BASSO - Annual Report 2021 | FinancialReports.eu

Stock Code:1527

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION Financial Statements With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: No. 24, 36th Rd., Taichung Industrial Park, Taichung, 40768 Taiwan, R.O.C. Telephone: 886-4-2359-8877

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

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information	Page
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Independent Auditors’ Report

To the Board of Directors of Basso Industry Corporation:

Opinion

We have audited the financial statements of Basso Industry Corporation (“the Company”), which comprise the balance sheets as of December 31, 2021 and 2020, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying 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 and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“ IASs” ). Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Revenue recognition

For the accounting policies relating to revenue recognition, please refer to Note 4(m).

3-1

Description of key audit matter:

Part of the sales of the Company is subject to various sales terms of discount, return, warranty (according to the contract) or consignment transactions based on contractual agreements or commercial practices, which may result in an error in revenue recognition. Therefore, the test of revenue recognition is one of our key audit matters.

How the matter was addressed in our audit

Our principal audit procedures included testing the effectiveness of design and implementation of the internal control for sales and collection cycle. Assessing whether recognition of revenue has been handled in accordance with the relevant regulations by acquiring and verifying the sales contracts and external purchase orders of major customers. Understanding the sales revenue of the major customers by comparing that of last year to assess whether there are any major abnormalities. Random sampling of sales during the period before and after the cut-off date, and checking the relevant documents to assess the accuracy of the timing of revenue recognition to understand whether there is any major sales return after the period.

2. Inventory evaluation

For the accounting policies of inventories, please refer to Note 4 (g); For the accounting estimates and assumptions uncertainty of inventory evaluation, please refer to Note 5; For the description of the inventory evaluation, please refer to Note 6(e).

Description of key audit matter:

The inventory of the Company is measured by the lower of cost and net realizable value. In recent years, the global market has become more volatile, which has led to an increase in the market demand for pneumatic nailing machines. The competition in the global market is fierce, prompting the design and manufacturing technology of pneumatic nailing machines to advance rapidly, resulting in the original products to be outdated or no longer meet market demand such as the needs of European and American brand manufacturers, as well as individual consumers. Sales of related products may fluctuate drastically, so there is a risk that the cost of the inventory may exceed its net realizable value. Therefore, the inventory evaluation is considered as one of our key audit matters.

How the matter was addressed in our audit

The main audit procedures for the above key audit matter include assessing the reasonableness of the inventory evaluation accounting policy. Reviewing the inventory aging report, analyzing the change in aging inventory, and evaluating whether the inventory evaluation has been handled according to accounting policies. Understanding and assessing the reasonableness of the net realizable value basis adopted by the management, selecting samples, and checking the relevant documents to ensure the accuracy of the amounts; as well as assessing whether the management's disclosure of the relevant inventory evaluation is fair and sufficient.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

3-2

In preparing the 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 the supervisors) are responsible for overseeing the Company’ s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

3-3

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.

The engagement partners on the audit resulting in this independent auditors’ report are Chun-Yuan Wu and Shyh-Huar Kuo.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2022

Notes to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and its cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Balance Sheets

December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6 (a)) 1150 Notes receivable, net (note 6(c)) 1170 Trade receivable, net (note 6 (c)) 1200 Other receivables (note 6 (d)) 1220 Current income tax assets 1310 Inventories (note 6 (e)) 1476 Other current financial assets (note 6 (h)) 1479 Other current assets (note 6 (h)) Non-current assets: 1520 Non-current financial assets at fair value through other comprehensive income (note 6 (b)) 1600 Property, plant and equipment (note 6 (h), 8) 1780 Intangible assets (note 6 (g)) 1840 Deferred tax assets (note 6 (k)) 1990 Other non-current assets (note 6 (h)) Total assets	December 31, 2021 Amount % $ 1,117,240 22 29,492 - 882,635 17 7,126 - - - 913,635 18 1,118,300 22 31,121 1 4,099,549 80 10 - 924,117 18 16,761 - 55,649 1 35,454 1 1,031,991 20 $ 5,131,540 100	December 31, 2020 Amount % 544,445 11 9,739 - 884,776 18 11,854 - 102,133 2 664,240 13 1,799,700 35 34,450 1 4,051,337 80 10 - 964,414 19 16,949 - 36,054 1 20,387 - 1,037,814 20 5,089,151 100 Liabilities and Equity Current liabilities: 2150 Notes payable 2170 Accounts payable 2200 Other payables 2210 Contract liabilities (note 6(n)) 2230 Current income tax liabilities 2250 Provisions 2399 Other current liabilities Non-Current liabilities: 2640 Defined benefit liabilities, net (note 6 (j)) Total liabilities Equity attributable to owners: (note 6 (l)) 3100 Ordinary share 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31,	2021	December 31, 2020 Amount % 6,369 - 417,221 8 396,059 8 35,963 1 73,048 1 4,260 - 1,368 - 934,288 18 37,929 1 37,929 1 972,217 19 1,385,706 27 26,667 1 2,743,121 54 (38,560) (1) 4,116,934 81 5,089,151 100
			Amount	%
			$ 7,006 274,948 359,459 83,878 104,110 5,481 1,159 836,041 32,604 32,604 868,645 1,385,706 26,842 2,850,347 - 4,262,895 $ 5,131,540	- 5 7 1 2 - - 15 1 1 16 27 1 56 - 84 100

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars , except for earnings per share)

4000 Operating Revenues: 4110 Sales revenues 4170 Sales returns 4190 Sales allowances Net sales revenues (note 6 (n)) 5000 Operating costs(note 6 (e),(g), (i) and (o)) Gross profit from operations Operating expenses (note 6 (g), (j) and (o)) 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Reversal of expected credit loss Net operating income Non-operating income and expenses (note 6 (p)) 7100 Interest income 7020 Other gains and losses, net 7050 Finance costs 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (note 6 (k)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8300 Other comprehensive income, net Comprehensive income Basic earnings per share (NT dollars) (note 6(m)) Diluted earnings per share (NT dollars) (note 6(m))	2021 Amount % $ 4,516,405 101 3,728 - 27,939 1 4,484,738 100 3,059,576 78 975,162 22 113,080 3 83,981 2 180,015 4 (1,178) - 375,898 9 599,264 13 7,006 - (20,959) - - - (13,953) - 585,311 13 117,901 3 467,410 10 1,775 - 2,242 - - - 4,017 - 4,017 - $ 471,427 10 $ 3.37 $ 3.35	2020 Amount % 3,621,689 101 1,057 - 31,319 1 3,589,313 100 2,680,365 75 908,948 25 104,546 3 87,915 2 174,562 5 (9,456) - 357,567 10 551,381 15 16,690 - (46,371) (1) - - (29,681) (1) 521,700 14 114,750 3 406,950 11 (4,950) - - - - - (4,950) - (4,950) - 402,000 11 2.94 2.92

