ARES — Audit Report / Information 2021

Dec 21, 2021

ARES INTERNATIONAL CORP.

PARENT COMPANY ONLY 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 parent company only balance sheets of Ares International Corp. (the “Company”) as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and reports of other independent auditors, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

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 Parent Company Only Financial Statements section of our report. We are independent of the Company 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 the these requirements. Based on our audits and 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.

Key audit matters

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

Key audit matters for the Company’s 2021 parent company only financial statements are stated as follows:

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Service revenue recognition

Description

Refer to Note 4(23) for accounting policies on service revenue recognition and Note 6(16) for details of service revenue.

The Company 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 Company 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 service revenue recognition is affected by the accuracy of the time 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 procedures on contracts which could not be reasonably estimated:

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

  • ⚫ 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.

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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. These investments accounted for using equity method amounted to NT$88,867 thousand and NT$62,925 thousand, constituting 6.78% and 4.92% of the 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 21.70% and 15.69% of the total comprehensive income for the years then ended, respectively.

Responsibilities of management and those charged with governance for the parent

company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ responsibilities for the audit of the parent company only financial statements

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

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only 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. 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 Company’s internal control.

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

4. 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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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.

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

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

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

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

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

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ARES INTERNATIONAL CORP.

PARENT COMPANY ONLY 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 7 6(4) 8 6(6) 6(7) 6(8) 6(22) 8	December 31, 2021 AMOUNT % $ 508,538 39 278,978 21 72,536 6 - - 149,619 11 - - 1,811 - 67 - 26,739 2 55,333 4 1,093,621 83 159,658 12 4,640 1 16,991 1 541 - 27,494 2 7,332 1 216,656 17 $ 1,310,277 100	December 31, 2020	December 31, 2020
		AMOUNT $ 508,538 278,978 72,536 - 149,619 - 1,811 67 26,739 55,333 1,093,621 159,658 4,640 16,991 541 27,494 7,332 216,656 $ 1,310,277	AMOUNT $ 575,030 281,844 63,419 1,058 108,557 682 1,357 67 23,614 46,214 1,101,842 127,211 5,072 3,507 533 32,539 7,119 175,981 $ 1,277,823	%
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 1210 Other receivables - related parties 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1920 Guarantee deposits paid 15XX Total non-current assets 1XXX Total assets				45 22 5 - 8 - - - 2 4
				86
				10 - - - 3 1
				14
				100

(Continued)

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ARES INTERNATIONAL CORP. PARENT COMPANY ONLY 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) $ 126,896 10 $ 160,896 12 264 - - - 6(9) 62,331 5 49,790 4 7 3,181 - 1,790 - 6(10) 129,709 10 124,188 10 18,776 2 14,358 1 6(12) 5,003 - 8,641 1 14,598 1 2,796 - 360,758 28 362,459 28 2,559 - 756 - 6(11) 131,822 10 146,423 12 134,381 10 147,179 12 495,139 38 509,638 40 6(13) 472,539 36 472,539 37 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 62 768,185 60 9 11 $ 1,310,277 100 $ 1,277,823 100	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 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 3XXX Total equity Significant contingent liabilities and unrecognised contract commitents Significant events after the balance sheet date 3X2X Total liabilities and equity			12 - 4 - 10 1 1 -
			28
			- 12
			12
			40
			37 11 4 1 7 -
			60
			100

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

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ARES INTERNATIONAL CORP. PARENT COMPANY ONLY 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 $ 774,467 100 $ 740,657 100 6(20)(21) and 7 ( 476,160) ( 61) ( 463,138) ( 62) 298,307 39 277,519 38 6(20)(21) and 7 ( 53,459) ( 7) ( 60,822) ( 8) ( 55,947) ( 7) ( 58,121) ( 8) ( 76,004) ( 10) ( 76,827) ( 11) 6(20) and 12(2) 161 - ( 2,186) - ( 185,249) ( 24) ( 197,956) ( 27) 113,058 15 79,563 11 6(17) 3,585 1 5,975 1 6(18) and 7 1,182 - 18,955 2 6(19) ( 12,984) ( 2) ( 11,944) ( 2) 6(8) ( 453) - ( 228) - 6(6) 33,668 4 20,461 3 24,998 3 33,219 4 138,056 18 112,782 15 6(22) ( 23,524) ( 3) ( 15,029) ( 2) $ 114,532 15 $ 97,753 13 6(11) $ 5,893 - ($ 5,530) - 6(5) - - ( 406) - 6(6) ( 323) - - - 6(22) ( 1,179) - 1,288 - 4,391 - ( 4,648) - 6(6) ( 1,252) - 75 - 6(22) 250 - ( 15) - ( 1,002) - 60 - $ 117,921 15 $ 93,165 13 6(23) $ 2.42 $ 2.07 $ 2.40 $ 2.05

4000 Operating revenue 5000 Operating cost 5950 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment gain (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 7070 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 Other comprehensive income Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial gain (loss) on defined benefit plan 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive loss 8330 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 Components of other comprehensive (loss) income 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) income that will be reclassified to profit or loss 8500 Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

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ARES INTERNATIONAL CORP.

