Altek — Audit Report / Information 2021

Nov 16, 2021

ALTEK CORPORATION AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2021 AND 2020

(Stock Code ： 3059)

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 21000181

To the Board of Directors and Shareholders of ALTEK CORPORATION

Opinion

We have audited the accompanying consolidated balance sheets of ALTEK CORPORATION AND SUBSIDIARIES (the “Group”) as at December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Allowance for inventory valuation losses

Description

Please refer to Note 4(14) for description of accounting policy on inventory valuation. Please refer to Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation. Please refer to Note 6(6) for the details of inventories.

The Group is primarily engaged in manufacturing and sales of automobile camera, medical and digital image application products. The Group measures inventories sold at the lower of cost and net realisable value.For inventory that is over a certain age and individually identified obsolete or damaged inventory, the Group recognises losses at net realisable value. Aforementioned allowance for inventory valuation losses mainly arises from individually identified obsolete or damaged inventory. Since the value of inventories is significant, involves various types of inventory, and the individual identification of inventory usually involves management judgement which is an area that also needs to be assessed using our judgement during the audit process. Thus, we identified valuation of allowance for inventory losses as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Obtained an understanding and assessed the provision policy on inventory valuation losses.

• B. Obtained the statement of individually identified obsolete inventory prepared by management and checked the accuracy of stock age analysis report and relevant information.

• C. Checked the accuracy of net realisable value of inventory, assessed the consistency between valuation of market value decline and its provision policy, and assessed the reasonableness of allowance for valuation losses determined by the Group.

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Timing of sales revenue recognition

Description

Please refer to Note 4(29) for accounting policies of revenue recognition. The Group’s revenue mainly arises from export sales and the cash amounts are material. As the sales terms vary from customers who are located in Mainland China, Europe and America, the terms in customer orders and contracts needs to be properly assessed. Since this involves judgement in the determination of timing of control transfer, we consider the timing of revenue recognition as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. Assessed the appropriation of policies on sales revenue recognition.

• B. Assessed and tested the design of internal controls that are relevant to sales revenue recognition and the effectiveness of execution.

• C. Performed cut-off test on sales revenue in specific period around balance sheet date.

• D. Performed confirmation and substantive test on the balance of accounts receivable at the end of period to confirm accounts receivable and that relevant sales revenue have been recorded in the proper period.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Altek Corporation as at and for the years ended December 31, 2021 and 2020.

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Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: A. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and

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obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

E.

F.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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safeguards.

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

Li, Tien-Yi

[Chiang, Tsai-yen ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 10, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows 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 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.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) 6(6) 6(2) 6(3) 6(4) 6(7) and 8 6(8) 6(9) and 8 6(10) 6(28)	December31,2021 AMOUNT % $ 5,368,653 33 - - 130,245 1 - - 1,302 - 1,451,230 9 110,440 1 3,390 - 2,688,960 16 179,933 1 4,863 - 9,939,016 61 79,184 1 101,860 1 1,302,879 8 2,652,307 16 135,733 1 1,377,915 8 491,634 3 228,629 1 33,436 - 6,403,577 39 $ 16,342,593 100	December31,2020	December31,2020
		AMOUNT $ 5,368,653 - 130,245 - 1,302 1,451,230 110,440 3,390 2,688,960 179,933 4,863 9,939,016 79,184 101,860 1,302,879 2,652,307 135,733 1,377,915 491,634 228,629 33,436 6,403,577 $ 16,342,593	AMOUNT $ 5,373,406 349,664 423,387 4,414 - 1,273,383 68,825 3,292 1,106,726 217,600 4,535 8,825,232 48,229 43,130 1,419,002 2,420,736 122,863 1,406,586 215,261 182,361 34,746 5,892,914 $ 14,718,146	%
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1136 Current financial assets at amortised cost 1140 Current contract assets 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				37 2 3 - - 9 - - 8 1 -
				60
				- - 10 17 1 10 1 1 -
				40
				100

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December31,2021 December31,2020 Notes AMOUNT % AMOUNT % 6(11) $ 2,510,000 15 $ 2,330,000 16 6(12) 599,818 4 299,798 2 6(21) 262,350 2 32,568 - 1,972,344 12 1,296,475 9 561,152 3 485,953 4 79,959 1 36,763 - 6(16) 25,245 - 9,295 - 13,925 - 9,336 - 6(13) 159,520 1 437,093 3 6,184,313 38 4,937,281 34 6(16) 135,035 1 160,395 1 6(28) 483,178 3 464,691 3 104,610 1 95,176 1 43,092 - 36,750 - 765,915 5 757,012 5 6,950,228 43 5,694,293 39 6(17) 2,792,011 17 2,794,973 19 6(18) 2,392,215 14 2,335,226 16 6(19) 1,418,410 9 1,402,467 9 651,556 4 592,325 4 2,266,140 14 2,249,655 15 6(20) ( 787,359) ( 5) ( 697,698) ( 5 ) 6(17) ( 131,461) ( 1) ( 209,287) ( 1 ) 8,601,512 52 8,467,661 57 4(3) 790,853 5 556,192 4 9,392,365 57 9,023,853 61 $ 16,342,593 100 $ 14,718,146 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Current lease liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity 3X2X Total liabilities and equity

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

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(21) $ 9,085,774 100 $ 6,102,675 100 6(6)(26)(27) ( 6,927,052 ) ( 76) ( 4,580,745) ( 75 ) 2,158,722 24 1,521,930 25 6(26)(27) ( 51,806 ) - ( 50,790) ( 1 ) ( 477,188 ) ( 5) ( 327,897) ( 6 ) ( 1,397,350 ) ( 16) ( 1,058,505) ( 17 ) 12(2) 96 - 731 - ( 1,926,248 ) ( 21) ( 1,436,461) ( 24 ) 232,474 3 85,469 1 6(22) 71,793 1 103,379 2 6(23) 66,143 1 49,171 1 6(24) 52,814 - 28,613 - 6(25) ( 25,852 ) - ( 25,195) - 164,898 2 155,968 3 397,372 5 241,437 4 6(28) ( 117,111 ) ( 2) ( 79,929) ( 2 ) $ 280,261 3 $ 161,508 2

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit gains 6000 Total operating expenses 6900 Operating profit 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 before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(14) $ 3,433 - ($ 1,153) - 6(3) ( 21,154 ) - ( 3,787) - 6(28) ( 942 ) - 988 - ( 18,663 ) - ( 3,952) - ( 120,930 ) ( 1) ( 88,390) ( 1 ) 6(28) 25,860 - 14,051 - ( 95,070 ) ( 1) ( 74,339) ( 1 ) ( $ 113,733 ) ( 1) ($ 78,291) ( 1 ) $ 166,528 2 $ 83,217 1 $ 224,734 2 $ 160,357 2 55,527 1 1,151 - $ 280,261 3 $ 161,508 2 $ 102,633 1 $ 100,204 1 63,895 1 ( 16,987) - $ 166,528 2 $ 83,217 1 6(29) $ 0.85 $ 0.60 6(29) $ 0.83 $ 0.59

Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealised losses from financial assets measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive (loss) income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Currency translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive income 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Total other comprehensive loss for the year 8500 Total comprehensive income for the year Profit, attributable to: 8610 Owners of the parent 8620 Non-controlling interest Profit for the year Comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Total comprehensive income for the year 9750 Basic earnings per share 9850 Diluted earnings per share

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

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ALTEK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation of 2019 earnings Legal reserve Special reserve Cash dividends Share-based payment transactions Restricted stocks Retirement of employee restricted shares Changes in ownership interests in subsidiaries Treasury shares repurchased Balance at December 31, 2020 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation of 2020 earnings Legal reserve Special reserve Cash dividends Share-based payment transactions Retirement of employee restricted shares Treasury stock transferred to employees Changes in ownership interests in subsidiaries Non-controlling interest Proceeds from disposal of financial assets at fair value through other comprehensive income Balance at December 31, 2021	Notes								Equityattrib	ut	ableto owners of the p	are	nt	nt							Non-controlling interest		Totalequity
			Commonstock		Additional paid-in capital				RetainedEarnings				Otherequity		interest	Treasury stocks			Total
							Legal reserve		Special reserve		Unappropriated retained earnings	d	Currency translation ifferences of foreign operations		Other
	6(20) 6(19) 6(15)(20) 6(15)(17)(18)(20) 6(15)(17)(18)(20) 6(20) 6(19) 6(15)(18)(20) 6(15)(17)(18)(20) 6(17)(18) 6(18) 6(30) 6(3)(20)		$ 2,753,613 - - - - - - - 43,120 ( 1,760 ) - - $ 2,794,973 $ 2,794,973 - - - - - - - ( 2,962 ) - - - - $ 2,792,011		$ 2,280,487 - - - - - - - 54,798 ( 2,194 ) 2,135 - $ 2,335,226 $ 2,335,226 - - - - - - 69,940 ( 3,722 ) ( 227 ) ( 9,002 ) - - $ 2,392,215		$ 1,394,151 - - - 8,316 - - - - - - - $ 1,402,467 $ 1,402,467 - - - 15,943 - - - - - - - - $ 1,418,410		$ 435,679 - - - - 156,646 - - - - - - $ 592,325 $ 592,325 - - - - 59,231 - - - - - - - $ 651,556		$ 2,394,976 160,357 ( 922 ) 159,435 ( 8,316 ) ( 156,646 ) ( 139,794 ) - - - - - $ 2,249,655 $ 2,249,655 224,734 2,746 227,480 ( 15,943 ) ( 59,231 ) ( 134,249 ) - - - - - ( 1,572 ) $ 2,266,140		($ 494,335 ) - ( 56,201 ) ( 56,201 ) - - - - - - - - ($ 550,536 ) ($ 550,536 ) - ( 103,438 ) ( 103,438 ) - - - - - - - - - ($ 653,974 )		($ 121,024 ) - ( 3,030 ) ( 3,030 ) - - - 70,856 ( 97,918 ) 3,954 - - ($ 147,162 ) ($ 147,162 ) - ( 21,409 ) ( 21,409 ) - - - 26,930 6,684 - - - 1,572 ($ 133,385 )		$ - - - - - - - - - - - ( 209,287 ) ($ 209,287 ) ($ 209,287 ) - - - - - - - - 77,826 - - - ($ 131,461 )		$ 8,643,547 160,357 ( 60,153 ) 100,204 - - ( 139,794 ) 70,856 - - 2,135 ( 209,287 ) $ 8,467,661 $ 8,467,661 224,734 ( 122,101 ) 102,633 - - ( 134,249 ) 96,870 - 77,599 ( 9,002 ) - - $ 8,601,512		$ 573,179 1,151 ( 18,138 ) ( 16,987 ) - - - - - - - - $ 556,192 $ 556,192 55,527 8,368 63,895 - - - 422 - - 9,002 161,342 - $ 790,853		$ 9,216,726 161,508 ( 78,291 ) 83,217 - - ( 139,794 ) 70,856 - - 2,135 ( 209,287 ) $ 9,023,853 $ 9,023,853 280,261 ( 113,733 ) 166,528 - - ( 134,249 ) 97,292 - 77,599 - 161,342 - $ 9,392,365

