stocks (overseas)
Total
(i)

$

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

(Continued)

14

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

EUROC Venture Capital Corp. reduced its capital by cash based on the resolutions approved
during the its shareholders’ meeting held on June 29, 2021, resulting in the Group to receive
the refunds of $5,186 thousand in August 2021. In addition, EUROC Venture Capital Corp.
was dissolved on May 10, 2022 by a resolution decided during its shareholders' meeting, withthe base date set on May 31, 2022. The dividend income from the company was amounted to$480 thousand for the nine months ended September 30, 2022.
No strategic investments were disposed for the nine months ended September 30, 2022 and
2021, and there were no transfers of any cumulative gain or loss within equity relating to theseinvestments.
(ii)

For credit risk and market risk, please refer to note 6(r).

(iii) The Group did not provide the financial assets as collateral.
(e)Property, plant and equipment
Land
Carrying value:
January 1, 2022
September 30, 2022
January 1, 2021
September 30, 2021

$
$
$
$

107,832
107,832
107,832
107,832

Buildings

Machinery

Other
equipment

161,136
157,660
165,606
162,300

3,811
4,216
3,817
3,980

5,367
4,949
8,523
6,121

Total
278,146
274,657
285,778
280,233

For the nine months ended September 30, 2022 and 2021, the Group did not have any significant
purchase, disposal, or provision (reversal) of impairment on property, plant and equipment. For the
information on depreciation expenses for the three months ended September 30, 2022 and 2021 andthe nine months ended September 30, 2022 and 2021, please refer to note 12; for pledged property,
plant and equipment, please refer to note 8; for other related information, please refer to note 6(e) of
the consolidated financial statements for the year ended December 31, 2021.
(f)

Right-of-use assets
Land
Carrying value:
January 1, 2022
September 30, 2022
January 1, 2021
September 30, 2021

$
$
$
$

10,037
10,14010,349
9,990

Building
31,811
20,17447,85535,800Transportationequipment
1,294
898
1,822
1,426

Total
43,142
31,21260,02647,216

For the nine months ended September 30, 2022 and 2021, the Group did not have any significant
purchase, disposal, or provision (reversal) of impairment on right-of-use assets. For the information
on depreciation expenses of right-of-use assets for the three months ended September 30, 2022 and2021 and the nine months ended September 30, 2022 and 2021, please refer to note 12; for otherrelated information, please refer to note 6(f) of the consolidated financial statements for the year
ended December 31, 2021.

(Continued)

15

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(g)

Investment property
For the nine months ended September 30, 2022 and 2021, the Group did not have any significant
purchase, disposal, or provision (reversal) of impairment on investment properties. For the
information on depreciation expenses of investment property for the three months ended September
30, 2022 and 2021 and the nine months ended September 30, 2022 and 2021, please refer to note 12;
for pledged investment properties, please refer to note 8; for other related information, please refer
to note 6(g) of the consolidated financial statements for the year ended December 31, 2021.
The fair value of the Group's investment properties does not significantly differ from the information
disclosed in note 6(g) of the consolidated financial statements for the year ended December 31,
2021.

(h)

Long-term and short-term borrowings
The details of the Group's long-term and short-term borrowings were as follows:(i)

Short-term borrowings

Unsecured loans
Secured bank loans
Total

September 30, 2022
Range of interest Year ofrates (%)
maturity
Currency
AmountTWD
1.85~2.03
2022$
190,000
TWD
1.79~1.91
2022~2023
430,000$
620,000

Unsecured loans
Secured bank loans
Total

December 31, 2021
Range of interest Year ofrates (%)
maturity
Currency
AmountTWD
1.51~1.65
2022$
210,000
TWD
1.41~1.50
2022
410,000$
620,000

Unsecured loans
Secured bank loans
Total

September 30, 2021
Range of interest Year ofrates (%)
maturity
Currency
AmountTWD
1.60~1.702021$
250,000
TWD
1.41~1.58
2021~2022
370,000$
620,000

As of September 30, 2022, December 31 and September 30, 2021, the unused credit facilities
amounted to $407,400 thousand, $496,120 thousand and $476,800 thousand, respectively.

(Continued)

16

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(ii)

Long-term borrowings

Unsecured loans

September 30, 2021
Range of interest Year ofrates (%)
maturity
Currency
Amount
$
6,724
USD
1.00
2026

As of September 30, 2022 and December 31, 2021, the Group had no long-term borrowings.
(iii) Collateral of loans
The Group has pledged certain assets against the loans; please refers to note 8 for additional
information.
(i)

Lease liabilities
The Group's lease liabilities were as follow:

Current
Non-current

December 31,
2021
16,774
17,148September 30,
2022$
17,307$
4,497

September 30,
2021
16,68521,501For the maturity analysis, please refer to note 6(r) financial instruments.
The amounts recognized in profit or loss were as follows:

Interest on lease liabilities
Expenses relating to leases of low-value
assets, excluding short-term leases of
low-value assets

For the three months
ended September 30
2022
2021
$
137
227

$

122

128

For the nine months
ended September 30
2022
2021
481
754

395

313

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

Total cash outflow for leases(i)$

For the nine months ended
September 30
2022
2021
13,377
13,233

Real estate leases
The Group leases land and buildings for its office space. The leases of its office space typicallyrun for a period of 5 to 7 years. Some leases include an option to renew the lease for an
additional period of the same duration after the end of the contract term.

(Continued)

17

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(ii)

Other leases
The Group leases vehicles, with lease terms of three years. The Group has options to purchase
the assets at the end of the contract term.
The Group also leases office and dormitory with contract terms of 1 to 2 years. These leases
are leases of low-value items. The Group has elected not to recognize right-of-use assets andlease liabilities for these leases.