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan dollars)

Capital surplus		Retained earnings	Retained earnings		Total other equity interest Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total equity

	Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings
26,396	802,915	38,560	1,665,930	2,507,405	(38,560) - - - - - - (38,560) (38,560) - 2,242 2,242 - - - - 36,318 -	3,880,947 406,950 (4,950) 402,000 - (166,284) 271 (166,013) 4,116,934 4,116,934 467,410 4,017 471,427 - (325,641) 175 (325,466) - 4,262,895
- -	- -	- -
-	-	-
- - 271	57,355 - -	- - -
271	57,355
26,667	860,270	38,560
26,667	860,270	38,560
- -	- -	- -
-	-	-
- - 175	40,200 - -	- - -
175	40,200	-
-	-	-
26,842	900,470	38,560

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Reversal of expected credit loss Interest income Gain on disposal of property, plant and equipment Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: (Increase) decrease in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Increase in inventories Decrease (increase) in other current assets Changes in operating assets Increase (decrease) in contract liability (Decrease) increase in notes payable (Decrease) increase in accounts payable (Decrease) increase in other payable Increase (decrease) in provisions Decrease in other current liabilities Decrease in net defined benefit liability Changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Decrease in financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in other financial assets Decrease in other non-current assets Increase in prepaid equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Unclaimed overdue dividends transferred to capital surplus Cash dividends paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 585,311 132,116 9,544 (1,178) (7,006) (1,871) 131,605 (19,753) 3,319 3,845 (268,478) 3,329 (277,738) 47,915 637 (142,273) (25,086) 1,221 (209) (3,550) (121,345) (399,083) (267,478) 317,833 7,889 (4,301) 321,421 2,242 (37,484) 1,871 (9,356) 681,400 37 (61,870) 576,840 175 (325,641) (325,466) 572,795 544,445 $ 1,117,240	2020 521,700 122,430 11,419 (9,456) (16,690) (1,139) 106,564 2,711 (298,416) (2,073) (126,345) (5,439) (429,562) (35,077) 365 178,424 15,507 (760) (156) (3,216) 155,087 (274,475) (167,911) 353,789 15,720 (1,427) 368,082 - (12,960) 1,720 (11,537) (99,700) 282 (77,917) (200,112) 271 (166,284) (166,013) 1,957 542,488 544,445

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars, Unless Otherwise Specified)

(1) Company history

Basso Industry Corporation (the “Company”) was incorporated on July 2, 1983 as a Company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company’ s registered office is No. 24, 36th Rd., Taichung Industrial Park, Taichung, 40768 Taiwan, R.O.C. The Company primarily is involved in the manufacturing and selling of penumatic nailers and automotive air tools.

(2) Approval date and procedures of the financial statements

The financial statements were authorized for issue by the Board of Directors on March 15, 2022.

(1) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
●Amendments to IAS 37 “ Onerous Contracts - Cast of Fulfilling a Controct”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”
Amendments to IAS 12
“Deferred Tax related to
Assets and Liabilities arising
from a Single Transaction”

Content of amendment
Effective date per
IASB
The
amendments
aim
to
promote
consistency in applying the requirements
by helping companies determine whether,
in the statement of balance sheet, debt and
other
liabilities
with
an
uncertain
settlement date should be classified as
current (due or potentially due to be settled
within one year) or non-current. The
amendments
include
clarifying
the
classification requirements for debt a
company might settle by converting it into
equity.
January 1, 2023
The amendments narrowed the scope of the
recognition exemption so that it no longer
applies to transactions that, on initial
recognition, give rise to equal taxable and
deductible temporary differences.
January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

●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” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(4) Summary of significant accounting policies

The accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C..

(b) Basis of preparation
(i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation.

(ii) Functional and presentation currency

The functional currency of each Group is determined based on the primary economic environment in which the entities operates. The financial statements are presented in New Taiwan dollars, which is the Company’ s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Foreign currencies

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(i) An investment in equity securities designated as at fair value through other comprehensive income;
(ii) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
(iii) qualifying cash flow hedges to the extent that the hedges are effective.
(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as noncurrent.

(i) It is expected to be realized, or intended to be sold or consumed , in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes, should be recognized as cash equivalents.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL ：

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL ：

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date ； and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Company considers a financial asset to be in default when the financial asset is more than a year past due or the debtor is unlikely to pay its credit obligations to the Company in full.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

Certificate deposits held by the company, the transaction target and other parties are financial institutions with investment grade and above, so they are deemed to have low credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer ；
a breach of contract such as a default or being more than a year past due ；
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider ；
it is probable that the borrower will enter bankruptcy or other financial reorganization ； or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

4) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted-average method and includes the expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less, the estimated costs of completion and selling expenses.

(h) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset, less, its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an items of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for the current and comparative periods are as follows:

1) buildings and structures:2~57 years
2) machinery and equipment:2~21 years
3) other equipment:2~21 years

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

Buildings and structures constitute mainly of building and building repair project. Each such part depreciates based on its useful life of 51~57 years and 2~56 years, respectively.

Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from the previous estimates, the change is accounted for as a change in an accounting estimate.

(i) Lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-ofuse asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The Company recognizes lease payments received under operating leases as income on a straightline basis over the lease term as part of ‘rent income’.

(j) Intangible assets

(i) Research and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred.Capital developed expenditure is measured at cost less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Company are measured at cost less accumulated amortization and any accumulated impairment losses.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Computer software:1~10 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting dateand adjusted if appropriate.

(k) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest Company of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or Company of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

For other assets, an impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(l) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

Warranties liability provisions are recognized when the underlying products or services are sold, based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

(m) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

1) Sale of goods

The Company manufactures and sells nail machine and pneumatic tools. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’ s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(n) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are expensed during which services are rendered by employees.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(o) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the same taxable entity; or
(ii) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(p) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding, after adjustment, for the effects of all dilutive potentially ordinary shares, such as employee compensation.

(q) Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company). The Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance regulatory reviews operating results of the operating segment. Each operating segment consists of standalone financial information.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

In preparing these financial statements, management has made judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in the accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to note 6 (e) for further description of the valuation of inventories.

The Company’s accounting policies and disclosures include measuring financial and non financial assets and liabilities at fair value through profit or loss.

