CHAINTECH — Annual Report 2021

Nov 10, 2021

Chaintech Technology Corporation and Subsidiaries

Consolidated Financial Statements and

Independent Auditors' Report

For the Years Ended December 31, 2021 and 2020 (Stock Code: 2425)

Company Address: 3F., No. 48-3, Minsheng Road, Xindian District, New Taipei City Tel: (02)2913-8833

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Chaintech Technology Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors' Report

Table of Contents

Items	Page
I. Cover Page	1
II. Table of Contents	2 ~ 3
III. Declaration of Consolidated Financial Statements of Affiliated Enterprises	4
IV. Independent Auditors' Report	5 ~ 9
V. Consolidated Balance Sheets	10 ~ 11
VI. Consolidated Statements of Comprehensive Income	12 ~ 13
VII. Consolidated Statements of Changes in Equity	14
VIII. Consolidated Statements of Cash Flows	15
IX. Notes to the Consolidated Financial Statements	16 ~ 64
(I) Company History	16
(II) Approval Date and Procedures of the Parent Company Only Financial Statements	16
(III) Application of New and Amended Standards and Interpretations	16 ~ 18
(IV) Summary of Significant Accounting Policies	18 ~ 30
(V) Significant Accounting Judgments and Sources of Estimation and Assumption
Uncertainty	30
(VI) Descriptions of Significant Accounting Items	30 ~ 51

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Items	Page
(VII) Transaction with related parties	51 ~ 53
(VIII) Pledged assets	53
(IX) Significant Contingent Liabilities and Unrecognized Contract Commitments	53
(X) Significant Disaster Loss	53
(XI) Significant Events after the End of the Financial Reporting Period	53
(XII) Others	54 ~ 62
(XIII) Supplementary Disclosures	62 ~ 63
1. Information on significant transactions	62 ~ 63
2. Information on investees	63
3. Information on investments in Mainland China	63
4. Information on major shareholders	63
(XIV) Segment Information	63 ~ 64

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Chaintech Technology Corporation and Subsidiaries

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies required to be included in the consolidated financial statements of affiliated enterprises under the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are all the same as enterprises required to be included in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries for the year ended December 31, 2021 as provided in the IFRS 10 Consolidated Financial Statements. In addition, relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has all been disclosed in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries. Consequently, no consolidated financial statements of affiliated enterprises are prepared separately.

Hereby declared by

Company Name: Chaintech Technology Corporation

Person in charge: Shu-Jung Kao March 23, 2022

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Independent Auditors' Report (111) Cai-Shen-Bao-Zi No. 21004729

To Chaintech Technology Corporation:

Audit Opinions

The independent auditors have audited the accompanying consolidated balance sheets of Chaintech Technology Corporation and subsidiaries (hereinafter referred to as "the Group") as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying consolidated financial statements, in all material respects, give a true and fair view of the consolidated financial position of the Group as of December 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed by the Financial Supervisory Commission of the Republic of China (the "FSC").

Basis of Audit Opinion

We perform the audit in accordance with the Rules for Auditing and Certification of Financial Statements by Accountants and the Generally Accepted Auditing Standards of the Republic of China. Our responsibilities under those standards are further described in the section of Responsibilities of Certified Public Accountants for Auditing the Consolidated Financial Statements. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

Key Audit Matters

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the consolidated financial statement of the Group for the year ended December 31, 2021. These matters are addressed in the context of our audit of the

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consolidated financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the consolidated financial statement of the Group for the year ended December 31, 2021 are stated as follows:

Sales revenue cut-off

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Notes IV (XXVII) to the consolidated financial statements. For the description of sales revenue, please refer to Note VI (XVIII) to the consolidated financial statements.

The Group has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Group mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. Such revenue recognition generally involves a large number of manual operations. Considering that the volume of the shipments of the Group is large, and the amount of transaction before and after the financial date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

1. Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Group. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.

2. Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Group determine the sales recognition when the customer receives the delivery of goods and the right of control is transferred.

3. Perform a closing test for sales revenue from delivery of warehouses for a certain period

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before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.

1. Make a written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

Impairment of intangible assets

Description

As of December 31, 2021, the balance of intangible assets was NT$168,525. Please refer to Note VI (XII) for the assessment of the impairment of non-financial assets. To assess whether intangible assets are impaired, the Group estimates the future cash flows based on the cash-generating units to which the intangible assets belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the Group's assessment of the impairment of intangible assets as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

1. Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.

2. Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.

3. Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

Other Matters – Parent Company Only Financial Statements

We have also audited the parent company only financial statements of Chaintech

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Technology Corporation for the years ended December 31, 2021 and 2020, for which we have issued the audit report with an unqualified opinion for reference.

Responsibility of Management and Those Charged with Governance for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, the responsibility of management includes assessing the Group's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless management intends to liquidate the Group or terminate the business, or has no realistic alternative but to do so.

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

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Responsibilities of Certified Public Accountants for Auditing the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the GAAS of Republic of China will always detect a material misstatement when it exists. Misstatements may arise from fraud and error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the consolidated financial statements, it will be deemed as material.

As part of an audit in accordance with the GAAS of Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also execute the following tasks:

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

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

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

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

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may cause the Group to no longer continue as a going concern.

1. Evaluate the overall expression, structure, and contents of the consolidated financial statements (including related notes) and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Group to express an opinion about the consolidated financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that are of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 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.

PwC Taiwan

Min-Chuan, Feng

Certified Public Accountants

Ya-Hui, Lin

Former Securities and Futures Bureau, Financial Supervisory Commission Approved Certificate Number: JGZLZ No. 0960038033 Financial Supervisory Commission

Approved Certificate Number: JGZSZ No. 1070323061 March 23, 2022

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Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets For the Years Ended December 31, 2021 and 2020

Assets	December31,2021 Notes Amount % VI(I) $ 692,998 20 VI(II) 64,204 2 VI (IV) - - VI (IV) 645,541 19 VI(IV) and VII 736,800 22 6,857 - - - VI(V) 512,277 15 VI(VI) 209,603 6 VI(VIII) and VIII 33,847 1 2,902,127 85 VI(III) 200,485 6 VI(VII) - - VI(IX) 23,158 1 VI(X) 37,312 1 VI (XI) 168,525 5 VI(XXIV) 20,773 1 48,960 1 499,213 15 $ 3,401,340 100 (Continued)	Unit: NT$ thousands December31,2020 Amount % $ 330,087 11 237,671 8 3,187 - 531,724 18 770,724 27 1,761 - 29,859 1 273,611 10 84,624 3 56,887 2 2,320,135 80 186,150 6 133,573 5 34,723 1 17,060 1 180,171 6 3,132 - 36,602 1 591,411 20 $ 2,911,546 100
		Amount $ 330,087 237,671 3,187 531,724 770,724 1,761 29,859 273,611 84,624 56,887 2,320,135 186,150 133,573 34,723 17,060 180,171 3,132 36,602 591,411 $ 2,911,546
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total Assets

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Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets

For the Years Ended December 31, 2021 and 2020

Unit: NT$ thousands

Liabilities and equity	Notes VI(XIII) and VIII VI(XVIII) VII VI(XIV) and VII VI(XXVI) VI(XXIV) VI(XVI) VI(XVII) VI(XVI) IX	December 31,2021	% 7 3 23 - 4 2 - - 39 - 1 - 1 40 30 - 4 1 23 ( 1 ) ( 4) 53 7 60 100	December 31,2020
		Amount $ 226,840 111,677 773,163 335 119,526 54,318 14,421 15,457 1,315,737 - 23,464 5,078 28,542 1,344,279 1,014,988 100 147,312 39,701 787,638 ( 29,249 ) ( 151,746) 1,808,744 248,317 2,057,061 $ 3,401,340
Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of the parent Capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Undistributed earnings Other equity 3400 Other equity 3500 Treasury stocks 31XX Total equity attributable to owners of the parent 36XX Non-controlling interests 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total liabilities and equity

The notes to the consolidated financial statements are part of the consolidated financial statements and should be read together.

Chairman of the Board: Shu-Jung Kao

President: Shu-Jung Kao

Accounting Officer: Yu-Nu Lai

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Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income

January 1 to December 31, 2021 and 2020

Unit: NT$ thousands

(Except for earnings per share, which are expressed in New Taiwan Dollars)

Item

2021 2020 Notes Amount % Amount % VI(XVIII) and VII $ 6,518,064 100 $ 4,672,310 100 VI(V)(XXII) (XXIII) and VII ( 5,841,667) ( 90)( 4,235,305 ) ( 91) 676,397 10 437,005 9 VI(XXII) (XXIII) and VII ( 174,123 ) ( 3) ( 105,616 ) ( 2) ( 91,522 ) ( 1) ( 83,744 ) ( 2) ( 20,980 ) - ( 17,887 ) - XII(II) ( 34,426) ( 1)( 3,547 ) - ( 321,051) ( 5)( 210,794 ) ( 4) 355,346 5 226,211 5 823 - 794 - VI(XIX) 10,777 - 7,115 - VI(XX) ( 117,225 ) ( 2) ( 26,072 ) ( 1) VI(XXI) ( 5,724 ) - ( 6,503 ) - VI(VII) ( 35,808) - ( 11,921 ) - ( 147,157) ( 2)( 36,587 ) ( 1) 208,189 3 189,624 4 VI(XXIV) ( 45,445) - ( 6,211 ) - $ 162,744 3 $ 183,413 4

4000 Operating revenue 5000 Operating costs 5950 Gross profit from operations Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit losses 6000 Total operating expenses 6900 Operating income Non-operating income and expenses 7100 Interest income 7010 Other revenue 7020 Other gains and losses 7050 Financial costs 7060 Share of profit or loss of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before tax 7950 Tax expense 8200 Current net profit

(Continued)

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Chaintech Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

January 1 to December 31, 2021 and 2020

Item	Notes VI(III) VI(XXV)	(Except fo 2 0 2	Unit: NT$ thousands r earnings per share, which are expressed in New Taiwan Dollars) 1 2 0 2 0 % A m o u n t % - $ 49,105 1 - 49,105 1 - 12,383 - - 12,383 - - $ 61,488 1 3 $ 244,901 5 2 $ 145,907 3 1 37,506 1 3 $ 183,413 4 2 $ 203,746 4 1 41,155 1 3 $ 244,901 5 1.27 $ 1.51 1.27 $ 1.51
		A m o u n t $ 14,335 14,335 ( 5,436) ( 5,436) $ 8,899 $ 171,643 $ 122,224 40,520 $ 162,744 $ 132,677 38,966 $ 171,643 $
Other comprehensive income, net Items that will not be reclassified to profit or loss 8316 Unrealized valuation gain (loss) on equity instruments measured at fair value through other comprehensive income 8310 Total amount of items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of financial statements of foreign operation 8360 Total amount of items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income, net 8500 Total comprehensive income (loss) Net (loss) profit attributable to: 8610 Owners of the parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share
		$

The notes to the consolidated financial statements are part of the consolidated financial statements and should be read together.