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

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2019 earnings Legal reserve Special reserve Cash dividends Donated by the shareholders Disposal of investments in equity instruments measured at fair value through other comprehensive income Balance at December 31, 2020 Year ended December 31, 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2020 earnings Legal reserve Special reserve Cash dividends Donated by the shareholders Changes in equity of investment in associates and joint ventures accounted for using equity method Balance at December 31, 2021	Notes		Share capital - common stock	Total capital surplus, additional paid-in capital				Retained Earnings			Other Equity Interest	Other Equity Interest		Total equity
						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
	6(15) 6(14) 6(5) 6(15) 6(14) 6(14)		$ 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

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

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ARES INTERNATIONAL CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) (Impairment gain) expected credit loss Depreciation on property, plant and equipment Depreciation on right-of-use assets Amortisation 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 Other receivables - related parties 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 $ 138,056 $ 112,782 6(20) and 12(2)( 161 ) 2,186 6(7)(20) 2,448 2,434 6(8)(20) 15,252 15,264 6(20) 306 363 6(17) ( 3,585 ) ( 5,975 ) 6(8) 453 228 6(6) ( 33,668 ) ( 20,461 ) ( 1,058 ) ( 390 ) ( 47,902 ) ( 15,234 ) 682 657 ( 571 ) 2 - 66 ( 4,349 ) ( 653 ) ( 10,929 ) 3,559 ( 34,000 ) 20,565 264 - 12,541 9,633 1,391 ( 2,149 ) 5,521 10,384 ( 3,638 ) 7,540 ( 8,708 ) ( 1,432 ) 28,345 139,369 3,702 6,998 ( 13,766 ) ( 10,836 ) 18,281 135,531

(Continued)

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ARES INTERNATIONAL CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets at amortised cost - current Decrease in financial assets at amortised cost - current Increase in investments accounted for under equity method Dividends received Acquisition of property, plant and equipment Acquisition of intangible assets (Increase) decrease in refundable deposits Financial assets at fair value through other comprehensive income - proceeds from capital reduction Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Payment of lease liability Cash dividends paid Donation 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 ) 277,269 283,888 6(6) ( 7,047 ) - 6(6) 6,561 7,521 6(7) ( 2,016 ) ( 762 ) ( 314 ) ( 800 ) ( 213 ) 241 6(5) - 1,379 1,647 14,198 6(24) ( 15,584 ) ( 15,643 ) 6(15) ( 70,881 ) ( 67,316 ) 6(14) 45 68 ( 86,420 ) ( 82,891 ) ( 66,492 ) 66,838 575,030 508,192 $ 508,538 $ 575,030

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

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ARES INTERNATIONAL CORP. NOTES TO THE PARENT COMPANY ONLY 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 is mainly 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 on the Taipei Exchange from March 1999, and was listed on the Taiwan Stock Exchange after the application of listing was approved.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only 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 FSC effective from 2021 are as follows:

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

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

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

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

the Company

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

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

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

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

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

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’ Amendments to IFRS 17, ‘Initial application od IFRS17 and 19 - 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 Company’s financial condition and financial performance based on the Company’s assessment.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

These parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Statements by Securities Issuers”.

• (2) Basis of preparation

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

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

(3) Foreign currency translation

Items included in the financial statements of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and 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 recognised in profit or loss in the period in which they arise.

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

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

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value are translated using the historical exchange rates at the dates of the initial transactions.

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

• B. Translation of foreign operations

• (a) The operating results and financial position of all the 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 Company 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 Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(4) Classification of current and non-current items

The Company’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 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.

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

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

• (b) Liabilities arising mainly from trading activities;

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

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

(5) Cash equivalents

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

(6) Financial assets at fair value through 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 Company 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 Company’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 Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) 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 Company’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.

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• C. At initial recognition, the Company 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 Company’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.

• (8) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company 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.

(9) 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 Company 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 Company recognises the impairment provision for lifetime ECLs.

(10) Derecognition of financial assets

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

• (11) Investments accounted for using equity method / subsidiaries and associates

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

• B. Inter-company transactions, balances and unrealised gains or losses on transactions between the Company and subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise the losses in proportion to the ownership.

• 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

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the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

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

• F. Associates are all entities over which the Company 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.

• G. The Company’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 Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• H. 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 Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• I. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’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 Company.

• J. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’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 Company’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.

• K. When the Company disposes its investment in an associate and loses significant influence over

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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.

• L. In accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, the profit or loss and other comprehensive income or loss presented on the parent company only financial statements are consistent with those presented on the consolidated financial statements. In addition, owner’s equity presented on the parent company only is consistent with equity attributable to owners of parent presented on the consolidated financial statements.