The Company establishes relevant internal control system for Fair value measuring. That include responsible for reviewing all significant fair value measurements (including level 3 fair values) by the financial management department , and reporting to management directly . The Company's financial department regularly review significant unobservable input values and adjustments.If the input value is used to measure the fair value of the use of external third-party information(such as broker or pricing service) The financial management department will evaluate evidence of support inputs provided by third-parties to ensure that the fair value level classification and evaluation in line with the provisions of IFRS.

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liability that are not based on observable market data.

For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date. Please refer to Note 6(q) for assumptions used in measuring fair value.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(6) Explanation of significant accounts

(a) Cash and Cash Equivalents

ash and Cash Equivalents
Cash on hand Demand deposits and time deposits Foreign currency deposits Cash and cash equivalents	December 31, 2021 $ 771 197,840 918,629 $ 1,117,240	December 31, 2020
		771 494,605 49,069
		544,445

Please refer to note 6(q) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

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

Equity investments at fair value through other comprehensive income Domestic unlisted stock-COTA Commercial bank Domestic unlisted stock-GATETECH technology Inc. Total	December 31, 2021 $ 10 - $ 10	December 31, 2020
		10 -
		10

No strategic investments were disposed during 2021 and 2020, there were no transfers of any cumulative gain or loss within equity relating to these investments.

For market risk, please refer to note 6 (q).

As of December 31, 2021 and 2020, none of the financial assets at fair value through other comprehensive income of the Company had been pledged as collateral for long-term borrowings.

(c) Note and trade receivables

Note receivables–measured as amortized cost Trade receivables–measured as amortized cost Less: Loss allowances	December 31, 2021 $ 29,492 883,290 (655) 882,635 $ 912,127	December 31, 2020 9,739 886,609 (1,833) 884,776 894,515

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

Current 1 to 90 days past due 91 to 180 days past due 181 to 365 days past due Total	December 31, 2021	December 31, 2021	December 31, 2021
	Gross carrying amount	Weighted- average loss rate Loss allowance provision
	$ 684,320 226,495 981 986 $ 912,782	% - % - % - % 66.43	- - - 655 655

Current 1 to 90 days past due 181 to 365 days past due Total	December 31, 2020	December 31, 2020	December 31, 2020
	Gross carrying amount	Weighted- average loss rate Loss allowance provision
	$ 776,873 116,224 3,251 $ 896,348	% - % - % 56.38	- - 1,833 1,833

The movement in the allowance for notes and trade receivables was as follows:

Balance on January 1 Impairment losses reversed Balance on December 31	For theyears ended December 31,	For theyears ended December 31,
	2021 $ 1,833 (1,178) $ 655	2020 11,289 (9,456) 1,833

The Company does not hold any collateral for the collectible amounts.

For further credit risk information, please refers to note 6 (q).

(d) Other receivables

Other receivable—interests receivable Others Less: Loss allowance	December 31, 2021 $ 1,896 5,230 - $ 7,126	December 31, 2020
		2,779 9,075 -
		11,854

For further credit risk information, please refers to note 6 (q).

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(e) Inventories

Finished goods Work in progress Raw materials Merchandise	December 31, 2021 $ 206,484 384,297 322,851 3 $ 913,635	December 31, 2020
		133,823 323,457 206,960 -
		664,240

As of December 31, 2021 and 2020, the detail of the cost of sales were as follows:

Inventory sold Inventory valuation decline losses Losses on disposal of obsolete inventories Gains on disposal of scraps Warranty provision Others	For theyears ended December 31 2021 2020 $ 3,447,281 2,698,351 101,819 7,394 7,023 11,269 (40,729) (34,476) 1,220 (760) (7,038) (1,413) $ 3,509,576 2,680,365
	2021 $ 3,447,281 101,819 7,023 (40,729) 1,220 (7,038) $ 3,509,576

As of December 31, 2021 and 2020, the Company did not provide any inventories as collateral for its loans.

(f) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2021 and 2020 were as follows:

Land Cost or deemed cost: Balance at January 1, 2021 $ 305,349 Additions - Disposals - Reclassification - Balance at December 31, 2021$ 305,349 Balance at January 1, 2020 $ 305,349 Additions - Disposals - Reclassification - Balance at December 31, 2020$ 305,349	Buildings and Structures 666,928 690 (2,341) 5,281 670,558 667,373 1,137 (1,712) 130 666,928	Machinery and Equipment 1,937,369 15,260 (38,435) 58,256 1,972,450 1,850,912 13,989 (29,222) 101,690 1,937,369	Other Equipment 148,300 9,840 (5,174) 2,312 155,278 147,612 4,168 (9,547) 6,067 148,300	Construction in progiess - 180 - - 180 - - - - -	Total 3,057,946 25,970 (45,950) 65,849 3,103,815 2,971,246 19,294 (40,481) 107,887 3,057,946

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

Land Depreciation and impairment loss`：` Balance at January 1, 2021 $ - Depreciation for the year - Disposals - Balance at December 31, 2021$ - Balance at January 1, 2020 $ - Depreciation for the year - Disposals - Balance at December 31, 2020$ - Carrying amounts: Balance at December 31, 2021$ 305,349 Balance at January 1, 2020 $ 305,349 Balance at December 31, 2020$ 305,349	Buildings and Structures 310,432 18,991 (2,341) 327,082 293,178 18,896 (1,642) 310,432 343,476 374,195 356,496	Machinery and Equipment 1,665,644 102,471 (38,435) 1,729,680 1,600,738 93,617 (28,711) 1,665,644 242,770 250,174 271,725	Other Equipment 117,456 10,654 (5,174) 122,936 117,086 9,917 (9,547) 117,456 32,342 30,526 30,844	Construction in progiess - - - - - - - - 180 - -	Total 2,093,532 132,116 (45,950) 2,179,698 2,011,002 122,430 (39,900) 2,093,532 924,117 960,244 964,414

As of December 31, 2021 and 2020, the Company did not provide the property, plant and equipment as collateral for its loans.

