Altek — Audit Report / Information 2021

Nov 16, 2021

ALTEK CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2021 AND 2020 (Stock Code ： 3059)

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

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR21000182

To the Board of Directors and Shareholders of ALTEK CORPORATION

Opinion

We have audited the accompanying parent company only balance sheets of ALTEK CORPORATION as of December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of ALTEK CORPORATION as of December 31, 2021 and 2020, and its financial performance and its 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 Auditors’ Responsibilities for the audit of the parent company only financial statements section of our report. We are independent of ALTEK CORPORATION in accordance with the Norm of Professional Ethics for Certified Public Accountants of 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 ALTEK CORPORATION’s 2021 the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only 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 ALTEK CORPORATION’s 2021 the parent company only financial statements of the current period are stated as follows:

Timing of sales revenue recognition

Description

Please refer to Note 4(27) for accounting policies of revenue recognition. ALTEK CORPORATION’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.

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Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing ALTEK CORPORATION’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 ALTEK CORPORATION or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but it 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 parent company only financial statements.

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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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and 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 ALTEK CORPORATION’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 ALTEK CORPORATION’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only 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 auditors’ report. However, future events or conditions may cause ALTEK CORPORATION to cease to continue as a going concern.

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

• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within ALTEK CORPORATION to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of ALTEK CORPORATION’s 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.

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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 safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ 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

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The accompanying parent company only 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 parent company only 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

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(4) 6(4) and 7 7 6(5) 6(2) 6(3) 6(6) 6(7) and 8 6(8) 6(9) and 8 6(10) 6(28)	December31,2021 AMOUNT % $ 684,671 5 914,619 7 2,704 - 5,547 - 88,171 1 326 - 164,429 1 21,419 - 2,251 - 1,884,137 14 79,184 1 - - 9,429,899 69 1,274,154 9 104,039 1 750,097 5 4,144 - 157,579 1 30,578 - 11,829,674 86 $ 13,713,811 100	December31,2020	December31,2020
		AMOUNT $ 684,671 914,619 2,704 5,547 88,171 326 164,429 21,419 2,251 1,884,137 79,184 - 9,429,899 1,274,154 104,039 750,097 4,144 157,579 30,578 11,829,674 $ 13,713,811	AMOUNT $ 516,404 685,899 13,677 1,793 61,816 3,216 75,032 10,816 1,404 1,370,057 48,229 - 9,387,038 1,305,203 101,792 756,915 5,618 134,168 32,429 11,771,392 $ 13,141,449	%
Current assets 1100 Cash and cash equivalents 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 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 1550 Investments accounted for under the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				4 5 - - - - 1 - -
				10
				- - 72 10 1 6 - 1 -
				90
				100

(Continued)

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ALTEK CORPORATION

PARENT COMPANY ONLY 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) $ 2,400,000 18 $ 2,330,000 18 6(12) 599,818 4 299,798 2 6(21) 2,483 - 981 - 36,978 - 31,859 - 7 1,193,341 9 895,646 7 210,486 2 184,840 2 7 13,380 - 8,831 - 6(16) 9,305 - 8,164 - 9,498 - 7,645 - 6(13) 15,503 - 272,159 2 4,490,792 33 4,039,923 31 6(16) 29,350 - 58,187 - 6(28) 482,818 3 463,796 4 96,038 1 95,176 1 13,301 - 16,706 - 621,507 4 633,865 5 5,112,299 37 4,673,788 36 6(17) 2,792,011 21 2,794,973 21 6(18) 2,392,215 17 2,335,226 18 6(19) 1,418,410 10 1,402,467 11 651,556 5 592,325 4 2,266,140 17 2,249,655 17 6(20) ( 787,359) ( 6) ( 697,698) ( 5 ) 6(17) ( 131,461) ( 1) ( 209,287) ( 2 ) 8,601,512 63 8,467,661 64 11 $ 13,713,811 100 $ 13,141,449 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 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 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 3XXX Total equity Significant events after the balance sheet date 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

YearendedDecember31 2021 2020 Notes AMOUNT % AMOUNT % 6(21) and 7 $ 5,105,488 100 $ 3,241,557 100 6(5) and 7 ( 4,634,033 ) ( 91) ( 2,883,034) ( 89 ) 471,455 9 358,523 11 6(26)(27) and 7 ( 23,405 ) - ( 26,121) ( 1 ) ( 298,898 ) ( 6) ( 230,383) ( 7 ) ( 354,883 ) ( 7) ( 299,046) ( 9 ) 12(2) 46 - 155 - ( 677,140 ) ( 13) ( 555,395) ( 17 ) ( 205,685 ) ( 4) ( 196,872) ( 6 ) 6(22) 661 - 2,778 - 6(23) and 7 29,488 1 28,423 1 6(24) 36,228 1 17,186 - 6(25) ( 25,517 ) ( 1) ( 24,965) ( 1 ) 6(6) 410,665 8 348,436 11 451,525 9 371,858 11 245,840 5 174,986 5 6(28) ( 21,106 ) ( 1) ( 14,629) - $ 224,734 4 $ 160,357 5 6(14) $ 3,433 - ($ 1,153) - 6(3) ( 21,154 ) 1 ( 3,787) - 6(28) ( 942 ) - 988 - ( 18,663 ) 1 ( 3,952) - ( 129,298 ) ( 3) ( 70,252) ( 2 ) 6(28) 25,860 1 14,051 - ( 103,438 ) ( 2) ( 56,201) ( 2 ) ( $ 122,101 ) ( 1) ($ 60,153) ( 2 ) $ 102,633 3 $ 100,204 3 6(29) $ 0.85 $ 0.60 6(29) $ 0.83 $ 0.59

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 loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 8316 Unrealised losses from investments in equity instruments 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 income that will not be reclassified to profit or loss Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Other comprehensive loss, before tax, exchange differences on translation 8399 Income tax relating to the components of other comprehensive income 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive loss for the year 8500 Total comprehensive income for the year Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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 dividend Share-based payment transactions Restricted stocks Retirement of employee resticted shares Changes in ownership interest in subsidiaries Treasury shares repurchased Balance at December 31, 2020 2021 Balance at January 1, 2020 Profit for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) Appropriation of 2020 earnings Legal reserve Special reserve Cash dividend Share-based payment transactions Retirement of employee resticted shares Treasury stock transferred to employees Changes in ownership interest in subsidiaries Proceeds from disposal of financial assets at fair value through other comprehensive income Balance at December 31, 2021	Notes		Commonstock		Additionalpaid-incapital				RetainedEarnings	RetainedEarnings	RetainedEarnings		Otherequityint	ere	st		Treasury stocks		Totalequity
							Legal reserve		Special reserve		Unappropriated retained earnings		Currency translation differences of foreignoperations		Other
	6(20) 6(19) 6(15)(20) 6(15)(17)(18)(20) 6(15)(17)(18)(20) 6(18) 6(17) 6(20) 6(19) 6(15)(18)(20) 6(15)(17)(18)(20) 6(17)(18) 6(18) 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