(12) Property, plant and equipment

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

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

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

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

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

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

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

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• 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 is 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.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(14) 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.

(15) Impairment of non-financial assets

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

(16) 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.

(17) 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 on due.

(18) Provisions

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

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(19) 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 plan

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

• (b) Defined benefit plan

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan 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 plan 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 Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognises expense as it can no longer withdraw an offer of termination benefits or it recognises related 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.

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(20) 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 operates and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only 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 Company 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.

(21) 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

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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.

(22) 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.

(23) Revenue recognition

• A. Sales revenue - sales of software

The Company engages in the research, development and sale of computer software and 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 Company’s activities. Revenue arising from the sales of goods is recognised when the Company 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 Company 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. Service revenue - IT Consulting services

The Company 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 Company are not distinct and are identified to be one performance obligation satisfied over time since the installation services involve significant customisation and modification. The Company recognises revenue on the basis of costs incurred relative to the total estimated costs of that performance obligation. Conversely, the Company 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 estimated costs, the customer is expected to obtain control of the good significantly before receiving services related to the good, and the Company procures the good from a third party and is not involved in designing and manufacturing the good by acting as a principal.

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The Company’s estimate on 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 estimated revision 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 Company bills a fixed amount for each hour of service provided is recognised at the amount to which the Company 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 Company 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 Company 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 Company’s promise in granting a licence is a promise to provide a right to access the Company’s intellectual property if the Company undertakes activities that significantly affect the computer software to which the customer has rights, the customer is affected by the Company’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 Company’s promise in granting a licence is a promise to provide a right to use the Company’s intellectual property. Therefore, the revenue is recognised when transferring the licence to a customer at a point in time.

(24) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company 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 Company recognises expenses for the related costs for which the grants are intended to compensate.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. 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 Company has no critical accounting judgements, estimates and assumption.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2021 168 $ 263,082 245,288 508,538 $	December31,2020
		171 $ 327,779 247,080
		575,030 $

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

• B. 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

and performance guarantee. Please refer to Note 8. 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 272,593 $ 6,385 278,978 $ 0.1 %~2.44 %	December31,2020
		277,269 $ 4,575
		281,844 $
		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 2,350 $	2020
		3,968 $

• 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 Company were $278,978 and $281,844, respectively.

• C. Details of the Company’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).

(3) Notes and accounts receivable

Notes and accounts receivable
		December	31,2021		December	31,2020
Notes receivable		$	-		$	1,058
Less: Allowance for uncollectible accounts			-			-
		$	-		$	1,058
Accounts receivable		$	153,899		$	112,998
Less: Allowance for uncollectible accounts	(		4,280)	(		4,441)
		$	149,619		$	108,557

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

follows:
Not past due Up to 90 days 91 to 180 days 181 to 270 days Over 271 days	December	Notes Accounts Notes receivable receivable receivable - $ 95,959 $ 1,058 $ - 11,216 - - 1,386 - - - - - 4,437 - - $ 112,998 $ 1,058 $ 31,2021 December31,2020
	Accounts receivable 139,884 $ 7,176 2,414 500 3,925 153,899 $

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 $96,185.

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

• D. The Company has no discounted notes receivable.

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

• F. As of 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 Company were $149,619 and $109,615, respectively.

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

(4) Prepayments

12(2). Prepayments
Prepaid project cost Other prepayments	December31,2021 23,850 $ 2,889 26,739 $	December31,2020
		20,413 $ 3,201
		23,614 $

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

	Items		December31,2021	December31,2021		December31,2020	December31,2020
Non-current items:
Equity instruments
Unlisted stocks			$	2,000		$	2,000
Valuation adjustment		(		2,000)	(		2,000)
			$	-		$	-

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

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

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

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

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

(6) Investments accounted for using equity method

to others. Investments accounted for using equity method
			2021			2020
At January 1		$	127,211		$	114,196
Investments accounted for using equity method			7,047			-
Share of profit of investments accounted for using
equity method			33,668			20,461
Earnings distribution of investments accounted for
using equity method	(		6,561)	(		7,521)
Changes in other equity interest	(		1,575)			75
Effect on investments accounted for using equity
method not recognised by shareholding percentage	(		132)			-
At December 31		$	159,658		$	127,211
		December31,2021			December31,2020
Subsidiaries		$	65,516		$	56,377
Associates			94,142			70,834
		$	159,658		$	127,211

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

• B. Associates:

• (a) The basic information of the associates of the Company is as follows:

Company name	Principal place of business Thailand Taiwan Taiwan	December 31, December 31, 2021 2020 49.00% 49.00% 34.83% 34.83% 23.04% 24.39% Ownership (%)	Nature of relationship	Method of measurement
		December 31, 2021 49.00% 34.83% 23.04%
ARES INTERNATIONAL (THAILAND) CO., LTD. ARGO INTERNATIONAL CORPORATION M-Power Information Co., Ltd.			Sale Purchase Sale	Equity method Equity method Equity method

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• (b) The carrying amount of the Company’s interests in all individually immaterial associates and the Company’s share of the operating results are summarised below:

• As of December 31, 2021 and 2020, the carrying amount of the Company’s individually immaterial associates amounted to $94,142 and $70,834, respectively.