(g) Intangible Assets

The costs of intangible assets, amortization, and impairment loss of the Company for the years ended December 31, 2021 and 2020 were as follows:

Costs: Balance at January1, 2021 Additions Disposals Balance at December 31, 2021 Balance at January1, 2020 Additions Disposals Balance at December 31, 2020 Amortization and Impairment Loss: Balance at January1, 2021 Amortization for the year Disposals Balance at December 31, 2021	Computer software $ 38,474 9,356 (1,172) $ 46,658 $ 35,335 11,537 (8,398) $ 38,474 $ 21,525 9,544 (1,172) $ 29,897

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

Balance at January1, 2020 Amortization for the year Disposals Balance at December 31, 2020 Carrying amounts: Balance at December 31, 2021 Balance atJanuary 1, 2020 Balance at December 31, 2020	Computer software $ 18,504 11,419 (8,398) $ 21,525 $ 16,761 $ 16,831 $ 16,949

(i) Amortization

The amortizations of intangible assets were included in the statement of comprehensive income:

Operating costs Operating expenses	2021 $ 2,204 7,340 $ 9,544	2020
		2,371 9,048
		11,419

(ii) Disclosures on pledges

As of December 31, 2021 and 2020, none of the intangible assets of the Company had been pledged as collateral.

(h) Other current assets and other non-current assets

The other current assets and other non-current assets of the Company were as follows:

Other financial assets-current Prepayment for equipment Refundable deposits Other-current Other-non current	December 31, 2021 $ 1,118,300 33,938 1,509 31,121 7 $ 1,184,875	December 31, 2020
		1,799,700 18,834 1,509 34,450 44
		1,854,537

(i) Short-term borrowings

The short-term borrowings were summarized as follows:

Unused short-term credit lines	December 31, 2021 $ 250,000	December 31, 2020
		200,000

For the collateral for short-term borrowings, please refer to note 8.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(j) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities he Company’s employee benefit liabilities were as Short-term paid leave liability	December 31, 2021 $ 146,113 (113,509) $ 32,604 follows: December 31, 2021 $ 13,135	December 31, 2020 147,028 (109,099) 37,929 December 31, 2020 13,649

The Company’s employee benefit liabilities were as follows:

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to 113,509 thousands at the report date. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

The movement in present value of the defined benefit obligations for the Company were as follows:

Balance,January 1 Current service costs and interest costs Remeasurements loss (gain): `－`Return on plan assets excluding interest income Actuarial loss (gain) arising from: `－`demographic assumptions `－`financial assumptions Benefits paid Balance, December 31	2021 $ 147,028 1,427 5,057 464 (5,737) (2,126) $ 146,113	2020 138,766 2,097 1,083 656 6,534 (2,108) 147,028

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Balance, January 1 Interest income Remeasurements loss (gain): -Return on plan assets excluding interest income Amount that has been allocated to the plan Benefits paid Balance, December 31	2021 $ 109,099 383 1,560 4,593 (2,126) $ 113,509	2020 102,571 774 3,322 4,540 (2,108) 109,099

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Selling expenses Administration expenses Research and development expenses	2021 $ 919 125 $ 1,044 $ 703 37 136 168 $ 1,044	2020
		1,068 255
		1,323
		877 47 178 221
		1,323

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

5) Remeasurement of net defined benefit liability recognized in other comprehensive income

The Company’s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2021 and 2020, were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2021 $ (59,673) 1,775 $ (57,898)	2020 (54,723) (4,950) (59,673)

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Increase in future salary rate	2021 2020
	% 0.70 % 0.35 % 2.00 % 2.00

The expected allocation payment to be made by the Company to the defined benefit plans for the year after the reporting date is 4,413 thousands.

The weighted average lifetime of the defined benefits plans is 11 years.

7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences of defined benefit obligations Increased 0.25% Decreased 0.25% $ (3,967) 4,125 4,061 (3,927) (4,159) 4,329 4,247 (4,103)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to 16,195 thousands and 15,872 thousands for the years ended December 31, 2021 and 2020, respectively.

(k) Income Taxes

1.Income taxes

The components of income tax in the years 2021 and 2020 were as follows:

		2021	2020
Current tax expense
Current period	$	135,059	63,274
Adjustment for prior periods		629	(180)
Additional tax on undistributed earnings		1,808	11,200
		137,496	74,294
Deferred tax expense
Origination and reversal of temporary differences		(19,595)	40,456
Tax expenses	$	117,901	114,750
econciliation of income tax and profit before tax for	2021	and 2020 is as follows:
		2021	2020
Profit before income tax	$	585,311	521,700
Income tax using the Company’s domestic tax rate		117,062	104,341
Tax incertives		(1,350)	-
The amount of tax adjusted according to the tax law		(698)	(611)
Change in deferred tax asset		450	-
Change in provision in prior periods		629	(180)
Additional tax on undistributed earnings		1,808	11,200
	$	117,901	114,750

Reconciliation of income tax and profit before tax for 2021 and 2020 is as follows:

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Deferred tax assets and liabilities

Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Deferred Tax Assets:

Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Inventory price loss	Unrealized exchange loss 163 327 490 2,351 (2,188) 163	Loss carry- forwards	Others 3,317 (1,096) 2,221 4,424 (1,107) 3,317	Total 36,054 19,595 55,649 76,509 (40,455) 36,054
	$ 32,574 20,364 $ 52,938 $ 31,095 1,479 $ 32,574		- - - 38,639 (38,639) -

(iii) Examination and Approval

The Company’s tax returns for the years through 2019 were examined and approved by the Taichung National Tax Administration.

(l) Capital and Other Equity

As of December 31 2021 and 2020, the number of authorized ordinary shares were 138,571 thousand shares at par value of $10 per share, amounting to $1,862,196 thousand.

Reconciliation of shares outstanding for 2021 and 2020 was as follows:

Balance at December 31 (as of January 1)	Ordinary Shares(thousand) 2021 2020 138,571 138,571	Ordinary Shares(thousand) 2021 2020 138,571 138,571
	2021 138,571
		138,571

(i) Capital surplus

The balances of capital surplus as of December 31, 2021 and 2020 were as follows:

Gain on disposal of assets Overdue dividends Premium from issued	December 31, 2021 $ 305 734 25,803 $ 26,842	December 31, 2020
		305 559 25,803
		26,667

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the capital increase, by transferring the capital surplus in excess of the par value, should not exceed 10% of the total common stock outstanding.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Retained Earnings

The Company's article of incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

The Company's dividend policy depends on the Company's capital expenditure budget and reqiured working capital. The remaining earnings will be distributed either in cash or in stock dividends, or both. However, the cash dividend can not be less than 10% of the total dividends distributed.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2)

Special reserve

In accordance with the regulation set by the FSC, a portion of current period earnings and undistributed prior period earnings shall be reclassified as a special earnings reserve during earnings distribution. When the undistributed retained earnings of 2019 are distributed in 2020, the special earnings reserve will be recognized from the profit and loss of the current period and the undistributed retained earnings of the previous period. When the undistributed retained earnings of 2020 are distributed in 2021, the special earnings reserve will be recognized from the profit after income tax of the current period plus other current earnings and the undistributed retained earnings of the previous period. The net reduction of other shareholders’ equity accumulated in the previous period shall be recognized from the undistributed retained earnings and shall not be distributed. Amounts of subsequent reversals pertaining to the net.The special reserve for the years ended December 31, 2021 and 2020 were $38,560 thousand, respectively.

