ARES — Audit Report / Information 2021

Dec 21, 2021

ARES INTERNATIONAL CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

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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

To the Board of Directors and Shareholders of Ares International Corp.

Opinion

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

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

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other independent auditors, 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 judgement, were of most significance in our audit of the Group’s 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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

Service revenue recognition

Description

Refer to Note 4(24) for accounting policies on service revenue and Note 6(16) for details of service revenue accounts.

The Group recognises service revenue by considering the possibility of incurred cost recovery when unable to reasonably measure the performance obligation result of the service contract. The Group recognises service revenue within the amount of incurred costs when the incurred costs are likely to be recovered before the acceptance by the client. At the time the work performed is accepted by the client, the service revenue for the period is recognised based on the difference between the total contract price and accumulated recognised service revenue. As the timing of revenue recognition of service contract is affected by the accuracy of the timing of client acceptance, service revenue recognition was identified as a key audit matter.

How our audit addressed the matter

The procedures that we have performed in response to specific aspects of the abovementioned key audit matter are summarised as follows:

• A. Obtained an understanding of the internal controls over the service revenue process and assessed the effectiveness of its implementation.

• B. Obtained a summary of service revenue and performed the following audit procedures on contracts which could not be reasonably estimated:

• (a) Service contracts accepted by the client during the year:

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• Sampled and checked the certificate of client acceptance confirmation.

• Verified the total contract price.

• Ascertained whether the date on the certificate of acceptance was consistent with the timing of the recognition of service revenue and the appropriate accounting entry was made.

• (b) Service contracts which have not been accepted by the client during the year:

• Reconciled the amount of input costs with service revenue recognition.

• Sampled and checked the consistency between the input costs and original documents.

– Other matter Scope of the Audit

For the years ended December 31, 2021 and 2020, the financial statements of certain investees accounted for using equity method were audited by other independent auditors whose reports thereon have been furnished to us, and our opinion expressed herein, is based solely on the audit reports of the other independent auditors. The balance of these investments accounted for using equity method amounted to NT$88,867 thousand and NT$62,925 thousand, constituting 6.66% and 4.83% of the consolidated total assets as of December 31, 2021 and 2020, respectively, and total comprehensive income amounted to NT$25,588 thousand and NT$14,621 thousand, constituting 21.67% and 15.72% of the consolidated total comprehensive income for the years then ended, respectively.

Other matter – Parent company only financial reports

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

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory

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Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and 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.

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

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

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

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

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

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

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

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

CPA Lin, Yi-Fan CPA Liao, Fu-Ming

For and on behalf of PricewaterhouseCoopers, Taiwan March 23, 2022

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

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

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) and 8 6(16) 6(3) 6(3) 7 6(4) 8 6(6) 6(7) 6(8) 6(22) 8	December 31, 2021 AMOUNT % $ 552,771 42 283,321 21 87,200 7 - - 152,095 11 - - 1,851 - 30,524 2 55,333 4 1,163,095 87 110,324 8 5,245 - 20,686 2 541 - 27,597 2 7,658 1 172,051 13 $ 1,335,146 100	December 31, 2020	December 31, 2020
		AMOUNT $ 552,771 283,321 87,200 - 152,095 - 1,851 30,524 55,333 1,163,095 110,324 5,245 20,686 541 27,597 7,658 172,051 $ 1,335,146	AMOUNT $ 618,306 286,211 79,030 1,058 109,095 682 1,397 23,686 46,214 1,165,679 86,804 5,809 3,912 533 32,521 7,447 137,026 $ 1,302,705	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortised cost - current 1140 Contract assets - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties, net 1200 Other receivables 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1550 Investments accounted for using the equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				47 22 6 - 8 - - 2 4
				89
				7 - - - 3 1
				11
				100

(Continued)

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(16) $ 141,855 11 $ 175,210 14 264 - - - 6(9) 62,331 5 49,790 4 7 - - 606 - 6(10) 135,256 10 131,907 10 18,776 2 14,358 1 6(12) 5,003 - 8,641 1 16,231 1 3,244 - 379,716 29 383,756 30 4,730 - 756 - 6(11) 131,822 10 146,423 11 136,552 10 147,179 11 516,268 39 530,935 41 6(13) 472,539 35 472,539 36 6(14) 142,878 11 142,965 11 6(15) 68,542 5 59,516 4 6,342 - 9,242 1 132,181 10 90,265 7 ( 7,344) - ( 6,342) - 815,138 61 768,185 59 3,740 - 3,585 - 818,878 61 771,770 59 9 11 $ 1,335,146 100 $ 1,302,705 100	December 31, 2020	December 31, 2020
			%
Current liabilities 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Current lease liabilities 21XX Total current liabilities Non-current liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitents Significant events after the balance sheet date 3X2X Total liabilities and equity			14 - 4 - 10 1 1 -
			30
			- 11
			11
			41
			36 11 4 1 7 -
			59 -
			59
			100

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

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(16) and 7 $ 800,734 100 $ 773,691 100 6(20)(21) and 7( 466,955) ( 59) ( 471,472) ( 61) 333,779 41 302,219 39 6(20)(21) and 7 ( 59,310) ( 7) ( 65,905) ( 8) ( 58,817) ( 7) ( 62,112) ( 8) ( 92,012) ( 12) ( 87,055) ( 11) 6(20) and 12(2)( 176) - ( 4,752) ( 1) ( 210,315) ( 26) ( 219,824) ( 28) 123,464 15 82,395 11 6(17) 3,742 1 6,118 1 6(18) 1,082 - 21,804 3 6(19) ( 13,148) ( 2) ( 12,558) ( 2) 6(8) ( 691) - ( 302) - 6(6) 24,385 3 16,180 2 15,370 2 31,242 4 138,834 17 113,637 15 6(22) ( 23,879) ( 3) ( 15,676) ( 2) $ 114,955 14 $ 97,961 13

4000 Operating revenue 5000 Operating costs 5950 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit loss 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(11) $ 5,893 1 ($ 5,530) ( 1) 6(5) - - ( 406) - 6(6) ( 323) - - - 6(22) ( 1,179) - 1,288 - 4,391 1 ( 4,648) ( 1) ( 1,520) - ( 271) - 6(22) 250 - ( 15) - ( 1,270) - ( 286) - $ 118,076 15 $ 93,027 12 $ 114,532 14 $ 97,753 13 423 - 208 - $ 114,955 14 $ 97,961 13 $ 117,921 15 $ 93,165 12 155 - ( 138) - $ 118,076 15 $ 93,027 12 6(23) $ 2.42 $ 2.07 $ 2.40 $ 2.05

Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial gain (loss) on defined benefit plan 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive loss 8320 Share of other comprehensive loss of associates and joint ventures accounted for using equity method, components of other comprehensive loss that will not be reclassified to profit or loss 8349 Income tax relating to components of other comprehensive (loss) income 8310 Other comprehensive income (loss) that will not be reclassified to profit or loss Other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax relating to components of other comprehensive income (loss) 8360 Other comprehensive loss that will be reclassified to profit or loss 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Total comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES

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

(Expressed in thousands of New Taiwan dollars)