Chairman of the Board: Shu-Jung Kao

President: Shu-Jung Kao

Accounting Officer: Yu-Nu Lai

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2020 Balance as of January 1, 2020 Current net profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2019: Provision of legal reserve Reversed special reserve Cash dividends paid Changes in the net worth of associates accounted for using equity method Balance as of December 31, 2020 2021 Balance as of January 1, 2021 Current net profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2020: Provision of legal reserve Reversed special reserve Cash dividends Balance as of December 31, 2021	Notes					C	ha	intech Technology Co	rporation and Subsidiaries ts of Changes in Equity ber 31, 2021 and 2020 thousands ityattributable to owners of thepare	nt			Grand Total $ 1,552,047 145,907 57,839 203,746 - - ( 28,950 ) ( 2,526 ) $ 1,724,317 $ 1,724,317 122,224 10,453 132,677 - - ( 48,250 ) $ 1,808,744	Non-controllinginterests	Total equity
							C	onsolidated Statemen
								January 1 to Decem
								Unit: NT$ Equ
		Common stock	Capital surplus - Change of net equity of associates and joint ventures accounted for using equity method		R	eta	in	ed earnings	Undistributed earnings	Other e	quity Unrealised gains on valuation of financial assets at fair value through other comprehensive income	Treasurystocks
				Legal reserve		Spe	ci	al reserve		Exchange differences on translation of financial statements of foreign operations
	VI(XVII) VI(VII) VI(XVII)	$ 1,014,988 - - - - - - - $ 1,014,988 $ 1,014,988 - - - - - - $ 1,014,988	$ - - - - - - - 100 $ 100 $ 100 - - - - - - $ 100	$ 122,290 - - - 10,694 - - - $ 132,984 $ 132,984 - - - 14,328 - - $ 147,312	$			112,514 - - - - 14,973 ) - - 97,541 97,541 - - - - 57,840 ) - 39,701	$ 551,542 145,907 - 145,907 ( 10,694 ) 14,973 ( 28,950 ) ( 2,626 ) $ 670,152 $ 670,152 122,224 - 122,224 ( 14,328 ) 57,840 ( 48,250 ) $ 787,638	($ 49,602 ) - 8,734 8,734 - - - - ($ 40,868 ) ($ 40,868 ) - ( 3,882 ) ( 3,882 ) - - - ($ 44,750 )	($ 47,939 ) - 49,105 49,105 - - - - $ 1,166 $ 1,166 - 14,335 14,335 - - - $ 15,501	($ 151,746 ) - - - - - - - ($ 151,746 ) ($ 151,746 ) - - - - - - ($ 151,746 )		$ 168,196 37,506 3,649 41,155 - - - - $ 209,351 $ 209,351 40,520 ( 1,554 ) 38,966 - - - $ 248,317	$ 1,720,243 183,413 61,488 244,901 - - ( 28,950 ) ( 2,526 ) $ 1,933,668 $ 1,933,668 162,744 8,899 171,643 - - ( 48,250 ) $ 2,057,061
					(
					$
					$
					(
					$

The notes to the consolidated financial statements are part of the consolidated financial statements and should be read together.

Chairman of the Board: Shu-Jung Kao

President: Shu-Jung Kao

Accounting Officer: Yu-Nu Lai

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Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Cash Flows

January 1 to December 31, 2021 and 2020

Unit: NT$ thousands

Cash flows from operating activities Profit before tax Adjustments Income charges Depreciation expenses Depreciation expenses on right-of-use assets Amortization expenses Expected credit losses Net gain on financial assets at fair value through profit or loss Interest expenses Interest income Dividend income Share of loss of associates accounted for using equity method Impairment loss Changes in operating assets and liabilities Net changes in operating assets Financial assets at fair value through profit or loss Notes receivable Accounts receivable (including related parties) Other receivables Inventories Prepayments Other current assets Other non-current assets Net changes in operating liabilities Contract liabilities Notes payable Accounts payable (including related parties) Other payables Other current liabilities Cash inflows (outflows) generated from operations Interest received Dividends received Interest paid Income tax received (paid) Net cash inflows (outflows) generated from operating activities Cash flows from investing activities Net cash flows from acquisition of subsidiaries Price for disposal of property, plant, and equipment Acquisition of property, plant, and equipment Other current assets - Decrease (Increase) in restricted assets Acquisition of investments accounted for using equity method Net cash inflows (outflows) generated from investment activities Cash flows from financing activities Increase (Decrease) in short-term borrowings Increase in guarantee deposits received Repayments of lease principal Cash dividends paid Net cash inflows (outflows) generated from financing activities Effect of exchange rate changes Net increase (decrease) in cash and cash equivalents Cash and cash equivalents balance at beginning of period Cash and cash equivalents balance at end of period

Notes January 1 to December 31,2021 January 1 to December 31,2020 $ 208,189 $ 189,624 VI(IX)(XXII) 24,913 24,609 VI(X)(XXII) 10,638 7,193 VI(XI)(XXII) 10,281 11,670 XII(II) 34,426 3,547 VI(II)(XX) ( 3,200 ) ( 6,124 ) VI(XXI) 5,724 6,503 ( 823 ) ( 794 ) VI(XIX) ( 5,795 ) ( 3,079 ) VI(VII) 35,808 11,921 VI(VII)(XII) (XX) 97,765 1,980 171,675 ( 49,084 ) 3,160 ( 3,117 ) ( 109,471 ) ( 350,311 ) ( 4,250 ) 1,017 ( 239,295 ) 75,045 ( 124,816 ) ( 30,504 ) - 45 ( 8,671 ) 2,173 43,069 53,075 - ( 24 ) 402,499 ( 184 ) 18,156 1,655 14,889 125 584,871 ( 53,039 ) 823 794 5,795 3,079 ( 5,527 ) ( 6,306 ) 7,549( 18,670) 593,511( 74,142) VI(XXVI) ( 8,677 ) - 18 2,803 VI(XXVII) ( 7,923 ) ( 2,359 ) 23,040 ( 23,882 ) VI(VII) - ( 150,000) 6,458( 173,438) VI(XXVIII) ( 175,187 ) 245,430 VI(XXVIII) 855 58 VI(XXVIII) ( 10,287 ) ( 7,110 ) VI(XVII) ( 48,250) ( 28,950) ( 232,869) 209,428 ( 4,189) 8,151 362,911 ( 30,001 ) 330,087 360,088 $ 692,998 $ 330,087

The notes to the consolidated financial statements are part of the consolidated financial statements and should be read together.

Chairman of the Board: Shu-Jung Kao

President: Shu-Jung Kao

Accounting Officer: Yu-Nu Lai

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Chaintech Technology Corporation and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2021 and 2020

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

• (I) The original East Chaintech Technology Co., Ltd. was established in November 1986 and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTC-listed company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company and its subsidiaries (hereinafter referred to as the "Group") are principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.

• (II) Colorful Group Ltd. (hereinafter referred to as "the Colorful Group") acquired 10% equity in the Company indirectly through CHUNG CHIEH TECHNOLOGY LIMITED and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, CHUNG CHIEH TECHNOLOGY LIMITED sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2021, the Colorful Group indirectly held 28.11% of the equity in the Company through Yicheng International Development Co., Ltd. As of December 31, 2021, the Group had 163 employees.

II. Approval Date and Procedures of the Consolidated Financial Statements

The consolidated financial statements were approved by the Board of Directors on March 23, 2022.

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III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission, R.O.C ("FSC")

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2021:

2021:
New/Revised/Amended Standards and Interpretations	Effective Date of Issuance bythe IASB
Revised “Application of Extension under IFRS 9 to Temporary Exemption” under IFRS 4	January 1, 2021
Revised “Changes in Interest Rate Indicators” under IFRS 9, IAS 39,IFRS 7,IFRS 4 and IFRS 16 in the Phase II	January 1, 2021
Revised “Concessions of COVID-19 Related Rent after June 30, 2021” under IFRS 16	April 1, 2021 (Note)

Note: The FSC allows early application on January 1, 2021.

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

• (II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Company

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2022:

2022:
New/Revised/Amended Standards and Interpretations	Effective Date of Issuance bythe IASB
Revised “Index to the Conceptual Framework” under IFRS 3	January1,2022
Revised [Property, Plant and Equipment: the Price Before Reaching the intended State of Use] of International Accounting Standards No. 16	January 1, 2022
Revised [Onerous Contract – the Cost of Contract Performance] of International AccountingStandards No. 37	January 1, 2022
Annual improvement for the 2018-2020period	January1,2022

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

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(III)Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

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

New/Revised/Amended Standards and Interpretations	Effective Date of Issuance bythe IASB
Revised “Sales or Investment of Assets between the Investor and its Affiliate or Joint Venture” under IFRS 10 and IAS 28	To be decided by the IASB
“Contract of Insurance” under IFRS 17	January1,2023
Revision to “Contract of Insurance” under IFRS 17	January1,2023
Revised “First Application of IFRS 17 and IFRS 9 – Comparative Information” of IFRS 17	January 1, 2023
Revised “Current or Non-current Classification of Liabilities” under IAS 1	January 1, 2023
Revised “Disclosure of AccountingPolicies” under IAS 1	January1,2023
Revised “Definition of AccountingEstimate” under IAS 8	January1,2023
Revised “Deferred Income Taxes Related to Assets and Liabilities arisingfrom a Single Transaction” under IAS 12	January 1, 2023

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

IV. Summary of Significant Accounting Policies

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

(I)Statement of compliance

The consolidated financial statements are prepared by the Group in accordance with the Regulations Governing the Preparation of Financi al Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC Interpretations as endorsed by the FSC (the "IFRSs").

(II)Basis of preparation

1. Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:

2. (1) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

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

4. The preparation of financial statements requires the use of certain

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critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

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(III)Basis of consolidation

1. Principles for preparation of consolidated financial statements

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

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

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

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

6. (5) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. For all amounts previously recognized in other comprehensive income, they shall be reclassified from equity to profit or loss.

7. Subsidiaries included in the consolidated financial statements:

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Investee	Subsidiary		Percentage of equityheld	Percentage of equityheld
Name	Name	Business nature	December 31,2021	December 31,2020	Notes
The Company	Shenzhen Jinghong Digital R&D Service Co., Ltd. (Shenzhen Jinghong)	Technology research and development and	100%	100%	-
		trading of electronic products, computer
		hardware, and peripheral devices
Shenzhen Jinghong	Sitonholy (Tianjin) Technology Co., Ltd.	Wholesale of electronic products,	51%	51%	-
		communication products, household
		appliances, office supplies, computer
		hardware and software and related spare
		parts
Sitonholy (Tianjin) Technology Co., Ltd.	Beijing Sitonholy Technology Co., Ltd. (Beijing Sitonholy)	Wholesale of electronic products,	100%	100%	-
		communication products, household
		appliances, office supplies, computer
		hardware and software and related spare
		parts
Sitonholy (Tianjin) Technology Co., Ltd.	Baotou Yihui Information Technology Co., Ltd.	Electronic products, communication	100%	-	Note 1
		products, computer software and hardware
		and data processing storage and support
		services

• Note 1: On October 31, 2021, the Group acquired 100% equity of Baotou Yihui Information Technology Co., Ltd. through its sub-subsidiary, Sitonholy (Tianjin) Technology Co., Ltd.