			Years ended	December31,
			2021	2020
Profit for the year from continuing operations		$	24,184	$	15,116
Other comprehensive loss, net of tax	(		323)		-
Total comprehensive income		$	23,861	$	15,116

• (c) The investments accounted for using the equity method, ARGO INTERNATIONAL CORPORATION and M-Power Information Co., Ltd., were valued based on the financial statements audited by independent auditors appointed by the respective companies.

• C. The Company 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 Company has no current ability to direct the relevant activities of ARGO INTERNATIONAL CORPORATION and M-Power Information Co., Ltd., the Company has no control, but only has significant influence, over the investees.

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(7) Property, plant and equipment

Property, plant and equipment
		Machinery and			Transportation				Office			Leasehold			Other
			equipment			equipment			equipment		improvements				facilities			Total
At January 1, 2021
Cost		$	6,595		$	12,190		$	1,681		$	5,335		$	918		$	26,719
Accumulated depreciation and
impairment	(		5,569)	(		8,953)	(		1,500)	(		5,263)	(		362)	(		21,647)
		$	1,026		$	3,237		$	181		$	72		$	556		$	5,072
2021
At January 1		$	1,026		$	3,237		$	181		$	72		$	556		$	5,072
Additions			1,604			-			30			382			-			2,016
Depreciation charges	(		592)	(		1,453)	(		150)	(		95)	(		158)	(		2,448)
At December 31		$	2,038		$	1,784		$	61		$	359		$	398		$	4,640
At December 31, 2021
Cost		$	8,074		$	12,190		$	1,707		$	5,717		$	918		$	28,606
Accumulated depreciation and
impairment	(		6,036)	(		10,406)	(		1,646)	(		5,358)	(		520)	(		23,966)
		$	2,038		$	1,784		$	61		$	359		$	398		$	4,640

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		Machinery and	Machinery and		Transportation	Transportation			Office			Leasehold			Other
			equipment			equipment			equipment		improvements				facilities			Total
At January 1, 2020
Cost		$	5,957		$	12,190		$	1,681		$	5,335		$	1,014		$	26,177
Accumulated depreciation and
impairment	(		5,466)	(		7,348)	(		1,355)	(		4,981)	(		283)	(		19,433)
		$	491		$	4,842		$	326		$	354		$	731		$	6,744
2020
At January 1		$	491		$	4,842		$	326		$	354		$	731		$	6,744
Additions			762			-			-			-			-			762
Depreciation charges	(		227)	(		1,605)	(		145)	(		282)	(		175)	(		2,434)
At December 31		$	1,026		$	3,237		$	181		$	72		$	556		$	5,072
At December 31, 2020
Cost		$	6,595		$	12,190		$	1,681		$	5,335		$	918		$	26,719
Accumulated depreciation and
impairment	(		5,569)	(		8,953)	(		1,500)	(		5,263)	(		362)	(		21,647)
		$	1,026		$	3,237		$	181		$	72		$	556		$	5,072

A. The Company has no interest capitalised.

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

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－ (8) Leasing arrangements lessee

• A. The Company’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 Company.

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

Buildings Buildings	December 31, 2021 December31,2020 Carryingamount Carryingamount 16,991 $ 3,507 $ Years ended December 31,	December31,2020
		Carryingamount 3,507 $
	2021 Depreciation charge 15,252 $	2020
		Depreciation charge
		15,264 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $28,735 and $2,972, respectively.

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

is as follows:
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Years ended December 31,
	2021 453 $ 511 964 $	2020
		228 $ 574
		802 $

• F. For the years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $16,095 and $16,217, respectively.

(9) Accounts payable

Accounts payable Project costs payable	December31,2021 11,798 $ 50,533 62,331 $	December 31, 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 89,002 $ 4,038 18,825 17,844 129,709 $	December31,2020
		87,613 $ 3,649 15,380 17,546
		124,188 $

(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			plan assets		benefit liability
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 assumptions	(		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			plan assets		benefit liability
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 assumptions			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	Years ended December 31,	Years ended December 31,
	2021 0.70% 4.00%	2020
		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 salaryincreases	Future salaryincreases	Future salaryincreases
	Increase	0.25%	Decrease	0.25%	Increase 0.25%		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.

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• (f) Expected contributions to the defined benefit pension plan of the Company 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.

• B. Defined contribution plan:

• (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company 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.

• (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2021 and 2020 were $12,733 and $12,293, 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:
		December 31, 2021		December31,2020
Current		5,003 $		$	8,641

The Company 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.

(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.

