CHIN-POON — Audit Report / Information 2021

Nov 10, 2021

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Stock Code:2355

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors' Report For the Years Ended December 31, 2021 and 2020

Address: No. 46, Nei-Tsuoh St., 3rd Lin, Nei-Tsuoh Village, Lu-Chu County, Taoyuan City, Taiwan, R.O.C. Telephone: (03)322-2226

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

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Table of contents

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

Page

1 2 3 4 5 6 7 8 9 9 9～10 10～20 21 21～53 54 54 54～55 55 55 55 56～58 58 58 59 59～61

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Representation Letter

The entities that are required to be included in the combined financial statements of Chin-Poon Industrial Co., Ltd. as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 "Consolidated Financial Statements" endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Chin-Poon Industrial Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Chin-Poon Industrial Co., Ltd.

Chairman: Zeng , Liu-Yuzhi Date: March 14, 2022

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web home.kpmg/tw

Independent Auditors' Report

To the Board of Directors Chin-Poon Industrial Co., Ltd.:

Opinion

We have audited the accompanying consolidated financial statements of Chin-Poon Industrial Co., Ltd. ("the Company") and its subsidiaries (collectively referred to as "the Group"), which comprise the consolidated statements of financial position as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Subsequent measurements of inventories

Please refer to note 4(h), note 5(a) and 6(f) for the related disclosures on subsequent measurements of inventories of the consolidated financial statements.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

4-1

Description of key audit matter:

The inventories of the Group are mainly electronic printed circuit boards and electronic materials. The products may be outdated or no longer meet the market demand due to the rapid changes in technology. In addition, with the price competition in the same industry, the demand on related products and their prices may fiercely fluctuate, which may result in a risk wherein the cost of inventories may exceed its net realizable value. As a result, the subsequent measurements of inventories have to be based on the managements' assessment using internal and extermal evidences. Therefore, the subsequent measurements of inventories were identified as one of our key audit matters.

How the matter was addressed in our audit:

The procedures included assessing the rationality of accounting policy for inventory subsequent measurements; reviewing the inventory aging documents and analyzing their changes; obtaining the documents of inventory subsequent measurements and understanding the rationality of sales prices adopted by the management; selecting samples and examining relevant documents to verify the accuracy of net realizable value of inventories; and assessing whether the disclosure of the inventory subsequent measurements made by the management was appropriate.

2. Refund liability of sales returns and discounts

Please refer to note 4(l), note 5(b) and note 6(o) for the related disclosures on the refund liabilities for sales returns and discounts of the consolidated financial statements.

Description of key audit matter:

The Group recorded a refund liability for its estimated future returns and discounts for specific electronic circuit boards by using historical trend and other known factors in the same period when related revenues were recorded. Since the refund liability for sales returns and discounts is subject to significant judgment of the management, it was, therefore, identified as one of our key audit matters.

How the matter was addressed in our audit:

The procedures included understanding the management's methodology used in estimating sales returns and discounts; assessing the reasonableness of relevant assumptions made by the management; obtaining the documents of refund liability for sales returns and discounts, selecting samples and examining relevant documents to verify the reasonableness of the management's methodology used in estimating refund liability of sales returns and discounts; and assessing whether the disclosure on refund liability for sales returns and discounts made by the management was appropriate.

Other Matter

The Company has prepared its parent company only financial statements as of and for the years ended December 31, 2021 and 2020, on which we have issued an unmodified opinion on the above paragraph concerning the emphasis of matter.

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

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

4-2

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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 used and the reasonableness of accounting estimates and related disclosures made by management.

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

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

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

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

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

4-3

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are Lily Lu and Yung-Sheng Wang.

KPMG

Taipei, Taiwan (Republic of China) March 14, 2022

Notes to Readers

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

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

December 31, 2021 and 2020

(All amounts expressed in thousands of New Taiwan dollars)