(j)

Operating leases
The Group leases out its investment property. The Group has classified these leases as operatingleases, because it does not transfer substantially all of the risks and rewards incidental to theownership of the assets. Please refer to note 6(g) for the information of investment property.
A maturity analysis of lease payments, showing the undiscounted lease payments to be received after
the reporting date is as follows:

Less than one year
One to two years
Two to three years
Total undiscounted lease payments(k)

September 30,
2022$
21,371
10,032
1,671$
33,074

December 31,
2021
23,904
17,677
9,196
50,777

September 30,
2021
15,530
11,102
26,632

Employee benefits
The Group recognized pension costs of the defined contribution plans in profit or loss as follows:

Operating costs
Operating expenses

For the three months
ended September 30
2022
2021
$
398
384
1,491
1,532
$

1,930

1,875

For the nine months
ended September 30
2022
2021
1,173
1,126
4,561
4,460
5,734

5,586

For other related information, please refer to note 6(l) to the consolidated financial statements for theyear ended December 31, 2021.
(l)

Income taxes
Income tax expense was best estimated by multiplying pretax gain for the interim reporting periodby the effective tax rate which was forecasted by the management.

(Continued)

18

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

The Group's income tax expense is as follows:
For the nine months
ended September 30
2022
2021

For the three months
ended September 30
2022
2021
Current income tax expense
Current period
Adjustment for prior periods
Income tax expense from continuing
operations

$

1
-

$

156

115
19

179
37

156

134

216

1

The ROC income tax authorities have examined the Company's income tax returns for all years
through 2019.
(m) Capital and other equity
The total value of authorized ordinary shares amounted to $7,000,000 thousand, with par value of$10 per share, divided into 700,000 thousand shares. The number of authorized shares included
ordinary shares and preference shares, of which 24,799 thousand ordinary shares were issued. In
addition, 1 thousand preference shares were issued. All issued capital was fully paid in. The
preference shares were classified under equity.
For the nine months ended September 30, 2022 and 2021, the reconciliation of outstanding shares of
the Company was as follows:
Ordinary shares

2022
Beginning balance on January 1
Capital reduction to offset accumulated
deficits
Balance at September 30(i)(Express in thousand shares)
Preference shares

2021

24,799195,924

24,799(171,125)
24,799

2022

2021
1

8

1

(7)
1

-

Capital stock
According to the Company's articles of incorporation, the rights and obligations of the 20%
cumulative convertible preference shareholders are as follows:1)

Annual earnings, after making up accumulated deficits and appropriating legal reserve,
are distributed, at 20% of par value, as dividends and bonus to the cumulative convertible
preference shareholders.

2)

Dividends and bonus are paid annually after being approved and declared in the annual
ordinary shareholders' meeting. Dividends are calculated based on the prior year's days
outstanding; however, upon conversion of their preference shares into ordinary shares,
the cumulative convertible preference shareholders waive their rights to the current year's
profit distribution.
(Continued)

19

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

(ii)

3)

Dividends and bonus in arrears must be made up in a later year before profits are
distributed to ordinary shareholders. Upon conversion of preference shares into ordinary
shares, dividends and bonus in arrears should be paid in full, and a cumulative
convertible preference shareholders is precluded from sharing in the prior years' profit
distribution with the ordinary shareholders. Except for the differences in dividend
distribution, a 20% cumulative convertible preference shareholder shares the same rights
or obligations as the ordinary stockholders.

4)

One year after issuance, the cumulative convertible preference shareholders may, at theiroption, in June of every year, exchange their convertible preference shares for ordinary
shares at a 1:1 ratio.

5)

A cumulative convertible preference shareholder has a higher claim than the ordinary
shareholders to the remaining assets in the event of the Company's liquidation, and islimited to the issuance amount of the cumulative convertible preference shares. Unlessotherwise stipulated in the articles of incorporation, a cumulative preference shareholder
has no other rights or obligations.

6)

In order to build up a sound financial structure, the Company offset its capital against its
accumulated deficits based on a resolution approved during the shareholders' meeting
held on July 15, 2021, resulting in its share capital to reduce by 171,125 thousand
ordinary shares and 7 thousand preference shares, approximately 87.34% of the total
shares, amounting to $1,711,320 thousand. Thereafter, the numbers of issued shares were
24,799 thousand ordinary shares and 1 thousand preference shares. The above transaction
has been approved by the Financial Supervisory Commission, with August 13, 2021 set
as the base date of capital reduction. All relevant statutory registration procedures havebeen completed.

Capital sarplus
The Company's capital surplus were as follows:

Donation from shareholders

September 30,
2022
$
35

December 31,
2021-

September 30,
2021-(iii) Retained earnings－Distribution of retained earnings
The Company's article of incorporation stipulates that Company's net earnings should first be
used to offset the prior years' deficits, if any, before paying any income taxes. Of the remainingbalance, 10% is to be appropriated as legal reserve, and then any remaining profit together
with any undistributed retained earnings shall be distributed according to the distribution plan
proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.
The remainder can be distributed as dividends in consideration of the overall industry
circumstances, the Company's financial structure, and the investors' best interests, but at least
50% of the remainder should be distributed. Such distribution, considering the capital surplus,
retained earnings, future profitability, and maintenance of the dividend distribution level, shallbe no more than 40% in cash and the rest in stock dividends.
(Continued)

20

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

The appropriation of 2021 earnings as dividends to ordinary shareholders that was approved by
the Company's shareholders during their meetings on June 10, 2022 was as follows:
2021
Dividends distributed to common shareholders:Cash$

24,799As of December 31, 2020, the Company had incurred accumulated deficits. Therefore, nodividends were distributed. Related information would be available at the Market Observation
Post System Website.
The Company's accumulated undistributed preference shares dividend of $2 thousand, $405
thousand and $404 thousand as of September 30, 2022, December 31 and September 30, 2021,
respectively. The appropriation of dividend of $405 thousand to preference shareholders from2008 to 2021 was decided during the Company’s shareholders’ meeting held on June 10, 2022.
(iv) Other equities (net of tax)