Notes Year ended December 31, 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriations of 2019 earnings 6(15) Legal reserve Special reserve Cash dividends Donated by the shareholders 6(14) Disposal of investments in equity instruments measured at fair value through other comprehensive income 6(5) Balance at December 31, 2020 Year ended December 31, 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriations of 2020 earnings 6(15) Legal reserve Special reserve Cash dividends Donated by the shareholders 6(14) Changes in equity of investment in associates and joint ventures accounted for using equity method 6(14) Balance at December 31, 2021	Notes					Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent			Non-controlling interest		Total equity
			Share capital - common stock	Capital surplus		Retained Earnings			Other Equity Interest			Total
						Legal reserve	Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
			$ 472,539 - - - - - - - - $ 472,539 $ 472,539 - - - - - - - - $ 472,539	$ 142,897 - - - - - - 68 - $ 142,965 $ 142,965 - - - - - - 45 ( 132 ) $ 142,878		$ 51,866 - - - 7,650 - - - - $ 59,516 $ 59,516 - - - 9,026 - - - - $ 68,542	$ 7,708 - - - - 1,534 - - - $ 9,242 $ 9,242 - - - - ( 2,900 ) - - - $ 6,342	$ 76,501 97,753 ( 4,424 ) 93,329 ( 7,650 ) ( 1,534 ) ( 67,316 ) - ( 3,065 ) $ 90,265 $ 90,265 114,532 4,391 118,923 ( 9,026 ) 2,900 ( 70,881 ) - - $ 132,181	($ 4,402 ) - 60 60 - - - - - ($ 4,342 ) ($ 4,342 ) - ( 1,002 ) ( 1,002 ) - - - - - ($ 5,344 )	($ 4,841 ) - ( 224 ) ( 224 ) - - - - 3,065 ($ 2,000 ) ($ 2,000 ) - - - - - - - - ($ 2,000 )	$ 742,268 97,753 ( 4,588 ) 93,165 - - ( 67,316 ) 68 - $ 768,185 $ 768,185 114,532 3,389 117,921 - - ( 70,881 ) 45 ( 132 ) $ 815,138		$ 3,723 208 ( 346 ) ( 138 ) - - - - - $ 3,585 $ 3,585 423 ( 268 ) 155 - - - - - $ 3,740	$ 745,991 97,961 ( 4,934 ) 93,027 - - ( 67,316 ) 68 - $ 771,770 $ 771,770 114,955 3,121 118,076 - - ( 70,881 ) 45 ( 132 ) $ 818,878

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

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED 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) Expected credit loss Depreciation of property, plant and equipment Depreciation of right-of-use assets Amortization Interest income Interest expense Share of profit of associates and joint ventures accounted for using equity method Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Prepayments Other current assets Changes in operating liabilities Contract liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Provisions for liabilities - current Accrued pension liabilities Cash inflow generated from operations Interest received Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2021 2020 $ 138,834 $ 113,637 6(20) and 12(2) 176 4,752 6(7)(20) 2,616 2,563 6(8)(20) 16,979 16,851 6(20) 306 363 6(17) ( 3,742 ) ( 6,118 ) 6(8) 691 302 6(6) ( 24,385 ) ( 16,180 ) ( 1,058 ) ( 390 ) ( 49,230 ) ( 18,460 ) 682 657 ( 571 ) ( 623 ) ( 8,062 ) 2,028 ( 10,929 ) 3,486 ( 33,355 ) 23,729 264 - 12,541 9,633 ( 606 ) ( 2,656 ) 2,251 14,968 ( 3,638 ) 7,540 ( 8,708 ) ( 1,432 ) 31,056 154,650 3,859 7,142 ( 13,766 ) ( 10,836 ) 21,149 150,956

(Continued)

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES CONSOLIDATED 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 financial assets at amortised cost-current Decrease in financial assets at amortised cost- current Financial assets at fair value through other comprehensive income - proceeds from capital reduction Increase in investments using the equity method Dividends received Acquisition of property, plant and equipment Acquisition of intangible assets (Increase) decrease in refundable deposits (shown in other non-current assets) Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Payment of lease liability Cash dividends paid Donated by the shareholders Net cash flows used in financing activities Net (decrease) increase 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 ($ 272,593 ) ($ 277,269 ) 277,293 283,888 6(5) - 1,379 6(6) ( 7,047 ) - 6,561 7,521 6(7) ( 2,054 ) ( 1,353 ) ( 314 ) ( 800 ) ( 211 ) 235 1,635 13,601 6(24) ( 17,483 ) ( 17,409 ) 6(15) ( 70,881 ) ( 67,316 ) 6(14) 45 68 ( 88,319 ) ( 84,657 ) ( 65,535 ) 79,900 618,306 538,406 $ 552,771 $ 618,306

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

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ARES INTERNATIONAL CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

1. HISTORY AND ORGANISATION

Ares International Corp. (hereinafter referred to as the “Company”) was established on December 3, 1980. The Company and subsidiaries (hereinafter referred to as the “Group”) are engaged in the design, sales, lease, maintenance and technology consultation of computer equipment, internet and related software, and analysis, design, modification, installment and maintenance of application software. The Company’s stock was traded at the Taipei Exchange from March 1999, and was listed at the Taiwan Stock Exchange after the application of listing was approved.

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

These consolidated financial statements were authorised for issuance by the Board of Directors on March 23, 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 the FSC effective from 2021 are as follows:

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

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

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

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

the Group

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

New standards, interpretations and amendments endorsed by the FSC follows:	effective from 2022 are as
	Effective date by
	International
	Accounting
New Standards,Interpretations andAmendments	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 on the Group’s financial condition and financial performance based on the Group’s assessment.

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

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

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

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

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

(2) Basis of preparation

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

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

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

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

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

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

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

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

• B. Subsidiaries included in the consolidated financial statements:

Name of Name of Main Business December 31, December 31, Investor Subsidiary Activities 2021 2020 Ares International Corp. APLUSOFT CO., LTD. Computer installation and information software service － － Ares International Corp. ARES GROUP CORP. Investment business 100% 100% Ares International Corp. WELJOIN TECHNOLOGIES LIMITED (BVI) Investment business 100% 100% ARES GROUP CORP. SHARP KEEN MANAGEMENT LIMITED Investment business 100% 100% WELJOIN TECHNOLOGIES LIMITED (BVI) APLUSOFT (SUZHOU) CORPORATION Research, development and sales of business managenment software 95.88% 95.88% Ownership (%)

Description Note Note

Note: APLUSOFT CO., LTD. was dissolved after merging with the Company on October 1, 2020 and shares in WELJOIN TECHNOLOGIES LIMITED (BVI) originally held by the investee were assumed by the Company.

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

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

• E. Significant restrictions: None.

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

(4) Foreign currency translation

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

~18~

recognised in profit or loss in the period in which they arise.

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

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

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

• B. Translation of foreign operations

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

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

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

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

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

(5) Classification of current and non-current items

The Group’s business includes sale of computer equipment and software and system integration design services. The operating cycle lasts more than one year. Therefore, all assets and liabilities

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associated with the sale of computer equipment and software and system integration design services are classified as current or non-current based on the length of the operating cycle. The classification criteria for all other accounts are as follows:

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

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

• (b) Assets held mainly for trading purposes;

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

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

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

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

• (b) Liabilities arising mainly from trading activities;

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

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

(6) Cash equivalents

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

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

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

  • (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets.

  • (b) The assets’ contractual cash flows represent particularly payments of principal and interest.

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

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

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

(8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent particularly payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Subsequently, interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

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

(9) Accounts and notes receivable

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

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

(10) Impairment of financial assets

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

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(11) Derecognition of financial assets

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

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

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

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

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

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

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

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

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(13) Property, plant and equipment

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

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

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

• 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:

Machinery and equipment 3~10 years Transportation equipment 5~6 years Office equipment 3~11 years Leasehold improvements 3~10 years Other equipment 5~11 years

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

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

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability. 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.

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(15) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 5 years.

(16) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. 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.

• (17) 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 short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(18) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or repaid.

(19) Provisions

Provisions (including warranties, etc.) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(20) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

(a) Defined contribution plans

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

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  - (b) Defined benefit plans

     - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

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

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

• C. Termination benefits

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

• D. Employees’ compensation and directors’ and supervisors’ remuneration

  • Employees’ compensation and directors’ and supervisors’ 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.

• (21) 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 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

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

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

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

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

• (22) 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.

• (23) Dividends

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

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(24) Revenue recognition

A. Sales revenue - Sales of software

The Group engages in the research, development and sale of computer software related products. Revenue is measured at the fair value of the consideration received or receivable taking into account business tax, sales returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods is recognised when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably, and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

• B. Services revenue - IT Consulting services

The Group provides business IT management, design, implementation and 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 actual labor hours spent relative to the total estimated labor hours. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

Some contracts include sales and installation services of equipment. The equipment and the installation services provided by the Group are not distinct and are identified to be one performance obligation satisfied over time since the installation services involve significant customisation and modification. The Group recognises revenue on the basis of costs incurred relative to the total estimated costs of that performance obligation. Conversely, the Group recognises revenue at an amount equal to the cost of a good if the good is not distinct and its cost is significant relative to the total expected costs, the customer is expected to obtain control of the good significantly before receiving services related to the good, and the Group procures the good from a third party and is not involved in designing and manufacturing the good by acting as a principal.