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

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Expected credit gains Net gain on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share-based payment compensation cost Gain on disposal of property, plant and equipment Changes in operating assets and liabilities Changes in operating assets Current contract assets Accounts receivable Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Notes payable Accounts payable Other payables Provisions for liabilities Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Interest received Dividends received Interest paid Income tax paid Net cash flows (used in) from operating activities

Notes Year ended December 31 2021 2020 $ 397,372 $ 241,437 6(7)(8)(9)(26) 193,256 182,683 6(10)(26) 131,008 88,966 12(2) ( 96 ) ( 731 ) 6(2)(24) ( 38,686 ) ( 8,541 ) 6(25) 25,852 25,195 6(22) ( 71,793 ) ( 103,379 ) 6(23) ( 1,526 ) ( 1,526 ) 6(15) 97,292 72,991 6(24) 26 ( 17 ) 4,414 ( 4,415 ) ( 178,257 ) ( 352,778 ) ( 23,189 ) ( 199 ) ( 1,584,612 ) ( 51,772 ) ( 44,724 ) ( 119,323 ) ( 344 ) 1,370 209,160 ( 1,574 ) - ( 4,294 ) 681,350 265,644 52,310 56,294 ( 9,405 ) 27,284 ( 6,935 ) ( 13,759 ) 19 51 ( 167,508 ) 299,607 53,041 77,946 1,526 1,526 ( 21,580 ) ( 22,980 ) ( 76,855 ) ( 71,795 ) ( 211,376 ) 284,304

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or less Acquisition of financial assets at amortised cost Proceeds from repayments of financial assets at amortised cost Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease in guarantee deposits paid Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayment of short-term borrowings Proceeds from issuance of short-term notes and bills payable Repayment of short-term notes and bills payable Proceeds from long-term borrowings Repayment of long-term borrowings Decrease in guarantee deposits received Repayment of principal portion of lease liabilities Acquisition of treasury stocks Cash dividends paid Treasury shares transferred to employees Changes in non-controlling interest Net cash flows from financing activities Effect of exchange rate Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes Year ended December 31 2021 2020 ($ 151,630 ) ($ 344,683 ) 506,419 - - ( 1,084,605 ) 398,571 13,421 ( 86,694 ) - 2,325 - 3,056 4,364 6(31) ( 392,165 ) ( 61,226 ) 432 311 6(31) ( 306,120 ) ( 55,852 ) 1,294 5,713 ( 24,512 ) ( 1,522,557 ) 6(32) 16,310,000 17,120,000 6(32) ( 16,130,000 ) ( 16,990,000 ) 6(32) 3,097,194 1,158,741 6(32) ( 2,800,000 ) ( 1,090,000 ) 6(32) - 250,000 6(32) ( 250,000 ) - 6(32) 9,841 5,816 6(32) ( 14,253 ) ( 9,615 ) 6(17) - ( 209,287 ) 6(19) ( 134,249 ) ( 139,794 ) 77,599 - 161,342 - 327,474 95,861 ( 96,339 ) ( 150,257 ) ( 4,753 ) ( 1,292,649 ) 6(1) 5,373,406 6,666,055 6(1) $ 5,368,653 $ 5,373,406

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

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ALTEK CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Altek Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the development, manufacturing and sale of automobile camera, medical and digital image technology application, and related export and import trade.

The Company was listed in the Taiwan Stock Exchange on December 24, 2002, as approved by the TaiTz (91) Letter No. 024976 of the former Securities and Futures Commission, Ministry of Finance, R.O.C., dated September 27, 2002.

1. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorized for issuance by the Board of Directors on March 10, 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 (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

New standards, interpretations and amendments endorsed by the follows:	FSC effective from 2021
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest Rate Benchmark Reform— Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond 30 June 2021’ Note：Earlier application from January 1, 2021 is allowed by	January 1, 2021 January 1, 2021 April 1, 2021(Note)

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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

the Group

New standards, interpretations and amendments endorsed by the 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’ Annual improvements to IFRS Standards 2018–2020	Effective date by International Accounting Standards Board
	January 1, 2022 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.

(3) 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:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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endorsed by the FSC are as follows: New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

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 applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

• The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

• (2) Basis of preparation

• A. 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 through profit or loss.

  • (b) Financial assets at fair value through other comprehensive income.

  • (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(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 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 unrealised 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 noncontrolling 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 recognised directly in equity.

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• (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 recognised in profit or loss. All amounts previously recognised 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 recognised in other comprehensive income in 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:

(Blank below)

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Name of Investor	Name ofSubsidiaries	Main Business Activities	Ownership (%)	Ownership (%)	Note
				December31,2020
					- - - - - - - - - - Note 2 Note 5 Note 4 - - - - Note 3 - - Note 5 Note 5 Note 6 Note 7 Note 8

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• 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: As of December 31, 2021 and 2020, the non-controlling interest amounted to $790,853 and $556,192, respectively. The information of non-controlling interest and respective subsidiaries is as follows:

as follows:
Name of subsidiary	Principal place of business Republic of China Republic of China China	Amount Ownership (%) Amount $ 555,009 50 $ 556,192 205,505 22.3 - 30,339 25 - Non-controllinginterest December 31,2021 December		Ownership (%) 50 - - 31,2020	Description
			Amount $ 556,192 - -
Altek Semiconductor (Cayman) Co. , Ltd. Altek Medical Holding (Cayman) Co. , Ltd. Altek Optical Technology (Kunshan) Co. , Ltd.					Note Note

Note : The country of registration is Cayman Islands.

Summarised financial information of the subsidiaries: Balance sheets

Balance sheets
		Altek Semiconductor	(Cayman)Co.,Ltd.
		December 31,2021		December 31,2020
Current assets	$	1,023,058	$	1,131,058
Non-current assets		475,386		179,042
Current liabilities	(	388,234)	(	197,580)
Non-current liabilities	(	193)	(	135)
Total net assets	$	1,110,017	$	1,112,385

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		Altek Medical Holding		Altek Optical Technology	Altek Optical Technology
		(Cayman)Co.,Ltd.			(Kunshan)Co.,Ltd.
		December 31,2021			December 31,2021
Current assets	$	1,807,687	$		148,247
Non-current assets		41,966			88,985
Current liabilities	(	818,234)	(		115,878)
Non-current liabilities	(	109,870)			-
Total net assets	$	921,549	$		121,354

Total net assets	$	921,549	$		121,354
Statements of comprehensive income
		Altek Semiconductor	(Cayman)Co.,Ltd.
		For the year ended			For the year ended
		December 31,2021			December 31,2020
Revenue	$	755,409	$		514,858
Profit before income tax		19,884			5,097
Income tax expense	(	719)	(		2,794)
Profit for the year		19,165			2,303
Other comprehensive loss, net of tax	(	21,533)	(		36,275)
Total comprehensive income for the
year	($	2,368)	($		33,972)
		Altek Medical Holding		Altek Optical Technology
		(Cayman) Co. , Ltd.			(Kunshan)Co.,Ltd.
		For the year ended			For the year ended
		December 31, 2021			December 31,2021
Revenue	$	2,795,867	$		250,987
Profit before income tax		286,661			36,824
Income tax expense	(	60,711)			-
Profit for the year		225,950			36,824
Other comprehensive (loss) income,
net of tax		23,729	(		3,305)
Total comprehensive income for
the year	$	249,679	$		33,519

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’s functional and the Group’s presentation currency.

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• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

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• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.

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• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

  • The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortised cost

The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(11) Impairment of financial assets

• For financial assets at amortised cost at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that does not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

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The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

• －

• (13) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

• (14) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

• (15) Investments accounted for using equity method / associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

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• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

• G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• (16) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

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• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 3 ~ 40 years Machinery and equipment 3 ~ 10 years Utility equipment 3 ~ 6 years Other equipment 2 ~ 11 years

• (17) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate.

  • The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability

  • (b) Any initial direct costs incurred by the lessee

  • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 10 ~ 46 years.

(19) Intangible assets

Computer software, reticle and patent rights are stated at cost and amortised on a straight-line basis over their estimated useful lives of 1 ~ 5 years.

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(20) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(21) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred.

(22) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The Group initially measures notes and accounts payable at fair value and subsequently amortises the interest expense in profit or loss over the period of circulation using the effective interest method.

(23) Provisions

Provisions (warranties) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date.

(24) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

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• (b) Defined benefit plans

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

  • ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  • iii. Past service costs are recognised immediately in profit or loss.

• C. Termination benefits

• Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ remuneration Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

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- (25) Employee share based payment

• A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

• B. Restricted stocks:

• (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.

• (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Group recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

• (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Group and the Group must refund their payments on the stocks, the Group recognises the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognises the payments from the employees who are expected to be eventually vested with the stocks in ’capital surplus – others’.

(26) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

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• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

(27) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(28) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities.

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(29) Revenue recognition

• A. Sales of goods

• (a) The Group manufactures and sells digital image technology application products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Revenue from these sales is recognised based on the price specified in the contract, net of the value-added tax, sales return, volume discounts, sales discounts and allowances.

• (c) The Group’s obligation to provide a repair for faulty products under the standard warranty terms is recognised as a provision.

• (d) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Technical service revenue

The Group provides technical support services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the number of delivered report relative to the total number of committed report.

• C. Royalty income

• (a) The Group entered into a contract with a customer to grant a licence of patented technology to the customer. Given the licence is distinct from other promised goods or services in the contract, the Group recognises the revenue from licencing when the licence transfer to a customer either at a point in time or over time based on the nature of the licence granted. The nature of the Group’s promise in granting a licence is a promise to provide a right to access the Group’s intellectual property if the Group undertakes activities that significantly affect the patents to which the customer has rights, the customer is affected by the Group’s activities and those activities do not result in the transfer of a good or a service to the customer as they occur. The royalties are recognised as revenue on a straight-line basis throughout the licencing period. In case the abovementioned conditions are not met, the nature of the Group’s promise in granting a licence is a promise to provide a right to use the Group’s intellectual property and therefore the revenue is recognised when transferring the licence to a customer at a point in time.