Exchangedifferences ontranslation offoreign financial
statements
Balance at January 1, 2022
Foreign exchange differences arising fromforeign operation
Unrealized losses from financial assets measured
at fair value through other comprehensive loss
Balance at September 30, 2022
Balance at January 1, 2021
Foreign exchange differences arising fromforeign operation
Unrealized gains from financial assets measured
at fair value through other comprehensive
incomeBalance at September 30, 2021$

Unrealized
gains (losses)
from financial
assetsmeasured atfair value
through othercomprehensive
income42,201(13,808)(16,991)-$$$(1,029)(18,020)(17,499)

28,39339,712
3,744

43,456

Noncontrollinginterests

1,896(15,603)

27,545(2,372)(16,180)

(37)
1,921

(1,029)10,33624,134

329

4,073

2,250

1,896
30,103

-

-

Total

2,335

-

(Continued)

21

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(n)Earnings per share
The calculations of the Company's basic earnings per share and diluted earnings per share were as
follows:(i)

Basic earnings per share
For the three months
ended September 30
2022
2021
$
35,575
10,869Net income of the Company
Dividends on non-redeemablepreference shares
Net income attributable to ordinary
shareholders of the Company$
Weighted average number ofordinary shares
Basic earnings per share (in NTD) $(ii)

For the nine months
ended September 30
2022
2021
69,85821,009

(1)

(1)

(2)

(2)

35,574

10,86869,85621,007

24,7991.43

24,7990.44

24,7992.82

24,7990.85

Diluted earnings per share
For the nine months
ended September 30
2022
2021

For the three months
ended September 30
2022
2021
Net income attributable to ordinary
shareholders of the Company(basic)$Dividends on non-redeemablepreference shares
Net income attributable to ordinary
shareholders of the Company(diluted)$
Weighted average number ofordinary shares outstanding(basic)Effect of dilutive potential
ordinary shares
Effect of remuneration toemployees
Effect of convertible preference
shares
Weighted average number ofshares outstanding (diluted)
Diluted earnings per share (inNTD)$

35,574

10,86869,85621,0071

1

2

2

35,575

10,86969,85821,00924,79924,79924,79924,799

67

768

115

768

1

1

1

1

24,86725,56824,91525,568

1.43

0.43

2.80

0.82
(Continued)

22

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(o)Revenue from contracts with customers(i)Disaggregation of revenue
For the nine months
ended September 30
2022
2021

For the three months
ended September 30
2022
2021
Primary geographical markets:
United States
TaiwanGermany
China
FranceOthers$$Major products/services lines:
LaptopMainboard
Sales of materials and others

$

$
(ii)

55,27628,03247,64916,293
14,91765,299227,466

65,03819,066
20,41915,563
8,736
114,390
243,212

190,705
69,424
118,88144,01147,711
192,640
663,372

223,874
62,78488,81938,91839,408210,540
664,343

181,433
22,507
23,526
227,466

199,897
21,485
21,830243,212536,689
54,151
72,532
663,372

536,584
61,79865,961
664,343

Contract Balance

Notes receivable
Accounts receivable
Accounts receivable－relatedparties
Total

September 30,
2022
$
171
78,094$

194
78,459December 31,
2021
116
70,836

September 30,
2021
44,922-

70,952

44,922

Please refer to the note 6(b) for the details on notes receivable, accounts receivables andallowance for impairment.
(p)Remunerations to employees and directors
In accordance with the Articles of incorporation before amended, the Company should contribute noless than 10% of the profit as employee remuneration and less than 2% as directors' remuneration
when there is profit for the year. However, if the Company has accumulated deficits, the profit
should be reserved to offset the deficit. The amount of remuneration of each director and of
remuneration for employees entitled to receive the abovementioned employee remuneration isapproved by the Board of Directors. The recipients of shares and cash may include the employees of
the Company's controlling or affiliated companies who meet certain conditions.

(Continued)

23

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

In accordance with the Articles of incorporation amended on June 10, 2022 the Company should
contribute no less than 5% of the profit as employee remuneration and less than 4% as directors'
remuneration when there is profit for the year. However, if the Company has accumulated deficits,
the profit should be reserved to offset the deficit. The amount of remuneration of each director andof remuneration for employees entitled to receive the abovementioned employee remuneration isapproved by the Board of Directors. The recipients of shares and cash may include the employees of
the Company's controlling or affiliated companies who meet certain conditions.
For the three months ended September 30, 2022 and 2021 and the nine months ended September 30,
2022 and 2021, the estimated employee remuneration amounted to $2,858 thousand, $2,335
thousand, $6,349 thousand and $2,335 thousand and the estimated directors' remuneration amounted$1,601 thousand, $0 thousand, $3,175 thousand and $0 thousand, respectively. The estimatedamounts mentioned above were calculated based on the net profit before tax, excluding the
remuneration to employees and directors, multiplied by the percentage of remuneration to employees
and directors as specified in the Company's articles, and expensed under operating expenses for eachperiod. If there are any subsequent adjustments to the actual remuneration amount, the adjustments
will be regarded as changes in accounting estimate and will be reflected in profit or loss in thefollowing year.
For the year ended December 31, 2021, the estimated employee remuneration amounted to $3,203
thousand and the estimated directors' remuneration amounted $640 thousand. The amounts, as statedin the consolidated financial statements, were identical to those of the actual distributions for 2021.
As of December 31, 2020, the Company had incurred accumulated deficits. Therefore, noremuneration to employees and directors were accrued by the Company. Related information would
be available at the Market Observation Post System Website.
(q)Non-operating income and expenses(i)Interest income

Interest income from bank deposits(ii)