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

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 Amortization Expected credit gains Net gain on financial assets at fair value through profit Interest expense Interest income Dividend income Share-based payment compensation cost Profit on investments accounted for under the equity method Changes in operating assets and liabilities Changes in operating assets Accounts receivable Accounts receivable-related parties Other receivables Other receivables-related parties Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Accounts payable Accounts payable - related parties Other payables Other payables-related parties Provision of liabilities Other current liabilities Other non-current liabilities Cash outflow generated from operations Interest received Dividend received Interest paid Income tax received Net cash flows from (used in) operating activities

Year ended December 31 Notes 2021 2020 $ 245,840 $ 174,986 6(7)(8)(9)(26) 54,468 56,380 6(10)(26) 3,778 4,387 12(2) ( 46 ) ( 155 ) 6(2)(24) ( 30,955 ) ( 8,073 ) 6(25) 25,517 24,965 6(22) ( 661 ) ( 2,778 ) 6(23) ( 1,526 ) ( 1,526 ) 6(15) 85,976 41,454 6(6) ( 410,665 ) ( 348,436 ) ( 228,674 ) ( 155,647 ) 10,973 ( 13,672 ) ( 3,762 ) ( 1,092 ) ( 15,461 ) 1,450 ( 89,397 ) 13,048 ( 10,603 ) ( 2,575 ) ( 847 ) ( 301 ) 1,502 ( 549 ) 5,119 1,375 297,695 ( 332,384 ) 29,404 17,613 4,549 804 ( 27,696 ) ( 1,929 ) ( 6,656 ) 6,158 19 51 ( 62,109 ) ( 526,446 ) 669 3,110 209,876 226,046 ( 21,274 ) ( 22,737 ) 2,313 1,198 129,475 ( 318,829 )

(Continued)

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ALTEK CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in investment accounted for under the equity method Acquisition of property, plant, and equipment Acquisition of intangible assets Increase 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 Increase in long-term borrowings Repayment of long-term borrowings (Decrease) increase in guarantee deposits received Repayment of principal portion of lease liabilities Acquisition of treasury stocks Cash dividends paid Treasury shares transferred to employees Net cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 $ - ($ 100,000 ) 6(30) ( 9,403 ) ( 9,200 ) 6(30) ( 2,376 ) ( 8,545 ) 1,851 ( 3,485 ) ( 9,928 ) ( 121,230 ) 6(31) 16,110,000 17,020,000 6(31) ( 16,040,000 ) ( 16,850,000 ) 6(31) 3,097,194 1,158,741 6(31) ( 2,800,000 ) ( 1,090,000 ) 6(31) - 250,000 6(31) ( 250,000 ) - 6(31) 9 ( 50 ) 6(31) ( 11,833 ) ( 7,620 ) 6(17) - ( 209,287 ) 6(19) ( 134,249 ) ( 139,794 ) 77,599 - 48,720 131,990 168,267 ( 308,069 ) 6(1) 516,404 824,473 6(1) $ 684,671 $ 516,404

The accompanying notes are an integral part of these parent company only financial statements.

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ALTEK CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

(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 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.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND

PROCEDURES FOR AUTHORISATION

The parent company only 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 (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

Note ： Earlier application from January 1, 2021 is allowed by FSC.

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

the Company
	Effective date by
	International
	Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment:	January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts—	January 1, 2022
cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these accompanying parent company only 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 parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

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

• 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

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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 subsidiaries, 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 Company 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.

• (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 Company 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.

(4) 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.

~16~

• 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.

(5) 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.

• (6) 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.

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

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

• (7) 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 Company 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 Company measures the financial assets at fair value plus transaction costs. The Company 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 Company and the amount of the dividend can be measured reliably.

~17~

(8) Accounts receivable

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

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

(9) Impairment of financial assets

At each balance sheet date, the Company taking into consideration all reasonable and verifiable information that includes forecasts for accounts receivable that does not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(10) Derecognition of financial assets

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

The Company 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 Company 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 Company has not retained control of the financial asset.

• －

• (11) 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.

• (12) 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.

(13) Investments accounted for using equity method / subsidiaries

• A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has ability to affect those returns through its power over the entity.

• B. Unrealised profit (loss) that occurred from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is

~18~

recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise its share in the subsidiary’s loss proportionately.

• 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.

• E. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the nonconsolidated financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the nonconsolidated financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

• (14) 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 Company 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.

• 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 4 years Utility equipment 3 ~ 6 years Other equipment 2 ~ 11 years

~19~

(15) 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 Company. For short-term leases or leases of low-value 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 Company 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.

(16) 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 ~ 35 years.

(17) Intangible assets

Computer software are stated at cost and amortised on a straight-line basis over its estimated useful lives of 1 ~ 3 years.

(18) Impairment of non-financial assets

The Company 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.

(19) Borrowings

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

~20~

(20) 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 Company 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.

(21) Provisions

Provisions (warranties) are recognised when the Company 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.

(22) 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.

• (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 Company 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 Company 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.

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• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’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 Company 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 Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (23) 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 Company 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.

~22~

  - (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 Company and the Company must refund their payments on the stocks, the Company 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’.

• (24) 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.

• 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 Company 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

~23~

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.

(25) 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.

(26) 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.

• (27) Revenue recognition

• A. Sales of goods

  • (a) The Company 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 Company 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 Company’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.

~24~

B. Technical service revenue

• The Company 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.

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

• The preparation of the parent company only financial statements requires management to make critical judgements in applying the Company’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.

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

• None.

(b) Critical accounting estimates and assumptions

• None.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

None. Critical accounting estimates and assumptions None. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand revolving funds Checking accounts and demand deposits Time deposits Total	December31,2021 384 $ 684,287 - 684,671 $	December 31, 2020
		398 $ 474,540 41,466
		516,404 $

• A. The Company 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 Company has no cash and cash equivalents pledged to others.

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

Financial assets at fair value through profit or loss
Items Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Valuation adjustment Total	December 31,2021 10,312 $ 68,872 79,184 $	December 31,2020
		10,312 $ 37,917
		48,229 $

• 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	For the year ended December31,2021 30,955 $	For the year ended December31,2020
		8,073 $

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

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

Items	December	31, 2021	December	31, 2020
Non-current items:
Equity instruments
Unlisted stocks	$	100,000	$	100,000
Valuation adjustment	(	100,000)	(	100,000)
Total	$	-	$	-

• A. The Company 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 both amounted to $0 as at December 31, 2021 and 2020.

• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income both amounted to $0 for the years ended December 31, 2021 and 2020.