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• (b) Some contracts require a usage-based royalty in exchange for a licence of intellectual property. The Group recognises revenue when the performance obligation has been satisfied and the subsequent usage occurs. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

• (30) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

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

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

• (a) Critical judgements in applying the Group’s accounting policies

• None.

• (b) Critical accounting estimates and assumptions

• Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2021, the carrying amount of inventories was $2,688,960.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand revolving funds Checking accounts and demand deposits Time deposits Total	December31,2021 808 $ 1,930,349 3,437,496 5,368,653 $	December31,2020
		1,052 $ 1,260,822 4,111,532
		5,373,406 $

• 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. The Group has no cash and cash equivalents pledged to others.

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(2) Financial assets at fair value through profit or loss

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Items December 31, 2021 December 31, 2020
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
-
Structured deposits $ $ 349,186
Valuation adjustment - 478
Total $ - $ 349,664
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Unlisted stocks $ 10,312 $ 10,312
Valuation adjustment 68,872 37,917
Total $ 79,184 $ 48,229
----- End of picture text -----

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

loss are listed below:
Equity instruments Structured deposit Total	For the year ended December 31,2021 30,955 $ 7,731 38,686 $	For the year ended December 31, 2020
		8,073 $ 468
		8,541 $

• B. The Group has no financial assets at fair value through profit or loss pledged to others as at December 31, 2021 and 2020.

• C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

(3) Financial assets at fair value through other comprehensive income

Items		December	31,2021		December	31,2020
Non-current items:
Equity instruments
Unlisted stocks	$		222,718	$		144,405
Valuation adjustment	(		120,858)	(		101,275)
Total	$		101,860	$		43,130

• A. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $101,860 and $43,130 as at December 31, 2021 and 2020, respectively.

• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income amounted to ($21,154) and ($3,787) for the years ended December 31, 2021 and 2020, respectively. For the year ended December 31, 2021, the accumulated loss due to delisting and transferring returned earnings was $1,572.

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• C. The Group has no financial assets at fair value through profit or loss as at December 31, 2021 and 2020 pledged to others.

(4) Financial assets at amortised cost

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----- Start of picture text -----

Items December 31, 2021 December 31, 2020
Current items:
Time deposit with maturity from
three months to one year $ 130,245 $ 423,387
Non-current items:
Time deposit with maturity over one year $ 1,302,879 $ 1,419,002
----- End of picture text -----

• A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

Interest income	For the year ended For the year ended December 31,2021 December 31,2020 45,773 $ 46,323 $

• B. The Group has no financial assets at amortised cost pledged to others.

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Notes and accounts receivable

Notes and accounts receivable
	December	31,2021	December	31, 2020
Notes receivable	$	1,302	$	-
Accounts receivable	$	1,451,400	$	1,273,648
Less: Allowance for uncollectible accounts	(	170)	(	265)
	$	1,451,230	$	1,273,383

• A. The ageing analysis of notes and accounts receivable that was past due but not impaired is as follows:

follows:
Not past due Up to 30 days 31 to 90 days	December	Accounts receivable 1,429,653 $ 21,660 87 1,451,400 $ 31,2021	December	31,2020
	Notes receivable 1,302 $ - - 1,302 $		Notes receivable - $ - - - $	Accounts receivable
				1,257,413 $ 8,351 7,884
				1,273,648 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2021 and 2020, accounts receivable were all from contracts with customers. And as of January 1, 2020, the balance of accounts receivable and notes receivable from contracts with customers amounted to $918,019.

• C. The Group’s notes receivable and accounts receivable do not hold any collateral provided by customers.

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• D. As at December 31, 2021 and 2020, 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 $1,302 and $0, $1,451,230 and $1,273,383, respectively.

• E. Information relating to credit risk of notes and accounts receivable are provided in Note 12(2).

• (6) Inventories

Inventories
Raw materials Work in progress Finished goods Total Raw materials Work in progress Finished goods Total	Cost Allowance for valuation loss 2,035,363 $ 27,264) ($ 313,778 3,294) ( 388,424 18,047) ( 2,737,565 $ 48,605) ($ December 31,2021 December 31, 2020	Book value
		2,008,099 $ 310,484 370,377
		2,688,960 $
	Cost Allowance for valuation loss 771,902 $ 26,938) ($ 165,380 3,468) ( 208,592 8,742) ( 1,145,874 $ 39,148) ($	Book value
		744,964 $ 161,912 199,850
		1,106,726 $

The cost of inventories recognised as expense for the period:

Cost of goods sold and others Loss on(gain on reversal of) decline in market value Total	For the year ended For the year ended December 31,2021 December 31,2020 6,917,595 $ 4,596,673 $ 9,457 15,928) ( 6,927,052 $ 4,580,745 $	For the year ended December 31,2020
		4,580,745 $

For the year ended December 31, 2020, the Group reversed a previous inventory write-down and accounted for as reduction of cost of goods sold because inventory that has been appropriated as loss on decline in market value was partially sold.

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(7) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At December 31 Cost Accumulated depreciation				2021

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2020

At January 1 Cost Accumulated depreciation Opening net book amount Additions Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount At December 31 Cost Accumulated depreciation

Construction in progress and Buildings and prepayment for Land structures Machinery Test equipment equipment Others Total 468,684 $ 3,243,125 $ 901,360 $ 153,649 $ 3,901 $ 406,631 $ 5,177,350 $ - 832,133) ( 665,486) ( 147,799) ( - 396,238) ( 2,041,656) ( 468,684 $ 2,410,992 $ 235,874 $ 5,850 $ 3,901 $ 10,393 $ 3,135,694 $ 468,684 $ 2,410,992 $ 235,874 $ 5,850 $ 3,901 $ 10,393 $ 3,135,694 $ - 11,670 17,727 2,955 25,559 6,620 64,531 - - 128) ( 157) ( - 9) ( 294) ( - 629,294) ( 2,447 - 3,901) ( 1,129 629,619) ( - 82,533) ( 72,619) ( 2,901) ( - 5,004) ( 163,057) ( - 10,225 2,581 4 499 172 13,481 468,684 $ 1,721,060 $ 185,882 $ 5,751 $ 26,058 $ 13,301 $ 2,420,736 $ 468,684 $ 2,478,439 $ 928,643 $ 148,613 $ 26,058 $ 384,141 $ 4,434,578 $ - 757,379) ( 742,761) ( 142,862) ( - 370,840) ( 2,013,842) ( 468,684 $ 1,721,060 $ 185,882 $ 5,751 $ 26,058 $ 13,301 $ 2,420,736 $

A. For the years ended December 31, 2021 and 2020, there was no capitalisation of borrowing interests attributable to the property, plant and equipment. B. Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

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－ (8) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, and business vehicles. Rental contracts are typically made for periods of 1 to 49 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 comprise of buildings and equipment. Low-value assets comprise of printers, etc.

• C. The carrying amount of the depreciation charge are as follows:

Land Buildings Transportation equipment (Business vehicles) Land Buildings Transportation equipment (Business vehicles)	December 31,2021 December 31,2020 106,638 $ 110,455 $ 23,359 1,421 5,736 10,987 135,733 $ 122,863 $ Carryingamount Depreciation charge	December 31,2020 110,455 $ 1,421 10,987 amount
		122,863 $
	For the year ended December 31,2021 3,713 $ 5,230 5,251 14,194 $	For the year ended December 31,2020
		3,949 $ 1,701 4,142
		9,792 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $27,307 and $10,325, respectively.

• 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 leases of low-value assets	For the year ended December 31,2021 1,108 $ 5,387 102	For the year ended December 31,2020
		1,139 $ 7,846 137

• F. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $19,742 and $17,598, respectively.

• G. Extension and termination options

In determining the lease term, the Group takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option. The assessment of lease period is reviewed if a significant event occurs which affects the assessment.

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(9) Investment property

nvestment property
						2021
			Land		Buildings and structures				Total
At January 1
Cost	$		587,286		$	1,054,765		$	1,642,051
Accumulated depreciation	(		3,879)	(		231,586)	(		235,465)
	$		583,407		$	823,179		$	1,406,586
At January 1	$		583,407		$	823,179		$	1,406,586
Depreciation charge	(		296)	(		24,863)	(		25,159)
Net exchange differences	(		53)	(		3,459)	(		3,512)
At December 31	$		583,058		$	794,857		$	1,377,915
At December 31
Cost	$		587,213		$	1,050,439		$	1,637,652
Accumulated depreciation	( $		4,155) 583,058	( $		255,582) 794,857	( $		259,737) 1,377,915
						2020
			Land		Buildings and structures				Total
At January 1
Cost		$	573,532		$	245,710		$	819,242
Accumulated depreciation			-		(	55,509)		(	55,509)
		$	573,532		$	190,201		$	763,733
At January 1		$	573,532		$	190,201		$	763,733
Reclassifications			9,722			629,619			639,341
Depreciation charge		(	49)		(	9,785)		(	9,834)
Net exchange differences			202			13,144			13,346
At December 31		$	583,407		$	823,179		$	1,406,586
At December 31
Cost		$	587,286		$	1,054,765		$	1,642,051
Accumulated depreciation		(	3,879)		(	231,586)		(	235,465)
		$	583,407		$	823,179		$	1,406,586

~40~

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
For the year ended December 31,2021 Rental income from investment property 95,078 $ Direct operating expenses arising from the investment property that generated rental income during the year 43,183 $	For the year ended December 31,2020
	37,690 $ 12,828 $

• B. The fair value of the investment property held by the Group as at December 31, 2021 and 2020 all amounted to $1,823,645 and $1,632,152, respectively, which were valued by independent appraisers. Valuations were made using the comparative method and income approach to perform evaluation capitalization.

• C. There was no capitalization of borrowing interests attributable to investment property.

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

(10) Intangible assets

in Note 8. Intangible assets
			2021			2020
At January 1
Cost	$		380,197	$		245,090
Accumulated amortisation	(		164,936)	(		91,549)
	$		215,261	$		153,541
At January 1	$		215,261	$		153,541
Additions			331,572			56,130
Adjustments			77,561			97,837
Amortisation charge	(		131,008)	(		88,966)
Net exchange differences	(		1,752)	(		3,281)
At December 31	$		491,634	$		215,261
At December 31
Cost	$		734,537	$		380,197
Accumulated amortisation	(		242,903)	(		164,936)
	$		491,634	$		215,261
A. Details of amortisation on intangible assets are as follows:
			For the year ended			For the year ended
		December31,2021			December31,2020
Operating costs		$	105		$	144
Operating expense			130,903			88,822
		$	131,008		$	88,966

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B. The Group has no intangible assets pledged to others.