For the three months
ended September 30
2022
2021
$
250
34

For the nine months
ended September 30
2022
2021
387
123

For the three months
ended September 30
2022
2021
$
6,943
6,839
2,137
336
$
9,080
7,175

For the nine months
ended September 30
2022
2021
20,821
20,705
480
8,874
5,954
30,17526,659Other income

Rental income
Dividend income
Other income－otherTotal other income(Continued)

24

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(iii) Other gains and losses

For the three months
ended September 30
2022
2021
Foreign exchange gain and losses,
net
Others$Other gains and losses, net$

For the nine months
ended September 30
2021
2022

24,026
(687)

(856)

49,603(11,362)(677)(4,919)(2,039)23,339(1,533)44,684(13,401)(iv) Finance costs

Interest expense(r)

For the nine months
ended September 30
2022
2021
(8,356)(8,238)For the three months
ended September 30
2022
2021
$
(2,991)(2,724)

Financial instruments
Except as noted below, there were no significant changes in the Group's exposure to credit risk due
to financial instruments. Please refer to note 6(s) of the consolidated financial statements for the year
ended December 31, 2021.
(i)

Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest
payments but excluding the impact of netting agreements.
Carrying
amountSeptember 30, 2022
Non-derivative financial liabilities
Short-term borrowings
Notes payable
Accounts payable
Other payables
Lease liabilities
Guarantee deposits received
Preference shares (including
preference shares dividends)$$

Contractual
cash flows

Less than 1
year

620,000
234
142,957
58,47821,804
6,781

620,969
234
142,957
58,47822,1356,781

11
850,26513
851,567

1-2 years

2-5 years

620,969
234
142,957
58,478
17,620
3,574

-

-

13
843,845

-

4,515
474

More than 5
years

2,733

-

2,733

-

4,989

(Continued)

25

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Carrying
amountDecember 31, 2021
Non-derivative financial liabilities
Short-term borrowings
Notes payable
Accounts payable
Other payables
Lease liabilities
Guarantee deposits received
Preference shares (including
preference shares dividends)$$
September 30, 2021
Non-derivative financial liabilities
Short-term borrowings
Long-term borrowings
Notes payable
Accounts payable
Other payables
Lease liabilities
Guarantee deposits received
Preference shares (including
preference shares dividends)$$

Contractual
cash flows

Less than 1
year

620,000
177
75,461
61,52333,922
6,676

623,179
177
75,461
61,52334,7196,676

623,179
177
75,461
61,52317,362100

17,1263,469-

11797,770416
802,151416
778,218

20,595-620,000
6,724
211
124,841
50,802
38,186
6,639

621,067
7,021
211
124,841
50,802
39,1906,639

621,067
67
211
124,841
50,802
17,367
2,733--

17,367
3,432

4,456
474

-

11
847,414415
850,186415
817,503

20,866

11,817-

1-2 years

More than 5years

2-5 years

67

231
3,107

-

3,338

-

6,887

The Group does not expect that the cash flows included in the maturity analysis would occur
significantly earlier or at significantly different amounts.
(ii)

Currency risk
1)

Exposure to foreign currency risk
The Group's financial assets and financial liabilities exposed to significant currency risk
were as follows:
Foreigncurrency
September 30, 2022
Financial assets:
Monetary assets:
USD
Financial liabilities:
Monetary liabilities:
USD

Exchange
rate

TWD

$

20,01531.75

635,476

$

2,532

31.75

80,391(Continued)

26

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Foreigncurrency
December 31, 2021
Financial assets:
Monetary assets:
USD
Financial liabilities:
Monetary liabilities:
USD
September 30, 2021
Financial assets:
Monetary assets:
USD
Financial liabilities:
Monetary liabilities:
USD
2)

Exchange
rate

TWD

$

19,89327.68

550,638

$

1,276

27.68

35,320$19,711

27.85

548,951

$

2,139

27.85

59,571

Sensitivity analysis
The Group's exposure to foreign currency risk arose from cash and cash equivalents,
accounts receivable, accounts payable and other payables that were denominated inforeign currencies. 1% appreciation (depreciation) of the TWD against the USD as of
September 30, 2022 and 2021, with all other variable factors remaining constant, would
have (decreased) increased the net income before tax by $5,551 thousand and $4,894
thousand, respectively. The analysis was performed on the same basis for both periods
with all other variable factors remaining constant.

3)

Foreign exchange gain and loss on monetary item
Due to the numerous types of functional currency of the Group, the Group aggregately
discloses its exchange gains and losses on monetary items. The Group's exchange losses,
including realized and unrealized, were $24,026 thousand, $(856) thousand, $49,603
thousand and $(11,362) thousand for the three months and nine months ended September
30, 2022 and 2021, respectively.

(iii) Interest rate risk analysis
Please refer to the notes on liquidity risk management for the interest rate exposure of theGroup's financial assets and liabilities.
The following sensitivity analysis is based on the risk exposure to interest rates of thederivative and non-derivative financial instruments on the reporting date. For floating-rate
instruments, the sensitivity analysis assumes the liabilities with a floating rate as of thereporting date are outstanding for the whole year.