• Subsidiaries not included in the consolidated financial statements: none.

• Adjustments for subsidiaries with different balance sheet dates: none.

• Significant restrictions: none.

• Subsidiaries with significant non-controlling interests to the Group: As of December 31, 2021 and 2020, the Group’s non-controlling interests totaled NT$248,317 and NT$209,351, respectively. What stated below is the information in respect of the Group’s significant non-controlling interests and the corresponding subsidiaries:

Subsidiary name		Non-controllinginterests	Non-controllinginterests	Non-controllinginterests	Non-controllinginterests	Not es
	Main	December 31,2021		December 31,2020
	business place	Amount	Percentage of shareholding	Amount	Percentage of shareholding
Tianjin Sitonholy	Mainland China	$	49	$	49

Summarized financial information of the subsidiary:

Balance sheet

Balance sheet
		Sitonholy (Tianjin) Technology Co., Ltd. and
		its subsidiaries
		December 31,2021	December 31,2020
Current assets		$ 1,0 $ 6
Non-current assets		67,778	34,507

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Current liabilities	(	(	603,504 )(	603,504 )(	235,437	)
Non-current liabilities	(		15,651 )(		4,341	)
Total net assets			$ 5 $ 4
Statement of comprehensive income
			Sitonholy (Tianjin) Technology Co., Ltd.
			And its subsidiaries
			2021		2020
Revenue			$ 2,2 $ 1,0
Profit before tax			90,723		79,888
Tax expense		(	8,030 )(		3,345	)
Current netprofit			82,693		76,543
Other comprehensive income
(net of tax)		(	3,171 )		7,447
Total comprehensive income
(loss)			$ $
Total comprehensive income
attributable to
Non-controllinginterests			$ $
Statement of cash flows
				Sitonholy (Tianjin) Technology Co., Ltd.
				and its subsidiaries
				2021	2020
Net cash outflows generated from operatingactivities				$ ( $ )
Net cash outflows generated from
investment activities			(	16,580 )	-
Exchange rate changes and and cash
and equivalents
Effect of cash			(	195 )	6,589
Current cash and cash equivalents
Number of(decrease)increase				147,476	4,067
Cash and cash equivalents balance at
beginningofperiod				33,705	29,638
Cash and cash equivalents balance at
end ofperiod				$ $

(IV)Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (i.e., functional currency). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.

1. Foreign currency transactions and balances

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

• (2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the re-transaction at the balance sheet date are recognized in profit or loss.

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

• (4) All exchange gains and losses are presented in the earnings statement of profit or loss within "other gains and losses."

• Translation of foreign operations

• The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• (1) Assets and liabilities for each balance sheet presented are re-translated at the closing rate prevailing at the balance sheet date;

• (2) Income and expenses for each composite income sheet are re-translated at the average exchange rates for the period; and

• (3) All resulting exchange differences are recognized in other comprehensive income.

• (4) When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other

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comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Group still retains partial interests in the former foreign associate aft er losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

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

• (V)Standard of assets and liabilities being classified as current and non -current

• Assets that meet one of the following criteria are classified as current assets:

  • (1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.

  • (2) Liabilities held mainly for trading purposes.

  • (3) Assets that are expected to be realized within twelve months from the balance sheet date.

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

  • Assets that do not meet the aforementioned conditions are classified as non-current.

• Liabilities that meet one of the following conditions are classified as current liabilities:

  • (1) Liabilities that are expected to be paid off within the normal operating cycle.

  • (2) Liabilities held mainly for trading purposes.

  • (3) Liabilities that are to be paid off within twelve months from the balance sheet date.

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

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Liabilities that do not meet the aforementioned conditions are classified as non-current.

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

1. Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.

2. Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Group using trade date accounting.

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

4. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.

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

1. Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:

2. (1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.

3. (2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interes t on the principal amount outstanding.

4. The Group adopts trade date accounting for financial assets measured at

5. fair value through other comprehensive income.

6. At initial recognition, the Group measures the financial assets at fair value plus transaction costs; the Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or los s following derecognition of the investment. Dividend income is

~26~

recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.

(VIII)Accounts and notes receivable

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

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

(IX)Impairment of financial assets

• Considering all reasonable and provable information (including forward-looking information), the Group measures the credit risk that increases insignificantly since original recognition vie the 12 -month expected credit loss amount through financial debt instrument at fair value through other comprehensive income and accounts receivable contain ing significant financial components. For those credit risk increasing significantly since original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.

(X)Derecognition of financial assets

Financial assets are derecognized when the Group's contractual rights to receive cash flows from financial assets are lapsed.

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(XI)Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

(XII) Inventories

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

(XIII)Investments accounted for using equity method - associates

1. Associates are all entities over which the Group has significant influence but has no control. Investments in associates are accounted for using the equity method and are initially recognized at cost.

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

3. When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.

4. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides

~28~

evidence of an impairment of the asset transferred. The accounting policies of related enterprises have been adjusted as necessary, and are consistent with the policies adopted by the Group.

1. Where an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for using equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.

2. When the Group disposes of any related enterprise, and the significant impact on the related enterprise is thereby lost, the accounting treatment provides that the Group directly dispose of the relevant assets or liabilities for all the amounts previously recognized in other comprehensive income related to the related enterprise, o n the same basis, that is, if the interests or losses previously recognized as other comprehensive income are reclassified as profit or loss when the relevant assets or liabilities are disposed, then when the significant impact on the related enterprise is lost, the benefit or loss in equity is concomitantly reclassified as profit or loss. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(XIV)Property, plant, and equipment

1. Property, plant and equipment are recorded as the foundation of acquisition cost.

2. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying

~29~

• amount of the replacement is de-recognized. All other repairs and maintenance are recognized as current gain or loss when incurred.

• Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.

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

Transportation equipment 5 years Furniture and fixtures 3 ~ 10 years Other equipment 2 ~ 10 years

(XV)Lease transaction in the capacity of a lessee - right-of-use assets/lease

liabilities

1. A right-of-use asset and a lease liability are recognized for a leased asset on the date when it becomes readily available for the Group's use. When a lease contract is a short-term lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.

2. For lease liabilities, the outstanding lease payments are recognized at the present value after discounting at the interest rate of the Group’s increased borrowings on the lease commencement date. The lease payments include fixed payments, subtracting any lease inducement that may be collected. In subsequent periods, the Company measures lease liabilities at interest based on cost after amortization and recognizes interest expenses in the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.

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1. The right-of-use assets are recognized at cost on the lease commencement date. The cost includes the originally measured amount of lease liabilities. In subsequent periods, the Company measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.

2. When a lease modification decreases the scope of a lease, t he carrying value of the right-of-use asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.

3. (XVI)Intangible assets

4. Acquired in a business combination, customer relationship is recognized at fair value on the acquisition date. Customer relationship is an asset of limited and durable years as amortized over an estimated useful life of 2.7 years on a straight-line basis.

5. Goodwill arises from the difference between the purchase price set in the equity purchase contract and the net identifiable assets.

(XVII)Impairment of non -financial assets

1. The Group assesses on each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Except for goodwill, When circumstances contributed to the recognition of impairment loss of an asset in the previous period do not exist or are decreased, the recognized impairment loss is reversed to the carrying amount of an asset to the extent that it does not exceed the carrying amount (net of depreciation and amortization) if the impairment loss had not been recognized.

2. The recoverable amount of goodwill shall be evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss

~31~

should not be reversed in the future.

1. For the purpose of impairment testing, goodwill acquired in a business merger is allocated to each of the cash-generating units. This allocation is based on the judgment of the operating units and the goodwill is allocated among cash-generating units or groups that are expected to benefit from goodwill generated in corporate mergers.

(XVIII)Borrowings

Borrowings refer to short-term loans from banks. The initial recognition of loans measured at fair value less transaction cost. Any subsequent difference between the price and the redemption value after deducting the transaction cost shall be recognized as interest expense in gain and loss by applying amortization procedure of effective interest method during the circulation period.

(XIX)Accounts payable

1. Account payable is the liabilities arising from the purchase of raw materials, commodities or services are taken.

2. Short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XX)Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(XXI)Offset of financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXII)Non-hedging and embedded derivatives

1. Under the financial assets, the hybrid contracts embedded with derivatives are initially recognized as financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, and financial assets at amortized cost based on the contract terms.

2. Under the non-financial assets, whether the hybrid contracts embedded with derivatives are accounted for separately at initial

~32~

recognition is based on whether the economic characteristics and risks of an embedded derivative are closely related in the host contract. When they are closely related, the entire hybrid instrument is accounted for by its nature in accordance with the applicable standard. When they are not closely related, the derivative is accounted for differently from the host contract as derivative while the host contract is accounted for by its nature in accordance with the applicable standard. Alternatively, the entire hybrid instrument is designated as financial liabilities at fair value through profit or loss upon initial recognition.

(XXIII)Employee benefits

1. Short-term employee benefits

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

1. Pensions

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

1. Employees' compensation and directors' and supervisors' remuneration Employees' compensation and directors' and supervisors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(XXIV)Income tax

1. Income tax expense comprises current and deferred income tax. Income tax is recognized in gain or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

2. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in

~33~

the country domicile where the Group operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Company shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.

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

2. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax asset s are reassessed.

3. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities

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are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXV)Capital

1. Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.

2. When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXVI)Dividend distribution

Dividends are recognized in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVII)Revenue recognition

1. Sales of goods

2. (1) The Group manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product, and the Group has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria

~35~

have been met, the goods are delivered.

• (2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.

• (3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Group has unconditional rights to the contract price since that point in time, and the Group can collect the consideration from the customer once upon the contractual time is expired.

• Service revenue

The Group provides services related to research and development and design. Service revenue is recognized as revenue at a point in time when the services are rendered to customers.

1. Financial composition

The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Group and customers are all less than one year. Therefore, the Group has not adjusted the transaction price to reflect the time value of money.

1. Costs to acquire contracts from customers

The Group recognizes the incremental costs incurred in the contracts with the customers and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

(XXVIII)Business combinations

1. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities

~36~

resulting from a contingent consideration arrangement. All acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business acquisition case, the Group measures the components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either acquisition-date fair value or the ratio of non-controlling interests to the acquiree’s net identifiable assets. All other components of non-controlling interests shall be measured at acquisition-date fair value.

1. If the aggregate of (i) the value of consideration transferred, (ii) the amount of non-controlling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree exceeds the fair value of identifiable assets acquired and liabilities assumed, the difference is recognized as goodwill on the acquisition date. If the fair value of identifiable assets acquired and liabilities assumed exceeds the aggregate of (i) the value of consideration transferred, (ii) the amount of non-controlling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree, the difference is recognized as profit or loss on the acquisition date.

(XXIX)Operating segments

The Group's operating segments are reported in a manner consistent with the internal management reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources to the operating segments and assessing the performance of the Group, has been identified as the members of the Board of Directors.

V Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Group's financial statements requires management to make critical judgments in applying the Group's accounting policies and make critical assumptions and estimates concerning future events accord ing to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and

~37~

adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(I)Significant judgments in applying accounting policies

None.

(II)Significant accounting estimates and assumptions

Assessment of impairment of intangible assets

The assessment of impairment of intangible assets relies on the Group’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units.

VI Descriptions of Significant Accounting Items

(I)Cash and cash equivalents

ash and cash equivalents
	December 31,2021	December 31,2020
Cash in hand and operatingfund	$	$
Cheque deposit and current deposit	692,941	329,987
	$ 692 $ 330

1. The Group associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.

2. The Group do not provide any cash and cash equivalents as pledges to others.

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(II)Financial assets at fair value through profit or loss - current

Item		December 31,2021	December 31,2020
Financial assets at fair value
forciblythroughprofit and loss
Beneficiarycertificate		$	$
Valuation adjustment		-	-
Total		$	$

1. The breakdown of profit or loss for financial assets at fair value through profit or loss - current is as follows:

Item		2021	2020
Equityinstruments		$	$
Beneficiarycertificate		3,200	4,043
Derivative instruments -
structural deposit		-	1,032
		$	$

1. The Group's financial assets at fair value through profit or loss - current have never been provided as pledged assets or guarantees.

2. Structured deposit contracts entered into between the Group with banks contain an embedded derivative that is not closely related to the host contract. Based on the assessment of the overall hybrid contracts, they should be classified as financial assets mandatorily measured at fair value through profit or loss.

3. For information on the price risk and fair value of financial assets at fair value through profit or loss, please refer to Note XII (II)(III).

(III)Non-current financial assets at fair value through other comprehensive income

Item		December 31,2021	December 31,2020
Equityinstruments
OTC companystock		$ 1	$
Unlisted,OTC,emergingstock		15,350	15,350
		184,984	184,984
Valuation adjustment		15,501	1,166
Total		$ 2	$

1. The Group elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income.

2. The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

~39~

2021

2020

Equity instruments at fair value through other comprehensive income (loss)

Changes in fair value recognized in other comprehensive income (loss)

Holders of dividend income recognized in the income at the end of the period

$ $ $ $

1. For information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII (II) (III).

(VI)Notes and accounts receivable

		December 31,2021	December 31,2020
Notes receivable		$	$
Accounts receivable		$ 6 $
Reduction: allowance for
losses	(	41,343 )(	6,943	)
		$ 6 $
Accounts receivable -
relatedparties		$ 7 $
Reduction: allowance for
losses	(	295 )(	304	)
		$ 7 $
		$ 1,3 $ 1,

1. The aging analysis of accounts receivable and notes receivable are as follows:

follows:
		December 31,2021		December 31,2020
		Accounts receivable	Notes receivable	Accounts receivable		Notes receivable
Not overdue		$	$	$		$
Overdue for 1-90 days		38,571	-	9,432		-
Overdue for more than 91 days		1,371	-	621		-
Total		$	$	$		$

The aging analysis above is based on past due date.

~40~

1. The balance of receivables (including notes receivable) on contracts with customers as of December 31, 2021, December 31, 2020, and January 1, 2020 was NT$1,423,979, NT$1,312,882, and NT$955,682, respectively.

2. Without consideration of the collateral held or other credit enhancements, the maximum credit risk that best represent the Group's notes receivable as of December 31, 2021 and 2020 amounted to NT$0 and NT$3,187, respectively, and the maximum credit risk that best represent the Group's accounts receivable as of December 31, 2021 and 2020 amounted to NT$1,382,341 and NT$1,302,448, respectively.

3. For more information on the credit risk of accounts receivable, please refer to Note XII (II).

(V)Inventories

nventories
			December 31,2021
		Costs	Allowance for valuation losses	Carryingamount
Raw materials		$ ( $ )		$
Work-in-process		73,637	-	73,637
Finishedproducts		63,305 (	2,107 )	61,198
Goods		297,827 (	4,663 )	293,164
		$ 5 ( $ ) $ 5
			December 31,2020
		Costs	Allowance for valuation losses	Carryingamount
Raw materials		$ ( $ ) $
Work-in-process		36,434	-	36,434
Finishedproducts		85,257 (	1,605 )	83,652
Goods		101,053 (	1,660 )	99,393
		$ 2 ( $ ) $ 2

Cost of inventories is recognized by the Group as expenses in the current period:

period:
		2021	2020
Cost of inventories sold		$ $
Gains on inventory value
recoveries(note)	(	1,136 )(	1,158	)
		$ $

Note: The Group's reported the gain on inventories in 2021 and 2020 as a result of de-stocking.

~41~

(VI)Prepayments

(VI)Prepayments	Prepayments	Prepayments
Prepayments Others (VII)Investments using equity method January1 Increase of investments accounted for usingequitymethod (Loss) gain shares of investments accounted for usingequitymethod Impairment loss Changes in capital surplus changes in retained earnings December 31 Associates					December 31,2021			December 31,2020
	Prepayments				$ 2			$
	Others				7,347			4,435
					$		2	$
		Investments using equity method
						2021		2020
	January1					$		$
	Increase of investments accounted for usingequitymethod					-		150,000
	(Loss) gain shares of investments accounted for usingequitymethod					35,808	)(	11,921 )
					(
	Impairment loss				(	97,765	)(	1,980 )
	Changes in capital surplus					-		100
	changes in retained earnings					-	(	2,626 )
	December 31					$		$
				December 31,2021				December 31,2020
	Associates			$				$

1. On January 21, 2020, the Board of Directors resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Group has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2021, the Group held a 13.05% equity interest in uSenlight Corporation, making the Group its singl e largest shareholder. As the other two largest shareholders (not the Group's related parties) held more than the Group’s shares, the Group had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Group had significant influence but had no control over uSenlight Corporation.

2. For the above investment accounted for using equity method in 2021 and 2020, the Group carried out an impairment test based on the recoverable amount of such investment. Based on the above valuation result, the Company recognized a impairment loss on investments accounted for using equity method of NT$97,765 and NT$1,980, respectively.

3. The basic information of the associates that are material to the Group is as follows:

~42~

Company Name	Main busines splace	Shareholdingratio December 31,2021 December 31,2020	Shareholdingratio December 31,2021 December 31,2020	Nature of relationship	Measure ment methods
		December 31,2021
uSenlight Corporation	Republ ic of China	13.05%	13.05% (Note)	With great influence	Equity method

The Company’s shareholding ratio decreased from 13.70% to 13.05% due to the conversion of share options by uSenlight Corporation in 2020, resulting in an adjustment of capital surplus and retained earnings due to net equity difference of NT$2,626.

1. The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Balance sheet	Balance sheet	Balance sheet	Balance sheet
Current assets Non-current assets Current liabilities ( Non-current liabilities ( Total net assets Share in net assets of associates Net equitydifference Provision of Impairment loss ( Carryingvalue of associates Statement of comprehensive income Revenue Current net loss of continuing business unit (Total comprehensive income for theperiod) (VIII)Other current assets Restricted bank deposit		Current assets Non-current assets Current liabilities ( Non-current liabilities ( Total net assets Share in net assets of associates Net equitydifference Provision of Impairment loss ( Carryingvalue of associates Statement of comprehensive income Revenue Current net loss of continuing business unit (Total comprehensive income for theperiod) Other current assets			uSenlight Corporation
					December 31,2021			December 31,2020
			Current assets		$		22 $
			Non-current assets				183,046		196,520
			Current liabilities	(			243,232 )(		273,142	)
			Non-current liabilities	(			141,233 )(		15,197	)
			Total net assets		$		2 $
			Share in net assets of associates		$		$
			Net equitydifference				94,115		96,095
			Provision of Impairment loss	(			97,765 )(		1,980	)
			Carryingvalue of associates		$			$
			Statement of comprehensive income
							2021		2020
			Revenue				$		$
			Current net loss of continuing
			business unit
			(Total comprehensive income for theperiod)				$	)( $ )
						(
						December 31,2021		December 31,2020
	Restricted bank deposit					$		$

The details of the pledges of other current assets of the Group are set out in Note VIII.

~43~

(IX)Property, plant, and equipment

	Machinery	Machinery		Transportat ion	Transportat ion	Furniture	Furniture
	equipment			equipment		and fixtures		Others		Total
January1,2021
Costs	$			$		$		$		$
Accumulated
depreciation	-		(	9,356 )(		4,007 )(		40,335 )(		53,698	)
	$			$		$		$		$
2021
January1	$			$		$		$		$
Add	4,664			2,615		-		644		7,923
Gains from business
combinations	5,473			-		-		-		5,473
Disposal	-			- (		7 )(		11 )(		18	)
Depreciation expenses (	1,532		)	- (		48 )(		23,333 )(		24,913 )
Net exchange
difference (	13		)(	8 )(		1 )(		8 )(		30	)
December 31	$			$		$		$		$
December 31,
2021
Costs	$			$		$		$		$
Accumulated
depreciation (	25,538		)(	9,285 )(		4,015 )(		63,441 )(		102,279	)
	$			$		$		$		$
			Transportati on			Furniture
			equipment		and fixtures			Others		Total
January1,2020
Costs			$		$		$			$
Accumulated
depreciation		(	8,605 )(		3,963 )(		20,759 )(			33,327	)
			$		$		$			$
2020
January1			$		$		$			$
Add			-		-		121			121
Disposal			-		- (		2,803 )(			2,803	)
Depreciation
expenses		(	594 )(		35 )(		23,980 )(			24,609	)
Net exchange
difference			14		1 (		4 )			11
December 31			$		$		$			$
December 31,2020

~44~

Costs		$	$	$	$
Accumulated depreciation	(	9,356 )(	4,007 )(	40,335 )(	53,698 )
		$	$	$	$

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

• (X)Lease transaction - lessee

• The Group's leased underlying assets are buildings, of which the lease term is usually between 3~5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.

• Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

		December 31,2021	December 31,2020
		Carryingamount	Carryingamount
House		$	$
		2021	2020
		Depreciation	Depreciation
		expenses	expenses
House		$	$

1. The Group added NT$32,746 and NT$12,781 of right-of-use assets for the years ended December 31, 2021 and 2020, respectively. The net amount of right-of-use assets acquired from business combinations was NT$1,399. For more information on business combinations, please refer to Note VI (XXVI).

2. Profit or loss items in connection with lease contracts are stated as follows:

follows:
		2021	2020
Items affecting the current income (loss)
Interest expenses of lease liabilities		$	$
Expenses of a short-term lease contract		1,513	416

1. The cash flows used in the Group's leases for the years ended December 31, 2021 and 2020 totaled NT$12,658 and NT$7,886, respectively.