(11) Short-term borrowings

Type of borrowings December 31, 2021 Interest rate range Collateral Bank borrowings Unsecured borrowings $ 2,510,000 0.82%~1.25% None Type of borrowings December 31, 2020 Interest rate range Collateral Bank borrowings Unsecured borrowings $ 2,330,000 0.82%~0.94% None

(12) Short-term notes and bills payable

December 31, 2021 December 31, 2020 Commercial paper payable $ 600,000 $ 300,000 Less: Discount on short-term notes and bills payable ( 182) ( 202) $ 599,818 $ 299,798 Interest rate ranges 0.84%~0.87% 0.85%~0.87%

- (13) Long term borrowings

As at December 31, 2021: None.

Borrowing period Interest rate Type of borrowings and repayment term range Collateral December 31, 2020 Secured borrowings Borrowing period is from August 24, 2018 to May 8, 2021. Revolving Yes credit facility. 0.8%~1% (Note) $ 250,000 Less: Current portion (classified under other current liabilities) ( 250,000) - $

During the terms of the unsecured borrowing, in accordance with the unsecured borrowing agreements contracted with bank, the Group is required to maintain a consolidated net value over $8 billion and a debt ratio under 100% based on the annual consolidated financial statements and the semi-annual consolidated financial statements.

Note: Information about collateral for long-term borrowings is provided in Note 8. The mortgage has been cancelled on June 28, 2021.

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(14) Pensions

• A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor 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 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 Group 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.

(b) The amounts recognised in the balance sheet are as follows:

	December	31,2021	December	31,2020
Present value of defined benefit obligations	($	51,430)	($	54,843)
Fair value of plan assets		44,574		44,573
Net defined benefit liability	($	6,856)	($	10,270)

(c) Movements in net defined benefit liabilities are as follows:

At January 1 Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31			2021
	Present value of defined benefit obligations		Fair value ofplan assets	Net defined benefit liability
	54,843) ($ 165) ( 55,008) ( - 43) ( 1,481 1,315 2,753 - 825 51,430) ($	44,573 $ 134 44,707 680 - - - 680 12 825) ( 44,574 $		10,270) ($ 31) ( 10,301) ( 680 43) ( 1,481 1,315 3,433 12 - 6,856) ($

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2020

				2020
	Present value of
	defined benefit			Fair value		Net defined
		obligations		ofplan assets	benefit liability
At January 1	($	52,536)	$	43,470	($	9,066)
Interest (expense) income	(	368)		305	(	63)
	(	52,904)		43,775	(	9,129)
Remeasurements:
Return on plan assets		-		1,514		1,514
(excluding amounts included in
interest income or expense)
Change in financial assumptions	(	1,954)		-	(	1,954)
Experience adjustments	(	713)		-	(	713)
	(	2,667)		1,514	(	1,153)
Pension fund contribution		-		12		12
Paid pension		728	(	728)		-
At December 31	($	54,843)	$	44,573	($	10,270)

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Group’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Group’s and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Group’s and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(f) The principal actuarial assumptions used were as follows:

	For the year ended	For the year ended
	December 31, 2021	December31,2020
Discount rate	0.60%	0.30%
Future salary increases	3.00%	3.00%

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in Taiwan life insurance industry after 2020 and 2021. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2021 Effect on present value of defined benefit obligations December 31, 2020 Effect on present value of defined benefit obligations	Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25% 1,156) ($ 1,194 $ 1,046 $ 1,019) ($ 1,234) ($ 1,277 $ 1,123 $ 1,093) ($ Discount rate Future salary increases	Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25% 1,156) ($ 1,194 $ 1,046 $ 1,019) ($ 1,234) ($ 1,277 $ 1,123 $ 1,093) ($ Discount rate Future salary increases
	Increase 0.25%
	1,156) ($ 1,234) ($

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (g) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $12.

• (h) As of December 31, 2021, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 2-5 years Over 5 years	4,803 $ 8,326 17,297
	30,426 $

B.(a) Effective July 1, 2005, the Company and its domestic subsidiaries have 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

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employment. The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020, were $34,655 and $29,910, respectively, under the above pension scheme.

• (b) The foreign subsidiaries provided defined contribution plans for its employees. Pursuant to local regulations, such employees and the subsidiaries each make contributions based on a certain percentage based of the salaries and wages to the pension funds. The subsidiaries had recognised pension costs of $17,046 and $1,994 for the years ended December 31, 2021 and 2020, respectively.

(15) Share-based payments

• A. For the years ended December 31, 2021 and 2020, the Group’s share-based payment arrangements were as follows:

arrangements were as follows:
Type of arrangement	Grant date	Quantity granted (share in thousands)	Contract period	Vesting conditions
Employee stock options " Plan for restricted shares to employee(2018-1) " Plan for restricted shares to employee(2019-1) " " Treasury stock transferred to employees " "	October 28, 2011 March 21, 2012 August 12, 2019 January 20, 2020 August 12, 2019 January 20, 2020 April 24, 2020 March 9, 2021 May 17, 2021 October 14, 2021	3,000 3,000 630 2,196 820 2,030 86 2,000 2,000 2,000	9.2 years 8.9 years 3 years 3 years 3 years 3 years 3 years - - -	Note 1 Note 1 Note 2 Note 2 Note 2 Note 2 Note 2 Immediately vested Immediately vested Immediately vested

• Note 1: 2 years’ service vest 40%, 3 years’ service vest 70%, 4 years’ service vest 100%.

• Note 2: The restricted shares were issued at no consideration to the Company’s existing employees whose service years have reached 1 year, 2 years and 3 years and who achieved the performance requirement. The vested ratio is 40%, 30% and 30%, respectively. If employees who are entitled to receive restricted stocks do not meet the vesting conditions, the Company will redeem at no consideration and retire those shares. The stocks and dividends distributed to employees during the vesting period shall be given by the Company at no consideration. Employees are not required to return the stocks and dividends if they resign during the vesting period.

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• B. Details of the share-based payment arrangements are as follows:

• (a) For the years ended December 31, 2021 and 2020, the information on the share options and the weighted number of average exercise price of compensation plan employee stock options are as follows:

are as follows:
Options outstanding at beginning of the period Option expired Options outstanding at end of the period Options exercisable at end of the period	Weighted-average Weighted-average exercise price exercise price No. of options (in NT dollars)(Note) No. of options (in NT dollars)(Note) - - $ 1,701 29.81 $ - - 1,701) ( 29.81 - - - - - - - - December 31,2021 December 31,2020 For the year ended For the year ended
		29.81 $ 29.81 - -

• Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• (b) No stock options were exercised during the years ended December 31, 2021 and 2020.

• (c) The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

December 31, 2021: None.

Issue date approved Expiry date October 28, 2011 December 31, 2020 March 21, 2012 December 31, 2020	Exercise price No. of shares (in NT dollars) (in thousands) (Note) - 28.8 $ - 28.7 December 31,2020

Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• (d) The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of arrangement	Grant date	Stock price (in NT dollars)	Exercise price (Note) (in NT dollars)	Expected price volatility	Expected option life	Expected dividends	Risk- free interest rate	Fair value per unit (in NT dollars)
Employee stock options "	October 28, 2011 March 21, 2012	$ 30.65 27.85	- -	30.27% 33.54%	5 years 4.9 years	1.4% 1.4%	1.18% 1.08%	7.42 $ 7.35

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Note: The exercise price of stock options was adjusted based on the cash dividends, stock dividends and cash capital reduction per share distributed.

• C. Restricted shares to employees:

• (a) The information on restricted shares to employees is as follows (share in thousands):

		For the year ended		For the year ended
		December 31,2021		December 31, 2020
Shares ungranted beginning balance		4,968		1,350
Given at period (Notes 1 and 2)		-		4,312
Shares exercised	(	1,993)	(	518)
Shares forfeited - retired	(	296)	(	176)
Shares ungranted ending balance		2,679		4,968

Note 1: For the restricted stocks granted with the compensation cost accounted for using the

     - fair vale method, the fair values on the grant date are calculated based on the closing price on the grant date.

  - Note 2: The fair value of restricted stocks granted in January 20 and April 24, 2020 was $22.8 (in NT dollars) and $18.2 (in NT dollars).

• (b) For the year ended December 31, 2021, the Company collected 296 thousand shares of restricted shares because certain employees did not meet the vesting condition, and the change of registration has been completed.

• D. For the year ended December 31, 2021, the weighted-average exercise price of treasury stock transferred to employees was $19.66 (in NT dollars).

• E. Expenses incurred on share-based payment transactions are shown below:

Provisions Equity-settled At January 1, 2021 Additional provisions Reversed during the period Exchange differences At December 31, 2021 Current Non-current	For the year ended For the year ended December31,2021 December31,2020 97,292 $ 72,991 $ Warranty 169,690 $ 27,043 36,448) ( 5) ( 160,280 $ December 31, 2021 December 31,2020 25,245 $ 9,295 $ 135,035 $ 160,395 $	For the year ended December31,2020
		72,991 $
		Warranty
		160,280 $
		December 31,2020
		9,295 $
		160,395 $

(16) Provisions

~48~

The Group gives warranties on digital image technology application products sold. Provision for warranty is estimated based on historical warranty data of digital image technology application products.

(17) Share capital

As of December 31, 2021, the Company’s authorised capital was $5,000,000, consisting of 500,000 thousand shares of ordinary stock, and the paid-in capital was $2,792,011 with a par value of $10 (in NT dollars) per share.

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows (share in thousands):

		2021			2020
At January 1			268,497			275,361
Treasury stock transferred to employees			3,800			-
Establish employee restricted shares			-			4,312
Retired restricted shares to employees that
did not meet the vesting conditions	(		296)	(		176)
Shares repurchases			-	(		11,000)
At December 31			272,001			268,497

• B. Treasury shares

• (a) Reason for share reacquisition and the number of the Company’s treasury shares are as follows :

follows :
Name of company holdingthe shares	Reason for reacquisition	Number of shares (share in thousands) 7,200 December Number of shares (share in thousands) 11,000 December	December	Carryingamount 131,461 $ 31,2021 31,2020
The Company Name of company holdingthe shares	To be reissued to employees Reason for reacquisition
				Carryingamount 209,287 $
The Company	To be reissued to employees

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

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• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired.