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

(4) Accounts receivable

December 31, 2021 and 2020. Accounts receivable
	December	31,2021	December	31,2020
Accounts receivable (including related parties)	$	917,414	$	699,713
Less: Allowance for uncollectible accounts	(	91)	(	137)
	$	917,323	$	699,576

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

Not past due Up to 30 days 31 to 90 days	897,788 $ 18,340 1,286 917,414 $ December 31, 2021	683,672 $ 7,891 8,150 699,713 $ December 31,2020

The above ageing analysis was based on past due date.

• B. As at December 31, 2021 and 2020, accounts receivable were all from contracts with customers. And as of January 1, 2020, the balance of accounts receivable from contracts with customers amounted to $530,102.

• C. None of the Company’s accounts receivable were pledged to others as collateral.

• 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 Company’s accounts receivable was $917,323 and $699,576, respectively.

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

~26~

(5) Inventories

Inventories
Raw materials Work in progress Finished goods Total Raw materials Work in progress Finished goods Total	Cost 20,576 $ 70,801 77,761 169,138 $ Cost 9,780 $ 54,873 14,360 79,013 $	Allowance for valuation loss 2,739) ($ 174) ( 1,796) ( 4,709) ($ December 31,2021 Allowance for valuation loss 2,883) ($ - 1,098) ( 3,981) ($ December 31,2020	Book value 17,837 $ 70,627 75,965 164,429 $
			Book value
			6,897 $ 54,873 13,262
			75,032 $

The cost of inventories recognised as expense for the period:

The cost of inventories recognised as expense	for the period:
	For the year ended		For the year ended
	December 31, 2021	December31,2020
Cost of goods sold and others	4,633,305 $	$	2,895,892
Loss (reversal of loss) in market value	728	(	12,858)
Total	4,634,033 $	$	2,883,034

For the year ended December 31, 2020, the Company 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.

(6) Investments accounted for using equity method

on decline in market value was partially sold. Investments accounted for using equity method
Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co., Ltd. Altek Investment Corporation	December31,2021		December31,2020
	8,258,680 $ 10,101 1,061,246 99,872 9,429,899 $		8,369,784 $ 11,223 906,110 99,921 9,387,038 $

• A. For information on the Company’s subsidiary, please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2021.

• B. The Company recognized gain of investment in associates amounted to $410,665 and $348,436 for the years ended December 31, 2021 and 2020.

~27~

(7) Property, plant and equipment

At January 1 Cost Accumulated depreciation Opening net book amount Additions Depreciation charge Closing net book amount At December 31 Cost Accumulated depreciation			2021

~28~

2020

At January 1 Cost Accumulated depreciation Opening net book amount Additions Reclassifications Depreciation charge 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 $ 1,177,057 $ 626 $ 59,884 $ 325 $ 63,269 $ 1,769,845 $ - 319,435) ( 626) ( 55,578) ( - 59,168) ( 434,807) ( 468,684 $ 857,622 $ - $ 4,306 $ 325 $ 4,101 $ 1,335,038 $ 468,684 $ 857,622 $ - $ 4,306 $ 325 $ 4,101 $ 1,335,038 $ - 11,955 - 367 - 425 12,747 - 325 - - 325) ( - - - 39,281) ( - 1,466) ( - 1,835) ( 42,582) ( 468,684 $ 830,621 $ - $ 3,207 $ - $ 2,691 $ 1,305,203 $ 468,684 $ 1,189,337 $ 626 $ 59,811 $ - $ 50,863 $ 1,769,321 $ - 358,716) ( 626) ( 56,604) ( - 48,172) ( 464,118) ( 468,684 $ 830,621 $ - $ 3,207 $ - $ 2,691 $ 1,305,203 $

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 Company leases various assets including land and business vehicles. Rental contracts are typically made for periods of 1 to 20 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 buildings and equipment. Lowvalue assets comprise printers, etc.

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

value assets comprise printers, etc. 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 87,943 $ 91,075 $ 10,360 - 5,736 10,717 104,039 $ 101,792 $ Carrying amount Depreciation charge	December 31, 2020 amount
		91,075 $ - 10,717
		101,792 $
	For the year ended For the year ended December 31,2021 December 31, 2020 3,132 $ 3,132 $ 3,080 - 4,981 3,848 11,193 $ 6,980 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were 13,440 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 $ 3,281 102	For the year ended December 31,2020
		1,139 $ 5,461 137

• F. For the years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $15,216 and $13,218, respectively.

• G. Extension and termination options

In determining the lease term, the Company 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.

~30~

(9) Investment property

At January 1 Cost Accumulated depreciation At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation At January 1 Cost Accumulated depreciation At January 1 Depreciation charge At December 31 At December 31 Cost Accumulated depreciation

Land Buildings and structures Total 573,532 $ 245,710 $ 819,242 $ - 62,327) ( 62,327) ( 573,532 $ 183,383 $ 756,915 $ 573,532 $ 183,383 $ 756,915 $ - 6,818) ( 6,818) ( 573,532 $ 176,565 $ 750,097 $ 573,532 $ 245,710 $ 819,242 $ - 69,145) ( 69,145) ( 573,532 $ 176,565 $ 750,097 $ 2021 Land Buildings and structures Total 573,532 $ 245,710 $ 819,242 $ - 55,509) ( 55,509) ( 573,532 $ 190,201 $ 763,733 $ 573,532 $ 190,201 $ 763,733 $ - 6,818) ( 6,818) ( 573,532 $ 183,383 $ 756,915 $ 573,532 $ 245,710 $ 819,242 $ - 62,327) ( 62,327) ( 573,532 $ 183,383 $ 756,915 $ 2020

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

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	For the year ended December 31,2021 27,552 $ 8,240 $	For the year ended December 31,2020
		27,077 $
		8,243 $

~31~

• B. The fair value of the investment property held by the Company as at December 31, 2021 and 2020 were $1,051,328 and $870,022, which were valued by independent valuers. 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	$	14,141	$	10,138
Accumulated amortisation	(	8,523)	(	8,956)
	$	5,618	$	1,182
At January 1	$	5,618	$	1,182
Additions		2,304		8,823
Amortisation charge	(	3,778)	(	4,387)
At December 31	$	4,144	$	5,618
At December 31
Cost	$	11,127	$	14,141
Accumulated amortisation	(	6,983)	(	8,523)
	$	4,144	$	5,618
A. Details of amortisation on intangible assets are as follows:
		For the year ended		For the year ended
		December31,2021		December31,2020
Operating expense		3,778		4,387

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

(11) Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December 31,2021 2,400,000 $ December 31,2020 2,330,000 $	Interest rate range 0.82%~0.89% Interest rate range 0.82% ~0.94%	Collateral
			None Collateral
			None

~32~

(12) Short-term notes and bills payable

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

At December, 31, 2021: None.