3)

Earnings distribution

Earnings distribution for 2020 and 2019 were decided via the general meeting of the shareholders held on August 30, 2021 and June 30, 2020, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to common shareholders Cash	2020	2020	Total amount 325,641	2019
	Amount per share (NTD)			Amount per share (NTD) 1.2	Total amount
	$ 2.35				166,284

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

On March 15, 2022, the Company's Board of Directors resolved to appropriate the 2021 earnings. These earnings were appropriated as follows:

			2021
			Amount per	Total
			share (NTD)	amount
	Dividends distributed to common shareholders
	Cash	$	2.40	332,570
(iii)	OCI, net of tax
			Unrealized gains
			(losses) from financial
			assets measured at fair
			value through other
			comprehensive income
	Balance at January 1, 2021		$	(38,560)
	Unrealized gains (losses) from financial assets measured at fair
	value through other comprehensive income			2,242
	Disposal of investments in equity instruments designated		at fair
	value through other comprehensive income			36,318
	Balance December 31, 2021		$	-
	Balance at January 1, 2020
	(Equal Balance at December 31, 2020)		$	38,560

(m) Earnings per Share

Basic earnings per share

The details on the calculation of basic earnings per share as of December 31, 2021 and 2020 was based on the profit attributable to ordinary shareholders of the Company amounting to $467,410 thousand and $406,951 thousand, and the weighted average number of ordinary shares outstanding were both of 138,571 thousand respectively, as follows:

(i) Profit attributable to ordinary shareholders of the Company

Profit attributable to ordinary shareholders of the Company (ii) Weighted average outstanding number of ordinary Issued ordinary shares at 1 January (As of weighted average outstanding number of ordinary shares at 31 December)	2021 $ 467,410 shares 2021 138,571	2020
		406,951
		2020
		138,571

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

2. Diluted earnings per share

The details on the calculation of diluted earnings per share as of December 31, 2021 and 2020 was based on the profit attributable to ordinary shareholders of the Company amounting to $467,410 thousand and $406,951 thousand , and the weighted average number of ordinary shares outstanding after adjusting the effects of all dilutive potential ordinary shares of 139,447 thousand and 139,471 thousand, respectively, as follows:

(i) Profit attributable to ordinary shareholders of the Company (diluted)

2021 Profit attributable to ordinary shareholders of the Company (diluted) $ 467,410 (ii) Weighted average outstanding number of ordinary shares (diluted) 2021 Weighted average outstanding number of ordinary shares (basic) 138,571 Effect of dilutive potential ordinary shares Effect of employee share bonus 876 Weighted average number of outstanding ordinary shares (diluted) at December 31 139,447	2020
	406,951
	2020
	138,571 900
	139,471

(n) Revenue from contracts with customers

(i) Details of revenue

By geographical markets United States Taiwan Germany Japan Belgium Others By products Pneumatic nailers Automotive air tools Magnesium alloy products Others		For the year ended December 31,

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Contract balances

Contract liabilities	December 31, 2021 $ 83,878	December 31, 2020 35,963	January 1, 2020 71,040

For details on trade receivable and allowance for impairment, please refer to note 6 (c).

The amount of revenue recognized for the year ended December 31, 2021 and 2020, that was included in the contract liability balance at the beginning of the period were $22,853 thousand and $59,267 thousand.

(o) Remuneration to employees and directors

The Company's articles of incorporation, which were authorized by the board of directors but has yet to be approved by the shareholders, require that earnings shall first be offset against any deficit, then, a minimum of 0.5% will be distributed as employee remuneration, and a maximum of 3% will be allocated as remuneration to directors and supervisors. Employees who are entitled to receive the above mentioned employee remuneration, in share or cash, include the employees of the Company's subsidiaries who meet certain specific requirements.

For the years ended December 31, 2021 and 2020, the Company accrued and recognized its employee remuneration amounting to $31,859 thousand and $29,622 thousand, respectively, as well as its remuneration to directors and supervisors amounting to 9,980 thousand and $11,000 thousand, respectively. These amounts were calculated by using the Company's pre-tax net profit for the period before deducting the amounts of the remuneration to employees, directors and supervisors, multiplied by the distribution of ratio of the remuneration to employees, directors and supervisors based on the Company's articles of incorporation, and expensed under operating costs or expenses. If there would be any changes after the reporting date, the changes shall be accounted for as changes in accounting estimates and recognized as profit or lost in the following year.

(p) Non-operating Income and Expenses
(i) Interest income

The details of other income were as follows:

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2021 2020
Bank deposits and foreign bonds $ 7,006 16,690
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(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Other gains and losses

The details of other gains and losses were as follows:

Foreign exchange gains or loss, net Miscellaneous income Gains (Losses) on disposals of property, plant and equipment	2021 $ (37,881) 15,051 1,871 $ (20,959)	2020 (49,537) 2,027 1,139 (46,371)

(q) Financial Instruments

(i) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

(ii) Concentration of credit risk

The major customers of the Company are centralized in the hightech computer industry. To minimize credit risk, the Company periodically evaluates their financial positions and the possibility of collecting trade receivables. Besides, the Company monitors and reviews the recoverable amount of the trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. As of December 31, 2021 and 2020, 33% and 44%, respectively, of accounts receivable were from three and two specific customers. Thus, credit risk is significantly centralized.

(iii) Receivables and debt securities

For credit risk exposure of note and trade receivables, please refer to note 6(c).

Other financial assets at amortized cost includes other receivables and time deposits. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. (Regarding how the financial instruments are considered to have low credit risk, please refer to note 4(f).

(iv) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Carrying amount	6 months - 1 years	Over 5 years
$ 281,954 359,459 $ 641,413	- - -	- -
		-

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

December 31, 2020 Non-derivative financial liabilities Notes and Accounts payable Other payables	Carrying amount		Contractual cash flows 423,590 396,059 819,649	Within 6 months 423,590 396,059 819,649	6 months - 1 years	1 - 2 years - - -	2 - 5 years - - -	Over 5 years
	$ 423,590 396,059 $ 819,649				- - -			- -
								-

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(v) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2020 Foreign currency Exchange rates TWD 27,353 28.48 779,026
Foreign currency $ 58,500	Exchange rates 27.68	TWD	Exchange rates TWD 28.48 779,026
		1,619,289

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, and other financial assets (current and non-current); and trade and other payables that are denominated in foreign currency.The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. A strengthening (weakening) of 3% of the USD as of December 31, 2021 and December 31, 2020 would have increased (decreased) the net profit after tax by 38,863 and 18,696 thousand. The analysis is performed on the same basis for prior year.