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2021

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

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

(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 proposed by the Board of Directors and resolved by the shareholders as dividends to shareholders. The Board of Directors could retain earnings for operation needs.

• B. The dividend policy of the Company is as follows: The Company is engaged in information

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technology, which is a rapidly advancing and growing market, based on the requirement of capital expenditure and optimal financial plan for long-term operation. When the Board of Directors propose the distribution of retained earnings from the remainder of the above items (a)~(d), they decide the proportion of cash dividends and share dividends based on the operation requirement. The proportion of cash dividends shall not be less than 10% of the total dividends. However, the proportion of cash dividends could be adjusted based on the operating situation of the 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 2020 and 2019 retained earnings, respectively as follows:

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

• (b) On March 23, 2022, the Company’s Board of Directors proposed for the distribution of 2021 retained earnings as follows:

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

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

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(16) Operating revenue

Revenue from contracts with customers Sales revenue Service revenue	2021 2020 34,131 $ 54,809 $ 740,336 685,848 774,467 $ 740,657 $ Years ended December31,

A. Disaggregation of revenue from contracts with customers

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

YearendedDecember31,2021 Timing of revenue recognition At a point in time Over time YearendedDecember31,2020 Timing of revenue recognition At a point in time Over time	Asia 8,096 $ 55,056 63,152 $ Asia 3,659 $ 67,020 70,679 $	America - $ 5,670 5,670 $ America 14 $ 383 397 $	Taiwan 25,945 $ 673,267 699,212 $ Taiwan 51,136 $ 617,150 668,286 $	Others 90 $ 6,343 6,433 $ Others - $ 1,295 1,295 $	Total
					34,131 $ 740,336
					774,467 $
					Total
					54,809 $ 685,848
					740,657 $

B. Contract assets and liabilities

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

December31,2021 December31,2020 Contract assets-customer contract 72,536 $ 63,419 $ Contract liabilities-advance receipt from customers 126,896 $ 160,896 $	January1,2020
	63,411 $
	140,331 $

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

year
Revenue recognised that was included in the contract liabilities balance at the beginning of the year Advance receipts	Years ended December31,
	2021 105,990 $	2020
		59,808 $

The Company 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 hours. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

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(17) Interest income

Interest income
		Years ended	December31,
		2021		2020
Interest income:
Interest income from bank deposits	$	1,235	$	2,007
Interest income from financial assets measured at
amortised cost		2,350		3,968
	$	3,585	$	5,975

(18) Other income

Other income
Commission income Government grant income Other income	2021 2020 374 $ 592 $ - 17,471 808 892 1,182 $ 18,955 $ Years ended December31,
		592 $ 17,471 892
		18,955 $

For the year ended December 31, 2020, the Company received government grant income of $17,471 from the Ministry of Economic Affairs under 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	($	12,721)	11,823) ($
Miscellaneous disbursements	(	263)	121) (
	($	12,984)	11,944) ($

(20) Expenses by nature

			Years ended	December31,	December31,
			2021		2020
Employee benefit expense		$	397,348	$	386,821
Depreciation charges on property, plant and
equipment			2,448		2,434
Depreciation charges on right-of-use assets			15,252		15,264
Amortisation			306		363
Operating lease payments			511		574
Service fees			12,033		7,709
Outsourcing software			187,652		175,278
(Impairment gain) expected credit loss	(		161)		2,186
Other expenses			19,871		26,825
Cost of sales			26,149		43,640
Operating costs and expenses		$	661,409	$	661,094

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(21) Employee benefit expense

Employee benefit expense
		Years ended	December31,
		2021		2020
Wages and salaries	$	338,987	$	331,902
Labor and health insurance fees		25,187		22,846
Pension costs		15,681		15,753
Directors’ remuneration		7,169		6,374
Other personnel expenses		10,324		9,946
	$	397,348	$	386,821

As of December 31, 2021 and 2020, the Company had 276 and 278 employees, respectively. There were 4 non-employee directors for both years.

• 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.

• D. For the years ended December 31, 2021 and 2020, the average employee benefit expenses were $1,434 and $1,388, and the average employees salaries were $1,246 and $1,211, respectively; the adjustment of average employees salaries was 2.89%.

• E. For the years ended December 31, 2021 and 2020, the supervisors’ remuneration recognised by the Company amounted to $1,083 and $1,101, respectively.

• F. The Company’s salary and remuneration policies:

• (a) The Company has set the remuneration policy for directors’ and supervisors’ remuneration in accordance with the Company’s Articles of Incorporation and established the remuneration committee to assess and supervise the Company’s salary and remuneration measures for the Company’s directors, supervisors and managers. The Company shall pay rewards to the Company’s directors and supervisors when they perform their respective duties and responsibilities on behalf of the Company no matter whether the Company had operating deficit. The Board of Directors is authorised to determine the rewards to directors and

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supervisors based on their participation frequency in the Company’s operations and contributions to the Company’s operations, taking into consideration the pay level within the same industry.