==> picture [483 x 32] intentionally omitted <==

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

Borrowing period Interest rate
Type of borrowings and repayment term range Collateral December 31, 2020
----- End of picture text -----

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 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 the consolidated net value over $8 billion and the 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

registration was completely cancelled on June 28, 2021.

(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 Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

~33~

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

		December 31,2021	December 31,2021	December 31,2021	December 31,2020	December 31,2020	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)
Movements in net defined benefit liability are as follows:
				2021
	Present value of
	defined benefit			Fair value			Net defined
	obligations		ofplan assets			benefit liability
At January 1	($	54,843)	$	44,573		($	10,270)
Interest (expense) income	(	165)			134	(	31)
	(	55,008)		44,707		(	10,301)
Remeasurements:
Return on plan assets		-			680		680
(excluding amounts included in
interest income or expense)
Change in demographic assumptions	(	43)			-	(	43)
Change in financial assumptions		1,481			-		1,481
Experience adjustments		1,315			-		1,315
		2,753			680		3,433
Pension fund contribution		-			12		12
Paid pension		825	(		825)		-
At December 31	($	51,430)	$	44,574		($	6,856)

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

~34~

2020

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

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’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 Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company 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.

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

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

~35~

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:

==> picture [446 x 155] intentionally omitted <==

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

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

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 Company 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:

Within 1 year 2-5 years Over 5 years	4,803 $ 8,326 17,297
	30,426 $

• B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2021 and 2020, were $14,750 and $13,806, respectively, under the above pension scheme.

~36~

(15) Share-based payment

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

==> picture [467 x 65] intentionally omitted <==

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

Quantity
granted
(shares in Contract Vesting
Type of arrangement Grant date thousand) period conditions
----- End of picture text -----

Type of arrangement	Grant date	thousand)	period	conditions
Employee stock options	October 28, 2011	3,000	9.2 years	Note 1
"	March 21, 2012	3,000	8.9 years	Note 1
Plan for restricted	August 12, 2019	630	3 years	Note 2
shares to employees (2018-1)
"	January 20, 2020	2,196	3 years	Note 2
Plan for restricted	August 12, 2019	820	3 years	Note 2
shares to employees (2019-1)
"	January 20, 2020	2,030	3 years	Note 2
"	April 24, 2020	86	3 years	Note 2
Treasury shares transferred to	March 9, 2021	2,000	-	Immediately
employees				vested
"	May 17, 2021	2,000	-	Immediately
				vested
"	October 14, 2021	2,000	-	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.

~37~

• 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:

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 - - - - - - - - For the year ended For the year ended December 31,2021 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.

• (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:

• At December 31, 2021: None.

Issue date approved	Expirydate December 31, 2020 December 31, 2020	December	Exercise price (in NT dollars) (Note) - $ - 31,2021	December	31,2020
		No. of shares (in thousands) - -		No. of shares (in thousands) - -	Exercise price (in NT dollars) (Note)
October 28, 2011 March 21, 2012					28.8 $ 28.7

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

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

~38~

• 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 (Note 1 and Note 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 stock granted with the compensation cost accounted for using the faire value method, the fair valued on the grant date are calculated based on the closing price on the grant date.

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

• (b) As of 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. As of December 31, 2021, the weighted-average experience price of treasury shares transferred to employees was $19.66 (in NT dollars).

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

(16)	Provisions Equity-settled At January 1, 2021 Additional provisions Reversed during the period At December 31, 2021 Current Non-current	For the year ended For the year ended December31,2021 December31,2020 85,976 $ 41,454 $ Warranty 66,351 $ 8,753 36,449) ( 38,655 $ December 31,2021 December 31, 2020 9,305 $ 8,164 $ 29,350 $ 58,187 $	For the year ended December31,2021		For the year ended December31,2020 41,454 $
			85,976 $

The Company 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.

~39~

(17) Share capital

As of December 31, 2021, the Company’s authorized 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 shares transferred to employees			3,800		-
Issuance of employee restricted shares			-		4,312
Retired restricted shares to employees that
did not meet the vesting conditions	(		296)	(	176)
Shares repurchased			-	(	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 holding the shares	Reason for reacquisition	Number of shares (share in thousands) 7,200 Number of shares (share in thousands) 11,000 December December	Carrying amount 31,2021
The Company Name of company holdingthe shares	To be reissued to employees Reason for reacquisition		131,461 $
			Carryingamount 31,2020
The Company	To be reissued to employees		209,287 $

• (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.

• (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.

~40~

(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 Issuance of restricted shares to employees Employee restricted share granted Retirement of employee restricted shares At December 31 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 1,821,473 $ 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 $ 2021 2020		Proceeds from sales of treasury Restricted shares to shares employees Total 1,455 $ 63,753 $ 2,335,226 $ - - 9,002) ( 69,713 - 69,713 - 25,632) ( - - 3,722) ( 3,722) ( 71,168 $ 34,399 $ 2,392,215 $ 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 $
	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 $

~41~

(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.

• 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.

~42~

• 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:

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

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:

2022. Details are summarized below:
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 from the shareholders’ meeting.

(20) Other equity items

approval from the shareholders’ meeting. Other equity items	meeting.
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-changed 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		2021
			Total

~43~

					2020	2020	2020
				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)
Operating revenue
			For the year ended					For the	year ended
			December31,			2021		December31,2020
Revenue from contracts with customers			$		5,105,488			$		3,241,557
A. Disaggregation of revenue from contracts with customers

(21) Operating revenue

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

B. Contract liabilities The Group has recognised For the year ended December 31,2021 Revenue from external customer contracts Timing of revenue recognition At a point in time For the year ended December 31,2020 Revenue from external customer contracts Timing of revenue recognition At a point in time Contract liabilities	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $	the following revenue-related contract liabilities: Asia Europe America Taiwan Total 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ 3,457,477 $ 135,513 $ 1,400,440 $ 112,058 $ 5,105,488 $ Asia Europe America Taiwan Total 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ 1,985,262 $ 173,004 $ 878,417 $ 204,874 $ 3,241,557 $ December31,2021 December31,2020 January1,2020 2,483 $ 981 $ 1,530 $
	the
			2,483 $		981 $		1,530 $

~44~

C. Revenue recognised from performance obligations satisfied in previous periods

	Year ended December	Year ended December	Year ended December	Year ended December	Year ended December
		31, 2021			31,2020
Revenue recognised that was included in the
contract liability balance at the beginning of
the period	$	45		$	1,507
Interest income
		For the year ended			For the year ended
	December 31,2021			December 31,2020
Interest income from bank deposits	$	614	$		2,738
Other interest income		47			40
	$	661	$		2,778
Other income
		For the year ended			For the year ended
	December 31,2021			December 31,2020
Rent income	$	26,700	$		22,113
Dividend income		1,526			1,526
Other income - others		1,262			4,784
	$	29,488	$		28,423
Other gains and losses
		For the year ended			For the year ended
	December31,2021			December31,2020
Net gains on financial assets at fair value
through profit or loss		30,955			8,073
Net currency exchange gains		5,273			9,118
Other expenses		-	(		5)
Total	$	36,228	$		17,186
Finance costs
		For the year ended			For the year ended
	December 31,2021			December 31,2020
Interest expense :
Bank loan	$	21,583	$		22,731
Lease liabilities		1,108			1,139
Other		2,826			1,095
	$	25,517	$		24,965