~45~

(XI)Intangible assets

tangible assets
		Business	Customer
		reputation	relationship	Total
January1,2021
Costs		$ $ $
Accumulated amortization and
impairment		- (	21,928 )(	21,928	)
		$ $ $
2021
January1		$ $ $
Amortization
expenses		- (	10,281 )(	10,281	)
Net exchange
difference	(	1,280 )(	85 )(	1,365	)
December 31		$ $		$
December 31,2021
Costs		$ $ 200,575
Accumulated amortization and
impairment		- (	32,050 )(	32,050	)
		$ $		$
		Business reputation	Customer relationship	Total
January1,2020
Costs		$ $ $
Accumulated amortization and impairment		- (	9,803 )(	9,803 )
		$ $ $
2020
January1		$ $ $
Amortization expenses		- (	11,670 )(	11,670 )
Net exchange difference		2,793	77	2,870
December 31		$ $ $
December 31,2020
Costs		$ $ $
Accumulated amortization and impairment		- (	21,928 )(	21,928 )
		$ $ $

~46~

Goodwill is allocated to the Group’s cash-generating units by operating segments:

segments:
		December 31,2021	December 31,2020
Sitonholy (Tianjin)
TechnologyCo.,Ltd.		$ 1	$

(XII) Impairment of non-financial assets

• 1.The impairment loss recognized by the Group in 2021 and 2020 was NT$97,765 and NT$1,980, as detailed below.

	2021	2021	2020	2020
	Recognition in the current	Recognition in other comprehensive	Recognition in the current income	Recognition in other comprehensive
	income(loss)	income(loss)	(loss)	income(loss)
Impairment loss-
Investments using
equitymethod	$	$	$	$

1. The Group conducted an impairment test on the invested company - uSenlight Corporation in 2021. After assessment, the invested company - uSenlight Corporation had a small recoverable amount, so the investment was fully recognized as impairment loss of NT$97,765.

2. Goodwill is allocated to the Group’s cash-generating units by operating segments. The recoverable amount is determined based on the value in use, and the value in use is calculated using the pre -tax cash flow forecast of the five-year financial budget approved by management. Cash flows beyond the five-year period were estimated using the estimated growth rates stated below.

The Group’s recoverable amount calculated based on the value in use exceeded the carrying amount, so no impairment loss on goodwill was generated. Main assumptions used to calculate the value in use are as follows:

follows:
		Sitonholy (Tianjin)TechnologyCo.,Ltd.
		2021	2020
Grossprofit rate		14.00%	16.60%
Growth rate		2.00%	4.00%
Discount rate		18.90%	15.10%

Management determined the budgeted gross margin based on the past performance and its expectation for market development. The weighted average growth rates used are consistent with the forecasts

~47~

included in industry reports. The discount rates used are pre -tax and reflect the risks specific to relevant operating segments.

(XIII)Short-term borrowings

Nature of borrowings	December 31,2021	Interest range	Collateral
Bank borrowings
Guaranteed	$ 19 0.90%~1.13%		Other current assets -
borrowings			bank deposits
Fiduciaryborrowings	35,612	0.96%	None
	$ 22
Nature of borrowings	December 31,2020	Interest range	Collateral
Bank borrowings
Guaranteed	$ 27 1.10%~1.61%		Other current assets -
borrowings			bank deposits
Fiduciaryborrowings	130,127	0.97%~1.22%	None
	$ 40

Interest expenses recognized in profit or loss as of December 31, 2021 and 2020 were NT$4,866 and NT$6,143, respectively.

(XIV)Other payables

		December 31,2021	December 31,2020
Salariespayable		$ $
Royaltiespayable		31,900	31,861
Others		30,138	47,869
		$ 1 $

(XV)Pensions

1. The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

2. The Company's subsidiaries in Mainland China have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People's Republic of China are based on certain percentage of employees' monthly salaries and wages. The pension

~48~

funds of each employee are managed and arranged by the government, and the Group has no further obligations except the monthly contributions.

1. The pension costs recognized by the Group in accordance with the aforesaid pension regulations for the years ended December 31, 2021 and 2020 were NT$6,578 and NT$2,886, respectively. (In 2020, the Group's subsidiaries in Mainland China were affected by the COVID-19, and the local government reduced or exempted the pension by NT$2,043).

~49~

(XVI)Capital

1. As of December 31, 2021, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$1,014,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.

2. Treasury shares

3. (1) The reason for share re-acquisition and movements in the number of treasury stock are as follows:

of treasurystock are	as follows:
		December 31,2021
Name of company holding		Number of shares (one		Carrying
shares	Reasons for recovery	thousand)		amount
	For transfer of shares to
The Company	employees	5,000		$
		December 31,2020
Name of company holding		Number of shares (1,000		Carrying
shares	Reasons for recovery	shares)		amount
	For transfer of shares to
The Company	employees	5,000		$

• (2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.

• (3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.

• (4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back.

(XVII)Retained earnings

1. Under the Company's Articles of Incorporation, if there is a surplus in

~50~

the annual final accounts, in addition to the income tax payable according to law, the Company shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the total paid-up-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

1. The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.

2. The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.

3. 4.(1) When the Company distributes the surplus, it is required by law to provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.

4. (2) When the Company adopted the IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related

~51~

assets, they are reversed according to the ratio of the recognized special reserve.

1. By a resolution in the shareholders' meetings on July 29, 2021 and June 18, 2020, respectively, the Company adopted the earnings distribution plan for the year ended December 31, 2020 and 2019 as follows:

follows:
	2020		2019
	Amount	Dividend per	Amount	Dividend per share
	(1,000yuan)	share(yuan)	(1,000yuan)	(yuan)
Legal reserve	$		$
Special reserve
(reversed) (	57,840 )	(	14,973 )
Cash dividends	48,250	$	28,950	$

1. Please refer to Note VI (XXIII) for information on employees' compensation and directors' and supervisors' remuneration.

2. As of March 23, 2022, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2021.

(XVIII)Operating revenue

perating revenue
		2021	2020
Contract revenue:
Sales revenue - Computer peripheralproducts		$ $
Service revenue		8,396	6,867
		$ $

1. The Group derives revenue from the transfer of goods and services over time and at a point in time.

2. The contract liabilities in relation to revenue from contracts with customers recognized by the Group are as follows:

		December 31,2021	December 31,2020	January1,2020
Contract
liabilities:
Advances on
sales		$	$	$

~52~

Oth						2021	2020	2020
	Current balance of contract liabilities at beginning of period
	Recognized revenue
						$	$
	er revenue
						2021	2020
Rental revenue						$	$
Dividend income						5,795	3,079
Other revenue - other						4,824	3,878
						$	$
ther gains and losses
						2021	2020
Net loss of foreign currency
exchange					(	$ )(	$	)
Financial assets at fair value
throughprofit or loss						3,200	6,124
Impairment loss					(	97,765 )(	1,980	)
Other losses					(	2,622 )(	658	)
					(	$ )( $		)
Fin	ancial costs
Ex
						2021	2020
	Interest expenses					$	$
	Lease liabilities					858	360
						$	$
	penses by nature
						2021	2020
	Employee benefit expenses					$ $
	Depreciation expenses on property, plant,and equipment					24,913	24,609
	舊費用
	Depreciation expenses on right-of-use assets					10,638	7,193
	Amortization expenses of intangible assets					10,281	11,670
						$ $

(XIX)Other revenue

(XX)Other gains and losses

(XXI)Financial costs

(XXII)Expenses by nature

~53~

(XXIII)Employee benefit expenses

		2021	2020
Salaries expenses		$ $
Expenses on labor insurance and national health insurance		7,365	2,860
Pension expenses		6,578	2,886
Other personal expenses		7,108	4,767
		$ $

1. According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors and supervisors shall not be paid more than 6% as remuneration.

2. For the years ended December 31, 2021 and 2020, the estimated amount of employees' compensation was NT$1,663 and NT$2,535, respectively, and the estimated amount of directors' and supervisors' remuneration was NT$4,988 and NT$7,129, respectively; the aforesaid amounts were recognized as wages and salaries.

For the year ended December 31, 2021, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were NT$1,663 and $4,988, respectively. The employees' compensation will be distributed in the form of cash.

The employees' compensation, NT$2,535, and directors' and supervisors' remuneration, NT$7,129, for the year ended December 31, 2020 that had been resolved by the Board of Directors were the same as the amounts recognized in the financial statements for the year then ended.

1. Information regarding employees' compensation and directors' and supervisors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

~54~

(XXIV)Income tax

1. Tax expense

Components of tax expense:

Components of tax expense:
			2021	2020
Current income tax:
Income tax arising from current income			$	$
Imposed on undistributed earnings			7,058	406
Low (high) estimate of income tax for
previousyears			893 (	43	)
Total income tax for theperiod			65,675	8,805
Deferred income tax:
Original generation and reversal of
temporarydifferences	(		20,230 )(	2,594	)
Tax expense			$	$
Tax expense and accounting profit
			2021	2020
Income tax of profit before tax calculated at
statutorytax rate			$	$
所得稅
Expenses that should be excluded according
to tax laws			566 (	334	)
Profit exempt from tax accordingto tax laws		(	1,159 )(	210	)
Temporary differences not recognized as
deferred tax assets		(	1,871 )(	7,606	)
Allowances for tax loss for theperiod			- (	21,997	)
Imposed on undistributed earnings			7,058	406
Low (high) estimate of income tax for
previousyears			893 (	43	)
Tax expense			$	$

2. Tax expense and accounting profit

~55~

1. The amount of deferred tax assets that arise from temporary differences is set out below:

differences is set	out below:
			2021
	January1	Recognized as the income (loss)	Recognized as other comprehensiv e income (loss)	Gains from business combina tions		December 31
Temporarydifferences:
Deferred tax assets
Allowance for inventory valuation losses and	$ (	$ 828 )	$	$		$
slow-moving loss
Impairment loss	-	19,948	-	-		19,948
Unrealized exchange loss	2,135	(1,482 )	-	-		653
Others	-	-	-	3		3
	3,132	17,638	-	3		20,773
Deferred tax liabilities
Amortization of intangible assets	( 2,592 )	2,592	-	-		-
	$	$	$	$		$

~56~

		2020	2020
		Recognized as the income	Recognized as other comprehensiv e income	December
	January1	(loss)	(loss)	31
Temporarydifferences:
Deferred tax assets
Allowance for inventory valuation
losses and	$ (	$ )	$	$
slow-movingloss
Unrealized exchange
loss	2,148 (	13 )	-	2,135
	3,435 (	303 )	-	3,132
Deferred tax liabilities
Amortization of
intangible assets (	5,489 )	2,897	-	(2,592	)
(	$ )	$	$	$

1. The amounts of deductible temporary differences not recognized as

2. deferred tax assets are as follows:

deferred tax assets	are as follows:
		December 31,2021	December 31,2020
Deductible temporary differences		$ 1 $

1. The tax authorities have examined income tax returns of the Company through the year ended December 31, 2019.

(XXV)Earnings per share

rnings per share
		2021
	After-tax amount	Weighted average number of outstanding shares (1,000 shares)		Earnings per share (yuan)
Basic earnings per share
Current net profit attributable to common shareholders of parent company
Currentnet profit	$	96,499		$
Diluted earnings per share
Current net profit attributable to common shareholders of parent company	$	96,499
Currentnet profit
Effect of potential common shares withdilutioneffect
Effects
Employees’compensation	-	71
Current net profit attributable to common shareholders of parent company and effect of potential commonshares
	$	96,570		$

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		2020
	After-tax amount	Weighted average number of outstanding shares (1,000 shares)		Earnings per share (yuan)
Basic earnings per share
Current net profit attributable to common shareholders of parent company
Current netprofit	$	96,499		$
Diluted earnings per share
Current net profit attributable to continuing business unit of parent company	$	96,499
Effect of potential common shares with dilution effect
Employees’ compensation	-	106
Effect of current net profit attributable to common shareholders of parent company and potential common shares
	$	$	$

(XXVI)Business combinations

1. The Group invested in Sitonholy (Tianjin) Technology Co., Ltd. through Jinghong, its subsidiary in mainland China, in December 2018, and prepaid an investment of RMB 10 million, and acquired 51% equity of Sitonholy (Tianjin) Technology Co., Ltd. on March 1, 2019. The total investment was RMB 86.36 million (including contingent consideration of RMB 44.36 million).