The Group’s estimation of revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to a revision of estimates is reflected in profit or loss during the period when the management becomes aware of the changes in circumstances. Revenue from a service contract in which the Group bills a fixed amount for each hour of service

~27~

provided is recognised at the amount to which the Group has the right to issue. While the Company is unable to reasonably measure the result of performance obligations but is able to estimate the recoverable costs incurred arising from satisfying performance obligations, in such case, the Company could only recognise revenue within the amount of costs incurred until the result of performance obligations can be measured reasonably.

• C. Sales revenue - Revenue from licencing intellectual property

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

• (25) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate.

• (26) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION

UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Group has no critical uncertainty of accounting judgements, estimates and assumption.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

• (1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2021 273 $ 307,210 245,288 552,771 $	December31,2020
		366 $ 370,860 247,080
		618,306 $

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

• B. As of December 31, 2021 and 2020, cash and cash equivalents were restricted to the bid bonds and performance guarantee. Please refer to Note 8.

• (2) Financial assets at amortised cost

Items Current items: Time deposits with maturity over three months Pledged time deposits Interest rate range of time deposits	December31,2021 276,936 $ 6,385 283,321 $ 0.1%~2.44%	December31,2020
		281,636 $ 4,575
		286,211 $
		0.1%~2.45%

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

below:
Interest income	Years ended December 31
	2021 2020 2,435 $ 4,051 $

• B. 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 financial assets at fair value through other comprehensive income held by the Group were $283,321 and $286,211, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

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

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(3) Notes and accounts receivable

		December	31,2021		December	31,2020
Notes receivable		$	-		$	1,058
Less: Allowance for uncollectible accounts			-			-
		$	-		$	1,058
Accounts receivable		$	159,327		$	116,166
Less: Allowance for uncollectible accounts	(		7,232)	(		7,071)
		$	152,095		$	109,095

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

Not past due Up to 90 days 91 to 180 days 181 to 271 days Over 271 days Not past due Up to 90 days 91 to 180 days 181 to 271 days Over 271 days	December	31, 2021
	Accountsreceivable 141,614 $ 7,810 2,415 948 6,540 159,327 $ December	Notesreceivable
		- $ - - - -
		- $
		31, 2020
	Accountsreceivable 96,416 $ 11,297 1,386 - 7,067 116,166 $	Notesreceivable 1,058 $ - - - -
		1,058 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2021 and 2020, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $103,020.

• C. The Group has no notes and accounts receivable pledged to others.

• D. The Group has no discounted notes receivable.

• E. The Group does not hold any collateral as security.

• F. 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 notes and accounts receivable held by the Group were $152,095 and $110,153, respectively.

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

(4) Prepayments

Prepayments
Prepaid project cost Other prepayments	December31,2021 27,221 $ 3,303 30,524 $	December31,2020
		20,485 $ 3,201
		23,686 $

(5) Financial assets at fair value through other comprehensive income-non-current

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

Items December 31, 2021 December 31, 2020
----- End of picture text -----

Items		Decem	ber 31, 2021		Decem	ber31,2020
Non-current items:
Equity instruments
Unlisted stocks		$	2,000		$	2,000
Valuation adjustment	(		2,000)	(		2,000)
		$	-		$	-

• A. The Group has elected to classify the equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $0 as at December 31, 2021 and 2020.

• B. For the years ended December 31, 2021 and 2020, the Group recognised the amount of $0 and ($406), respectively, in profit or loss and other comprehensive income.

• C. The Group received proceeds from capital reduction of the equity instruments in the amount of $1,379 in June 2020.

• D. Equity instruments that the Group invested in were liquidated as approved by the shareholders in October 2020. The Group reclassified cumulative valuation losses amounting to $3,065 to retained earnings due to derecognition.

• E. The Group has no financial assets at fair value through other comprehensive income pledged to others.

(6) Investments accounted for using the equity method

Associates: BLITZ IT CONSULTANTS PTE. LTD. ARES INTERNATIONAL (THAILAND) CO., LTD. ARGO INTERNATIONAL CORPORATION M-Power Information Co., Ltd.	December31,2021 16,182 $ 5,275 26,324 62,543 110,324 $	December31,2020
		15,970 $ 7,909 22,260 40,665
		86,804 $

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• A. The basic information of the associates of the Group is as follows:

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

Principal Ownership (%)
place December 31, December 31, Nature of Method of
Company name of business 2021 2020 relationship measurement
----- End of picture text -----

Companyname	place of business	December 31, 2021	December 31, 2020	Nature of relationship	Method of measurement
BLITZ IT	Singapore	25.00%	25.00%	-	Equity method
CONSULTANTS PTE. LTD.
ARES INTERNATIONAL	Thailand	49.00%	49.00%	Note 2	Equity method
(THAILAND) CO., LTD.
ARGO INTERNATIONAL	Taiwan	34.83%	34.83%	Note 1	Equity method
CORPORATION
M-Power Information Co., Ltd.	Taiwan	23.04%	24.39%	Note 2	Equity method

Note 1: The Group made purchases from this associate company.

Note 2: The Group had sales to this associate company.

• B. The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarised below:

As of December 31, 2021 and 2020, the carrying amounts of the Group’s individually immaterial associates amounted to $110,324 and $86,804, respectively.

		Years ended	Years ended	December31
		2021		2020
Profit for the year from continuing operations		$	24,385	16,180 $
Other comprehensive loss, net of tax	(		323)	-
Total comprehensive income		$	24,062	16,180 $

• C. For the years ended December 31, 2021 and 2020, the Group recognised share of profit of associates in the amounts of $24,062 and $16,180, respectively, which were valued based on the financial statements audited by independent auditors appointed by the respective companies.

• D. The Group is the single largest shareholder of ARGO INTERNATIONAL CORPORATION and M-Power Information Co., Ltd. with a 34.83% and 23.04% equity interest, respectively. As the Group has no current ability to direct the relevant activities of ARGO INTERNATIONAL CORPORATION and M-Power Information Co., Ltd., the Group has no control, but only has significant influence, over the investees.

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(7) Property, plant and equipment

		Machinery and	Machinery and		Transportation	Transportation			Office			Leasehold			Other
			equipment			equipment			equipment		improvements				facilities			Total
At January 1, 2021
Cost		$	7,723		$	12,190		$	1,681		$	5,335		$	918		$	27,847
Accumulated depreciation	(		5,960)	(		8,953)	(		1,500)	(		5,263)	(		362)	(		22,038)
		$	1,763		$	3,237		$	181		$	72		$	556		$	5,809
2021
At January 1		$	1,763		$	3,237		$	181		$	72		$	556		$	5,809
Additions			1,642			-			30			382			-			2,054
Depreciation charges	(		760)	(		1,453)	(		150)	(		95)	(		158)	(		2,616)
Net exchange differences	(		2)			-			-			-			-	(		2)
At December 31		$	2,643		$	1,784		$	61		$	359		$	398		$	5,245
At December 31, 2021
Cost		$	9,237		$	12,190		$	1,707		$	5,717		$	918		$	29,769
Accumulated depreciation	(		6,594)	(		10,406)	(		1,646)	(		5,358)	(		520)	(		24,524)
		$	2,643		$	1,784		$	61		$	359		$	398		$	5,245

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		Machinery and	Machinery and		Transportation	Transportation			Office			Leasehold			Other
			equipment			equipment			equipment		improvements				facilities			Total
At January 1, 2020
Cost		$	9,914		$	12,190		$	1,681		$	5,335		$	1,014		$	30,134
Accumulated depreciation	(		9,150)	(		7,348)	(		1,355)	(		4,981)	(		283)	(		23,117)
		$	764		$	4,842		$	326		$	354		$	731		$	7,017
2020
At January 1		$	764		$	4,842		$	326		$	354		$	731		$	7,017
Additions			1,353			-			-			-			-			1,353
Depreciation charges	(		356)	(		1,605)	(		145)	(		282)	(		175)	(		2,563)
Net exchange differences			2			-			-			-			-			2
At December 31		$	1,763		$	3,237		$	181		$	72		$	556		$	5,809
At December 31, 2020
Cost		$	7,723		$	12,190		$	1,681		$	5,335		$	918		$	27,847
Accumulated depreciation	(		5,960)	(		8,953)	(		1,500)	(		5,263)	(		362)	(		22,038)
		$	1,763		$	3,237		$	181		$	72		$	556		$	5,809

A. The Group has no interest capitalization.

B. The Group has no property, plant and equipment pledged to others.

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－ (8) Leasing arrangements lessee

• A. The Group’s leased assets are buildings. Rental contracts are typically made for periods of 1 to 3 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. Right-of-use assets are not recognised for short-term leases with a lease term of 12 months or less for part of leased buildings of the Group.