3) Foregin exchange gain and loss on monetary items

Since the Company transacts in different functional currencies, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(vi) Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.5 basis points, the Company’s net income would have increased / decreased by $5,591 thousand and $8,999 thousand for the year ended December 31, 2021 and 2020, respectively, with all other variable factors remaining constant. This is mainly due to the Company’s foreign currency deposits.

(vii) Fair value of financial instruments

1) Fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or loss, derivative financial instruments used for hedging is measured on a recurring basis. The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required :

	December 31, 2021	December 31, 2021	December 31, 2021
Book Value		Fair Value
	Level 1	Level 2	Level 3 10 - - - - 10 - -	Total
$ 10 1,117,240 919,253 1,118,300 3,154,793 $ 3,154,803 641,413 $ 641,413	-	-		10
	- - -	- - -		- - -
	-	-		-
	-	-		10
	-	-		-
	-	-		-

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Book Value		Fair Value
	Level 1	Level 2	Level 3 10 - - - - 10 - -	Total
$ 10 544,445 906,369 1,799,700 3,250,514 $ 3,250,524 $ 819,649 $ 819,649	-	-		10
	- - -	- - -		- - -
	-	-		-
	-	-		10
	-	-		-
	-	-		-

2) Valuation techniques for financial instruments not measured at fair value

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Financial assets measured at amortized cost (held-to-maturity financial assets). If quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the estimated valuation or prices used by competitors are adopted.

3) Valuation techniques for financial instruments measured at fair value

Non-derivative financial instruments regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’ s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

4) Transfers between Level 1 and Level 2

There were no transfers from Level 1 to another in 2021 and 2020.

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’ s financial instruments that use Level 3 inputs to measure fair value include “financial assets measured at fair value through profit or loss – debt investments” and “fair value through other comprehensive income (available-for-sale financial assets) – equity investments”.

The Company's equity investment instruments that are not available for active market quotes and are not for short-term trading purposes, the management adopts the recent financial report of the investee company to assess the industry development and view publicly available information, and to examine and Evaluate the operating status and future operating performance of the investee company to assess the fair value of the investee company. Generally, changes in industry and market prospects are highly positively correlated with changes in the operating and future performance of the investee company.

Inter-relationship between significant Valuation Significant unobservable inputs and Item technique unobservable inputs fair value measurement Financial assets at fair value Net Asset Value  Net Asset Value Not applicable through other comprehensiveMethod income (Non-current financial assets measured at cost) equity investments without an active market

(r) Financial Risk Management

(i) Overview

The Company is exposed to the following risks from its financial instruments:

1) Credit risk

2) Liquidity risk

3) Market risk

The following likewise discusses the Company’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects on these risks exposures, please refer to the respective notes in the accompanying financial statements.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Structure of risk management

The Company’ s finance department provides business services for the overall internal department. It coordinates the domestic and international financial market operations, as well as supervises and manages the financial risks related to the Company’s operation based on the internal risk report on exposure to risk with the analysis of the extent and the width of the risk. Operation of derivative financial instruments is subject to the policy approved by the Board of Directors, which is the documentation regarding exchange rate risk, interest risk, credit risk , operation of derivative and non-derivative financial instruments and investment in the remaining current capital. The internal auditors of the Company continue with the review of the compliance with the policy and the extent of the exposure to risk. The Company has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to financial instruments fails to meet its contractual obligations that arise principally from the Company’s receivables from customers and investments in debt securities.

1) Accounts receivables and other receivable

The Company established a credit policy to obtain the necessary collateral to mitigate risks arising from financial loss due to default risk. The Company will transact with corporations having credit ratings equivalent to investment grade, and such ratings are provided by independent rating agencies. When it is not possible to obtain such information, the Company will assess the ratings based on other publicly available financial information and records of transactions with its major customers. The Company continuously monitors its exposure to credit risk and counterparty credit ratings, and establishes sales limits based on credit rating for each of its approved customer. The credit limits for each counterparty are approved and reviewed annually by the Risk Management Committee.

The Company did not have any collateral or other credit enhancements to avoid credit risk of financial assets.

2) Investments

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company expects the counterparties above to meet their obligations; hence, there is no significant credit risk arising from these counterparties.

3) Guarantee

Either as of December 31, 2021 and 2020, there was no outstanding guarantees.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. Its management supervises the banking facilities and ensures compliance with the terms of loan agreements.

Loans and borrowings from the bank form an important source of liquidity for the Company. As of December 31, 2021 and 2020, the Company's unused credit lines amounted to $25,000 thousand and $200,000 thousand, respectively.

(v) Market risk

Market risk is a risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, which affects the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily US Dollars (USD).

2) Interest rate risk

The Company adopts a policy of ensuring that exposure to changes in interest rates on borrowings is on a floating-rate basis

3) Other market price risk

The Company is exposed to equity price risk due to the investments in equity securities. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company minimizes the risk of holding different investment portfolios.

(s) Capital Management

The Company’ s objective is to manage its capital to safeguard its capacity to continue to operate, and provide a return on shareholders, as well as to maintain the interest of other related parties, 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 dividend payment to its shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabiltiies.

The Company and other entities in the same industry use the debt-to-equity ratio to manage their capital. This ratio is the total net debt, divided by the total capital. The net debt from the balance sheet is derived from the total liabilities, less, cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity, plus, net debt.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

As of December 31, 2021, the Company’s capital management strategy is consistent with that of the prior year. The Company’s debt to equity ratio at the end of the reporting period was as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Adjusted capital Debt-to-equity ratio	December 31, 2021 $ 868,645 (1,117,240) (248,595) 4,262,895 $ 4,014,300 -	December 31, 2020 972,217 (544,445) 427,772 4,116,934 4,544,766 9.41%

The cash flows from operation activities resulted in an decrease in the Company’s debt ratio as of December 31, 2021.

(7) Related-party transactions:

Key management personnel compensation

Key management personnel compensation comprised of the following:

Short-term employee benefits Post-employment Benefits Termination benefits Other long-term employee benefits Share-based paymen	2021 $ 33,948 522 - - - $ 34,470	2020
		39,079 543 - - -
		39,622

(8) Pledged assets: None.

(9) Commitments and contingencies: None.