The equity interest was acquired as follows:

• (1) The Group purchased a 26% equity interest from Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) at the amount of RMB 35.36 million.

• (2) The Group acquired a 25% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through capital increase at the amount of RMB 51 million.

Sitonholy (Tianjin) Technology Co., Ltd. retails electronic products

and communication products in China. After the acquisition, the

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Group expects to strengthen its presence in the retail market of electronic products and communication products in China.

1. Information on the consideration for acquiring Sitonholy (Tianjin) Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and portion of non-controlling interests to the acquiree's net identifiable assets is stated as follows:

Acquisition consideration
Cash(Note 1)
Equitytransfer fund		$ 1
Payments forpurchase of shares		73,648
Contingent consideration(Note 2)		149,140
		342,466
Share of non-controlling interests in purchasers’ net
identifiable assets		157,465
		$ 4
Identifiable assets acquired and fair values of
liabilities assumed
Cash		$
Accounts receivable		182,945
Inventories		90,866
Other current assets		113,415
Intangible assets(customer relationship)		33,961
Property, plant,and equipment		797
Right-of-use assets		3,744
Other non-current assets(Note 3)		201,522
Accountspayable	(	129,566	)
Other current liabilities(Note 4)	(	184,300	)
Lease liabilities	(	3,802	)
Deferred tax liabilities	(	8,490	)
Total identifiable net assets		321,358
Business reputation		$ 1

Note 1: Acquisition consideration - cash includes payments for equity transfer and payments for purchase of shares:

• (1) Payments for equity transfer include prepayments of NT$44,720 (RMB 10 million) made in December 2018 and NT$74,958 (RMB 16 million) paid in March 2019.

• (2) Payments for purchase of shares amounted to RMB 16 million. The capital increase was completed in March 2019.

• Note 2: Contingent consideration is the present value of investment after taking into account performance

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compensation set forth in the investment agreement.

  - Note 3: Other non-current assets include payments for purchase of shares receivable, RMB 16 million, in March 2019 and payments for purchase of shares, RMB 35 million, to be received when conditions of contingent consideration are established.

  - Note 4: Other current liabilities include payments for equity transfer, RMB 18.1326 million payable by Sitonholy (Tianjin) Technology Co., Ltd. due to its acquisition of a 100% equity interest in Beijing Sitonholy.

1. On December 17, 2018, both parties reached an agreement on contingent consideration as follows:

2. (1) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 15 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 20 million within 15 working days, and should pay RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively (recognized in other non-current liabilities).

3. (2) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 22 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 15 million within 15 working days.

4. (3) If Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy fail to meet the performance target for the year within the period of performance commitment, Shenzhen Jinghong has the right to defer the aforesaid contingent consideration to the next period and, based on the realization of the accumulated net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing

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Sitonholy, determine whether to pay.

1. As of December 31, 2019, the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 reached the agreement on contingent consideration. According to the agreement, Shenzhen Jinghong paid RMB 20 million to Sitonholy (Tianjin) Technology Co., Ltd. for capital increase and paid RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively. The audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 was not met. According to the agreement, Shenzhen Jinghong deferred the contingent consideration to the next period.

2. On December 28, 2020, both parties entered into a supplemental agreement to extend the original terms of the contract for two years (to the end of 2022). Both parties also agreed that compensation should be collected from the original shareholders for the portion belonging to Shenzhen Jinghong (51%) in case of failure to meet the performance target.

The amount of compensation is calculated below:

• (1) If the performance target is met by the end of 2021: Unmet net profit target for 2018 to 2020 x 51% x 15%

• (2) If the performance target is met before June 2022: Unmet net profit target for 2018 to 2020 x 51% x (15%+10%)

• (3) If the performance target is met before the end of 2022: Unmet net profit target for 2018 to 2020 x 51% x (15%+20%) The Group has received the above compensation of NT$15,353 (i.e. RMB 3.53 million) in March 2021.

• The contingent consideration agreement for the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy Technology Co., Ltd. in 2021 has been reached, and Shenzhen Jinghong will pay the contingent consideration and refund part of the compensation according to the original contract and supplementary agreement.

• In October, 2021, the Group invested in Baotou Yihui Information

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Technology Co., Ltd. through its subsidiary in Mainland China, Sitonholy (Tianjin), and acquired 100% equity of Baotou Yihui Information Technology Co., Ltd. The total investment was RMB 2 million.

1. Information on the consideration for acquiring Baotou Yihui Information Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and portion of non-controlling interests to the acquiree's net identifiable assets is stated as follows:

stated as follows:
Acquisition consideration
Cash		$
Identifiable assets acquired and fair values of liabilities assumed
Cash		$
Accounts receivable		160
Other receivables		846
Other current assets		163
Property, plant,and equipment		5,473
Right-of-use assets		1,399
Other non-current assets		3,690
Contract liabilities	(	988 )
Accountspayable	(	326 )
Otherpayables	(	341 )
Lease liabilities	(	1,399 )
Total identifiable net assets		$

1. The Group merged Baotou Yihui Information Technology Co., Ltd. on October 31, 2021. The operating revenue and pre-tax net loss contributed by Baotou Yihui Information Technology Co., Ltd. in 2021 were NT$255 and NT$1,580, respectively. If Baotou Yihui Information Technology Co., Ltd. were acquired by the Group in January 1, 2021, the Group's operating revenue and pre-tax net loss would be NT$1,554 and NT$3,059, respectively, for the year ended December 31, 2021.

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(XXVII)Supplemental cash flow information

	2021	2020
Purchase of property, plant, and equipment	$ 7,923	$ 121
Add: prepayments for equipment at end ofperiod	-	2,238
deduce: prepayments for equipment at beginning of period (Note)	-	-
Casepayment for theperiod	$ 7,923	$ 2,359

Note: The equipment price prepaid in 2020 was transferred to other losses in 2021.

(XXVIII)Changes in liabilities from financing activities

		2021	2021	2021	2021
	Short-term	Guarantee deposits		Lease		Total liabilities from financing
	borrowings	received		liabilities		activities
January1	$	$		$		$
Change in cash flows
from financingactivities (	175,187 )	855 (		10,287 )(		184,619		)
Gains from business
combinations	-	-		1,399		1,399
Effect of exchange rate
changes	-	-		160		160
Other non-cash changes	-	-		29,271		29,271
December 31	$	$		$		$
			2020
	Short-term		Guarantee deposits		Lease		Total liabilities from financing
	borrowings		received		liabilities		activities
January1	$		$		$		$
Change in cash flows from
financingactivities	245,430		58 (		7,110	)	238,378
Effect of exchange rate
changes	-		-		110		110
Other non-cash changes	-		-		12,781		12,781
December 31	$		$		$		$

VII Transaction with related parties

(I)Parent company and the ultimate controller

The Company is controlled by Yicheng International Development Co., Ltd. (incorporated in the Republic of China), which owns 28.11% of the shares of the Company. The rest is held by the public. The ultimate controller of

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the Company is the Colorful Group.

(II)Name of related party and relationship with the Company

Name of related party and relationship with	the Company
Name of relatedpartyand relationshipwith the Company	Relation with the Company
Colorful TechnologyCo.,Ltd.	100% reinvestment business by Colorful Group
Shenzhen Colorful Yugong Technology and Development Co.,Ltd.(Yugong)	The same person in charge as the Colorful Group
uSenlight Corporation(uSenlight)	Associates

(III)Significant transactions with related parties

1. Operating revenue

		2021	2020
Sales ofgoods:
Colorful		$ $

The Group's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different products.

2. Purchases

Purchases
		2021	2020
Purchase ofgoods:
Yugong		$	$
Colorful		505	-
		$	$

Goods are purchased from related parties according to general commercial terms and conditions. Purchases from related parties are mainly display cards.

3. Receivables from related parties

		December 31,2021	December 31,2020
Accounts receivable:
Colorful		$ 7 $
Reduction: allowance for
losses	(	295 )(	304	)
Total		$ 7 $

Receivables from related parties mainly arise from sales transactions. Payment for sales transactions is made in accordance with the payment terms after the date of sale. The receivables are unsecured and not interest-bearing.

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4. Payables to related parties

		December 31,2021	December 31,2020
Accountspayable:
Yugong		$	$ 1
Colorful		335	-
Total		$	$ 1

The payables to related parties mainly arise from purchases, which are due one month after the purchase date. The payables are non-interest bearing.

5. Advertising expense

After the launch of the products jointly developed by the Group and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2021 and 2020 were NT$9,041 and NT$10,698, respectively; the amounts not yet paid as of December 31, 2021 and 2020 were NT$5,951 and NT$6,778, respectively, and recognized as "other payables."

(IV)Key management compensation information

		2021	2020
Salaries and other short-term employee benefits		$	$

VIII Pledged Assets

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

	Carrying	Carrying	value
Asset Name	December 31,2021		December 31,2020	Collateralpurpose
Other current assets
Bank deposits	$ 33,847		$ 56,887	Borrowing repayment account

IX Significant Contingent Liabilities and Unrecognized Contract Commitments

(I)Contingencies

None.

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(II)Commitments

1. As of December 31, 2021, the Group's guaranteed letter of credit for the purchase was US$1,500 thousand.

2. As of December 31, 2021, the Company issued a promissory note totaling NT$100,000 for the purchase of goods as a guarantee for the purchase of loan claims.

X Significant Disaster Loss

None.

XI Significant Events after the End of the Financial Reporting Period

None.

XII Others

(I)Capital management

The Group's objectives in capital management are to safeguard the Group's ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

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(II)Financial instruments

1. Category of financial instruments

		December 31,2021
Financial assets
Financial assets at fair value throughprofit and loss
		$ 64,204
Financial assets at fair value through other comprehensive income (loss)
Financial assets at amortized cost
Cash
Notes receivable		-
Accounts receivable (includingrelatedparties)		1,382,341
Other receivables		6,857
Other financial assets (recognized in other current assets)		33,847
Guarantee deposits paid (recognized in other non-current assets)
		9,594
Financial liabilities
Short-term borrowings
Accounts payable (includingrelatedparties)		773,498
Otherpayables		119,526
Guarantee deposits received (recognized in other non-current liabilities)
		1,275
Lease liabilities

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1. Risk management policies

2. (1) The Group's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.