(22) Interest income

(23) Other income

(24) Other gains and losses

(25) Finance costs

~45~

(26) Expenses by nature

Employee benefit expenses Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortisation charges on intangible assets	For the year ended For the year ended December 31,2021 December 31,2020 501,447 $ 392,756 $ 36,457 42,582 11,193 6,980 6,818 6,818 3,778 4,387

(27) Employee benefit expenses

Employee benefit expenses Amortisation charges on intangible assets		3,778		4,387
		For the year ended		For the year ended
	December 31, 2021		December 31, 2020
Wages and salaries	$	453,465	$	350,013
Labour and health insurance fees		23,949		21,025
Pension costs		14,781		13,869
Other personnel expenses		9,252		7,849
Total	$	501,447	$	392,756

• 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 recognized 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.

~46~

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

Income tax A. Income tax expense (a) Components of income tax expense:	Income tax A. Income tax expense (a) Components of income tax expense:	Income tax A. Income tax expense (a) Components of income tax expense:
(b) The income tax charged to other comprehensive income is as follows: B. Reconciliation between income tax expense and accounting profit: For the year ended For the year ended December 31,2021 December 31,2020 Current tax: Prior year income tax underestimation(overestimation) 547 $ 381) ($ Tax paid outside of the territory of the Republic of China 30 - Total current tax 577 381) ( Deferred tax: Origination and reversal of temporary differences 20,529 15,010 Income tax expense 21,106 $ 14,629 $ 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) ($ For the year ended December 31,2021 For the year ended December 31,2020 Tax calculated based on profit before tax and statutory tax rate 49,168 $ 34,997 $ Expenses disallowed by tax regulation 6,421) ( 13,161) ( Prior year income tax underestimation(overestimation) 547 381) ( Tax paid outside of the territory of the Republic of China 30 - Change in assessment of realisation of deferred tax assets 22,218) ( 6,826) ( Income tax expense 21,106 $ 14,629 $
	49,168 $ 6,421) ( 547 30 22,218) ( 21,106 $	34,997 $ 13,161) ( 381) ( - 6,826) ( 14,629 $

~47~

• 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 expense Others Subtotal Total 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 expense Others Subtotal Total		January1	Recognised in profit or loss Recognised in other comprehensive income December 31 10,971) ($ - $ 11,648 $ - 25,860 134,003 - 255) ( - 8,612 - 11,046 165 - 882 2,194) ($ 25,605 $ 157,579 $ 18,114) ($ - $ 479,367) ($ 4 687) ( 1,572) ( 225) ( - 1,879) ( 18,335) ($ 687) ($ 482,818) ($ 20,529) ($ 24,918 $ 325,239) ($ 2021 2020	Recognised in profit or loss Recognised in other comprehensive income December 31 10,971) ($ - $ 11,648 $ - 25,860 134,003 - 255) ( - 8,612 - 11,046 165 - 882 2,194) ($ 25,605 $ 157,579 $ 18,114) ($ - $ 479,367) ($ 4 687) ( 1,572) ( 225) ( - 1,879) ( 18,335) ($ 687) ($ 482,818) ($ 20,529) ($ 24,918 $ 325,239) ($ 2021 2020
	22,619 $ 108,143 255 2,434 717 134,168 $ 461,253) ($ 889) ( 1,654) ( 463,796) ($ 329,628) ($
		January1	Recognised in profit or loss	Recognised in other comprehensive income December 31 - $ 22,619 $ 14,051 108,143 255 255 - 2,434 - 717 14,306 $ 134,168 $ - $ 461,253) ($ 231 889) ( 502 1,654) ( 733 $ 463,796) ($ 15,039 $ 329,628) ($
	23,124 $ 94,092 - 2,835 - 120,051 $ 441,904) ($ 1,130) ( 6,674) ( 449,708) ($ 329,657) ($		505) ($ - - 401) ( 717 189) ($ 19,349) ($ 10 4,518 14,821) ($ 15,010) ($

~48~

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

tax assets are as follows:
			December 31, 2021
			Unrecognised
Qualifying items	Unused tax credits		deferred tax assets	Expiry year
Research and development	$	8,820	7,938 $	2022
			December 31, 2020
			Unrecognised
Qualifyingitems	Unused tax credits		deferred tax assets	Expiry year
Research and development	$	7,168	6,451 $	2021

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

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December 31, 2021
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2018 $ 17,466 $ 17,466 $ - 2028
2020 5,053 5,053 - 2030
2021 32,710 32,710 - 2031
December 31, 2020
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2018 $ 17,466 $ 12,168 $ - 2028
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• 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.

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(29) Earnings per share

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 Treasury shares transferred to Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 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 Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Amount after tax 224,734 $ 224,734 $ - - - 224,734 $ For For	Weighted average number of ordinary shares outstanding Earnings per share (share in thousands) (in NT dollars) 265,654 0.85 $ 2,719 1,203 1,135 270,711 0.83 $ theyear ended December 31,2021 theyear ended December 31,2020
	Amount after tax 160,357 $ 160,357 $ 160,357 $	Weighted average number of ordinary shares outstanding (share in thousands) 265,758 3,458 1,156 270,372	Earnings per share (in NT dollars)
			0.60 $
			0.59 $

~50~

(30) Supplemental cash flow information

Investing activities with partial cash payments

			For the year ended			For the year ended
		December 31,2021			December 31,2020
Acquisitions of property, plant, and
equipment	$		5,408	$		12,747
Add: Property and equipment and
construction billings payable at
beginning of year			4,203			656
Less: Property and equipment and
construction billings payable at end
of year	(		208)	(		4,203)
Cash paid	$		9,403	$		9,200
			For the year ended			For the year ended
		December 31,2021			December 31, 2020
Acquisitions of intangible assets	$		2,304	$		8,823
Add: Payables at beginning of period			278			-
Less: Payables at end of year	(		206)	(		278)
Cash paid	$		2,376	$		8,545