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

Buildings Buildings	December 31, 2021 December 31, 2020 Carrying amount Carrying amount 20,686 $ 3,912 $ Years ended December 31	December 31, 2021 December 31, 2020 Carrying amount Carrying amount 20,686 $ 3,912 $ Years ended December 31
	2021 Depreciation charge 16,979 $	2020
		Depreciationcharge
		16,851 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $33,768 and $2,972, respectively.

• E. Information on profit or loss not recognised as depreciation charge but in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Years ended December31	Years ended December31
	2021 691 $ 1,447 2,138 $	2020
		302 $ 872
		1,174 $

• F. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $18,930 and $18,281, respectively.

• G. The Group has applied the practical expedient to “Covid-19-related rent concessions”, and recognised the gain from changes in lease payments arising from the rent concessions amounting to $327 by decreasing depreciation charge of right-of-use assets.

(9) Accounts payable

Accounts payable
Accounts payable Project costs payable	December31,2021 11,798 $ 50,533 62,331 $	December31,2020
		12,286 $ 37,504
		49,790 $

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(10) Other payables

Wages and bonus payable Labor and health insurance fees payable Employees’compensation and directors’ and supervisors’ remuneration payable Other accrued expenses	December31,2021 91,336 $ 4,038 18,825 21,057 135,256 $	December31,2020
		93,299 $ 3,649 15,380 19,579
		131,907 $

(11) Pensions

A. Defined benefit plan

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

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

	December	31,2021	December	31,2020
Present value of defined benefit obligations	($	187,789)	($	197,858)
Fair value of plan assets		55,967		51,435
Net defined benefit liability	($	131,822)	($	146,423)

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

		Present value of	Present value of
			defined benefit			Fair value of			Net defined
			obligations			planassets		benefitliability
2021
Balance at January 1		$	197,858		$	51,435		$	146,423
Current service cost			2,508			-			2,508
Interest cost			594			-			594
Interest income			-			154	(		154)
			200,960			51,589			149,371
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)
Change in demographic
assumptions			122			-			122
Change in financial ssumptions	(		5,272)			-	(		5,272)
Experience adjustments			12			755	(		743)
	(		5,138)			755	(		5,893)
Pension fund contribution			-			11,567	(		11,567)
Paid pension	(		8,033)	(		7,944)	(		89)
Balance at December 31		$	187,789		$	55,967		$	131,822
		Present value of
			defined benefit			Fair value of			Net defined
			obligations			planassets		benefitliability
2020
Balance at January 1		$	186,935		$	44,609		$	142,326
Current service cost			2,463			-			2,463
Interest cost			1,309			-			1,309
Interest income			-			312	(		312)
			190,707			44,921			145,786
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)
Change in financial ssumptions			5,806			-			5,806
Experience adjustments			1,345			1,621	(		276)
			7,151			1,621			5,530
Pension fund contribution			-			4,893	(		4,893)
Balance at December 31		$	197,858		$	51,435		$	146,423

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s 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

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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-thecounter, 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 has no right to participate in managing and operating that fund and hence the Company is 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. (e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	2021 2020 0.70% 0.30% 4.00% 4.00% Years endedDecember31	2021 2020 0.70% 0.30% 4.00% 4.00% Years endedDecember31
		0.30%
		4.00%

Assumptions regarding future mortality experience for the years ended December 31, 2021 and 2020 are set based on the 6th and the 5th Taiwan Standard Ordinary Experience Mortality Table, respectively.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

		Discountrate	Discountrate			Future salary increases	Future salary increases	Future salary increases
	Increase	0.25%	Decrease	0.25%	Increase0.25%		Decrease	0.25%
December 31, 2021
Effect on present value of
defined benefit obligation	($	3,088)	$	3,188	$	2,720	($	2,654)
December 31, 2020
Effect on present value of
defined benefit obligation	($	3,665)	$	3,790	$	3,255	($	3,171)

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.

• (f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $1,829.

• (g) As of December 31, 2021, the weighted average duration of the retirement plan is 7 years.

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• B. Defined contribution plans:

• (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount no less than 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 the defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $12,733 and $12,293, respectively.

• (b) The Company’s mainland China subsidiary, APLUSOFT (SUZHOU) CORPORATION, has a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of employees’ monthly salaries and wages. The contribution percentage was 7% for the years ended December 31, 2021 and 2020. Other than the monthly contributions, the Group has no further obligations. The pension costs under the defined contribution pension plan of APLUSOFT (SUZHOU) CORPORATION for the years ended December 31, 2021 and 2020 were $282 and $310, respectively.

(12) Provisions

			Warranty	Warranty	Warranty
		2021			2020
Balance at January 1		$	8,641		$	1,101
Additional provisions			5,756		10,411
Used during the year	(		3,183)	(		1,804)
Unused amounts reversed	(		6,211)	(		1,067)
Balance at December 31		$	5,003		$	8,641
Analysis of total provisions:
		December31,	2021		December31,	2020
Current		$	5,003		$	8,641

The Group provides warranties on project contract. Provision for warranty is estimated based on historical warranty data.

(13) Share capital

As of December 31, 2021, the Company’s authorised capital was $1,156,000 (including 10 million shares reserved for employee stock options and 20 million shares reserved for convertible bonds issued by the Company), and the paid-in capital was $472,539, consisting of 47,254 thousand shares of ordinary stock, with a par value of $10 (in dollars) per share.

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(14) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of 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. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

At January 1 Recognition of change in equity of associates in proportion to the Group's shareholding interest Donated by the shareholders (Note) At December 31 At January 1 Donated by the shareholders (Note) At December 31	Share Treasury share Donated assets Changes in equity of associates and joint ventures accounted for using equity premium transactions received method Total 92,839 $ 48,738 $ 209 $ 1,179 $ 142,965 $ - - - 132) ( 132) ( - - 45 - 45 92,839 $ 48,738 $ 254 $ 1,047 $ 142,878 $ 2021 Share Treasury share Donated assets Changes in equity of associates and joint ventures accounted for using equity premium transactions received method Total 92,839 $ 48,738 $ 141 $ 1,179 $ 142,897 $ - - 68 - 68 92,839 $ 48,738 $ 209 $ 1,179 $ 142,965 $ 2020	Share Treasury share Donated assets Changes in equity of associates and joint ventures accounted for using equity premium transactions received method Total 92,839 $ 48,738 $ 209 $ 1,179 $ 142,965 $ - - - 132) ( 132) ( - - 45 - 45 92,839 $ 48,738 $ 254 $ 1,047 $ 142,878 $ 2021 Share Treasury share Donated assets Changes in equity of associates and joint ventures accounted for using equity premium transactions received method Total 92,839 $ 48,738 $ 141 $ 1,179 $ 142,897 $ - - 68 - 68 92,839 $ 48,738 $ 209 $ 1,179 $ 142,965 $ 2020
	Share Treasury share Donated assets premium transactions received 92,839 $ 48,738 $ 141 $ - - 68 92,839 $ 48,738 $ 209 $	Changes in equity of associates and joint ventures accounted for using equity method 1,179 $ - 1,179 $

Note: Capital surplus arising from donation pertain to unclaimed dividends over 5 years past due.

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(15) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be distributed in the following methods and order:

• (a) Pay all taxes.

• (b) Offset prior years’ operating losses.

• (c) 10% of the remaining amount shall be set aside as legal reserve.

• (d) Set aside or reverse a special reserve in accordance with related laws.

  • The remaining earnings shall be distributed as dividends to shareholders which shall be proposed by the Board of Directors and resolved by the shareholders, The Board of Directors may decide not to distribute earnings for operation needs.