• (18) 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 common 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 capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

reserve is insufficient.
At January 1 Changes in ownership interests in subsidiaries Treasury stock transferred to employees Employee restricted share granted Retired restricted shares to employees that did not meet the vesting conditions At December 31			2021
	Share Employee stock premium options 1,821,473 $ 49,102 $ - - - - 25,632 - - - 1,847,105 $ 49,102 $	Difference between consideration and carrying amount of subsidiaries acquired or Changes in ownership interests in disposed subsidiaries 1,534 $ 397,909 $ - 9,002) ( - - - - - - 1,534 $ 388,907 $

~50~

2020

At January 1 Changes in ownership interests in subsidiaries Issuance of restricted shares to employees Employee restricted share granted Retirement of employee restricted shares At December 31	Share Employee stock premium options 1,814,532 $ 49,102 $ - - - - 6,941 - - - 1,821,473 $ 49,102 $	Difference between consideration and carrying amount of subsidiaries acquired or disposed 1,534 $ - - - - 1,534 $	Changes in ownership interests in subsidiaries 395,774 $ 2,135 - - - 397,909 $	Proceeds from sales of treasury Restricted shares to shares employees Total 1,455 $ 18,090 $ 2,280,487 $ - - 2,135 - 54,798 54,798 - 6,941) ( - - 2,194) ( 2,194) ( 1,455 $ 63,753 $ 2,335,226 $

(19) Retained earnings

• A. According to the Company’s Articles of Incorporation, the annual 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. Special reserve shall be set aside in accordance with the rules. The remaining amount plus the unappropriated earnings of prior years were distributed in new shares, which were proposed by the Board of Directors and resolved at the shareholders’ meeting.

All or some of the dividends and bonus could, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, be distributed in the form of cash and reported at the shareholders’ meeting.

• B. The amount of dividends appropriated is based on the Company’s current year’s net income and prior years’ retained earnings, taking into account the Company’s financial structure and future operating plans. The distribution ratio of cash dividends to stock dividends is based on the Company’s funding status, diluted earnings per share and other factors. According to the dividend policy adopted by the Board of Directors, cash dividends shall account for at least 20% of the total dividends distributed.

• C. 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 balance of the reserve exceeds 25% of the Company’s paid-in capital.

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• D. (a) 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.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriation of 2020 and 2019 earnings had been resolved at the stockholders’ meeting on August 26, 2021 and June 12, 2020, respectively. Details are summarized below:

Legal reserve Special reserve Cash dividends	Dividends per share Amount (in NT dollars) 15,943 $ 59,231 134,249 0.5 $ 209,423 $ 2020	2019	2019
		Amount 8,316 $ 156,646 139,794 304,756 $	Dividends per share (in NT dollars)
			0.5 $

The appropriation of 2020 and 2019 earnings were the same as that approved by the Board of Directors on March 25, 2021 and March 20, 2020, respectively.

• F. The appropriation of 2021 earnings had been proposed at the Board of Directors on March 10, 2022. Details are summarized below:

The appropriation of 2021 earnings had been proposed at 2022. Details are summarized below:	the Board of Directors on March 10,	the Board of Directors on March 10,
Legal reserve Special reserve Cash dividends	2021
	Amount 22,591 $ 123,277 190,401 336,269 $	Dividends per share (in NT dollars)
		0.7 $

For the aforementioned distribution of 2021 earnings, except for cash dividends which were resolved and approved by the Board of Directors on March 10, 2022, others were pending for approval by the shareholders’ meeting.

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(20) Other equity items

(21)

Operating revenue Unrealized Foreign currency losses on Unearned translation valuation compensation Total At January 1 550,536) ($ 101,020) ($ 46,142) ($ 697,698) ($ Valuation adjustment - 21,409) ( - 21,409) ( Valuation adjustment to retained earnings - 1,572 - 1,572 Currency translation differences: -Group 103,438) ( - - 103,438) ( Retirement of restricted shares to employees - - 6,684 6,684 Share-based payment transactions - - 26,930 26,930 At December 31 653,974) ($ 120,857) ($ 12,528) ($ 787,359) ($ 2021 Unrealized Foreign currency losses on Unearned translation valuation compensation Total At January 1 494,335) ($ 97,990) ($ 23,034) ($ 615,359) ($ Valuation adjustment - 3,030) ( - 3,030) ( Currency translation differences: -Group 56,201) ( - - 56,201) ( Issuance of restricted shares to employees - - 97,918) ( 97,918) ( Retirement of restricted shares to employees - - 3,954 3,954 Share-based payment transactions - - 70,856 70,856 At December 31 550,536) ($ 101,020) ($ 46,142) ($ 697,698) ($ 2020 For the year ended For the year ended December 31,2021 December 31,2020 Revenue from contracts with customers 9,085,774 $ 6,102,675 $

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A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major geographical regions:

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----- Start of picture text -----

For the year ended
December 31, 2021 Asia Europe America Taiwan Total
Revenue from external
customer contracts $ 5,568,808 $ 1,197,596 $ 2,305,695 $ 13,675 $ 9,085,774
Timing of revenue
recognition
At a point in time $ 5,527,908 $ 1,197,596 $ 2,305,695 $ 13,675 $ 9,044,874
Over time 40,900 - - - 40,900
Total $ 5,568,808 $ 1,197,596 $ 2,305,695 $ 13,675 $ 9,085,774
For the year ended
December 31, 2020 Asia Europe America Taiwan Total
Revenue from external
customer contracts $ 3,415,337 $ 1,041,331 $ 1,522,933 $ 123,074 $ 6,102,675
Timing of revenue
recognition
At a point in time $ 3,323,127 $ 1,041,331 $ 1,522,933 $ 123,074 $ 6,010,465
Over time 92,210 - - - 92,210
Total $ 3,415,337 $ 1,041,331 $ 1,522,933 $ 123,074 $ 6,102,675
----- End of picture text -----

B. Contract liabilities

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

	December 31,2021	December 31, 2020	January 1, 2020
Contract liabilities	262,350 $	32,568 $	34,096 $
C. Revenue recognised that was included in the contract liability balance at			the beginning of the
period

period
Revenue recognised that was included in the contract liability balance at the beginning of the period	For the year ended December 31,2021 25,011 $	For the year ended December 31,2020
		26,371 $

~54~

(22) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	For the year ended For the year ended December 31, 2021 December 31, 2020 25,973 $ 57,016 $ 45,773 46,323 47 40 71,793 $ 103,379 $

(23) Other income

Other income
			For the year ended			For the year ended
		December 31,2021			December 31, 2020
Rent income	$		47,745	$		36,185
Dividend income			1,526			1,526
Other income - others			16,872			11,460
	$		66,143	$		49,171
Other gains and losses
			For the year ended			For the year ended
		December 31, 2021			December 31,2020
Loss (gains) on disposal of property, plant and
equipment	($		26)	$		17
Net currency exchange gains			14,232			21,723
Net gains on financial assets at fair value
through profit			38,686			8,541
Other expenses	(		78)	(		1,668)
Total	$		52,814	$		28,613
Finance costs
			For the year ended			For the year ended
		December 31,2021			December 31,2020
Interest expense :
Bank loan	$		21,918	$		22,961
Lease liabilities			1,108			1,139
Other			2,826			1,095
	$		25,852	$		25,195

(24) Other gains and losses

(25) Finance costs

~55~

(26) Expenses by nature

Expenses by nature
		For the year ended		For the year ended
	December 31, 2021		December 31, 2020
Employee benefit expenses	$	1,523,840	$	1,195,937
Depreciation charges on property, plant and
equipment		153,903		163,057
Depreciation charges on right-of-use assets		14,194		9,792
Depreciation charges on investment property		25,159		9,834
Amortisation charges on intangible assets		131,008		88,966

(27) Employee benefit expenses

Employee benefit expenses equipment 153,903 Depreciation charges on right-of-use assets 14,194 Depreciation charges on investment property 25,159 Amortisation charges on intangible assets 131,008	163,057 9,792 9,834 88,966
For the year ended December 31, 2021 Wages and salaries 1,370,405 $ Labour and health insurance fees 62,205 Pension costs 51,732 Other personnel expenses 39,498 Total 1,523,840 $	For the year ended December 31,2020
	1,080,574 $ 51,533 31,967 31,863
	1,195,937 $

• A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute compensation to the employees and pay remuneration to the directors that account for 10% to 20% and no higher than 2%, respectively, of distributable profit of the current period. If a company has accumulated deficit, earnings should be channeled to cover losses. Employees’ compensation can be distributed in the form of shares or in cash. Employees of subsidiaries that the Company holds more than 50% shareholding are entitled to receive aforementioned stock or cash.

• Abovementioned distributable profit of the current period refers to the pre-tax profit before deduction of employees’ compensation and directors’ remuneration. A company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributed as employees’ compensation and directors’ remuneration; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

• B. For the years ended December 31, 2021 and 2020, employees’ compensation was accrued at $44,429 and $31,624, respectively; directors’ remuneration was accrued at $5,924 and $4,217, respectively. The aforementioned amounts were recognised in salary expenses. Employees’ compensation and directors’ and supervisors’ remuneration for 2020 amounting to $31,624 and $4,217, respectively, as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2020 financial statements.