3. (2) The risk management is carried out by the Group's finance department according to the policies approved by the Board of Directors. The finance department of the Group is responsible for identifying, evaluating, and avoiding financial risks in close co-operation with the Group's operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.

4. The nature and degrees of significant financial risks

5. (1) Market risk

Exchange rate risk

• A. The Group is a multinational operation and is exposed to exchange rate risk arising from transactions with the Company and its subsidiaries, which is mainly denominated in USD and CNY. The related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• B. Business of the Group is involved in a number of non-functional currency (the functional currency of the Company is NTD; for subsidiaries, the functional currency is CNY) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

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		December 31,2021	December 31,2021
(Foreign currency: functional currency)		Foreign currency (1,000 yuan)	Exchange rate	Carrying amount (NT$)
Financial assets
	Monetary item
	US$: NT$	$	27.68	$
Financial liabilities
	Monetary item
	US$: NT$	$	27.68	$
		December 31,2020
(Foreign currency: functional currency)		Foreign currency (1,000 yuan)	Exchange rate	Carrying amount (NT$)
Financial assets
	Monetary item
	US$: NT$	$	28.48	$
Financial liabilities
	Monetary item
	US$: NT$	$	28.48	$

C. The Group's material monetary items affected by the exchange rate fluctuations were recognized as net exchange losses (including realized and unrealized), which amounted to NT$20,038 and NT$29,558, respectively, for the years ended December 31, 2021 and 2020.

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• D. The Group's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

			2021	2021
			Sensitivityanalysis
(Foreign currency: functional currency)		Amount of variation	Affecting income (loss)	Affecting other comprehensive income(loss)
Financial assets
	Monetary item
	US$: NT$	1%	$	$
Financial liabilities
	Monetary item
	US$: NT$	1%	$	$

			2020	2020
			Sensitivityanalysis
(Foreign currency: functional currency)		Amount of variation	Affecting income (loss)	Affecting other comprehensive income(loss)
Financial assets
	Monetary item
	US$: NT$	1%	$	$
Financial liabilities
	Monetary item
	US$: NT$	1%	$	$

Price risk

• A. The Group's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Group diversifies its portfolio with its diversification method based on limits set by the Group.

• B. The Group primarily invests in equity instruments and beneficiary certificates issued by domestic companies, and the price of such equity instruments is affected by the uncertainty of the future value of the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, profit after tax for the years ended December 31, 2021 and 2020 will increase or decrease by NT$642 and NT$2,377, respectively due to the gain or loss on equity instruments at fair value through profit or loss, and other

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comprehensive income for the years then ended will increase or decrease by NT$2,005 and NT$1,862, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• A. The Group's interest rate risk arises primarily from short -term borrowings issued at variable rates, which expose the Group to cash flow interest rate risk. For the years ended December 31, 2021 and 2020, the Group's borrowings issued at variable rates were mainly denominated in USD.

• B. The Group's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Group is exposed to the risk of changes in future market interest rates.

• C. If the USD borrowing interest rate increases/decreases by 1%, with all other variables held constant, net profit after tax for the years ended December 31, 2021 and 2020 will decrease or increase by NT$1,815 and NT$3,216, respectively. Changes in interest expense mainly result from floating-rate borrowings.

• (2) Credit risk

• A. The Group's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment.

• B. The Group has established credit risk management in the Group's corporate policy. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. In accordance with the internal defined credit policy, the Group's operating entities and each new customer shall be subject to the management and credit risk analysis before making payment and delivery of the agreed payment and delivery. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based

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on internal or external ratings and regularly monitored by the Board of Directors.

• C. The Group follows the credit risk management procedures, which stipulate that if the contract amount is overdue for more than 90-120 days in accordance with the agreed payment terms, it is regarded that a default has taken place.

• D. The Group follows the credit risk management procedures, which are taken as the basis as to whether the credit risk on financial instruments since initial recognition has increased significantly:

• (A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.

• (B) There are actual or expected significant changes in external credit ratings of financial instruments.

• E. The Group will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the simplified method to estimate the expected credit loss based on the preparation matrix.

• F. The Group makes individual assessments on the material accounts receivable that have defaulted and recognizes 10% as allowance for losses. The Group includes the rest accounts receivable into forward-looking consideration according to the credit extension conditions of the Group to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for notes and accounts receivable by the said loss rate. The provision matrix as of December 31, 2021 and 2020 is as follows:

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						OA more than	OA more than	OA more than
		Individual	Not OA		OA 1-90 days	91 days			Total
December 31, 2021
Assumbed loss						17.50%~100
ratio		10%	0.04%~9.24%		17.50%	%
Total carrying
value		$	$		$	$			$
Allowance for
losses		$	$		$	$			$
			Not OA		Overdue OA 1-90 days	OA more than 91 days 91天以上			Total
December 31, 2020
Assumbed loss ratio			0.04%~3.62 %		6.81%	6.81%~100 %
Total carryingvalue			$		$	$			$
Allowance for losses			$		$	$			$
G. The statement of allowance loss for accounts receivable of the Group using simplified approach is as follows: January1,2021 Accounts receivable January1 $ 7 Provision of Impairment loss 34,426 Effect of exchange rate changes ( 35 ) December 31 $ 41 2020 Accounts receivable January1 $ 3 Provision of Impairment loss 3,547 Effect of exchange rate changes 130 December 31 $ 7
							January1,2021
							Accounts receivable
	January1						$ 7
	Provision of
	Impairment loss						34,426
	Effect of exchange
	rate changes			(			35			)
	December 31						$ 41
								2020
								Accounts receivable
	January1							$ 3
	Provision of Impairment loss							3,547
	Effect of exchange rate changes							130
	December 31							$ 7

• (3) Liquidity risk

• A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements predict to ensure that it has

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sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.

• B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in interest-bearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.

• C. The following tables detail the Group's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

		Within 1-2	Within 2-5
December 31,2021	Within 1year	years	years
Non-derivative
financial liabilities:
Lease liabilities	$	$	$
December 31,2020	Within 1year	Within 1-2 years	Within 2-5 years
Non-derivative
financial liabilities:
Lease liabilities	$	$	$

Except as stated above, the Group's non-derivative financial liabilities are due within one year.

(III)Fair value information

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

2. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take

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place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks is of Level 1.

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

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in equity investment without active markets is of Level 3.

• For financial instruments not measured at fair value, including cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables, short-term borrowings, notes payable, accounts payable (including related parties), and other payables, their carrying amounts are a reasonable approximation of their fair value.

• The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

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• (1) The Group classifies its assets and liabilities according to their nature; the information is as follows:

December 31,2021	Level 1	Level 2	Level 3	Total
Assets
Repeatable fair value
Financial assets at fair value throughprofit or loss
Beneficiarycertificate	$	$	$	$
Financial assets at fair value through other comprehensive income		-	-
	-
Equitysecurities	185,135	-	15,350	200,485
Total	$	$	$	$
December 31,2020	Level 1	Level 2	Level 3	Total
Assets
Repeatable fair value
Financial assets at fair value throughprofit or loss
Beneficiarycertificate	$	$	$	$
Financial assets at fair value through other comprehensive income
Equitysecurities	170,800	-	15,350	186,150
Total	$	$	$	$

• (2) Methods and assumptions used by the Group to measure the fair value are as follows:

A. The instruments that the Group uses market-quoted prices as their fair values (i.e. Level 1) are listed below by characteristics: OTC company stock Beneficiary certificate Market quotes Closing price Net value

B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or

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other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters commercial paper interest rate).

• C. The valuation of derivative instruments is based on the valuation model that is widely accepted by market users, such as the discount method. Structured interest rate derivatives are valued by the estimation of future cash flows at contractual interest rates.

• D. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group's financial and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Group's fair value evaluation model management policy and related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instrum ents and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.

• E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.

• For the years ended December 31, 2021 and 2020, there were no transfers between Level 1 and Level 2.

• The following table indicates the movement of Level 3 for the years ended December 31, 2021 and 2020:

		2021	2020
		Equity instruments	Equity instruments
January1(December 31)		$	$

1. For the years ended December 31, 2021 and 2020, there were no transfers into or out of Level 3.

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

2. Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

	Fair value on December 31, 2021	Evaluation technique	Major non-observable input value	Relationship between input and fair value
Non-derivative equityinstruments:
Non-OTC company stock	$	Market value method	Lack of market liquidity discount and expected equity value volatility	Lack of market liquidity discount and the higher the expected equity value volatility, the lower the fair value
	Fair value on December 31, 2020	Evaluation technique	Major non-observable input value	Relationship between input and fair value
Non-derivative equityinstruments:
Non-OTC company stock	$	Market value method	Lack of market liquidity discount and expected equity value volatility	Lack of market liquidity discount and the higher the expected equity value volatility, the lower the fair value

1. The Group carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

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				December 31,2021	December 31,2021
				Recognized as other comprehensive income
		Input value	Change	Favorable change	Unfavorable change
Financial assets
Equity instruments		Lack of market liquidity discount and expected equityvalue volatility	±1%	$	$
				December 31,2020
				Recognized as other comprehensive income
		Input value	Change	Favorable change	Unfavorable change
Financial assets
Equity instruments		Lack of market liquidity discount and expected equityvalue volatility	±1%	$	$

XIII Supplementary Disclosures

(I)Information on significant transactions

1. Capital loans to others: none.

2. Endorsements and guarantees: please refer to Table 1.

3. Marketable securities held at the end of the period (excluding investment in subsidiaries): please refer to Table 2.

4. Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: none.

5. Acquisition of real estate reaching NT$300 million or 20% of paid -in capital or more: none.

6. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: none.

7. Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more: please refer to Table 3.

8. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: please refer to Table 4.

9. Derivative transactions: none.

10. Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: please refer to Table 5.

11. (II)Information on investees

Information on investees (not including investees in Mainland China): Please refer to Table 6.

(III)Information on investments in Mainland China

1. Basic information: please refer to Table 7.

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1. Significant transactions between the Company and investees in Mainland China directly or indirectly through entities in a third area: please refer to Table 8.

(IV)Information on major shareholders

Information on major shareholders: please refer to Table 9.

XIV Segment Information

(I)General information

The Board of Directors of the Group operates business and makes decisions by product types, which are divided into consumer electronic products and AI servers (namely, reportable segments).

(II)Segment Information

The information for departments that should issue a report to the chief operating decision maker is as follows:

2021		Consumer goods	AI server	Adjustment and write-off	Grand Total
External revenue		$	$	$	$
Internal segment revenue		11,887	121,032 (	132,919 )	-
Segment revenue		$	$ (	$ )	$
Segment profit or loss		$	$ (	$ )	$
2020		Consumer goods	AI server	Adjustment and write-off	Grand Total
External revenue		$	$	$	$
Internal segment revenue		10,178	33,039 (	43,217 )	-
Segment revenue		$	$ (	$ )	$
Segment profit or loss		$	$ (	$ )	$

(III)Information on the adjustment of segment profit or loss

1. No reconciliation is necessary as the Group’s chief operating decision maker assesses segment performance and decide on the allocation of

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resources based on profit after tax.