• B. As the Company is engaged in information technology, which is a rapidly advance and growing market, the dividend policy of the Company is based on the Company’s capital expenditure requirement and optimal financial plan for long-term operations. When the Board of Directors propose the distribution of retained earnings after deducting (a)~(d) above, the Board of Directors will propose the distribution of cash dividends and share dividends based on the operating requirements. Cash dividends shall comprise not less than 10% of total dividends distributed. However, the proportion of cash dividend could be adjusted based on the operating situation of current year.

• 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 distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. 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.

• E. Distribution of retained earnings:

• (a) On July 30, 2021 and June 19, 2020, the shareholders during their meeting resolved the distribution of the 2020 and 2019 retained earnings, respectively. The distribution of retained earnings is as follows:

~41~

Dividend per share Amount (indollars) Legal reserve 9,026 $ (Reversal of) appropriation for special reserve 2,900) ( Cash dividends 70,881 1.50 $ YearendedDecember31,2020	Dividend per share Amount (indollars) 7,650 $ 1,534 67,316 1.42 $ YearendedDecember31,2019

• (b) On March 23, 2022, the shareholders during their meeting resolved the distribution of 2021 retained earnings as follows:

Legal reserve Special reserve Cash dividends	Dividend per share Amount (in dollars) 11,892 $ 1,002 106,029 2.24 $ YearendedDecember31,2021

As of March 23, 2022, abovementioned distribution of 2021 retained earnings has not yet been resolved at the stockholders’ meeting.

(16) Operating revenue

Operating revenue
Revenue from contracts with customers Sales revenue Services revenue	Years ended December31
	2021 34,131 $ 766,603 800,734 $	2020
		54,809 $ 718,882 773,691 $

A. Disaggregation of revenue from contracts with customers

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

Year ended December31,2021(Note) Total segment revenue Revenue from external customer contracts Inter-segment Timing of revenue recognition At a point in time Over time	Asia 89,417 $ 17,808 107,225 $ 8,096 $ 81,321 89,417 $	America 5,670 $ - 5,670 $ - $ 5,670 5,670 $	Taiwan 699,214 $ - 699,214 $ 25,945 $ 673,269 699,214 $	Others 6,433 $ - 6,433 $ 90 $ 6,343 6,433 $	Total
					800,734 $ 17,808
					818,542 $
					34,131 $ 766,603
					800,734 $

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Year ended December31,2020 (Note) Total segment revenue Revenue from external customer contracts Inter-segment Timing of revenue recognition At a point in time Over time	Asia 103,713 $ 14,085 117,798 $ 3,659 $ 100,054 103,713 $	America 397 $ - 397 $ 14 $ 383 397 $	Taiwan 668,286 $ - 668,286 $ 51,136 $ 617,150 668,286 $	Others 1,295 $ - 1,295 $ - $ 1,295 1,295 $	Total
					773,691 $ 14,085
					787,776 $
					54,809 $ 718,882
					773,691 $

Note: Segmental information is provided in Note 14.

B. Contract assets and liabilities

• (a) The Group has recognised the following revenue-related contract assets and liabilities:

Contract assets - customer contract Contract liabilities - advance receipts from customers	December31,2021 87,200 $ 141,855 $	December 31, 2020 January 1, 2020 79,030 $ 72,065 $ 175,210 $ 151,481 $

• (b) Revenue recognised that was included in the contract liability balance at the beginning of the

year

Revenue recognised that was included in the contract liabilities balance at the beginning of the year Advance receipts	Years ended December31	Years ended December31
	2021 110,720 $	2020
		65,763 $

The Group does not expect to have any contracts wherein the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year or contracts that are billed in accordance with actual service hour. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

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(17) Interest income

		Years ended	December31	December31
		2021		2020
Interest income from bank deposits	$	1,307	$	2,067
Interest income from financial assets measured at
amortised cost		2,435		4,051
	$	3,742	$	6,118

(18) Other income

Commission income Government grant income (Note) Other grant income Other income	2021 2020 374 $ 592 $ - 17,471 - 2,997 708 744 1,082 $ 21,804 $ Years endedDecember31

Note: For the year ended December 31, 2020, the Group received government grant income of $17,471 from the Ministry of Economic Affairs as eligible for the ‘Special Act for Relief and Revitalization Measures for Industries Affected by COVID-19 Handled by the Ministry of Economic Affairs’.

(19) Other gains and losses

Other gains and losses
		Years ended	December31
		2021	2020
Foreign exchange losses	($	12,884)	($	12,359)
Miscellaneous disbursements	(	264)	(	199)
	($	13,148)	($	12,558)

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(20) Expenses by nature

Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Amortization Operating lease payments Service fees Outsourcing software Expected credit loss Other expenses Cost of sales Operating costs and expenses	2021 2020 427,017 $ 414,976 $ 2,616 2,563 16,979 16,851 306 363 1,447 872 12,128 7,844 172,104 169,731 176 4,752 18,348 29,704 26,149 43,640 677,270 $ 691,296 $ Years endedDecember31	2021 2020 427,017 $ 414,976 $ 2,616 2,563 16,979 16,851 306 363 1,447 872 12,128 7,844 172,104 169,731 176 4,752 18,348 29,704 26,149 43,640 677,270 $ 691,296 $ Years endedDecember31
		691,296 $

(21) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Years ended December 31	Years ended December 31
	2021 364,285 $ 29,276 15,963 17,493 427,017 $	2020
		355,837 $ 26,755 16,063 16,321
		414,976 $

As of December 31, 2021 and 2020, the Group had 307 and 311 employees, respectively.

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 5% and not higher than 15% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.

• B. For the years ended December 31, 2021 and 2020, employees’ compensation was accrued at $14,119 and $11,535, respectively; while directors’ and supervisors’ remuneration was accrued at $4,706 and $3,845, respectively. The aforementioned amounts were recognised in salary expenses.

• C. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 9% and 3% of distributable profit of current year for the year ended December 31, 2021, respectively. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $14,119 and $4,706, respectively, and will be distributed in the form of cash.

~45~

Employees’ compensation and directors’ and supervisors’ remuneration for 2020 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2020 financial statements.

Information about employees’ compensation and directors’ and supervisors’ 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.

(22) Income tax

A. Income tax expense

• (a) Components of income tax expense:

ome tax expense Components of income tax expense:
Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Prior year income tax under estimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	Years ended December 31
	2021 18,404 $ 663 817 19,884 3,995 23,879 $	2020
		15,088 $ - 473
		15,561 115
		15,676 $

• (b) The income tax (charge)/credit relating to components of other comprehensive income and loss is as follows:

loss is as follows:
		Years	ended	December 31
		2021			2020
Remeasurement of defined benefit obligations		$	1,179	($	1,106)
Changes in fair value of financial assets at fair
value through other comprehensive income			-	(	182)
Currency translation differences	(		250)		15

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B. Reconciliation between income tax expense and accounting profit:

Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:	Reconciliation between income tax expense and accounting profit:
Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows: 2021 2020 Tax calculated based on profit before tax and statutory tax rate (Note) 26,483 $ 22,540 $ Tax exempt income by tax regulation 5,091) ( 7,522) ( Change in assessment of realisation of deferred tax assets 121) ( 64 Taxable loss not recognised as deferred tax assets 1,128 121 Prior year income tax under estimation 817 473 Tax on undistributed surplus earnings 663 - Income tax expense 23,879 $ 15,676 $ Years endedDecember31 Recognised in Recognised in other comprehensive Recognised in At January 1 profit or loss income equity At December 31 Temporary differences: －Deferred tax assets: Warranty cost 1,728 $ 728) ($ - $ - $ 1,000 $ Allowance for bad debts in excess of allowable limit 411 8) ( - - 403 Unrealised exchange loss 632 417) ( - - 215 Unappropriated pensions 23,239 1,741) ( 1,179) ( - 20,319 Unused annual leave 1,918 450 - - 2,368 Loss on investment in foreign companies 4,593 1,551) ( 250 - 3,292 32,521 $ 3,995) ($ 929) ($ - $ 27,597 $ 2021
		At January 1	Recognised in profit or loss	Recognised in other comprehensive income		Recognised in equity
		1,728 $ 411 632 23,239 1,918 4,593 32,521 $	728) ($ 8) ( 417) ( 1,741) ( 450 1,551) ( 3,995) ($	- $ - - 1,179) ( - 250 929) ($		- $ - - - - - - $		1,000 $ 403 215 20,319 2,368 3,292 27,597 $