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(12) Other:

A summary of current-period employee benefits, depreciation, depletion, and amortization, by function is as follows:

as follows:
By function By item	2021			2020
	Operating Costs	Operating Expenses	Total	Operating Costs	Operating Expenses	Total
Employee benefits
Salaryand wages	346,222	120,912	467,134	328,536	117,521	446,057
Labor and health insurance	32,301	10,630	42,931	29,851	9,394	39,245
Pension	12,594	4,645	17,239	12,673	4,522	17,195
Director's remuneration	-	13,016	13,016	-	18,379	18,379
Others	11,762	2,398	14,160	11,644	2,344	13,988
Depreciation	80,507	51,609	132,116	75,567	46,863	122,430
Amortization	2,204	7,340	9,544	2,371	9,048	11,419

The number of employees in the Company and employee benefits for 2021 and 2020 were as follows:

2021 The number of employees 753 The number of non-employee directors 6 Average employee benefits $ 725 Average salary $ 625 Adjustment of average salary 2.46% Supervisor’s remuneration $ 2,220	2020
	736 5 707 610 (0.49)% 3,360

The Company's salary and remuneration policy (including directors, supervisors, managers and employees) are as follows:

1. Remuneration to directors and supervisors

The Board is authorized to determine the salary for the directors and supervisors, taking into account the extent and value of the services they provided for the Company, as well as the level within the same industry in Taiwan. In addition, the Company's articles of incorporation, which were authorized by the board of directors but has yet to be approved by the shareholders, require that earnings shall first be offset against any deficit, then, a maximum of 3% will be allocated as remuneration to directors and supervisors.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

Remuneration to executive officers
(1) Ensure that the Company’s salary and remuneration policies comply with relevant laws and regulations to attract talents.
(2) The remuneration and performance bonuses of executive officers are with reference to the industry practice in the R.O.C.; and the total remuneration paid to executive officers is decided based on their contribution to the Company, job responsibility, achievement of their individual goals, and the achievement of the Company’ s performance on short-term and long-term business goals, as well as the projected future risks the Company will face.
(3) The executive officers should not violate the Company's risk management policy to get more bonuses.
(4) The Company determines the percentage of bonus on business performance and the timing of bonus payment based on operating results and industry practice in the R.O.C.
The Company’s remuneration policies

The Company’ s remuneration policies are in accordance with the Company’ s “ Rules for Compensation to Employees” and “Rules for performance of Employees”

(13) Other disclosures:

(a) Information on significant transactions: None.

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties: None.
(ii) Guarantees and endorsements for other parties: None.
(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock-COTA commercial bank	None	FVOCI	2	10	-	13

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None .
(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions: None.
(b) Information on investments: None.
(c) Information on investment in mainland China: None.
(d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Ba Wei Investment Co., Ltd.	13,507,138	% 9.74

(14) Segment information:

(a) General information

The Company has one reportable segment, the pneumatic hand tool. This segment is mainly involved in manufacturing and selling Nail machine and pneumatic tools, providing products and manage relevant skills and marketing strategies.

(b) Information about reportable segments and their measurement and reconciliations

The Company uses the internal management report that the chief operating decision maker reviews as the basis to determine the resource allocation and make a performance evaluation. The internal management report includes profit before taxation.

The segment profit includes depreciation and amortization expenses, income tax expense (income), unusual profit (loss), and other significant non-monetary items. The reporting amount is the same with that of the chief operating decision maker's.

There is no inconsistency between the accounting principles of the operating segment and the accounting principle described in Note 4. All reportable segments of the Company is consistent with the financial statements. Please refer to the balance sheet and comprehensive income statement.

(Continued)

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(c) Production and service information

Revenue from the external customers of the Company was as follows:

Product and services 2021 Pneumatic nailers $ 2,481,263 Automotive air tools 1,059,588 Magnesium alloy products 417,371 Others 526,516 $ 4,484,738	2020
	2,073,237 758,492 333,127 424,457
	3,589,313

(d) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

Geographical information United States Taiwan Germany Japan Belgium Danmark Switzerland Other countries	2021 $ 2,278,571 576,401 334,623 140,925 144,195 75,624 60,284 874,115 $ 4,484,738	2020
		1,784,631 485,529 294,443 112,334 101,584 90,019 69,664 651,109
		3,589,313

Non-current assets:

rrent assets:
Geographical information Taiwan	2021 $ 974,822	2020
		1,000,242

Non-current assets include property, plant and equipment, investment property, intangible assets, and other assets; excluding financial instruments, deferred tax assets, pension fund assets, and rights arising from an insurance contract (non-current).

(e) Major customers

2020 A customer of pneumatic hand tool division $ 728,357	2019
	724,186

Basso Industry Corporation

List of cash and bank deposits

December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Cash Bank deposits	Description Petty cash Foreign currency(USD7,164.74×30.7522 JPY467,000 ×0.28547 EUR3,260 ×35.2316 HKD640 ×3.9422 CNY16,962.5 ×4.41243 GBP2,905 ×41.2180 KWR190,000 ×0.02911 Demand deposit and time deposit Foreign currency(USD31,122,823.01×27.68 JPY1,430,056×0.2405 EUR1,813,683.64×31.32 CAD200×4.3440)	Amount
		$ 100 671 197,840 918,629 $ 1,117,240

Basso Industry Corporation

List of nots and accounts receivable

December 31, 2021

(expressed in thousands of New Taiwan dollars)

Client's name Notes Receivable`：` A Company Others (Note) Trade Receivable`：` B Company C Company D Company Others (Note) Allowance	Description Operating " Operating " " "	Amount
		$ 18,753 10,739 $ 29,492 $ 143,974 96,932 48,051 594,333 883,290 (655) $ 882,635

Other receivable list

Item Other receivable	Description Interest receivable and others	Amount
		$ 7,126

Basso Industry Corporation

List of other current financial assets

December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Other financial asset	Description Time deposits with maturities of more than three months	Amount
		$ 1,118,300

Inventory list

Item Commodity Financial goods Work in process Raw materials Allowance for valuation	Amount Cost Market price $ 6 6 220,482 236,265 463,282 385,890 494,552 474,551 1,178,322 1,096,712 (264,687) $ 913,635	Amount Cost Market price $ 6 6 220,482 236,265 463,282 385,890 494,552 474,551 1,178,322 1,096,712 (264,687) $ 913,635	Notes
	Cost $ 6 220,482 463,282 494,552 1,178,322 (264,687) $ 913,635
			Net realizable value Net realizable value Net realizable value Replacement cost