• (b) The Company has set the employees’ compensation policy. The Company offers the optimum salary and benefit, including a monthly salary and various bonuses approved by the management, to employees in accordance with related regulations. The Company implements performance assessment for all employees every six months in order to understand employees’ working performance. The result of performance assessment will be used as a reference for the promotion and salary distribution of employees.

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

Information about employees’ compensation and directors’ 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:

Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Prior year income tax under (over) estimation Total current tax Deferred tax: Origination and reversal of temporary differences Total deferred tax Income tax expense	2021 2020 18,404 $ 14,986 $ 663 - 341 6) ( 19,408 14,980 4,116 49 4,116 49 23,524 $ 15,029 $ Years endedDecember31,

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

			Years ended	December31,
			2021	2020
Changes in fair value of financial assets at fair
value through other comprehensive income		$	-	($	182)
Remeasurement of defined benefit obligations			1,179	(	1,106)
Currency translation differences	(		250)		15

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B. Reconciliation between income tax expense and accounting profit:

			Years ended	December31,
			2021	2020
Tax calculated based on profit before tax and
statutory tax rate		$	27,611	$	22,557
Tax exempt income by tax regulation	(		5,091)	(	7,522)
Prior year income tax under (over) estimation			341	(	6)
Tax on undistribrted surplus earnings			663		-
Income tax expense		$	23,524	$	15,029

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

Deferred tax assets: Temporary differencess: Warranty cost Allowance for bad debts in excess of allowable limit Unrealised exchange loss Unappropriated pensions Unused annual leave Loss on investment in foreign companies Deferred tax assets: Temporary differencess: 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			2021
	Recognised in other Recognised in comprehensive AtJanuary1 profit or loss income 1,728 $ 728) ($ - $ 532 129) ( - 632 417) ( - 23,239 1,741) ( 1,179) ( 1,815 450 - 4,593 1,551) ( 250 32,539 $ 4,116) ($ 929) ($ 2020			Recognised in equity - $ - - - - - - $	At December31
					1,000 $ 403 215 20,319 2,265 3,292
					27,494 $
	Recognised in other Recognised in comprehensive AtJanuary1 profit or loss income 220 $ 1,508 $ - $ 124 408 - 163 345) ( 182 2,012 1,380) ( - 22,419 286) ( 1,106 1,516 299 - 4,861 253) ( 15) ( 31,315 $ 49) ($ 1,273 $			Recognised in equity - $ - - - - - - - $	At December31
					1,728 $ 532 - 632 23,239 1,815 4,593
					32,539 $

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D. The amounts of deductible temporary differences that were not recognised as deferred tax assets:

Unrealised impairment loss Deductible temporary differences	December31,2021 400 $ 400 $	December31,2020 400 $
		400 $

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

(23) Earnings per share

Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	Year ended December31,2021	Year ended December31,2021
	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) 114,532 $ 47,254 2.42 $ 114,532 $ 47,254 - 565 114,532 $ 47,819 2.40 $ Year ended December31,2020	Earnings per share (in dollars)
		2.42 $
		2.40 $
	Weighted average number of ordinary shares outstanding Amount after tax (shares in thousands) 97,753 $ 47,254 97,753 $ 47,254 - 446 97,753 $ 47,700	Earnings per share (in dollars)
		2.07 $
		2.05 $

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(24) Changes in liabilities from financing activities

		2021	2021			2020	2020
			Liabilities from				Liabilities from
				financing				financing
	Lease	liabilities	activities-gross		Lease	liabilities	activities-gross
At January 1	$	3,552	$	3,552	$	15,994	$	15,994
Changes in cash flow from financing activities	(	15,584)	(	15,584)	(	15,643)	(	15,643)
Changes in other non-cash items		29,189		29,189		3,201		3,201
At December 31	$	17,157	$	17,157	$	3,552	$	3,552

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

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Names of related parties Relationship with the Company
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LATED PARTY TRANSACTIONS 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
APLUSOFT (SUZHOU) CORPORATION	Third-tier subsidiary

Note: For related party transactions, the subsidiaries mentioned in Note 7(2) refer to the total number of the aforementioned related parties.

(2) Significant related party transactions

• A. Operating revenue

		Years ended	December31,
		2021	2020
Sales of goods:
-Subsidiaries	($	616)	$	8,043
-Associates		-		650
-Other related parties		45		689
-Key management		876		262
	$	305	$	9,644

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 which is 60 days after monthly billings, other terms would be available to third parties.

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B. Purchases

		Years ended	December31,	December31,
		2021		2020
Purchases of goods:
-Associates	$	45	$	1,292
Purchases of services:
-Subsidiaries		18,424		6,042
-Associates		10,015		16,872
	$	28,484	$	24,206

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

• (b) Most of 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 which is 60 days after monthly billings, other terms would be available to third parties.