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

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Temporary differences: －Deferred tax assets: Warranty cost Allowance for bad debts in excess of allowable limit Unrealised impairment loss on financial assets Unrealised exchange loss Unappropriated pensions Unused annual leave Loss on investment in foreign companies		At January 1	Recognised in Recognised in other comprehensive profit or loss income 1,508 $ - $ 287 - 345) ( 182 1,380) ( - 286) ( 1,106 354 - 253) ( 15) ( 115) ($ 1,273 $ 2020	Recognised in equity - $ - - - - - - - $	At December 31 1,728 $ 411 - 632 23,239 1,918 4,593 32,521 $
		220 $ 124 163 2,012 22,419 1,564 4,861 31,363 $

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

December 31, 2021

Year incurred 2017 2018 2019 2020 2021	Amount filed/ assessed Amount filed Amount filed Amount filed Assessed Estimated	Unused amount 6,409 $ 6,102 2,365 2,060 7,519 24,455 $	Unrecognised deferred tax assets 6,409 $ 6,102 2,365 2,060 7,519 24,455 $	Expiry year
				2022 2023 2024 2025 2026

December 31, 2020

Year incurred 2017 2018 2019 2020	Amount filed/ assessed Amount filed Amount filed Assessed Estimated	Unused amount 6,409 $ 6,102 2,365 424 15,300 $	Unrecognised deferred tax assets 6,409 $ 6,102 2,365 424 15,300 $	Expiry year
				2022 2023 2024 2025

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• E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

Unrealised impairment loss	December31,2021 December31,2020 400 $ 400 $

• F. As of December 31, 2021, the Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

• G. ARES GROUP CORP., WELJOIN TECHNOLOGIES LIMITED (BVI) and SHARP KEEN MANAGEMENT LIMITED are companies that were established in Seychelles and British Virgin Islands, respectively. These companies have no income tax.

• (23) 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 Employees' compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Earnings per share Amount aftertax (sharesinthousands) (indollars) 114,532 $ 47,254 2.42 $ 114,532 $ 47,254 - 565 114,532 $ 47,819 2.40 $ YearendedDecember31,2021
		2.42 $
		2.40 $

~49~

				Year ended December31,	Year ended December31,	Year ended December31,	Year ended December31,	Year ended December31,	2020
					Weighted average
					number of		ordinary
					shares outstanding				Earnings per share
		Amount after		tax	(shares in	thousands)				(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent		$	97,753					47,254	$		2.07
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent		$	97,753					47,254
Assumed conversion of all
dilutive potential ordinary
shares
Employees' compensation				-				446
Profit attributable to ordinary
shareholders of the parent
plus assumed conversion of
all dilutive potential
ordinary shares		$	97,753					47,700	$		2.05
Changes in liabilities from financing activities
			2021						2020
				Liabilities from						Liabilities from
					financing						financing
	Leaseliabilities			activities-gross		Leaseliabilities				activities-gross
At January 1		$	4,000	$	4,000		$	18,462		$	18,462
Changes in cash flow from
financing activities	(		17,483)	(	17,483)	(		17,409)		(	17,409)
Impact of changes in foreign
exchange rate	(		15)	(	15)	(			327)	(	327)
Changes in other non-cash items			34,459		34,459			3,274			3,274
At December 31		$	20,961	$	20,961		$	4,000		$	4,000

(24) Changes in liabilities from financing activities

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company ARGO INTERNATIONAL CORPORATION Associate M-Power Information Co., Ltd. Associate ARES INTERNATIONAL (THAILAND) CO., LTD. Associate MiTAC INC. Key management SHUTTLE INC. Other related party

(2) Significant related party transactions

A. Operating revenue

		Years ended	December 31	December 31
		2021		2020
Sales of goods:
-Associates	$	-	$	650
-Other related parties		45		689
-Key management		876		262
	$	921	$	1,601

Most of the transactions in relation to sales, services and maintenance made with related parties are separate cases, thus the transaction prices are determined based on mutual agreement. Except for the payment term of 60 days after monthly billings, other terms would be available to third parties.

B. Purchases

Purchases
Purchases of goods: -Associates Purchases of services: -Associates	Years endedDecember31
	2021 45 $ 10,420 10,465 $	2020
		1,292 $ 17,908
		19,200 $

(a) The Group’s purchases are made for each system integration projects and are only purchased from related parties. Therefore, the purchase price is determined based on mutual agreement. Except for the payment term of 60 days after monthly billings, other terms would be available to third parties.

• (b) Most of the transactions in relation to services and maintenance made with related parties are separate cases, thus the transaction prices are determined based on mutual agreement. Except for the payment term of 60 days after monthly billings, other terms would be available to third parties.

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C. Receivables from related parties

Receivables from related parties
Payables to related parties -ARGO INTERNATIONAL CORPORATION Accounts receivable -ARGO INTERNATIONAL CORPORATION -M-Power Information Co., Ltd. Accounts payable	December31,2021 - $ December31,2021 - $ - - $	December31,2020 682 $
		December31,2020
		532 $ 74
		606 $

• D. Payables to related parties

E. Property transactions:

Acquisition of financial assets

Year ended December 31, 2021 Accounts No. of shares Objects Consideration Investment Common stock Associates accounted for using 414,549 $ 7,074 (Note) the equity method

• the cash capital increase of associates with cash in the amount of $7,047 on October 1, 2021 and acquired 414,549 shares based on the shareholding ratio.

• F. In 2021 and 2018, the Group entered into a three-year Argo ERP maintenance contract with an associate in the amount of $748 and $720, respectively. The Group recognised $249 and $240 in operating expenses for the years ended December 31, 2021 and 2020, respectively..

• G. The Group paid the service fee to an associate. For the years ended December 31, 2021 and 2020, operating expense was recognised amounting to $51 and $98, respectively.

(3) Key management compensation

Key management compensation
Salaries and other short-term employees’ benefits	Years ended December31
	2021 53,048 $	2020
		56,636 $

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8. PLEDGED ASSETS

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

==> picture [503 x 149] intentionally omitted <==

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

Book value
Pledged asset December 31, 2021 December 31, 2020 Purpose
Time deposits $ 6,385 $ 4,575 Bid bond
(shown as financial assets
at amortised cost - current)
Guarantee deposits paid 55,333 46,214 Bid bond and
(shown as other current assets) performance bond
Guarantee deposits paid Guarantees
(shown as other non-current assets) 7,658 7,447 provided for leasing
$ 69,376 $ 58,236
----- End of picture text -----

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

• A. Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows:

December31,2021 Software products 3,388 $	December31,2020
	9,311 $

• B. As of December 31, 2021 and 2020, the Group issued promissory notes amounting to $240 for the execution of contract projects.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

On March 23, 2022, the Group’s Board of Directors proposed for the distribution of 2021 retained earnings.

Please refer to Note 6(15) for details.

12. OTHERS

(1) Capital management

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

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(including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

During the year ended December 31, 2021, the Group’s strategy, which was unchanged from 2020, was to maintain the gearing ratio as low as possible.

(2) Financial instruments

A. Financial instruments by category

Financial instruments by category
Financial assets Financial assets at fair value through other comprehensive income Financial assets at amortised cost/Loans and receivables Cash and cash equivalents Current financial assets at amortised cost Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Guarantee deposits paid (shown as other current assets) Guarantee deposits paid (shown as other non- current assets) Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable Accounts payable to related parties Other payables Lease liabilities	December31,2021 552,771 $ 283,321 - 152,095 - 1,851 55,333 7,658 1,053,029 $ December31,2021 264 $ 62,331 - 135,256 20,961 218,812 $	December31,2020
		618,306 $ 286,211 1,058 109,095 682 1,397 46,214 7,447
		1,070,410 $
		December31,2020
		- $ 49,790 606 131,907 4,000
		186,303 $

B. Financial risk management policies

The Group’s financial risks are primarily risks associated with its investments in financial instruments and foreign exchange risk arising from foreign-currency transactions. The Company uses the most rigorous controls to manage the financial risks from investments in various financial products. Each investment is assessed comprehensively, taking into account market risk, credit risk, liquidity risk and cash flow risk, with the goal of choosing the investment with the smallest risk. According to our policy goals of risk management, the Group manages its foreign

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exchange risk from foreign-currency transactions by optimizing our risk exposure and maintaining an appropriate level of exposure to liquidity risk, thus achieving the best possible hedging strategy.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

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

• ii. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.