(Continued)

27

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

If the interest rate had increased/decreased by 1%, the Group's net income before tax would
have increased/decreased by $4,650 thousand and $4,700 thousand for the nine months ended
September 30, 2022 and 2021, respectively, with all other variable factors remaining constant.
This is mainly due to the Group's borrowings at floating rates.
(iv) Fair value
1)

Categories and fair value of financial instruments
The carrying amount and fair value of the Group's financial assets and liabilities were as
follows, except as described in the following paragraphs, for financial instruments notmeasured at fair value whose carrying amount is reasonably close to the fair value,
disclosure of fair value information is not required:
Carrying
amountFinancial assets at fair value
through othercomprehensive income
Unlisted stocks (domestic)
Unlisted stocks (overseas)
Subtotal
Financial assets measured atamortized cost
Cash and cash equivalents
Notes and accounts
receivable (including
related parties)
Other receivables
Refundable deposits
Subtotal
Total
Financial liabilities measured
at amortized cost
Short-term borrowings
Notes and accounts
payableOther payables
Lease liabilities
Guarantee deposits
received
Preference shares
Total

$

September 30, 2022
Fair value
Level 1
Level 2
Level 3

Total

720
54
774

-

-

261,246

-

-

-

-

-

-

-

-

$

78,45991
7,246
347,042
347,816$620,000

-

-

-

-

143,191
58,47821,804

-

-

-

-

6,781
11
850,265

-

-

-

-

$

720
54
774

720
54
774

774

774

(Continued)

28

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Carrying
amountFinancial assets at fair value
through othercomprehensive income
Unlisted stocks (domestic)
Unlisted stocks (overseas)
Subtotal
Financial assets measured atamortized cost
Cash and cash equivalents
Notes and accounts
receivable
Other receivables
Refundable deposits
Subtotal
Total
Financial liabilities measured
at amortized cost
Short-term borrowings
Notes and accounts
payableOther payables
Lease liabilities
Guarantee deposits
received
Preference shares
Total

$

December 31, 2021
Fair value
Level 1
Level 2
Level 3

Total

1,744
59
1,803

-

-

236,489

-

-

-

-

-

-

-

-

$

70,952
1,222
7,071
315,734
317,537$

620,000

-

-

-

-

75,63861,52333,922

-

-

-

-

6,676
11
797,770

-

-

-

-

$

Carrying
amountFinancial assets at fair value
through othercomprehensive income
Unlisted stocks (domestic) $Unlisted stocks (overseas)
Subtotal
Financial assets measured atamortized cost
Cash and cash equivalents
Accounts receivable
Other receivables
Refundable deposits
Subtotal
Total
$

1,744
59
1,803

1,803

September 30, 2021
Fair value
Level 1
Level 2
Level 3

3,130
61
3,191

-

-

257,284
44,922
1,224
7,081
310,511313,702

-

-

1,744
59
1,803

1,803

Total

3,130
61
3,191

-

3,130
61
3,191

3,191

3,191

(Continued)

29

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Carrying
amountFinancial liabilities measured
at amortized cost
Short-term borrowings$
Long-term borrowings
Notes and accounts
payableOther payables
Lease liabilities
Guarantee deposits
received
Preference shares
Total
$

2)

September 30, 2021
Fair value
Level 1
Level 2
Level 3

Total

620,000
6,724

-

-

-

-

125,052
50,802
38,186

-

-

-

-

6,639
11
847,414

-

-

-

-

Valuation techniques for financial instruments measured at fair value－ Non-derivative
financial instruments
If there are quoted prices in active markets for financial instruments, the fair value of
those prices may be based on the quoted market prices. The market prices announced by
Securities Exchange and Over the Counter are the benchmarks used for the fair value ofequity instruments and liability instruments traded in active markets.
If the quoted prices from stock exchanges, brokers, underwriters, industry associations,pricing agencies or authorities are timely and frequently, and that the price fairly presents
the market transaction, the financial instrument is regarded to have a quoted price in an
active market. If the aforementioned conditions are not fulfilled, the market is regarded
as inactive. Generally, large or significantly widen bid-ask spread, or significantly low
trading volume are indications of an inactive market.
If the financial instrument held by the Group is an equity investment without an active
market, its fair value will have to be derived using the market approach. The fair value
can be estimated based on the valuation of the comparable company and the quoted priceprovided by third parties, as well as the equity value of the comparable company and its
operating performances. Whereas the liquidity discount is a significant unobservable
input in valuing equity investment, its potential changes will not cause material impact
on financial figures, and therefore, its quantitative information need not be disclosed.

(Continued)

30

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

3)

Reconciliation of Level 3 fair values

Balance at January 1, 2022
Total loss recognized:
In other comprehensive income
Balance at September 30, 2022
Balance at January 1, 2021
Total gain recognized:
In other comprehensive income
Return of capital for the period
Balance at September 30, 2021

Fair value
through othercomprehensive
incomeUnquoted equity
instruments
$
1,803

$
$

(1,029)
774
6,481

$

1,896
(5,186)
3,191

The aforementioned total income (loss) was included in unrealized gains and losses fromfinancial assets at fair value through other comprehensive income.
4)

Quantified information on significant unobservable inputs (Level 3) used in fair value
measurement.
Quantified information of significant unobservable inputs was as follows:

Item
Financial assets atfair value throughothercomprehensive
income－equity
investments
without an active
marketValuationtechniqueComparative
listed company

Inter-relationshipbetween significant
unobservable inputs
and fair value
Significant
measurement
unobservable inputs‧ Multiplier of price-to- The estimated fairvalue wouldbook ratio (As of
September 30, 2022, increase (decrease)if
December 31 and
September 30, 2021
‧ the multiplier
was 0.08~1.00,
were higher
0.08~1.00 and(lower)0.08~1.01,‧ the market
respectively.)
illiquidity‧ Market illiquidity
discount werediscount rate (As oflower (higher)
September 30, 2022,
December 31 and
September 30, 2021
were 20%)(Continued)

31

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

5)

Fair value measurements in Level 3－ sensitivity analysis of reasonably possible
alternative assumptions.
The Group's measurement of the fair value of financial instruments is reasonable, but theuse of different evaluation models or parameters may result in different results. For fairvalue measurements in Level 3, changing one or more of the assumptions would have thefollowing effects on profit or loss and other comprehensive income:

September 30, 2022
Financial assets at fair value throughother comprehensive income
Equity investments without an active
marketDecember 31, 2021
Financial assets at fair value throughother comprehensive income
Equity investments without an active
marketSeptember 30, 2021
Financial assets at fair value throughother comprehensive income
Equity investments without an active
market

Input

Assumptions

Market liquidity
discount at 20%

5%Market liquidity
discount at 20%

Market liquidity
discount at 20%

Other comprehensive income
Favorable
Unfavorable

$

48

(48)

5%

113

(113)

5%

199

(199)

The favorable and unfavorable effects represent the changes in fair value, and fair value
is based on a variety of unobservable inputs calculated using a valuation technique.
(s)Financial risk management
The objectives and policies of the Group's financial risk management are the same as these in note
6(t) of the consolidated financial statements for the year ended December 31, 2021.