1. The measurement method used for total amount of assets reported to the chief operating decision maker is the same as that used for the total amount of assets stated in the financial statements.

(IV)Information on products and services

The breakdown of the revenue balance is as follows:

						2021	2020
Sales revenue:
Computer peripheral products						$ $
Service revenue						8,396	6,867
						$ $
Geographi	cal information
	2021					2020
	Revenue				Non-current assets	Revenue	Non-current assets
China	$			$ $ $
Taiwan	13,991				42,905	665	66,973
	$			$ $ $
Key accounts information
						2021	2020
10C001						$ $
16L002						579,767	497,686

(V)Geographical information

(VI)Key accounts information

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Chaintech Technology Corporation and Subsidiaries Endorsements and Guarantees

For the Year Ended December 31, 2021

Table 1

Unit: NT$ thousand (Unless specified otherwise)

Subject of endorsements and guarantees

No. (Note 1) Endorser/ Guarantor Company name 0 Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd.	Relationship (Note 2) 2	Ceiling limit on endorsements and guarantees for a single entity (Note 3) $ 904,372	Maximum balance of endorsements and guarantees for the period	Balance of endorsements and guarantees at end of period Endorsements and guarantees used $56,472 $56,472 $	Endorsements and guarantees secured with collateral -	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements 3.12%	Ceiling limit on endorsements and guarantees (Note 3) $904,372	Parent providing endorsements and guarantees for subsidiary (Note 5) Y	Subsidiary providing endorsements and guarantees for parent (Note 5) N	Endorsements and guarantees involving Mainland China (Note 5) Y	Remark
		$	(Note 4) $ 56,472

Note 1: Explanations are as follows:

• (1) The issuer shall fills in 0.

(2) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.

Note 2: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.

(1) Companies with which the Group conducts business;

(2) Subsidiaries in which the Group directly holds more than 50% of their common shares;

(3) Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;

(4) The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;

(5) Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or

(6) Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.

Note 3: The ceiling limit on endorsements and guarantees provided by the Company, on endorsements and guarantees for a single enterprise, and on endorsements and guarantees provided by the Company and its subsidiaries should be 50% of the net value in the most recent financial statements respectively. Note 4: The maximum balance of endorsement/guarantee provided to others in the current year.

Note 5: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

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Chaintech Technology Corporation

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures) December 31, 2021

Table 2

Unit: NT$ thousands (Unless specified otherwise)

Company holding securities Type and name of securities Chaintech Technology Corporation Stocks_APAQ Technology Co., Ltd. Chaintech Technology Corporation Stocks_CloudMile Co., Ltd. (Cayman Islands) Sitonholy (Tianjin) Technology Co., Ltd. Beneficiary certificates_Tianli Kuaixian current net-value wealth management product Beijing Sitonholy Technology Co., Ltd. Beneficiary certificates_Gongying Wenjian Tiantianli wealth management product	Relationship with the issuer of securities Accounting item - Non-current financial assets at fair value through other comprehensive income - Non-current financial assets at fair value through other comprehensive income - Financial assets at fair value through profit or loss - current - Financial assets at fair value through profit or loss - current	Number of shares 3,050,000 510,204 - -	at the End of the Period Carrying amount Shareholding ratio Fair value $ 185,135 3.61% $ 185,135 15,350 2.19% 15,350 43,440 - 43,440 20,764 - 20,764	Remark
				- - - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities as promulgated in IFRS 9 "Financial Instruments." Note 2: When the issuers of marketable securities are not related parties, this column can be left blank.

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Chaintech Technology Corporation

Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more January 1, 2021 to December 31, 2021

Table 3

Unit: NT$ thousands (Unless specified otherwise)

Company Counterparty Relationship Chaintech Technology Corporation Colorful Technology Co.,Ltd. 100% reinvestment business by Colorful Group Sitonholy (Tianjin) Technology Co., Ltd. Shenzhen Colorful Yugong Technology and Development Co., Ltd. The same person in charge as the Colorful Group Beijing Sitonholy Technology Co., Ltd. Shenzhen Colorful Yugong Technology and Development Co., Ltd. The same person in charge as the Colorful Group	Transaction Purchases (sales) Amount Sales $ 2,178,925 Purchases $ 78,868 Purchases $ 1,402	Percentage of total purchases (sales) Credit period 33.43% OA 45~125 days 1.31% OA 30 days 0.02% OA 30 days	Unusual trade conditions and its reasons Unit price Credit period Not applicable Not applicable $ Not applicable Not applicable $ Not applicable Not applicable $	Unusual trade conditions and its reasons Unit price Credit period Not applicable Not applicable $ Not applicable Not applicable $ Not applicable Not applicable $	Unusual trade conditions and its reasons Unit price Credit period Not applicable Not applicable $ Not applicable Not applicable $ Not applicable Not applicable $	Ratio of notes and accounts receivable (payable) Balance Ratio of notes and accounts receivable (payable) 737,095 51.76% - 0.00% - 0.00%	Ratio of notes and accounts receivable (payable) Balance Ratio of notes and accounts receivable (payable) 737,095 51.76% - 0.00% - 0.00%	Ratio of notes and accounts receivable (payable) Balance Ratio of notes and accounts receivable (payable) 737,095 51.76% - 0.00% - 0.00%	Remark - - -
				Unit price	reaso
							Balance 737,095 - -

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Chaintech Technology Corporation Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: December 31, 2021

Table 4

Unit: NT$ thousands (Unless specified otherwise)

Company Counterparty Relationship Chaintech Technology Corporation Colorful Technology Co.,Ltd. 100% reinvestment business by Colorful Group	Balance of receivables from related parties Accounts receivable $ 737,095	Overdue receivables from related parties Turnover rate Amount Handling method 2.89 $ - -	Receivables from related parties Amount recovered Allowances for losses $ 197,905 ($ 295)

AR at the beginning of the period AR at the end of the period Average AR Sales revenue Conversion throughout the year Turnover rate	770,724 737,094
	753,909
	2,178,925 2,178,925 2.89

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Chaintech Technology Corporation and Subsidiaries Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof For the Year Ended December 31, 2021

Table 5

Unit: NT$ thousand (Unless specified otherwise)

Transaction status

No. (Note 1) Company Counterparty 0 Chaintech Technology Corporation Shenzhen Jinghong Digital R&D Service Co., Ltd. 0 Chaintech Technology Corporation Shenzhen Jinghong Digital R&D Service Co., Ltd.	Relationship with counterparty (Note 2) Accounting item Parent company to a subsidiary Operating expenses $ Parent company to a subsidiary Other payables	Percentage of consolidated total revenue or total assets Amount Transaction terms 9,050 Agreed by both parties 0.14% 3,054 Agreed by both parties 0.09%

• Note 1: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction: (1) The parent company is coded 0.

• (2) The subsidiaries are coded from "1" in the order presented in the table above.

Note 2: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

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Chaintech Technology Corporation

Information on investees, such as name and location (not including investees in Mainland China) January 1, 2021 to December 31, 2021

Table 6									Unit: NT$	thousands
									(Unless specified	otherwise)
				Initial amount of	investment	Shareholding at end of period		Investee
									Gain (loss) on
	Investee		Main businesses and		December 31,	Number of		Income (loss) for the	investment for
Investor	company	Location	products	December 31, 2020	2019	shares	Percentage Carrying amount	period	the period	Remark
Chaintech	uSenlight	Republic	Electronics, computers, and	$ 150,000	$ 150,000	5,000,000	13.05% $ -	($ 274,391)	($ 35,808)	Loss for
Technology	Corporation	of China	peripherals							the period
Corporation										reached
										$97,765

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Chaintech Technology Corporation and Subsidiaries Information on Investments in Mainland China - Basic Information For the Year Ended December 31, 2021

Table 7

Unit: NT$ thousand (Unless specified otherwise)

	Investee in Mainland China		Main businesses and products	Actual paid-in	Actual paid-in	Method of investment (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted from Taiwan at end of period	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Carrying amount of investments at end of period	Gain (loss) on investment recovered as of the period		Remark
					capital			Remittance		Recovery
Dongguan Changan Fortech Electronics Co.,Ltd.		Production and manufacturing of mainboard, display card and computer products		$343,327		2	$343,327		($343,327)		$	($8,545)	100	(8,545)	$	$		Note 3
Shenzhen Jinghong Digital R&D Service Co., Ltd.		Technology research and development and trading of electronic products, computer hardware, and peripheral devices		$ 499,065		1	$ 499,065	$ -	$ -		$ 499,065	$43,170	100	$ 43,170	$ 518,552	$ -		-
Sitonholy (Tianjin) Technology Co., Ltd.		Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts		100,162		3	-	-	-		-	90,404	51	46,106	406,163	-		-
Beijing Sitonholy Technology Co., Ltd.		Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts		36,824		3	-	-	-		-	(2,137)	51	1,090	49,771	-		-
Baotou Yihui Information Technology Co., Ltd.		Electronic products, communication products, computer software and hardware and data processing storage and support services		28,295		3						(3,098)	51	1,580	3,724
Note 1: The method of investment in Mainland China includes the three following types:
(1) Direct investment;
(2) Investment in Mainland China through a company set up in a third area; or
(3) Others: Investment in Mainland China through an reinvestment in Mainland China.
Note2:The valuation isrecognizedinthefinancialstatements audited by the CPAs ofthe parent companyin Taiwan.

Company name Chaintech Technology Corporation

Accumulated investment amount Ceiling on investment in Mainland China remitted from Taiwan to Mainland Investment amount authorized by regulated by Investment Commission, China at end of period Investment Commission, M.O.E.A. M.O.E.A. $ 499,065 $ 544,794 $ 1,234,237

Note 3: The Group's investment in Shenzhen Jinghong Digital R&D Service Co., Ltd., which was approved by the Investment Commission, Ministry of Economic Affairs on November 26, 2015, at a total amount of US$5 million, was remitted in full.

Note 4: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

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Chaintech Technology Corporation

Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area January 1, 2021 to December 31, 2021

Table 8

Unit: NT$ thousand (Unless specified otherwise)

Property Accounts receivable Endorsements and guarantees or Sales (purchases) transactions (payable) collateral provided Financing Investee in Mainland Balance at end of Highest balance China Amount % Amount % Balance % period Purpose for the period Balance at end of period Interest range Interest for the period Others Shenzhen Jinghong Digital $ - - $ - - ($ 3,054) - $ - - $ - $ - - $ - Operating expenses $9,050 R&D Service Co., Ltd. Sitonholy (Tianjin) 56,742 For line of credit of suppliers Technology Co., Ltd.

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Chaintech Technology Corporation Information on major shareholders December 31, 2021

Table 9

Name of major shareholder Yeland International Development Ltd. Masterlink Securities (Hong Kong) Corporation Limited - Client A/C at CTBC Bank Core Pacific - Yamaichi International (H.K.) Ltd. - Client A/C at HSBC	Shareholding Number of shares 28,532,080 8,444,841 5,099,000	Shareholding ratio 28.11% 8.32% 5.02%

• Note 1: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.

• Note 2: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity, please refer to the Market Observation Post System.

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