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

Foreign currency amount Exchange (inthousands) rate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 8,855 $ 27.68 HKD:NTD 16,464 3.55 AUD:NTD 481 20.08 EUR:NTD 114 31.32 RMB:NTD 18,578 4.34 USD:RMB 173 6.37 RMB:USD 2,751 0.16 Non-monetary items USD:NTD 585 27.68 THB:NTD 6,320 0.83 December31,2021	December31,2021	December31,2021
		Exchange rate 27.68 3.55 20.08 31.32 4.34 6.37 0.16 27.68 0.83	Book value (NTD)
			245,106 $ 58,447 9,658 3,570 80,629 4,783 12,184 16,182 5,275

~55~

==> picture [430 x 253] intentionally omitted <==

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

December 31, 2020
Foreign currency
amount Exchange Book value
(in thousands) rate (NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD $ 7,981 28.48 $ 227,299
HKD:NTD 12,809 3.67 47,009
AUD:NTD 480 21.95 10,536
EUR:NTD 114 35.02 3,992
RMB:NTD 22,502 4.38 98,559
USD:RMB 108 6.52 3,084
RMB:USD 1,758 0.15 7,510
Non-monetary items
USD:NTD 561 28.48 15,970
THB:NTD 8,276 0.96 7,909
----- End of picture text -----

• iv. The total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020, amounted to ($12,844) and ($12,359), respectively.

• v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

Analysis of foreign currency market variation:	risk arising from significant foreign exchange	risk arising from significant foreign exchange	risk arising from significant foreign exchange
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD HKD:NTD AUD:NTD EUR:NTD RMB:NTD USD:RMB RMB:USD Non-monetary items USD:NTD THB:NTD	Year ended December31,2021
	Sensitivity analysis
	Degree of variation 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%	Effect on profit or loss 2,451 $ 584 97 36 806 48 122 - -	Effect on other comprehensive income
			- $ - - - - - - 162 53

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==> picture [430 x 282] intentionally omitted <==

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

Year ended December 31, 2020
Sensitivity analysis
Effect on other
Degree of Effect on comprehensive
variation profit or loss income
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD 1.00% $ 2,273 $ -
HKD:NTD 1.00% 470 -
AUD:NTD 1.00% 105 -
EUR:NTD 1.00% 40 -
RMB:NTD 1.00% 986 -
USD:RMB 1.00% 31
RMB:USD 1.00% 75
Financial liabilities
Non-monetary items
USD:NTD 1.00% - 160
THB:NTD 1.00% - 79
----- End of picture text -----

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise domestic beneficiary certificates and equity instrument issued by foreign listed companies. The prices of equity securities would change due to the variation of the future value of investee companies. If the prices of these equity securities had increased or decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have increased or decreased both by $0, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

• (b) Credit risk

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

• ii. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard

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payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumption under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.

• v. The Group classifies customers’ accounts receivable and contract assets in accordance with customer types. The Group applies the simplified approach using the provision matrix, loss rate methodology to estimate expected credit loss.

• vi. 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.

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

Group1 December 31, 2021 Expected loss rate Total book value Loss allowance	Not past due 0% 121,664 $ 4 $	Up to 90 days 0.05%~ 0.26% 7,810 $ 6 $	91-180 days 0.56%~ 5.27% 2,415 $ 54 $	181-270 days 14.99%~ 58.33% 948 $ 628 $	Over 270 days 100% 6,540 $ 6,540 $	Total
						139,377 $ 7,232 $

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Group1 December 31, 2020 Expected loss rate Total book value Loss allowance December 31, 2021 Expected loss rate Total book value Loss allowance December 31, 2020 Expected loss rate Total book value Loss allowance	Not Up to 90 91-180 181-270 Over 270 past due days days days days Total 0% 0.01%~ 0.04% 0.07%~ 0.22% 0.66%~ 16.23% 100% 78,472 $ 11,297 $ 1,386 $ - $ 7,067 $ 98,222 $ 1 $ 2 $ 1 $ - $ 7,067 $ 7,071 $ Group 2 Group 3 Total 0% 0% 17,245 $ 2,705 $ 19,950 $ - $ - $ - $ Group2 Group 3 Total 0% 0% 11,273 $ 6,671 $ 17,944 $ - $ - $ - $

Group 1: General business

Group 2: Government-owned corporation

Group 3: Government organisations

As of December 31, 2021 and 2020, contract assets amounted to $87,200 and $79,030, respectively, and loss allowance was $0 if measured at expected credit loss rate of 0%.

• ix. Movements in relation to the group applying the simplified approach to provide loss allowance for accounts receivable and contract assets are as follows:

Accounts receivable At January 1 7,071 $ Impairment loss 176 Effects of foreign exchange 15) ( At December 31 7,232 $		2021
		Contract assets - $ - - - $

At January 1 Impairment loss Effects of foreign exchange At December 31		2020
	Accounts receivable 2,255 $ 4,752 64 7,071 $	Contract assets - $ - - - $	Notes receivable - $ - - - $	Total
				2,255 $ 4,752 64
				7,071 $

~59~

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• ii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities: December 31, 2021 Notes payable Accounts payable Other payables Lease liabilities Non-derivative financial liabilities: December 31, 2020 Accounts payable Accounts payable to related parties Other payables Lease liabilities	Less than Between 3 3 months months and 2 years 264 $ - $ 62,239 92 113,012 22,244 4,346 15,722 Less than Between 3 3months months and 2 years 48,774 $ 1,016 $ 606 - 113,234 18,673 2,096 1,942	Between 2 and 5 years
		- $ - - 1,427 Between 2 and 5 years
		- $ - - -

(3) Fair value information

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

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

• 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.

• B. Financial instruments not measured at fair value

• Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, notes payable, accounts payable and other payables are approximate to their fair values.

• C. The related information on 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:

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December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income	Level 1 - $ Level 1 - $	Level 2 - $ Level 2 - $	Level3 - $ Level 3 - $	Total - $ Total
				- $

• D. The methods and assumptions the Group used to measure fair value are as follows:

• (a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Closed-end fund Open-end fund Market quoted price Closing price Closing price Net asset value

• (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. 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 (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

• 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:

At January 1 Gains and losses recognised in other comprehensive income Recorded as unrealised losses on valuation of investments in equity instruments measured at fair value through other comprehensive income Proceeds from captial reduction At December 31	2021 2020 Equityinstruments Equityinstruments - $ 1,785 $ - 406) ( - 1,379) ( - $ - $

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• G. For the years ended December 31, 2021 and 2020, there was no transfer into or out from Level 3.

• H. Finance 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. Valuation techniques of fair value that the Group used in level 3 are net asset value and market comparable companies. The significant unobservable input of market comparable companies is the discount for lack of marketability. If the input and discount for lack of marketability are higher, the fair value will be lower.

(4) Other matter

During the COVID-19 pandemic, the Group was able to maintain its normal operations amidst the various preventive measures imposed by the government. Based on the Group’s assessment, the pandemic had no significant impact on its ability to continue as a going concern, impairment of assets and financing risks.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: None.

• 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 1.

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

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

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

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

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

• J. Significant inter-company transactions during the reporting periods: None.

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(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 2.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 3.

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

(4) Major shareholders information

Major shareholders information: Please refer to table 4.

14. SEGMENT INFORMATION

(1) General information

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

There is no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during this period.

(2) Measurement of segment information

The Board of Directors evaluates the performance of the operating segments based on a measure of segment income (loss). Interest income are not allocated to operating segments, as this type of activity is driven by the Group’s financial segment, which manages the cash position of the group.