(31) Changes in liabilities from financing activities

January 1, 2021 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2021 January 1, 2020 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2020		Short-term borrowings		Short-term notes and billspayable	Long-term borrowings (Note)	Long-term borrowings (Note)		Guarantee deposits received 6,436 $ 9 - 6,445 $ Guarantee deposits received	Lease liabilities		Total
		2,330,000 $ 70,000 - 2,400,000 $ Short-term borrowings		299,798 $ 297,194 2,826 599,818 $ Short-term notes and billspayable	250,000 $ 250,000) ( - - $ Long-term borrowings (Note)				102,821 $ 11,833) ( 14,548 105,536 $ Lease liabilities		2,989,055 $ 105,370 17,374 3,111,799 $ Total
		2,160,000 $ 170,000 - 2,330,000 $		229,962 $ 68,741 1,095 299,798 $		- $ 250,000 - 250,000 $	6,486 $ 50) ( - 6,436 $		98,977 $ 7,620) ( 11,464 102,821 $		2,495,425 $ 481,071 12,559 2,989,055 $

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

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship:

LATED PARTY TRANSACTIONS Names of related parties and relationship:
Names of relatedparties	Relationshipwith the Company
Altek International Trading Co., Ltd (AIT) Altek Semiconductor Corporation (SEMI) Altek Biotechnology Corporation (BIO) Altek Medical Holding (Cayman) Co., Ltd. Taiwan Branch (AMH-TW) Altek Investment Corporation (AIC)	The subsidiary included in the Group's Consolidated Financial Statements (Note) " " " "

Note: For information on the Company’s subsidiary, please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2021.

(2) Significant transactions and balances with related parties:

• A. Operating revenue:

Sales of Goods: AIT SEMI BIO AMH-TW Subtotal Sales of services: SEMI BIO Subtotal Total		Year ended December 31, 2021		Year ended December 31, 2020
		11 $ 12,010 1,759 2,017 15,797 38,619 $ 49,773 88,392 104,189 $		- $ 14,025 681 - 14,706 42,376 $ 46,939 89,315 104,021 $

Goods are sold based on the prices lists in force and terms that would be available to third parties, and the general collection term was 45~90 days after monthly billings.

B. Purchases:

Purchases:
Purchases of Goods: AIT Other Total		Year ended December 31, 2021		Year ended December 31, 2020
		4,196,943 $ 792 4,197,735 $		2,657,515 $ 2,739 2,660,254 $

~52~

Goods are purchased on normal commercial terms and conditions, and the payment terms above was 60~120 days after monthly billings.

• C. Rent income:

was 60~120 days after monthly billings. Rent income:
Service fees: Receivables from related parties: SEMI BIO AMH-TW AIC Total SEMI BIO Total Accounts receivable: SEMI BIO AMH-TW Total SEMI BIO Other Total Other receivables:	Year ended December 31, 2021		Year ended December 31, 2020
	10,566 $ 5,192 540 24 16,322 $ Year ended December 31, 2021 10,385 $ 3,767 14,152 $ December 31,2021 1,354 $ 556 794 2,704 67,233 $ 20,678 260 88,171		7,344 $ 5,192 540 12 13,088 $ Year ended December 31, 2020
			1,663 $ 6,359 8,022 $ December 31, 2020 13,136 $ 541 - 13,677 35,438 $ 26,103 275 61,816

• D. Service fees:

• E. Receivables from related parties:

~53~

F. Payables to related parties:

Payables to related parties:
Accounts payable: AIT SEMI Total AIT SEMI BIO Total Other payables:	December 31,2021 1,193,335 $ 6 1,193,341 8,980 $ 4,400 - 13,380 $	December 31,2020 895,635 $ 11
		895,646
		3,782 $ 648 4,401
		8,831 $

(3) Key management compensation

Key management compensation
For the year ended December 31, 2021 Salaries and other short-term employee benefits 36,191 $ Post-employment benefits 1,027 Share-based payments 5,927 Total 43,145 $	For the year ended December 31,2020
	32,104 $ 908 15,619
	48,631 $

8. PLEDGED ASSETS

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

Pledged asset Purpose Land, buildings and structures Long-term borrowings Investment property Long-term borrowings	Book value	Book value
	December 31,2021 - $ - - $	December 31,2020
		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).

~54~

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’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 Company 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

timal capital structure. ancial instruments Financial instruments by category
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 Accounts receivable (including related parties) Other receivables (including related parties) Guarantee deposit paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	December31,2021 79,184 $ - $ 684,671 $ 917,323 93,718 30,578 1,726,290 $ 2,400,000 $ 599,818 1,230,319 223,866 - 6,445 4,460,448 $ 105,536 $	December31,2020
		48,229 $
		- $
		516,404 $ 699,576 63,609 32,429
		1,312,018 $
		2,330,000 $ 299,798 927,505 193,671 250,000 6,436
		4,007,410 $
		102,821 $

B. Financial risk management policies

(a) The Company’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 Company, 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.

~55~

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’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 Company 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 company to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Company 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 Company 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 Company’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

~56~

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

December 31, 2021
Sensitivity Analysis
Effect on
Foreign Currency Effect on Other
Amount Exchange Book Value Extent of Profit or Comprehensive
(In thousands) Rate (NTD) Variation (Loss) Income (Loss)
(Foreign currency:
functional currency)
Financial assets
Monetary items
----- End of picture text -----

(In thousands) (Foreign currency: functional currency) Financial assets Monetary items	(In thousands)	Rate (NTD) Variation (Loss) Income(Loss)	Rate (NTD) Variation (Loss) Income(Loss)
USD:NTD 52,356 USD RMB:NTD 539 RMB Non-monetary items USD:NTD 336,704 USD Financial liabilities Monetary items USD:NTD 42,197 USD RMB:NTD 1,273 RMB Foreign Currency Amount (In thousands) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 37,759 USD RMB:NTD 9,659 RMB Non-monetary items USD:NTD 325,699 USD Financial liabilities Monetary items USD:NTD 30,075 USD RMB:NTD 1,336 RMB	52,356 USD 539 RMB 336,704 USD 42,197 USD 1,273 RMB	27.680 1,449,214 $ 1% 14,492 $ - $ 4.3415 2,340 1% 23 - 27.680 9,319,926 $ 1% - $ 93,199 $ 27.680 1,168,013 $ 1% 11,680) ($ - $ 4.3415 5,527 1% 55) ( - Effect on Effect on Other Exchange Book Value Extent of Profit or Comprehensive Rate (NTD) Variation (Loss) Income(Loss) 28.480 1,075,376 $ 1% 10,754 $ - $ 4.3648 42,160 1% 422 - 28.480 9,275,894 $ 1% - $ 92,759 $ 28.480 856,536 $ 1% 8,565) ($ - $ 4.3648 5,831 1% 58) ( - December31,2020 SensitivityAnalysis
		Exchange Rate 28.480 4.3648 28.480 28.480 4.3648	Book Value (NTD) 1,075,376 $ 42,160 9,275,894 $ 856,536 $ 5,831

v. Total exchange gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2021 and 2020 amounted to $5,273 and $9,118, respectively.

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Price risk

• i. The Company’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.

• ii. The Company’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 $0 and $0, 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 Company 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 Company 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 Company manages their credit risk taking into consideration the entire company’s concern. According to the Company’s credit policy, each local entity in the Company 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 Company 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.