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

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(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
For the year ended December 31,2021 Current tax: Current tax on profit for the period 101,185 $ Charge on unappropriated retained earnings 3,418 Tax paid outside of the territory of the Republic of China 20,401 Prior year income tax (over) underestimation 5,030) ( Total current tax 119,974 Deferred tax: Origination and reversal of temporary differences 2,863) ( Income tax expense 117,111 $	For the year ended December 31,2020 60,287 $ 7,315 3,293 17
	70,912 9,017 79,929 $

(b) The income tax charged to other comprehensive income is as follows:

		For the year ended		For the year ended
	December 31,2021		December 31,2020
Changes in fair value of financial assets at
fair value through other comprehensive
income	$	255	($	757)
Translation differences of foreign operations	(	25,860)	(	14,051)
Benefit obligations revaluation		687	(	231)
	($	24,918)	($	15,039)

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B. Reconciliation between income tax expense and accounting profit ：

		For the year ended		For the year ended
	December 31,2021		December 31,2020
Tax calculated based on profit before
tax and statutory tax rate	$	189,793	$	153,035
Expenses disallowed by tax regulation	(	12,184)	(	66,521)
Tax on undistributed earnings		3,418		7,315
Change in assessment of realisation of
deferred tax assets	(	37,347)	(	3,748)
Effect from investment tax credits	(	33,433)	(	4,537)
Loss deducted not recognised as
deferred tax assets	(	8,507)	(	8,925)
Prior year income tax (over) underestimation	(	5,030)		17
Effect of different tax rates in countries
in which the group operates		20,401		3,293
Income tax expense	$	117,111	$	79,929

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Deferred tax assets: Temporary differences: Cost of after-sales service and other estimated expenses Currency translation differences Others Tax losses Investment tax credits Subtotal Deferred tax liabilities: Temporary differences: Gain on foreign investment under equity method Pension expenses Others Subtotal Total		2021	2021
		January1 Recognised in profit or loss	Recognised in other comprehensive income December 31 - $ 40,831 $ 25,860 134,003 255) ( - - 30,814 - 22,981 25,605 $ 228,629 $ - $ 479,367) ($ 687) ( 1,572) ( - 2,239) ( 687) ($ 483,178) ($ 24,918 $ 254,549) ($
	51,602 $ 10,771) ($ 108,143 - 255 - 16,347 14,467 6,014 16,967 182,361 $ 20,663 $ 461,253) ($ 18,114) ($ 889) ( 4 2,549) ( 310 464,691) ($ 17,800) ($ 282,330) ($ 2,863 $

~58~

Deferred tax assets: Temporary differences: Cost of after-sales service and other estimated expenses Currency translation differences Others Tax losses Investment tax credits Subtotal Deferred tax liabilities: Temporary differences: Gain on foreign investment under equity method Pension expenses Others Subtotal Total		January1	Recognised in profit or loss Recognised in other comprehensive income December 31 5,364 $ - $ 51,602 $ - 14,051 108,143 - 255 255 5,996 - 16,347 4,877) ( - 6,014 6,483 $ 14,306 $ 182,361 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 3,839 502 2,549) ( 15,500) ($ 733 $ 464,691) ($ 9,017) ($ 15,039 $ 282,330) ($ 2020	Recognised in profit or loss Recognised in other comprehensive income December 31 5,364 $ - $ 51,602 $ - 14,051 108,143 - 255 255 5,996 - 16,347 4,877) ( - 6,014 6,483 $ 14,306 $ 182,361 $ 19,349) ($ - $ 461,253) ($ 10 231 889) ( 3,839 502 2,549) ( 15,500) ($ 733 $ 464,691) ($ 9,017) ($ 15,039 $ 282,330) ($ 2020
	46,238 $ 94,092 - 10,351 10,891 161,572 $ 441,904) ($ 1,130) ( 6,890) ( 449,924) ($ 288,352) ($		5,364 $ - - 5,996 4,877) ( 6,483 $ 19,349) ($ 10 3,839 15,500) ($ 9,017) ($

D. Details of the amount the Company is entitled as investment tax credit and unrecognised deferred tax assets are as follows:

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December 31, 2021
Unrecognised
Qualifying items Unused tax credits deferred tax assets Expiry year
Research and development $ 20,379 $ 7,938 2021
Research and development 10,539 - 2022
$ 30,918 $ 7,938
December 31, 2020
Unrecognised
Qualifying items Unused tax credits deferred tax assets Expiry year
Research and development $ 16,014 $ 12,457 2021
Research and development 2,457 - 2022
$ 18,471 $ 12,457
----- End of picture text -----

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• E. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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----- Start of picture text -----

December 31, 2021
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2018 $ 17,466 $ 17,466 $ - 2028
2019 187,895 163,611 64,771 2029
2020 5,053 5,053 - 2030
2021 32,710 32,710 - 2031
$ 243,124 $ 218,840 $ 64,771
December 31, 2020
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2018 $ 17,466 $ 12,168 $ - 2028
2019 187,895 175,178 150,611 2029
2020 79 79 79 2030
$ 205,440 $ 187,425 $ 150,690
----- End of picture text -----

• F. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows: None.

• G. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

(29) Earnings per share

Authority. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Restricted shares to employees Treasure stock transferred to employees Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For	theyear ended December 31,2021
	Amount after tax 224,734 $ 224,734 $ - - - 224,734 $	Weighted average number of ordinary shares outstanding (share in thousands) 265,654 2,719 1,203 1,135 270,711	Earnings per share (in dollars)
			0.85 $
			0.83 $

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----- Start of picture text -----

For the year ended December 31, 2020
Weighted average number of
ordinary shares outstanding Earnings per share
Amount after tax (share in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 160,357 265,758 $ 0.60
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 160,357
Assumed conversion of all dilutive
potential ordinary shares
-
Restricted shares to employees 3,458
Employees’ bonus - 1,156
Profit attributable to ordinary
shareholders of the parent
plus assumed conversion of
all dilutive potential ordinary
shares $ 160,357 270,372 $ 0.59
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(30) Transactions with non-controlling interest

1. In January, 2021, the Group disposed 25% of its shares in subsidiary—Altek Optical Technology (Kunshan) Co., Ltd. and in February 11.67% of its shares in subsidiary—Altek Medical Holding (Cayman) Co., Ltd. Therefore, the Group reduced its shareholding in subsidiaries in the above transactions.

2. Altek Medical Holding (Cayman) Co., Ltd., a subsidiary company of the group, increased its capital in January 2021. The Group did not subscribe to the capital increase which resulted in a reduction of 6.15% of its shareholding in accordance with its shareholding ratio. The subsidiary company, Altek Optical Technology (Kunshan) Co., Ltd, increased its capital in February 2021. The Group and the non-controlling interests are subscribed in accordance with the shareholding ratio.

3. Altek Medical Holding (Cayman) Co., Ltd., a subsidiary company of the group, issued restricted stock to reward employees in November 2021. The Group did not subscribe to the capital increase which resulted in a reduction of 4.48% of its shareholding in accordance with its shareholding ratio.

The effect of changes in interests on the equity attributable to owners of the parent is shown below:

For the year ended December 31,2021 Consideration received from non-controlling interest 99,094 $ Non-controlling interests invested in cash 117,175 Increase in the carrying amount of non-controlling interest 225,271) ( Capital surplus 9,002) ($	For the year ended December 31,2020
	- $ - -
	- $

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(31) Supplemental cash flow information

Investing activities with partial cash payments ：

			For the year ended		For the year ended
		December 31,2021		December 31,2020
Acquisition of property, plant, and
equipment	$		389,916	$	64,531
Add: Property and equipment and
construction billings payable at
beginning of period			4,203		898
Less: Property and equipment and
construction billings payable at end
of period	(		1,954)	(	4,203)
Cash paid	$		392,165	$	61,226
			For the year ended		For the year ended
		December 31, 2021		December 31,2020
Acquisition of intangible assets		$	331,572	$	56,130
Add: Payables at beginning of period			278		-
Less: Payables at end of period	(		25,730)	(	278)
Cash paid		$	306,120	$	55,852

(32) Changes in liabilities from financing activities

January 1, 2021 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items December 31, 2021 January 1, 2020 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items December 31, 2020		Short-term borrowings		Short-term notes and bills payable	Long-term borrowings (Note)	Long-term borrowings (Note)	Guarantee deposits received	Guarantee deposits received	Lease liabilities	Total	Total
		2,330,000 $ 180,000 - - 2,510,000 $ Short-term borrowings		299,798 $ 297,194 - 2,826 599,818 $ Short-term notes and billspayable	250,000 $ 250,000) ( - - - $ Long-term borrowings		26,480 $ 9,841 85) ( - 36,236 $ Guarantee deposits received		104,512 $ 14,253) ( 139) ( 28,415 118,535 $ Lease liabilities	3,010,790 $ 222,782 224) ( 31,241 3,264,589 $ Total
		2,200,000 $ 130,000 - - 2,330,000 $		229,962 $ 68,741 - 1,095 299,798 $		- $ 250,000 - - 250,000 $		20,326 $ 5,816 338 - 26,480 $	102,805 $ 9,615) ( 12 11,310 104,512 $		2,553,093 $ 444,942 350 12,405 3,010,790 $

Note: The loan will be due within 1 year and is classified under other current liabilities.

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship: None.

(2) Significant transactions and balances with related parties:

Earnings distribution plan of the Company for the year 2021 is provided in Note 6(19).

(3) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Share-based payments Total	For the year ended For the year ended December 31,2021 December 31,2020 48,747 $ 41,659 $ 1,027 908 5,927 15,619 55,701 $ 58,186 $

8. PLEDGED ASSETS

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

Pledged asset	Purpose Long-term borrowings Long-term borrowings	Book value	Book value
		December 31,2021 - $ - - $	December 31, 2020
Land, buildings and structures Investment property			734,116 $ 756,915
			1,491,031 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENT

Earnings distribution plan of the Company for the year 2021 is provided in Note 6(19).

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, return capital or issue new shares to achieve the optimal capital structure.

(2) Financial instruments

A. Financial instruments by category

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Financial assets Financial assets measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Current financial assets at amortised cost Current contract assets Notes receivable Accounts receivable Other accounts receivable Guarantee deposit paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Accounts payable Other accounts payable Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	December31,2021 79,184 $ 101,860 $ 5,368,653 $ 1,433,124 - 1,302 1,451,230 110,440 33,436 8,398,185 $ 2,510,000 $ 599,818 1,972,344 561,152 - 36,236 5,679,550 $ 118,535 $	December31,2020
		397,893 $
		43,130 $
		5,373,406 $ 1,842,389 4,414 - 1,273,383 68,825 34,746 8,597,163 $
		2,330,000 $ 299,798 1,296,475 485,953 250,000 26,480
		4,688,706 $
		104,512 $

B. Financial risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimize any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk, and interest rate swaps are used to fix variable future cash flows. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

~64~

• (b) Risk management is carried out by a Group treasury department under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• 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 recognised assets and liabilities.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimize the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

• iv. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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December 31, 2021

			December 31,2021	December 31,2021	December 31,2021
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB Financial liabilities Monetary items USD:NTD USD:RMB (Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB Financial liabilities Monetary items USD:NTD USD:RMB	Foreign Currency Amount (In thousands) 76,326 USD 47,181 USD 52,205 USD 65,151 USD	Exchange Rate 27.680 6.3757 27.680 6.3757	Effect on Effect on Other Book Value Extent of Profit or Comprehensive (NTD) Variation (Loss) Income(Loss) 2,112,704 $ 1% 21,127 $ - $ 1,305,970 1% 13,060 - 1,445,034 $ 1% 14,450) ($ - $ 1,803,380 1% 18,034) ( - SensitivityAnalysis December 31, 2020
	Foreign Currency Amount (In thousands) 60,233 USD 42,521 USD 50,084 USD 40,800 USD	Exchange Rate 28.480 6.5249 28.480 6.5249	Book Value (NTD) 1,715,436 $ 1,210,998 1,426,392 $ 1,161,984	SensitivityAnalysis
				Effect on Extent of Profit or Variation (Loss) 1% 17,154 $ 1% 12,110 1% 14,264) ($ 1% 11,620) (	Effect on Other Comprehensive Income(Loss)
					- $ - - $ -

• v. Total exchange gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020 amounted to $14,232 and $21,723, respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.