• (c) Certain integrated system projects are subcontracted to related parties. The transaction prices are determined through negotiations between the two parties, and the payment terms are 60 days after the end of the month. The rest of the conditions are not significantly different from those with other vendors.

• C. Receivables from related parties

those with other vendors. Receivables from related parties
Payables to related parties Accounts receivables -ARGO INTERNATIONAL CORPORATION Other receivables -APLUSOFT (SUZHOU) CORPORATION Accounts payable -APLUSOFT (SUZHOU) CORPORATION -ARGO INTERNATIONAL CORPORATION -M-Power Information Co., Ltd.	December31,2021 - $ 67 $ December31,2021 3,181 $ - - 3,181 $	December31,2020
		682 $
		67 $
		December31,2020
		1,184 $ 532 74
		1,790 $

• D. Payables to related parties

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E. Property transactions:

Acquisition of financial assets:

Property transactions: Acquisition of financial assets:
Accounts No. of shares Associates Investments accounted for using the equity method 414,549	Objects Commom stock (Note)	Year ended December31,2021
		Consideration
		7,047 $

Note: On September 29, 2021, the Board of Directors of the Company approved to participate in 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 Company entered into three-year ArgoERP maintenance contracts with an associate in the amounts of $748 and $720, respectively. The Company recognised $249 and $240 in operating expences for the years ended December 31,2021 and 2020, respectively.

• G. The Company paid the service fee to the associate. For the years ended December 31, 2021 and 2020, operating expenses were recognised amounting to $51 and $98, respectively.

• H. The Company entered into a commissioned service and supervisory fee agreement with the subsidiary. For the years ended December 31, 2021 and 2020, the Company recognised other income amounting to $798 and $797, respectively.

(3) Key management compensation

income amounting to $798 and $797, respectively. Key management compensation
Salaries and other short-term employee benefits	Years ended December 31,
	2021 53,048 $	2020
		56,636 $

8. PLEDGED ASSETS

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

Pledged asset Pledged as time deposits (shown as financial assets at amortised cost - current) Guarantee deposits paid (shown as other current assets) Guarantee deposits paid	December31,2021 December31,2020 6,385 $ 4,575 $ 55,333 46,214 7,332 7,119 69,050 $ 57,908 $ Bookvalue	Purpose
	December31,2021 6,385 $ 55,333 7,332 69,050 $
		Bid bond and performance bond Bid bond and performance bond Guarantees provided for leasing

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

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

	December31,2021	December31,2020
Software products	3,388 $	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 Company’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 Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company 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 (including ‘current and non-current borrowings’ as shown in the balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the balance sheet plus net debt.

In 2021, the Company’s strategy, which was unchanged from 2020, was to maintain the gearing ratio as low as possible.

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(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
Financial assets 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 Other receivables from related parties Guarantee deposits paid (shown as other currents assets) Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable Accounts payable to related parties Other payables Lease liabilities	December31,2021 508,538 $ 278,978 - 149,619 - 1,811 67 55,333 7,332 1,001,678 $ December31,2021 264 $ 62,331 3,181 129,709 17,157 212,642 $	December31,2020
		575,030 $ 281,844 1,058 108,557 682 1,357 67 46,214 7,119
		1,021,928 $
		December31,2020
		- $ 49,790 1,790 124,188 3,552
		179,320 $

B. Financial risk management policies

The Company’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 the policy goals of risk management, the Company manages its foreign exchange risk from foreign currency transactions by optimizing the 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 Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company used in various functional currency, primarily with

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respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

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

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

Company’s functional currency: NTD.) The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:	TD.) The information on assets and liabilities hose values would be materially affected by the s:	TD.) The information on assets and liabilities hose values would be materially affected by the s:	TD.) The information on assets and liabilities hose values would be materially affected by the s:
Foreign currency amount Exchange Book value (inthousands) rate (NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 8,855 $ 27.68 245,106 $ HKD:NTD 16,464 3.55 58,447 AUD:NTD 481 20.08 9,658 EUR:NTD 114 31.32 3,570 RMB:NTD 18,578 4.34 80,629 Non-monetary items USD:NTD 2,367 27.68 65,516 THB:NTD 6,320 0.83 5,275 Foreign currency amount Exchange Book value (inthousands) rate (NTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 7,891 $ 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 20,743 4.38 90,854 Non-monetary items USD:NTD 1,979 28.48 56,377 THB:NTD 8,276 0.96 7,909 December31,2021 December31,2020	December31,2021
			Book value (NTD)
		Exchange rate 28.48 3.67 21.95 35.02 4.38 28.48 0.96	Book value (NTD)
			227,299 $ 47,009 10,536 3,992 90,854 56,377 7,909

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 ($12,721) and ($11,823), respectively.