(3) Segment information

The Group’s segment profit and loss is measured with the operating income and loss, which is used as a basis for the Group in assessing the performance of the operating segments. The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Year ended December 31, 2021:

		Commercial	Financial business	Financial business		Project
		segment		segment		segment		Total
Revenue from external
customers	$	373,126	$	246,616	$	180,992	$	800,734
Inter-segment revenue		17,808		-		-		17,808
Total segment revenue	$	390,934	$	246,616	$	180,992	$	818,542
Segment income	$	62,415	$	64,978	$	13,879	$	141,272
Segment income (loss),
including:
Depreciation and
amortisation	($	8,623)	($	7,506)	($	3,772)	($	19,901)

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Year ended December 31, 2020:

		Commercial	Financial business	Financial business		Project
		segment		segment		segment		Total
Revenue from external
customers	$	377,552	$	258,514	$	137,625	$	773,691
Inter-segment revenue		14,085		-		-		14,085
Total segment revenue	$	391,637	$	258,514	$	137,625	$	787,776
Segment income	$	39,427	$	43,557	$	13,496	$	96,480
Segment income (loss),
including:
Depreciation and
amortisation	($	8,298)	($	7,438)	($	4,041)	($	19,777)

The Group did not disclose the information in relation to segment assets and segment liabilities as this information is not provided to the Chief Operating Decision-Maker.

(4) Reconciliation for segment income and loss

The segment operating income reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income. The Group did not provide the amounts of total assets and total liabilities to the Chief Operating Decision-Maker for making operating decisions. The reconciliation on segment revenue, operating revenue, segment income/loss and income/loss before tax from continuing operations of reportable segment are as follows:

				Years ended	December31	December31
	Profit or loss			2021		2020
Total reportable segment revenue			$	818,542	$	787,776
Write-off of inter-segment revenue		(		17,808)	(	14,085)
Operating revenue			$	800,734	$	773,691
				Years ended	December31
	Profit or loss			2021		2020
Segment income			$	141,272	$	96,480
Adjustments and write-offs		(		17,808)	(	14,085)
Non-operating income and expenses				15,370		31,242
Income before tax	from continuing operations		$	138,834	$	113,637

(5) Information on products and services

The primary operations of the Group are the design, sales, maintenance, and leasing of computers and related equipment, hardware, and software. All these operations belong in the same industry, therefore disclosure of financial information by industry does not apply here.

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(6) Geographical information

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

				Years ended	December 31	December 31
		2021				2020
		Revenue	Non-current assets			Revenue	Non-current assets
Taiwan	$	699,214	$	22,172	$	668,286	$	9,112
Asia		89,417		4,300		103,713		1,142
America		5,670		-		397		-
Australia		6,433		-		1,295		-
	$	800,734	$	26,472	$	773,691	$	10,254

• A. The Group’s revenue by location is calculated based on the location in which the sales were made.

• B. Non-current assets refer to property, plant and equipment, right-to-use assets and intangible assets, and do not include financial instruments and deferred tax assets.

(7) Major customer information

For the years ended December 31, 2021 and 2020, the Group did not have customers that contributed to more than 10% of the operating revenue on the statement of comprehensive income.

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Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) Year ended December 31, 2021

Ares International Corp. and Subsidiaries

Year ended December 31, 2021
Securities held by Marketable securities(Note 1) Relationship with the securities issuer（Note 2） General ledger account Table 1		As of December 31,2021 (Except a Expressed		Footnote(Note 4) s otherwise indicated) in thousands of NTD
	Number of shares	Book value (Note 3)	Ownership (%) Fair value
Ares International Corp. Common shares/Formosa First Country Club - Financial assets at fair value through other comprehensive income	2,025	- $	0.01% - $	-

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities in accordance with IFRS9, ‘Financial instruments’. Note 2: Leave the column blank if the issuer of marketable securities is a non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 1 Page 1

Ares International Corp. and Subsidiaries Names, locations, and related information on investees (excluding information on investment in Mainland China) Year ended December 31, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Table 2

Investor	Investee(Note 1 and 2)	Location	Main business activities	Initial investment amount	Shares held as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021 (Note 2(2))	8,186 $ 17,725 159 Subsidiary 1,727) ( 9,325 Subsidiary Note 3 Second-tire subsidiary Note 3 Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 2(3)) Footnote
				Balance as at December 31,2021 Balance as at December 31,2020 14,014 $ 14,014 $ 28,541 21,493 35,029 35,029 6,865 6,865 26,177 26,177 34,115 34,115 33,256 33,256	Number of shares Ownership (%) Book value 1,567,476 34.83 26,324 $ 3,340,781 23.04 62,543 1,500,000 100 16,491 1,470,000 49 5,275 50,000 100 49,025 1,120,000 100 16,242 484,000 25 16,182
Ares International Corp. Ares International Corp. Ares International Corp. Ares International Corp. Ares International Corp. ARES GROUP CORP. SHARP KEEN MANAGEMENT LIMITED	ARGO INTERNATIONAL CORPORATION M-Power Information Co., Ltd. ARES GROUP CORP. ARES INTERNATIONAL (THAILAND) CO., LTD. WELJOIN TECHNOLOGIES LIMITED (BVI) SHARP KEEN MANAGEMENT LIMITED BLITZ IT CONSULTANTS PTE LTD.	Taiwan Taiwan Seychelles Thailand British Virgin Islands British Virgin Islands Singapore	Provides professional service of computer application software and sells computer peripheral equipments Agency and sale of database system and professional service of software Investment business Provides professional service of computer application software and sells computer peripheral equipments Investment business Investment business Agency of computer software and internet			23,507 $ 78,999 159 3,523) ( 9,325 200 799

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

(1)The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at December 31, 2021’ should fill orderly in the Company’s (public company’s) information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

(2)The ‘Net profit (loss) of the investee for the year ended December 31, 2021’ column should fill in amount of net profit (loss) of the investee for this period.

(3)The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2021’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Note 3: Investment income (loss) for the period was recognised by subsidiaries of investees.

Table 2 Page 1

Ares International Corp. and Subsidiaries Information on investments in Mainland China Year ended December 31, 2021

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Investment flows

Investee in Mainland China	Main business activities	Paid-in capital (Note 3)	Investment method	Beginning balance of accumulated outflow of investment from Taiwan	Investm	ent flows	Ending balance of accumulated outflow of investment from Taiwan	Net income of investee for the year ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income recognised by the Company for the year ended December 31, 2021 （Note 2）	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2021	Note
					Remitted to Mainland China	Remitted back to Taiwan
APLUSOFT (SUZHOU) CORPORATION.	Research and development of enterprise management software and sale of self-produce product of the Company	$ 25,228	Note1	$ 23,806	- $	- $	$ 23,806	10,267 $	95.88	9,844 $	$ 36,430	- $	Note 4

• Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China. The investee in the third area is WELJOIN TECHNOLOGIES LIMITED (BVI). Note 2: The financial statements were audited and attested by R.O.C. parent company's CPA Note 3: The paid-in capital of Aplusoft (Suzhou) Corporation amounted to RMB5,215,000 (USD750,592). Note 4: In August 2021, APLUSOFT (SUZHOU) CORPORATION remitted its earnings amounting to RMB1,100,031.24 to the investee in the third area, WELJOIN TECHNOLOGIES LIMITED (BVI).

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2021	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Ares International Corp.	73,252 $	86,349 $	489,083 $

Table 3 Page 1

Ares International Corp. and Subsidiaries Major shareholders information December 31, 2021

	Ares International Corp. and Subsidiaries Major shareholders information December 31, 2021	Ares International Corp. and Subsidiaries Major shareholders information December 31, 2021
Table 4 Name of major shareholders	Shares
	Number of shares held	Ownership (%)
YU, HONG-YANG	3,558,449	7.53%

• Note1: (1) The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements is different from the actual number of shares issued in dematerialised form because of the different calculation basis or the differences.

• (2) If the aforementioned data contains shares which were held in trust by the shareholders, the data was disclosed as separate account of client which was set by the trustee. As for the shareholder who reports share equity as an insider whose shareholding ratio greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio includes the self-owned shares and trusted shares, at the same time, the shareholders have power to decide how to allocate the trust assets. For the information of reported share equity of insider, please refer to Market Observation Post System.

Table 4 Page 1