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• ii. The Group’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $7,918 and $4,823, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $10,186 and $4,313, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• Interest risk arises from the changes of market interest rate causing fluctuation in financial instruments’ fair value or cash received and paid in the future.

The Group raised short-term and long-term borrowings at fixed rates during the years ended December 31, 2021 and 2020, and thus had no significant cash flow interest rate risk.

• (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 the accounts receivable based on the agreed terms.

• ii. The Group manages their credit risk taking into consideration the entire group’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and 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 utilisation of credit limits is regularly monitored.

• iii. The Group measured internal operating procedures, past experience of trading customers, and actual transaction status. If the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 360 days based on the term, the default has occurred.

• 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;

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• (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 customers’ accounts receivable, notes receivable and contract asset in accordance with customer types. The Group applies the simplified approach using loss provision matrix to estimate expected credit loss under the provision matrix basis.

• vi. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• vii. The Group used the forecastability to adjust historical and timely information to access the default possibility of contract assets, notes receivable and accounts receivable. As of December 31, 2021 and 2020, the provision matrix is as follows:

December31,2021 Expected loss rate Total book value Loss allowance December31,2020 Expected loss rate Total book value Loss allowance	Up to 90 days past due	91 to180 days past due	181 to 360 days past due	Up to 361 days	Total
	0.01%~0.03% 1,452,702 $ 170 $ Up to 90 days past due	15%~20% - $ - $ 91 to 180 days past due	30%~40% - $ - $ 181 to 360 days past due	100% - $ - $ Up to 361 days	1,452,702 $ 170 $ Total
	0.02%~0.03% 1,278,063 $ 266 $	15%~20% - $ - $	30%~40% - $ - $	100% - $ - $	1,278,063 $ 266 $

viii. Movements in relation to the Group applying the simplified approach to provide loss

allowance for contract assets, notes receivable and accounts receivable are as follows:

Contract assets At January 1 1 $ Reversal of impairment loss 1) ( Effect of foreign exchange - At December 31 - $		2021

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At January 1 Provision for impairment Reversal of impairment loss Write-offs Effect of foreign exchange At December 31	2020	2020
	Contract assets Accounts receivable - $ 5,282 $ 1 - - 732) ( - 4,285) ( - - 1 $ 265 $	Accounts receivable
		265 $

• ix. The Group’s recorded financial assets at amortized cost include time deposits with contract period over three months, restricted bank deposits and structured deposits of guaranteed floating revenue of financial assets at fair value through profit or loss. Because of the low credit risk, expected credit losses for the period are measured through a loss allowance at an amount equal to the 12-month expected credit losses. There is no significant provision for the losses.

(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 Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, and compliance with internal balance sheet ratio targets.

• ii. Surplus cash held by the operating entities over and above the balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts.

• iii.The Group has the following undrawn borrowing facilities:

0 Fixed rate: Expiring within one year Expiring beyond one year	December31,2021 2,259,130 $ - 2,259,130 $	December31,2020
		2,814,256 $ 950,000
		3,764,256 $

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• iv.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. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2021 Non-derivative financial liabilities: Short-term borrowings Short-term notes and bills payable Accounts payable Other payables Lease liabilities Guarantee deposits received December 31, 2020 Non-derivative financial liabilities: Short-term borrowings Short-term notes and bills payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Guarantee deposits received

Less than 1 year Over 1 year 2,510,000 $ - $ 599,818 - 1,972,344 - 561,152 - 15,001 120,019 - 36,236 Less than 1year Over 1year 2,330,000 $ - $ 299,798 - 1,296,475 - 485,953 - 10,443 111,661 250,000 - - 26,480

(3) Fair value estimation

• 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.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market, structured deposits and investment property are included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(9).

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• C. Financial instruments was not measured at fair value, including the carrying amounts of cash and cash equivalents, financial assets at amortized cost, notes receivable, accounts receivable, other receivables, deposits paid, long-term borrowings, short-term borrowings, short-term bills payable, notes payable, accounts payable, other payables, deposit received and lease liabilities are approximate to their fair values.

• D. 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 are as follows:

• (a) The related information of natures of the assets is as follows:

The related information of natures	of the assets is	as follows:
December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Structured deposits Unlisted stocks Financial assets at fair value through other comprehensive income Unlisted stocks	Level 1 - $ - - $ Level 1 - $ - - - $	Level 2 - $ - - $ Level 2 - $ - - - $	Level 3 79,184 $ 101,860 181,044 $ Level 3 349,664 $ 48,229 43,130 441,023 $	Total
				79,184 $ 101,860
				181,044 $
				Total
				349,664 $ 48,229 43,130
				441,023 $

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• (b) The methods and assumptions the Group used to measure fair value are as follows:

  • i. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• ii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs.

• E. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the years ended December 31, 2021 and 2020:

		2021		2020
At January 1	$	441,023	$	90,800
Purchases in the period		238,324		344,683
Gains recognised in profit or loss		38,686		8,541
Losses recognised in other comprehensive income	(	21,154)	(	3,787)
Sold in the period	(	510,036)		-
Proceeds from capital reduction in the period	(	3,056)	(	4,364)
Effect of exchange rate changes	(	2,743)		5,150
At December 31	$	181,044	$	441,023

• G. For the years ended December 31, 2021 and 2020, there was no transfer of Level 3.

• H. Accounting Department segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

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• I. 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:

value measurement:
Financial assets at fair value through profit or loss Unlisted shares Financial assets at fair value through other comprehensive income Unlisted shares Unlisted shares	Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Relationship of inputs to fair value
	$ 79,184 37,910 63,950	Market comparable companies Net asset value Discounted cash flow	Price to earnings ratio multiple, price to book ratio multiple,discount for lack of marketability, control premium Not applicable Long-term revenue growth rate, weighted average cost of capital, long- term pre-tax operating margin, discount for lack of marketability, discount for lack of control	The higher the multiple and control premium, the higher the fair value Not applicable The higher the weighted average cost of capital and discout for lack of control, the lower the fair value; the higher the long-term revenue growth rate and long-term pre-tax operating margin, the higher the fair value

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Financial assets at fair value through profit or loss Structured deposit Unlisted shares	Fair value at December 31, 2020 Valuation technique 349,664 $ Depends on individual contract 48,229 Market comparable companies	Significant unobservable input	Relationship of inputs to fair value
		Depends on individual contract Price to earnings ratio multiple, price to book ratio multiple,discount for lack of marketability, control premium	Depends on individual contract The higher the multiple and control premium, the higher the fair value

Financial assets at fair value through other comprehensive income Unlisted shares 43,130 Net asset value Not applicable Not applicable

- ’ (4) The impact of the COVID 19 pandemic to the Group s operation

In response to the third-level epidemic prevention alert of COVID-19 implemented in May, 2021, the Group has adjusted the work style of employees, strengthened disinfection and control of personnel entry and exit measures for operating entities in Taiwan. The Group assessed that the COVID-19 pandemic had no significant impact to its overall operating activities and financial statements as of December 31, 2021.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) : Please refer to table 2.

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

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

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

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

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

• I. Trading in derivative financial 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. The related information of investments in Mainland China: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area:

For the significant purchases, sales, accounts payable and accounts receivable transactions between the Company and the investee companies in Mainland China through its subsidiaries, please refer to table 3 ~ table 5.

(4) Major shareholders information

Please refer to table 8.

14. SEGMENT INFORMATION

(1) General information

The Group mainly operates in one segment. The Chief Operating Decision-Maker reviews the Group’s reporting to assess performance and allocate resources. The Group mainly has a single reportable segment.

(2) Measurement of segment information

The Group evaluates performance based on profit or loss by using sales revenue and operation profit measurements. The accounting policies of the Group's operating segments are the same as the significant accounting policies summarized in Note 4.

(3) Information about segment profit or loss, assets and liabilities

The Group has a single reportable segment. The revenue from external customers, the related gain

• or loss, and the assets correspond with the consolidated revenue, consolidated operating income, and consolidated assets.

(4) Reconciliation for segment income (loss)

The amounts provided to the Chief Operating Decision-Maker with respect to department assets, liabilities and profit are measured in a manner consistent with that of the financial statements.

(5) Information on products and services

The revenue from external customers are mainly derived from the sales of digital related products and related export and import trade.

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(6) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

Geographical information Geographical information for the years ended December 31, 2021	and 2020 is as follows:	and 2020 is as follows:
Non-current Revenue assets Asia 5,568,808 $ 1,845,447 $ Europe 1,197,596 - America 2,305,695 242,201 Taiwan 13,675 2,569,941 9,085,774 $ 4,657,589 $ Year ended December 31,2021	Non-current Revenue assets 3,415,337 $ 1,844,374 $ 1,041,331 - 1,522,933 - 123,074 2,321,072 6,102,675 $ 4,165,446 $ Year ended December 31,2020
		4,165,446 $

Note: Financial instruments and deferred income tax assets are excluded from non-current assets.

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2021 and 2020 is as follows:

A B C

	Revenue	Revenue
Year ended December	31,2021	Year ended December 31, 2020
$	3,093,704	1,847,986 $
	1,935,079	1,475,849
	1,244,792	788,395

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Altek Corporation and subsidiaries Loans to other For the year ended December 31, 2021

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year December 31, 2021	Balance at December 31, 2021	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note)	Ceiling on total loans granted (Note)
													Item	Value
1 2	Altek Semiconductor (Cayman) Co., Ltd. Altek (Kunshan) Co., Ltd.	Altek Semiconductor Corporation Altek Optical Technology (Kunshan) Co. , Ltd.	Other receivables- related party Other receivables- related party	Yes Yes	142,675 $ 43,415	138,400 $ 43,415	- $ 43,415	0% 3.7%	Reason for short-term financing Reason for short-term financing	- $ -	Operational need Operational need	- $ -	Promissory note N/A	138,400 $ -	1,081,138 $ 873,655	1,081,138 $ 1,747,311

Note 1: The ”Procedure for Provision of Loans” policy for loans granted by Altek Semiconductor (Cayman) Co.,Ltd. is as follows: the ceiling on total loans is 100% of the net assets value of lender. For the short-term financing, the ceiling on loans is 40% of the net assets value of lender. Note 2: The ”Procedure for Provision of Loans” policy for loans granted by Altek (Kunshan) Co., Ltd. is as follows: the ceiling on total loans is 40% of the net assets value of lender. For the short-term financing, the ceiling on loans is 40% of the net assets value of lender. Note 3: If the amount of NTD in this Note relates to foreign currencies, it is converted to NTD at the exchange rate at the end of the financial reporting period.