(t)

Capital management
The objectives, policies, and procedures of the Group's capital management are the same as those in
the consolidated financial statements for the year ended December 31, 2021. There were no materialchanges in the Group's quantitative information from that disclosed in the consolidated financial
statements for the year ended December 31, 2021. For further information, please refer to note 6(u)to the consolidated financial statements for the year ended December 31, 2021.

(Continued)

32

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(u)

Investing and financing activities not affecting current cash flow
For the nine months ended September 30, 2022 and 2021, the reconciliation of liabilities arisingfrom financing activities was as follows:

Short-term borrowings
Lease liabilities
Total liabilities from financing activities

Long-term borrowings (including current portion)
Short-term borrowings
Lease liabilities
Total liabilities from financing activities(7)

January 1,
2022$
620,000
33,922$653,922January 1,
2021$
620,000
50,465$
670,465

Cash flows(12,501)(12,501)

Non-cashchanges
Foreignexchange
movement
383
383

September
30, 2022
620,000
21,804
641,804

Cash flows
6,891(12,166)(5,275)

Non-cashchanges
Foreignexchange
movement
(167)
(113)
(280)

September
30, 2021
6,724
620,000
38,186
664,910

Related-party transactions(a)Name and relationship with related party
In this consolidated financial report, the related party having transactions with the Group was listed
as below:
Name of related party
NCS Technologies, Inc. (NCS)(b)

Relationship with the Group
Other related party of the Group (The president of
NCS is the director of the Company)

Significant transactions with related party(i)Operating revenue
The amounts of significant sales by the Group to related party were as follows:

NCS

For the three months
ended September 30
2022
2021
$
1,270
-

For the nine months
ended September 30
2022
2021
1,315
5,685

The sales price with related party was not significantly different from normal transactions, andthe payment term was 30 days after sales.

(Continued)

33

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(ii)

Accounts receivable-related parties
The details of the Group's accounts receivable from related party were as follows:
Accounts
Accounts
receivable－
related parties

Type of relatedparties
Other related parties

September 30,
2022$

December 31,
2021

September 30,
2021

-

-

194

(iii) Advance sales receipts (recognized under other current liabilities)
The details of the Group's advance sales receipts from related party were as follows:
September 30,
2022
$
-

NCS
(c)

December 31,
2021
6,880

September 30,
2021
6,918

Key management personnel transactions
The compensation of the key management personnel comprised the following:

Short-term employee benefits
Post-employment benefits(8)

For the three months
ended September 30
2022
2021
$
6,424
6,207
54
54
$
6,478
6,261

For the nine months
ended September 30
2022
2021
18,38915,194162
162
18,551
15,356

Pledged assets
The carrying values of pledged assets were as follows:
Pledged assets
Land
Buildings
Investment property(9)

ObjectShort-term borrowings
Short-term borrowings
Short-term borrowings

September 30,
2022$
107,832
156,656
98,868$363,356

December 31,
2021
107,832
159,997
142,763410,592

September 30,
2021
107,832
161,111
143,114412,057

Commitments and contingencies: None.

(10) Losses Due to Major Disasters: None.
(11) Subsequent Events: None.

(Continued)

34

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(12) Other(a)

The employee benefit expenses, depreciation, and amortization, categorized by function, were as
follows:
By function Three months ended September 30, 2022

Three months ended September 30,
2021
OperatingOperatingcosts
expenses
Total

Operatingcosts

Operatingexpenses

7,121

36,59843,7196,942

34,55541,497

Labor and health insurance

806

2,965

3,771

781

2,749

3,530

Pension

398

1,532

1,930

384

1,491

1,875

By nature
Employee benefits
SalaryRemuneration of directors

-

Total

2,344

2,344

730

730

467

910

1,377

497

898

1,395

Depreciation (note)

1,238

5,137

6,375

1,219

5,218

6,437

Amortization

-

3,149

3,149

-

2,955

2,955

OthersBy function Nine months ended September 30,
2022
Operating Operating
costs
expensesTotal

By nature
Employee benefits
SalaryLabor and health insurance
PensionRemuneration of directors

OthersDepreciation (note)
Amortization

21,568
2,379
1,173
1,368
3,693
-

108,467
8,805
4,561
5,308
2,710
15,2338,839

130,035
11,184
5,734
5,308
4,078
18,926
8,839-

Nine months ended September 30,
2021
Operating Operating
costs
expenses
Total
21,047
2,282
1,126
1,388
3,638
-

102,733
8,619
4,460
2,345
2,613
16,035
8,934

123,780
10,901
5,586
2,345
4,001
19,6738,934

Note: Depreciation expenses for investment property recognized under other income and expenses amounted
to $687 thousand, $677 thousand, $2,060 thousand and $2,039 thousand for the three months and ninemonths ended September 30, 2022 and 2021, respectively.

(b)

Seasonality or cyclicality of interim operations
The business of the Group is neither seasonal nor cyclical.

(Continued)

35

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(13) Other disclosures(a)

Information on significant transactions:
The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial
Reports by Securities Issuers" for the Group for the nine months ended September 30, 2022:(i)

Loans extended to other parties: None.

(ii)

Guarantees and endorsements for other parties: None.