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• 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;

• (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 Company classifies customers’ accounts receivable in accordance with customer types. The Company applies the simplified approach using loss provision matrix to estimate expected credit loss under the provision matrix basis.

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

• vii. The Company used the forecastability to adjust historical and timely information to access the default possibility of accounts receivable (included related parties). As of December 31, 2021 and 2020, respectively, the provision matrix is as follows:

December 31,2021	Up to 90 days past due	Up to 90 days past due	91~180 days past due	91~180 days past due	181 to 360 days past due Up to 361 days	181 to 360 days past due Up to 361 days	Total
	0.01% 917,414 $ 91 $ Up to 90 days past due		15% - $ - $ 91~180 days past due		30% 100% - $ - $ - $ - $ 181 to 360 days past due Upto361 days
Expected loss rate Total book value Loss allowance December31,2020 Expected loss rate Total book value Loss allowance
	0.02% 699,713 $ 137 $		15% - $ - $		30% - $ - $	100% - $ - $

• viii. Movements in relation to the gcompany applying the simplified approach to provide loss allowance for accounts receivable (included related parties) are as follows:

		2021			2020
At January 1	$		137	$		292
Reversal of impairment loss	(		46)	(		155)
At December 31	$		91	$		137

~59~

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’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 Company’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 Company treasury. Company 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 head-room as determined by the above-mentioned forecasts.

• iii.The Company has following undrawn borrowing facilities:

0 Fixed rate: Expiring within one year Expiring beyond one year	December31,2021 December 31, 2020 1,144,000 $ 1,714,000 $ - 950,000 1,144,000 $ 2,664,000 $

• iv.The table below analyses the Company’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 (including related parties) Other payables (including related parties) Lease liabilities Guarantee deposits received	Less than 1year 2,400,000 $ 599,818 1,230,319 223,866 10,573 -	Over 1year
		- $ - - - 111,448 6,445

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December 31, 2020 Less than 1 year Over 1 year
Non-derivative financial liabilities:
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December 31, 2020 Non-derivative financial liabilities:	Les	s than 1year	O	ver 1year
Short-term borrowings	$	2,330,000	$	-
Short-term notes and bills payable		299,798		-
Accounts payable (including related parties)		927,505		-
Other payables (including related parties)		193,671		-
Lease liabilities		8,753		111,661
Long-term borrowings (including current portion)		250,000		-
Guarantee deposits received		-		6,436

(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 Company’s investment in equity investment without active market and investment property are included in Level 3.

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

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

~61~

• 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 nature 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 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 $ - 79,184 $ Level 3 48,229 $ - 48,229 $	Total 79,184 $ -
				79,184 $
				Total
				48,229 $ -
				48,229 $

• (b) The methods and assumptions the Company 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 Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs.

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• 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	$	48,229	$	40,156
Gains recognised in profit or loss		30,955		8,073
At December 31	$	79,184	$	48,229

• 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.

• 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:

Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Relationship of inputs to fair value

• Financial assets at fair value through profit or loss Unlisted shares $ 79,184 Market Price to The higher the comparable earnings ratio multiple and companies multiple, price control to book ratio premium, the multiple,discount higher the fair for lack of value marketability, control premium

~63~

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

- ’ (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 Company has adjusted the work style of employees, strengthened disinfection and control of personnel entry and exit measures for operating entities in Taiwan. The Company 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.

• 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.

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(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

Not applicable.

~65~

ALTEK CORPORATION STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars, except foreign currency in dollars)

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Item Description Amount
Cash
Cash on hand-New Taiwan Dollar $ 200
-Foreign currency USD 4,735.00 at exchange rate of 27.68 131
RMB 6,551.00 at exchange rate of 4.3415 28
JYP 74,262.00 at exchange rate of 0.2405 18
EUR 215.00 at exchange rate of 31.32 7
384
Bank deposits
Demand deposits and checking account 149,977
Foreign currency demand deposits USD 19,191,806.07 at exchange rate of 27.68 531,229
RMB 531,952.65 at exchange rate of 4.3415 2,309
JYP 1,092,997.00 at exchange rate of 0.2405 263
HKD 1,722.74 at exhcnage rate of 3.549 6
EUR 15,123.52 at exchange rate of 31.32 474
GBP 774.02 at exchange rate of 37.3 29
684,287
$ 684,671
----- End of picture text -----

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ALTEK CORPORATION STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Client Name	Description Amount 438,636 $ 216,886 173,242 85,946 914,710 1,354 $ 794 556 2,704 917,414 91) ( 917,323 $	Note
Customer: A B C Other Subtotal Related parties : Altek Semiconductor Corporation Altek Medical Holding (Cayman) Co., Ltd. Taiwan Branch Altek Biotechnology Corporation Subtotal Total Less : Allowance for uncollectible accounts		The balance of each customer has not exceeded 5% of the accounts receivable

~67~

ALTEK CORPORATION STATEMENT OF INVENTORIES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Raw material Work in progress Finished goods Less : Allowance for valuation loss Item Description	Cost Net Realisable Value 20,576 $ 18,622 $ Net realisable values are used as market 70,801 122,223 '' 77,761 84,662 '' 169,138 225,507 $ 4,709) ( 164,429 $ Amount Note

~68~

ALTEK CORPORATION

STATEMENT OF CHANGES IN FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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

Beginning Balance Addition Ending Balance
Name of Financial Percentage
Instrument Shares Book Value Shares Amount Shares share holding Book Value Collateral Note
Gianta Co., Ltd. 762,876 $ 48,229 - $ 30,955 762,876 14.55% $ 79,184 None Note
Hua-chuang Automobile
Information Technical
Center Co.,Ltd. 2 - - - 2 0.00% -
$ 48,229 $ 30,955 $ 79,184
----- End of picture text -----

Note :Recognize valuation profit.

~69~

ALTEK CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Name	BeginningBalance	BeginningBalance	Shares Amount - - $ - - - 155,136 Note 2 - - 155,136 $ Addition	Shares Amount - 111,104) ($ Note 1 - 1,122) ( Note 2 - - - 49) ( Note 3 112,275) ($ Decrease	EndingBalance	EndingBalance		Market Value or Net Assets Value	Market Value or Net Assets Value	Collateral
	Shares	Amount	Shares	Shares	Shares	Percentage of Ownership	Amount	Unit Price	Total Amount
Altek International Investment Co., Ltd. Altek Japan Corporation Altek International Holding (BVI) Co., Ltd. Altek Investment Corporation	87,769,559 1,000 12,865,921 10,000,000	8,369,784 $ 11,223 906,110 99,921 9,387,038 $	- - - -	- - - -	87,769,559 1,000 12,865,921 10,000,000	100% 100% 100% 100%	8,258,680 $ 10,101 1,061,246 99,872 9,429,899 $	- $ - - -	8,258,680 $ 10,101 1,061,246 99,872 9,429,899 $	None " " "

Note 1 :Including the repatriation of earnings, investment gains and losses recognized under the equity method, changes in cumulative conversion adjustments, and the elimination of unrealized gains and losses adjustments for countercurrent transactions between companies, etc. Note 2 :Including changes in investment gains and losses recognized under the equity method and cumulative conversion adjustments. Note 3 :Newly established investment funds and investment losses recognized under the equity method.