Table 1

Altek Corporation and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2021

			December 31, 2021
Table 2 Securitiesheld by	Marketable securities	Relationship with the securitiesissuer	General ledgeraccount		As of December31,2021 Expressed in thousands of NTD (Except as otherwise indicated)
				Numberofshares	Bookvalue	Ownership (%)	Fairvalue
Altek Corporation " Altek (Kunshan) Co., Ltd. Altek EMS (Kunshan) Co., Ltd.	Gianta Co., Ltd. - Common stock Hua-chuang Automobile Information Technical Center Co., Ltd. - Common stock CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership) Aimore Acoustivs Incorporation	Director None None Director	Financial assets at fair value through profit or loss - non-current Financial assets measured at fair value through other comprehensive income - non-current " "	762,876 2 N/A N/A	79,184 $ - 37,910 63,950	14.55% 0.00% (Note 1) (Note 2)	79,184 $ - 37,910 63,950

Note 1: 1% of CPEC Huachuang Private Equity (Kunshan) Enterprise (Limited Partnership)’s capital contribution. Note 2: 12.5% of Aimore Acoustivs Incorporation’s capital contribution.

Table 2

Altek Corporation and subsidiaries

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

For the year ended December 31, 2021

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Altek Corporation Altek International Trading Co., Ltd. Altek Biotechnology Corporation " Altek Medical Holding (Cayman) Co., Ltd. Taiwan Branch " Altek (Kunshan) Co., Ltd.	Altek International Trading Co., Ltd. Altek (Kunshan) Co., Ltd. Altek International Trading Co., Ltd. Altek Medical (Kunshan) Limited Altek International Trading Co., Ltd. Altek Medical (Kunshan) Limited Altek International Trading Co., Ltd.	Parent-subsidiary The same ultimate parent company " The same parent company The same ultimate parent company The same parent company "	Purchases Purchases Purchases Purchases Purchases Purchases Purchases	4,196,943 $ 6,619,029 1,460,030 196,090 422,666 100,794 533,105	89% 100% 88% 12% 80% 19% 7%	Net 120 days Net 75 days " " " " "	Approximately the same price with third parties " " " " " "	Note " " " " " "	1,193,335) ($ 978,546) ( 3,053) ( 189,876) ( - 55,324) ( -	97% 100% 2% 97% 0% 99% 0%

Note: The payment term with third parties was net 60~120 days.

Table 3

Altek Corporation and subsidiaries

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

December 31, 2021

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2021	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Altek International Trading Co., Ltd. Altek (Kunshan) Co., Ltd. Altek Medical (Kunshan) Limited	Altek Corporation Altek International Trading Co., Ltd. Altek Biotechnology Corporation	Parent-subsidiary The same ultimate parent company The same parent company	1,193,335 $ 978,546 189,876	3.84 4.93 8.28	- $ - -	N/A N/A N/A	1,010,316 $ 776,647 110,106	- $ - -

Table 4

Altek Corporation and subsidiaries

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2021

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Companyname	Counterparty	Relationship (Note1)			Transaction
			General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues ortotalassets (Note2)
Altek Corporation " Altek International Trading Co., Ltd. " Altek Biotechnology Corporation " " Altek Medical Holding (Cayman) Co., Ltd. Taiwan Branch " " Altek (Kunshan) Co., Ltd.	Altek International Trading Co., Ltd. " Altek (Kunshan) Co., Ltd. " Altek International Trading Co., Ltd. Altek Medical (Kunshan) Limited " Altek International Trading Co., Ltd. Altek Medical (Kunshan) Limited " Altek International Trading Co., Ltd.	(1) (1) (3) (3) (3) (3) (3) (3) (3) (3) (3)	Purchases Accounts payable Purchases Accounts payable Purchases Purchases Accounts payable Purchases Purchases Accounts payable Purchases	4,196,943 $ 1,193,335 6,619,029 978,546 1,460,030 196,090 189,876 422,666 100,794 55,324 533,105	Net 120 days " Net 75 days " " " " " " " "	46% 7% 73% 6% 16% 2% 1% 5% 1% 0% 6%

Note 1: Relationship between transaction and counterparty is classified into the following categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 2: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 3: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 5

Altek Corporation and subsidiaries

Information on investees

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

For the year ended December 31, 2021

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2021	Shares held as at December 31,2021	Shares held as at December 31,2021	Net profit (loss) of the investee for the year ended December 31,2021	Investment income(loss) recognised by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Altek Corporation " " " Altek International Investment Co., Ltd. " " " Altek International Holding (BVI) Co, Ltd. Altek Semiconductor (Cayman) Co., Ltd. Altek Medical Holding (Cayman) Co., Ltd. " Altek Investment Corporation	Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co, Ltd. Altek Investment Corporation Altek Lab Inc. Altek Semiconductor (Cayman) Co., Ltd. Altek Optical Technology (Cayman) Co., Ltd. Altek International Trading Co,. Ltd. Altek Medical Holding (Cayman) Co. ,Ltd. Altek Semiconductor Corporation Altek Biotechnology Corporation Altek Medical (HongKong) Limited Ptek Corporation	British Virgin Islands Japan British Virgin Islands Republic of China U.S.A. Cayman Islands Cayman Islands Republic of Seychelles Cayman Islands Republic of China Republic of China HongKong Republic of China	Investment Buying and saleing of electronic components Investment Investment Design service Investment Investment Intercompany transactions Investment and general business operations Research design and sales of ASIC Research and development, manufacture and sales of medical electronic equipments Investment Product development and design	2,882,512 $ 2,869 415,376 100,000 101,855 170,155 366,649 276,800 312,032 350,000 115,376 33,216 3,000	2,882,512 $ 2,869 415,376 100,000 101,855 170,155 310,016 276,800 415,376 350,000 415,376 - -	87,769,559 1,000 12,865,921 10,000,000 11,311,875 20,000,000 13,246,000 10,000,000 45,063,684 35,000,000 10,100,000 N/A 300,000	100 100 100 100 100 50 100 100 77.7 100 100 100 100	8,258,680 $ 10,101 1,061,246 99,872 58,042 554,845 91,018 228,670 716,044 277,561 517,126 35,471 2,997	223,922 $ 353 189,280 49) ( 605 19,165 27,616 18,025) ( 225,950 26,035 59,723 1,900 3) (	221,081 $ 353 189,280 49) ( 605 9,877 27,616 18,025) ( 189,212 13,017 48,517 1,387 3) (	Note 1 Note 1 Note 4 Note 2 Note 4 Note 4 Note 2 Note 4 Note 2 Note 4 Note 3

Note 1: The difference between the profit or loss of the investee for the current period and the investment profit or loss recognized in the current period is the unrealized profit and loss adjustments for countercurrent transactions between subsidiaries. Note 2: Altek Biotechnology Holding (Cayman) Co., Ltd. changed its name to Altek Medical Holding (Cayman) Co., Ltd. since June 8, 2021.

Note 3: Ptek Corporation changed its Chinese name on August 11, 2021. Note 4: The difference between the profit and loss of the investee company in the current period and the investment profit and loss recognized in the current period is based on the shareholding ratio.

Table 6

Altek Corporation and subsidiaries

Information on investments in Mainland China

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

For the year ended December 31, 2021

Investee in Mainland China	Mainbusiness activities	Paid-incapital	Investment method （Note1）	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December31,2021	Accumulated amount of remittance from Taiwan toMainland China as of December31,2021	Net profit (loss) of investee for the year ended December31,2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note4)	Accumulated amount of investment income remitted back to Taiwan as of December31,2021 Book value of investments in Mainland China as of December31,2021
					Remitted to Mainland China Remitted back to Taiwan
Altek (Kunshan) Co., Ltd. (Note 2) Altek EMS (Kunshan) Co., Ltd. (Note 3) Altek Trading (Shanghai) Limited Altek Precision (Kunshan) Co., Ltd. Altek Optical Technology (Kunshan) Co., Ltd. Altek Semiconductor (Shanghai) Co., Ltd. Altek Medical (Shanghai) Limited Altek Medical (Kunshan) Limited	Manufacture and sale of digital still cameras and its accessories Production /sales of electronic product components Wholesale, import and export of digital cameras, digital video cameras and their associated accessories Design, manufacture and sales of digital camera parts Manufacture and sale of digital still cameras and its accessories Research design and sales of imaging technologies, electronic software and hardware Sales of medical electronic equipment Manufacture and sale of medical electronic equipment	1,372,928 $ 138,400 235,280 381,984 387,520 41,520 27,680 26,049	2 2 2 2 2 2 2 2	1,245,600 $ 251,417 235,280 381,984 310,016 - - -	- $ - $ - - - - - - 58,128 - - - - - - -	1,245,600 $ 251,417 235,280 381,984 368,144 - - -	194,398 $ 14,566 6,231 1,883 36,824 7,379) ( 1,900 2,482	100 100 100 100 75 50 77.7 77.7	194,398 $ 14,566 6,231 1,883 27,618 3,690) ( 1,387 1,941	4,430,286 $ - $ 772,227 - 313,818 - 152,206 - 91,016 - 109,349 - 29,936 - 28,536 -

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1)Directly invest in a company in Mainland China.

(2)Through investing in an existing company in the third area,which then investeed in the investee in Mainland China.

Note 2: Including retained earnings capitalized of US$4,600 (In thousand of US dollars).

Note 3: Including retained earnings capitalized of US$3,600 (In thousand of US dollars). Note 4: Investment income or loss was recognised in the financial statements that are audited by the R.O.C parent company's independent accountants.

Company name Altek Corporation

Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2021

$2,482,425

Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) $2,806,023

Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA $5,160,907

Table 7

Altek Corporation and subsidiaries Information of major shareholders December 31, 2021

Table 8

Name of major shareholders	Shares	Shares
	Number of shares held	Holding percentage
Yitsang International Co., Ltd.	14,630,100	5.23%

Table 8