(iii) Securities held as of September 30, 2022 (excluding investment in subsidiaries, associates and joint ventures):(in Thousands of New Taiwan Dollars / in thousands of sharers)
Nature and nameName of holder

Relationshipwith theAccount namesecurity issuer
Non-current financial assets at fair value
through other comprehensive income

Number ofshares80

Ending balanceBook
Holdingvalue
percentage
720
10.000 %Market Remarks
value
720

The Companyof security
EUROC Venture
Capital Corp.

The Company

I1, Inc.

-

Non-current financial assets at fair value
through profit or loss

The Company

Trigem ComputerInc.

-

Non-current financial assets at fair value
through profit or loss

The Company

Ambicion Co., Ltd.

-

Non-current financial assets at fair value
through other comprehensive income

1

The Company

Adolite Inc.

-

Non-current financial assets at fair value
through other comprehensive income

400-

0.535 %-The Company

Durabook Federal,Inc-

Non-current financial assets at fair value
through other comprehensive income

19-19.000 %

-

400
-

-

2.125 %--

0.006 %-

54

0.691 %

54(iv) Accumulated holding amount of a single security in excess of NT$300 million or 20% of the Company's issued sharecapital: None.
(v)

Acquisition of real estate in excess of NT$300 million or 20% of the Company's issued share capital: None.

(vi) Disposal of real estate in excess of NT$300 million or 20% of the Company's issued share capital: None.
(vii) Sales to and purchases from related parties in excess of $100 million or 20% of the Company's issued share capital:(in Thousands of New Taiwan Dollars)Name ofcompany

The Company

Counter-party

Durabook

Durabook Americas The Company
Inc.

Relationship Purchase /(sale)
Subsidiary(Sale)

Parentcompany

Purchase

Transaction details
Percentage of
Credit period
total purchases
Amount(sales)(76,315)(12) % The receivables can be offset
with accounts payable frompurchase or be O/A 60 days
76,315

97%

Status and reason for deviation fromarm's-length transaction
Unit price

Credit periodNot
The receivables can be offset
significantly with accounts payable fromdifferences
purchase or be O/A 60 days

Accounts / notes receivable (payable)
Percentage of total Remarks
accounts / notes
Balancereceivable (payable)
67,21731 %Note 2(Note 1)The payables can be offset with Not
The payables can be offset withaccounts receivables from sales significantly accounts receivables from sales
differences
or be O/A 60 days
or be O/A 60 days

(147,995)(99) %

Note 2

Note 1: As of September 30, 2022 , the Company's accounts receivable was offset against the investments of Durabook, accounted for using the equity method.
Note 2: The transactions within the Group were eliminated in the consolidated financial statements.

(viii) Receivables from related parties in excess of NT$100 million or 20% of the Company's issued share capital:
Name of

Balance ofTurnoverCounter-party Relationship receivables from
related party
related party
rate(Notes 1 and 5)
The Company Twinhead Kunshan Indirect
337,422
Technology Co., subsidiary(Note 3)Ltd.
The Company Durabook

Subsidiary

147,995(note 4)0.78

(in Thousands of New Taiwan Dollars)
Amounts received Allowancesin subsequent
for badAction taken
period (Note 2)
debts

Overdue amountAmount337,422 The receivable has been
(Note 3)traced and recognized
as long-term accounts
receivable
77,541 The receivable has been
(Note 4)
traced and recognized
as long-term accounts
receivable

-

-

5,661

-

(Continued)

36

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Note 1: Includes the amount recorded under long-term accounts receivables.
Note 2: Until November 11, 2022.
Note 3: It represents the net amount of accounts receivable of the Company derived from the purchase of supplies on behalf of Twinhead Kunshan
Technology Co., Ltd. and accounts payable derived from purchase of goods from Twinhead Kunshan Technology Co., Ltd. in prior years.
Twinhead Kunshan Technology Co., Ltd. pays the Company with the rental income according to the capital plan.
Note 4: As of September 30, 2022, the Company's accounts receivable from Durabook were $147,995 thousand. The overdue receivables of $77,541
thousand were reclassified to long-term receivables.
Note 5: The transactions within the Group were eliminated in the consolidated financial statements.

(ix) Information regarding trading in derivative financial instruments: None.
(x)

Business relationships and significant intercompany transactions:No.
(Note 1)Name ofcompany

Name of counterparty

Existing
relationshipwith theAccount namecounter-party(Note 2)
Sales revenue
1

0

The Company Durabook

0

The Company Kunshan Lun Teng

1

Sales revenue

0

The Company Durabook

1

0

The Company Twinhead Kunshan
Technology Co., Ltd.

1(in Thousands of New Taiwan Dollars)
Transaction details
Percentage of thetotal consolidated
AmountTrading terms
revenue or total(Note 5)assets76,315 The transaction is not
11.50%
significantly different fromnormal transactions
39,854 The transaction is not
significantly different fromnormal transactions

6.01 %

Accounts receivable－related parties

67,217 The receivables can be offset(Note 3) with accounts payable frompurchase or be O/A 60 days

5.58 %

Long-term accounts
receivable－relatedparties

80,094 The receivables can be offset(Note 4) with accounts payable frompurchase or be O/A over 180
days. The payment is arranged
according to the capital plan.

6.65 %

Note 1: Company numbering is as follows:(1) Parent company is 0.
(2) Subsidiary starts from 1.
Note 2: The number of the relationship with the transaction counterparty represents the following:(1) 1 represents downstream transactions.
(2) 2 represents upstream transactions.
(3) 3 represents sidestream transactions.
Note 3: As of September 30, 2022, the Company's accounts receivable was offset against the investments of Durabook, accounted for using the equity
method.
Note 4: It represents the net amount of accounts receivable of the Company derived from the purchase of supplies on behalf of Twinhead Kunshan
Technology Co., Ltd. and accounts payable derived from purchase of goods from Twinhead Kunshan Technology Co., Ltd. in prior years after
offsetting against the investment of Twinhead Kunshan Technology Co., Ltd., accounted for using the equity method.
Note 5: The transactions within the Group were eliminated in the consolidated financial statements.
Note 6: For balance sheet items, over 1% of total consolidated assets, and for profit or loss item, over 1% of total consolidated revenues were selected
for disclosure.