~70~

ALTEK CORPORATION STATEMENT OF ACCOUNTS PAYABLES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Client Name	Description		Amount	Note
			6,014 $ 3,273 3,039 2,164 22,488 36,978 1,193,335 $ 6 1,193,341 1,230,319 $	The balance of each payable account has not exceeded 5% of the accounts payable

~71~

ALTEK CORPORATION STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Nature	Description		EndingBalance	Contract Period	Range of Interest Rate 0.82%~0.89%	Credit Line	Collateral	Note
Unsecured borrowings	Bank-borrowings		2,400,000 $	Expired in 3 months		$4,150,000	None	-

~72~

ALTEK CORPORATION STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Volume Amount Note Net operating revenue : Digital imaging related $ 5,105,488 application products, etc.

~73~

ALTEK CORPORATION STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Direct raw materials used Raw materials at beginning of year Add: Raw materials purchased Less: Sale of raw materials Expenses transferred in Raw materials at end of year Consumption of raw materials for the year Manufacturing expenses Manufacturing cost Work in progress at beginning of year Add: Work in progress purchased Less: Expenses transferred in Sales of work in process Work in progress at end of year Cost of finished goods Finished goods at beginning at the year Add: Finished good purchased Less: Expenses transferred in Finished goods at end of year Total cost of goods sold Sales of raw materials and work in progress Allowance of loss on decline in market Other operating costs Total operating cost Item

Amount

9,780 $ 530,824 467,577) ( 2,322 20,576) ( 54,773 42,609 97,382 54,873 1,162,645 5,764) ( 10,200) ( 70,801) ( 1,228,135 14,360 3,004,492 6,648) ( 77,761) ( 4,162,578 477,777 728 7,050) ( 4,634,033 $

~74~

ALTEK CORPORATION STATEMENT OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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Item Description Amount Note
Wages and salaries $ 27,305
Import and export expenses 4,744
The amount of each
item in others does
not exceed 5% of
Other 10,560 the account balance
$ 42,609
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~75~

ALTEK CORPORATION STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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

Item Description Amount Note
Wages and salaries $ 15,483
Science Park management fees 2,808
The amount of each
item in others does
not exceed 5% of the
Other 5,114 account balance
$ 23,405
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ALTEK CORPORATION

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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

Item Description Amount Note
Wages and salaries $ 193,011
Depreciation charges 26,552
Royalty 15,000
The amount of each item
in others does not exceed
5% of the account balance
Other 64,335
$ 298,898
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ALTEK CORPORATION STATEMENT OF RESEARCH AND DESIGN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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

Item Description Amount Note
Wages and salaries $ 217,666
Service expenses 22,338
The amount of each
item in others does not
exceed 5% of the
account balance
Other 114,879
$ 354,883
----- End of picture text -----

~78~

ALTEK CORPORATION

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Nature Function	Year ended December 31,2021	Year ended December 31,2021	Year ended December 31,2021	Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee benefit expense	$ 30,375	$ 471,072	$ 501,447	$ 16,151	$ 376,605	$ 392,756
Wages and salaries	27,305	415,591	442,896	13,908	328,823	342,731
Labor and health insurance fees	1,590	22,359	23,949	1,120	19,905	21,025
Pension costs	764	14,017	14,781	577	13,292	13,869
Directors' remuneration	-	10,569	10,569	-	7,782	7,782
Other personnel expenses	716	8,536	9,252	546	7,303	7,849
Depreciation charges	2,040	52,428	54,468	1,559	54,821	56,380
Amortisation charges	-	3,778	3,778	-	4,387	4,387

Note:

1. As at December 31, 2021 and 2020, the Company had both 242 employees,including both 4 non-employee directors, respectively.

2. Average employee benefit expense in current year and previous year is $2,063 and $1,618. (Total employee benefits- directors' remuneration / number of employees - number of non-emplyee directors )

3. Average employees salaries in current year and previous year is $1,861 and $1,438. (Total employee salaries / number of employees - number of non-emplyee directors )

4. Adjustments of average employees salaries 29.4 %. (Average employee salaries current year - Average employee salaries previous year / Average employee salaries previous year )

5. The supervisors’ remuneration for the years ended December 31, 2021 and 2020 were both $0, due to the establishment of the audit committee.

6. The Company’s policies of salary and remuneration were as follows:

The Company’s compensation for directors including directors’ return, traveling expenses and directors’ remuneration. In accordance with the Company’s Articles of Incorporation, directors’ return

was based on the degree of participant in the operation, value of contribution to the Company and common standard of the industry. Traveling expenses were based on the common standard of

the industry and the attendance of the Board of Directors. Directors’remuneration shall not be higher than 2% of the profit of current year.

The Company's compensation for managers and employees including salary, award and employees’ return were based on the contribution, experience, management performance and responsibility and referred to the standard of the same industry. Managers’ performance examination and salary and remuneration have been reviewed by the remuneration committee and the Board of Directors, and will be checked based on the actual management result and related laws accordingly. Additionally, in accordance with the Company’s Articles of Incorporation, employees’compensation shall be distributed based on 10% to 20% of the profit of the current year.

~79~

Altek Corporation 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 drawndown	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason term financing	Allowance for doubtful accounts	Col	lateral	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

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 Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021 Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares	Book value	Ownership (%)	Fair value
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

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 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) Expressed in thousands of NTD (Except as otherwise indicated)	Notes/accounts receivable(payable) Expressed in thousands of NTD (Except as otherwise indicated)
			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 The same ultimate 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

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

Expressed in thousands of NTD

Altek Corporation

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2021

Table 5

(Except as otherwise indicated)

Companyname	Counterparty	Relationship (Note 1)			Transaction
			General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 2)
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

Information on investees

For the year ended December 31, 2021

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares he	ld 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

Information on investments in Mainland China

Expressed in thousands of NTD (Except as otherwise indicated)

Table 7

For the year ended December 31, 2021

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	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 December 31,2021	Accumulated amount of remittance from Taiwan toMainland China as of December 31,2021	Net profit (loss) of investee for the year ended December 31,2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 4)	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021 Book value of investments in Mainland China as of December 31,2021
					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.

(3)Others.

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 auditors.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Investment amount approved by the Investment Commission of the Ministryof Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed bythe Investment Commission of MOEA
Altek Corporation	$2,482,425	$2,806,023	$5,160,907

Table 7

Altek Corporation 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