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

Analysis of foreign currency market risk arising from significant foreign exchange variation:	risk arising from significant foreign exchange	risk arising from significant foreign exchange	risk arising from significant foreign exchange
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% 2,451 $ - $ HKD:NTD 1.00% 584 - AUD:NTD 1.00% 97 - EUR:NTD 1.00% 36 - RMB:NTD 1.00% 806 - Non-monetary items USD:NTD 1.00% - 655 THB:NTD 1.00% - 53 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% 909 - Non-monetary items USD:NTD 1.00% - 564 THB:NTD 1.00% - 79 YearendedDecember31,2021 Sensitivity analysis Year ended December 31, 2020 Sensitivity analysis	YearendedDecember31,2021
	Sensitivity analysis
			Effect on other comprehensive income
	Sensitivity analysis
		Effect on profit or loss 2,273 $ 470 105 40 909 - -	Effect on other comprehensive income
			- $ - - - - 564 79

Price risk

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

• ii. The Company’s investments in equity securities comprise equity instruments issued by domestic 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

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

• ii. According to the Company’s credit policy, the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

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

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

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

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		Not	Up to 90	Up to 90	91-180	91-180	181-270	181-270	Over 271	Over 271
Group1	past due			days		days		days		days		Total
December 31, 2021
Expected loss rate		0%		0.05%~	0.56%~		14.99%~			100%
				0.26%		5.27%		58.33%
Total book value	$	119,934	$	7,176	$	2,414	$	500	$	3,925	$	133,949
Loss allowance	$	4	$	6	$	53	$	292	$	3,925	$	4,280
		Not	Up to 90		91-180		181-270		Over 271
Group 1	past due			days		days		days		days		Total
December 31, 2020
Expected loss rate		0%		0.01%~	0.07%~			0.66%~		100%
				0.04%		0.22%		16.23%
Total book value	$	78,015	$	11,216	$	1,386	$	-	$	4,437	$	95,054
Loss allowance	$	1	$	2	$	1	$	-	$	4,437	$	4,441
			Group2				Group 3			Total
December 31, 2021
Expected loss rate					0%			0%
Total book value		$		17,245		$		2,705		$		19,950
Loss allowance		$			-	$			-	$		-
			Group 2				Group 3			Total
December 31, 2020
Expected loss rate					0%			0%
Total book value		$		11,273		$		6,671		$		17,944
Loss allowance		$			-	$			-	$		-

Group 1: General business

Group 2: Government-owned corporation

Group 3: Government organizations

As of December 31, 2021 and 2020, contract assets amounted to $72,536 and $63,419, respectively, and loss allowance was $0 if measured at expected credit loss rate of 0%.

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

Accounts receivable At January 1 4,441 $ Reversal of impairment loss 161) ( December 31 4,280 $ Accounts receivable At January 1 2,255 $ Impairment loss 2,186 December 31 4,441 $	Contract assets Notesreceivable Total - $ - $ 4,441 $ - - 161) ( - $ - $ 4,280 $ Contract assets Notes receivable Total - $ - $ 2,255 $ - - 2,186 - $ - $ 4,441 $ 2021 2020

• (c) Liquidity risk

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

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

Non-derivative financial liabilities: December 31, 2021 Accounts payable Accounts payable to related parties Other payables Lease liabilities Non-derivative financial liabilities: December 31, 2020 Accounts payable Accounts payable to related parties Other payables Lease liabilities	Less than 3months 62,503 $ 1,167 107,465 3,888 Less than 3months 48,774 $ 606 105,515 1,646	Between 3 months and 2years 92 $ 2,014 22,244 12,482 Between 3 months and 2years 1,016 $ 1,184 18,673 1,942	Between 2 and5 years Over5 years - $ - $ - - - - 1,036 - Between 2 and5 years Over5 years - $ - $ - - - - - -

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(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 of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

==> picture [461 x 160] intentionally omitted <==

• 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).

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

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

2020:
		2021			2020
	Equity	instruments		Equity	instruments
At January 1	$	-		$	1,785
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		-	(		406)
Proceeds from captial reduction		-	(		1,379)
At December 31	$	-		$	-

• 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 Company 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 Company was able to maintain its normal operations amidst the various preventive measures imposed by the government. Based on the Company’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.

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• 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

(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

Not applicable.

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

Ares International Corp.

Securities held by Table 1	Marketable securities(Note 1)	Relationship with the securities issuer（Note 2）	General ledger account		As of December 31,2021	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 IFRS 9, ‘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. Names, locations, and related information on investees (excluding information on investment in Mainland China) For the year ended December 31, 2021

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

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 Note3 Second-tire subsidiary Note3 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. Information on investments in Mainland China For the year ended December 31, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

Investment flows

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

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).

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

Table 3 Page 1

Ares International Corp. Major shareholders information December 31, 2021

Table 4

Shares

YU,HONG-YANG

Name of major shareholders

Number of shares held

3,558,449

Ownership (%)

7.53%

Note1: (1) The major shareholders information was 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 kept at the 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 including the self-owned shares and trusted shares, at the same time, persons who 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