(b)

Information on investees:
The following is the information on investees for the nine months ended September 30, 2022 (excluding information on investees
in Mainland China):
Name ofinvestor

Name ofinvestee

Location

Original cost
September 30, December 31,
2022
2021
The trading of computers and computer
73,44273,442
peripheral equipment
Scope of business

The Company

Durabook

U.S.A.

The Company

Twinhead (Asia)

Singapore

Investment holding

539,919

Twinhead (Asia)

Twinhead Enterprises(BVI) Ltd.

British Virgin
Islands

Investment holding

1,388

Shares(in Thousands of New Taiwan Dollars / in Thousands of shares)
Ending balance
Net income
Investment
Percentage Book value(loss) of
incomeRemarksof ownershipinvestee(losses)769

80.000 %(note 3)

(3,091)(2,473) Subsidiary (note 2)

539,919

5,872

100.000 %(note 4)

(15,645)(15,645) Subsidiary (note 2)

1,388

50

100.000 %104

104 Indirect subsidiary(note 2)

1,299

Note 1: The exchange rate as of September 30, 2022 : USD1=TWD31.75.
Note 2: The transactions within the Group were eliminated in the consolidated financial statements.
Note 3: Please refer to note 13(a)(x) note 3.

(Continued)

37

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements

Note 4: Please refer to note 13(a)(x) note 4.

(c)Information on investment in Mainland China:(i)

The names of investees in Mainland China, the main businesses and products, and other information:
Name ofinvesteein Mainland
China

Scope of business(in Thousands of New Taiwan Dollars / in thousands of USD)
Investment flow during
Cumulative
Net income
Direct /Investment
Book
Accumulated
current period
investment(losses) ofindirect
incomevalue
remittance ofRemittance Repatriation (amount) frominvesteeinvestment (losses) (Noteas ofearnings inamountamountTaiwan as ofholding2)
Septembercurrent
September 30,
percentage
30, 2022
period2022
396,875
396,875(16,623) 100.00 %(16,623)(275,926)(USD12,500)(USD12,500)

Cumulative
investment(amount) from
Taiwan as ofJanuary 1, 2022

Twinhead Kunshan Sales and production of PDAs,
Technology Co., calculators and their parts, andLtd.
computer keyboards

396,875(USD12,500)(2)

Twinhead
Huazhong
Technology
Limited Corp.

127,000(USD4,000)(2)

63,500(USD2,000)--

63,500(USD2,000)

6,668(USD210)

(2)

6,668
(USD210)

-

-

6,668
(USD210)Installation and sales of laptop parts
and accessories; sales and productionof related software

Kunshan Lun Teng Import and export of computers,
electronic components, and digital
cameras, and technical consultant
services
Note 1:(ii)

Method ofIssued capital investment(Note 1)

-

-

911

%

100.00 %

-

911

-

-

20,588-The method of investment is divided into the following four categories:(1) Remittance from third-region companies to invest in Mainland China (Through Twinhead (Asia) Ptd Ltd. invest in Mainland china).
(2) Through transferring the investment to third-region existing companies then investing in Mainland China.

Note 2:(3) Through the establishment of third-region companies then investing in Mainland China.
(4) Other methods: EX: delegated investments.
The amounts of investment income (loss), were recognized under the equity method based on the financial statements which were not reviewed by the auditors of the Company.

Note 3:The exchange rate as of September 30, 2022 : USD1=TWD31.75.

Note 4:

The transactions within the Group were eliminated in the consolidated financial statements.

Limitation on investment in Mainland China:
Company
name
The Company

Accumulated investment
amount in Mainland China as
of September 30, 2022 (Note 1)
508,318(USD16,010)

Investment (amount) approved
by Investment Commission,
Ministry of Economic Affairs
508,318(USD16,010)

Maximum investment amountset by Investment Commission,
Ministry of Economic Affairs(Note 3)Note 1: Including the amount of USD1,300 thousand wired to Twinhead Beijing Technology Co., Ltd.
Note 2: The exchange rate as of September 30, 2022: USD1=TWD31.75.
Note 3: In accordance with the "Regulations on Permission for Investment or Technical Cooperation in Mainland China"
and the Principles for Examination of Applications for Investment or Technical Cooperation in Mainland China
amended and ratified by the Executive Yuan on August 22, 2008, the Company met the criteria for operational
headquarters under the Statute for Industrial Innovation and obtained approval from the Industrial Development
Bureau Ministry of Economic Affairs, on June 12, 2020. As it has an operational headquarters status, theCompany is not subject to the limitation as to the amount of investment in Mainland China during the period from
June 9, 2020 to June 8, 2023.
(iii) Significant transactions with investees in Mainland China:
Related information is provided in note 13(a)(x).

(Continued)

38

TWINHEAD INTERNATIONAL CORP. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements(d)Major shareholders:
Unit: share
Shareholding
Shareholder’s Name
Kaos Enterprise Co., Ltd.
Protegas Futuro Holdings, LLC
Outstanding Corporation
KANG EEL SHIUAN Co., Ltd.

Shares3,973,315
3,802,355
1,644,480
1,391,327

Percentage
16.02 %
15.33 %
6.63 %
5.61 %(14) Segment information
The Group is mainly engaged in the design, manufacture and sale of computers, as well as related
products. The management regularly reviews the Group's overall performance to evaluate the efficiencyof each segment and allocate its resources accordingly. The Group is identified as a sole operating
segment.