Basso Industry Corporation

List of prepaid expenses and other current assets

December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Prepayments Tax refund Other current assets	Description Prepaid receipts Other prepaid expenses VAT Temporary payments	Amount
		$ 1,609 8,875 10,484 17,403 3,234 20,637 $ 31,121

Basso Industry Corporation

List of changes in P.P.E and accumulated depreciation

January 1, 2021 to December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Opening balance Cost`：` Land $ 305,349 Building and structure 666,928 Machinery equipment 1,937,369 Other equipment 148,300 Work in progross - 3,057,946 Accumulated depreciation`：` Building and structure 310,432 Machinery equipment 1,665,644 Other equipment 117,456 2,093,532 $ 964,414		Increased - 690 15,260 9,840 180 25,970 18,991 102,471 10,654 132,116 (106,146)		Decreased - (2,341) (38,435) (5,174) - (45,950) (2,341) (38,435) (5,174) (45,950) -		Reclassify	Ending balance	Ending balance	Notes
						- 5,281 58,256 2,312 - 65,849 - - - - 65,849		305,349 670,558 1,972,450 155,278 180 3,103,815 327,082 1,729,680 122,936 2,179,698 924,117	Note1 Note1 Note1

Note1 ： The reclassification of this period consisted of the transfer of prepayment of equipment into the amount of 46,766 thousand and the transfer of inventory of 19,083 thousand.

Basso Industry Corporation

January 1, 2021 to December 31, 2021

List of changes in intangible assets

(expressed in thousands of New Taiwan dollars)

Please refer to 6 (g) for related information.

List of other non-current assets

December 31, 2021

Item Other Non-current assets	Description Refundable deposits Prepaid equipment Prepayment	Amount
		$ 1,509 33,939 6 $ 35,454

List of notes and accounts payable

Supplier's name Notes payable Others (Note) Account payable E Company Others (Note)	Description Operating Operating "	Amount
		$ 7,006 $ 22,090 252,858 $ 274,948

Note: If the amount is less than 5% of the total amount, it will not be disclosed seperately.

Basso Industry Corporation

List of accured expenses and other current liabilities

December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Other payable Other current liabilities	Description Payroll Processing fee Employee bonus and director's compensation Advertising Others (Note) Temporary payment`－`other Collection payment	Amount
		$ 96,590 97,399 41,839 22,726 100,905 359,459 517 642 1,159 $ 360,618

Note: If the amount is less than 5% of the total amount, it will not be disclosed seperately.

Basso Industry Corporation

List of net operating income

For the year ended December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Pneumatic nailers Automotive air tools Magnesium alloy products Others	Quantity 1,212,457 609,592 4,483,003	Amount
		$ 2,481,263 1,059,588 417,371 526,516 $ 4,484,738

Basso Industry Corporation List of cost of goods sold

For the year ended December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item
Merchandise
Merchandise, beginning of year
Plus：Merchandise purchased
Less：Merchandise, end of year
Cost of goods soldfrom merchandise
Raw materials
Raw materials, beginning of year
Plus：raw materials purchased
Gain on physical inventory
Less：raw materials, end of year
Sale of raw materials
Scrapped
Others
Raw materials consumed
Direct labor
Manufacturing expenses
Manufacturing costs
Plus：work-in-process, beginning of year
Less：work-in-process, end of year
Cost of finished goods manufactured
Plus：finished goods, beginning of year
finished goodspurchased
Less：finished goods, end of year
Scrapped
Transferred to fixed assets
Others
Cost of goods sold from production
Sale of raw material
Revenue from sale of scraps
Warranty provision
Scrapped
Inventory valuation loss
Others
Operating cost Amount

$ 3
2,449
(6)
2,446
345,717
2,311,990
14
(494,552)
(292,217)
(6,401)
(19,383)
1,845,168
205,816
1,324,824
3,375,808
341,765
(463,282)
3,254,291
139,623
15,394
(220,482)
(622)
(19,083)
(16,506)
3,152,615
292,217
(40,729)
1,221
7,023
101,819
(7,036)
$
3,509,576

Basso Industry Corporation

List of operating expenses

For the year ended December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Salary Freight Employee benefits Depreciation Advertising Sample fee Commission Export fee Professional service fees Others (note)	Sales expense $ 27,257 16,187 419 2,360 14,606 6 7,214 34,343 - 10,688 $ 113,080	Administration 52,185 - 8,382 768 - - - - 8,733 13,913 83,981	Research expense	Research expense
				56,727 - 738 48,481 - 20,954 - - 130 52,985
				180,015

Note: If the amount is less than 5% of the total amount, it will not be disclosed seperately.

Basso Industry Corporation

List of non-operating income and expenses

For the year ended December 31, 2021

(expressed in thousands of New Taiwan dollars)

Item Non-operating income`：` Interest income`－`bank deposits and bonds Profit on disposal of fixed assets Others (note) Non-operating expense`：` Financial assets valuation loss	Description Non-operating " " Non-operating	Amount
		$ 7,006 1,871 15,051 $ 23,928 37,881 $ 37,881

Note: If the amount is less than 5% of the total amount, it will not be disclosed seperately.

AI assistant

BASSO — Annual Report 2021

51850_rns_2021-11-11_6a2bde59-225c-41b7-b5f7-ed0c2e7532bd.pdf

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Description of key audit matter:

How the matter was addressed in our audit

2. Inventory evaluation

Description of key audit matter:

How the matter was addressed in our audit

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditor’s Responsibilities for the Audit of the Financial Statements

KPMG

Notes to Readers

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Balance Sheets

December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars)

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars , except for earnings per share)

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(English Translation of Financial Statements and Report Originally Issued in Chinese) BASSO INDUSTRY CORPORATION

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(expressed in Thousands of New Taiwan dollars)

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

(1) Company history

(2) Approval date and procedures of the financial statements

(1) New standards, amendments and interpretations adopted:

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

(c) Foreign currencies

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(f) Financial instruments

(i) Financial assets

1) Financial assets measured at amortized cost

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

4) Derecognition of financial assets

2) Equity instrument

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(i) Lease

(j) Intangible assets

(i) Research and measurement

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Subsequent expenditure

(iii) Amortization

1) Computer software:1~10 years

(k) Impairment of non-financial assets

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(l) Provisions

(m) Revenue from contracts with customers

1) Sale of goods

2) Financing components

(n) Employee benefits

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(ii) Defined benefit plans

(iii) Short-term employee benefits

(o) Income taxes

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(p) Earnings per share

(q) Operating segments

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

BASSO INDUSTRY CORPORATION Notes to the Financial Statements

(6) Explanation of significant accounts

(c) Note and trade receivables

BASSO Annual Report 2021