Assets 11xx Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Financial assets measured at fair value through profit and loss－current (note 6(b)) 1150 Notes receivable, net (notes 6(d) and (o)) 1170 Accounts receivable, net (notes 6(d) and (o)) 1200 Other receivables (note 6(e)) 1220 Current income tax assets 130x Inventories (notes 6(f) and 9) 1410 Prepayments 1476 Other financial assets－current (note 6(c)) 1479 Other current assets Total current assets 15xx Non-current assets: 1600 Property, plant and equipment (notes 6(g), 7, 8 and 9) 1755 Right-of-use assets (note 6(h)) 1840 Deferred tax assets (note 6(l)) 1915 Prepayments for equipment (note 9) 1975 Net defined benefit asset－non-current (note 6(k)) 1980 Other financial assets－non-current (note 6(c)) Total non-current assets 1xxx Total assets	December 31, 2021 Amount % $ 3,824,300 17 34 - 4,337 - 4,229,831 18 138,836 1 9,805 - 4,256,689 18 61,466 - 1,663,308 7 217,097 1 14,405,703 62 7,388,403 32 350,369 2 218,925 1 - - 95,926 - 757,617 3 8,811,240 38 $ 23,216,943 100	December 31, 2020 Amount % 4,110,135 19 416,822 2 34,747 - 3,383,028 15 113,631 - 111,426 - 2,941,555 13 53,079 - 656,602 3 160,300 1 11,981,325 53 7,331,156 33 409,007 2 207,994 1 365,177 2 128,510 - 2,054,149 9 10,495,993 47 22,477,318 100 Liabilities and Equity 21xx Current liabilities: 2100 Short-term loans (notes 6(i), 8 and 9) 2120 Financial liabilities at fair value through profit or loss－current (note 6(b)) 2150 Notes payable 2170 Accounts payable 2219 Other payables (notes 6(k) and 6(p)) 2230 Current tax liabilities 2280 Current lease liabilities (note 6(j)) 2399 Other current liabilities (note 6(o)) Total current liabilities 25xx Non-Current liabilities: 2570 Deferred tax liabilities (note 6(l)) 2580 Non-current lease liabilities (note 6(j)) 2640 Net defined benefit liability－non-current (note 6(k)) Total non-current liabilities 2xxx Total liabilities 31xx Equity attributable to shareholders of the parent (note 6(m)): 3110 Common stock 3200 Capital surplus 3300 Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings 3400 Other equity: 3410 Foreign currency translation differences for foreign operations 31xx Total equity attributable to shareholders of the company 36xx Non-controlling interests 3xxx Total equity 2-3xxx Total liabilities and equity	December 31, 2021 Amount % $ 1,352,335 6 - - 817,394 4 2,535,350 11 1,191,452 5 47,411 - 52,542 - 1,069,022 4 7,065,506 30 588,447 3 260,234 1 30,919 - 879,600 4 7,945,106 34 3,974,954 17 1,579,698 7 2,409,315 10 434,369 2 7,444,695 32 10,288,379 44 (571,745) (2) 15,271,286 66 551 - 15,271,837 66 $ 23,216,943 100	December 31, 2020 Amount % 1,311,226 6 182 - 485,694 2 2,271,078 10 1,267,259 6 - - 49,387 - 877,089 4 6,261,915 28 560,091 3 316,330 1 32,878 - 909,299 4 7,171,214 32 3,974,954 18 1,579,225 7 2,404,255 11 350,229 1 7,430,852 33 10,185,336 45 (434,369) (2) 15,305,146 68 958 - 15,306,104 68 22,477,318 100

See accompanying notes to the consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(All amounts expressed in thousands of New Taiwan dollars)

4000 Operating revenue (note 6(o)) 5000 Operating costs (notes 6(f), (k) and 7) 5900 Gross profit 6000 Operating expenses (notes 6(d), (e), (k), (p) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit losses (reversal of expected credit losses) Total operating expenses 6900 Operating loss 7000 Non-operating income and expenses (notes 6(b), (g), (j) and (q)): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs Total non-operating income and expenses 7900 Income before income tax 7950 Less: Income tax expenses (benefit) (note 6(l)) Net income 8300 Other comprehensive income (notes 6(l) and (m)): 8310 Items that may not be reclassified subsequently to profit or loss 8311 Remeasurements of defined benefit plans 8349 Less: income tax related to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified subsequently to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Foreign currency translation differences for foreign operations 8399 Less: income tax related to items that will be reclassified subsequently to profit or loss Total items that will be reclassified subsequently to profit or loss 8300 Other comprehensive income, net of tax 8500 Total comprehensive income 8600 Net income (loss) attributable to: 8610 Shareholders of the Company 8620 Non-controlling interests 8700 Total comprehensive income attributable to: 8710 Shareholders of the Company 8720 Non-controlling interests Basic earnings per share(expressed in New Taiwan dollars) (note 6(n)) 9750 Basic earnings per share 9850 Diluted earnings per share	2021 Amount % $ 18,219,280 100 17,085,633 94 1,133,647 6 579,715 3 425,769 2 306,422 2 7,395 - 1,319,301 7 (185,654) (1) 100,890 1 312,555 2 254,780 1 (21,907) - 646,318 4 460,664 3 122,964 1 337,700 2 (44,989) - (8,998) - (35,991) - (137,702) (1) - - (137,702) (1) (173,693) (1) $ 164,007 1 $ 337,782 2 (82) - $ 337,700 2 $ 164,415 1 (408) - $ 164,007 1 $ 0.85 $ 0.85	2020 Amount % 15,313,285 100 14,443,453 94 869,832 6 486,778 3 433,764 3 81,783 1 (8,722) - 993,603 7 (123,771) (1) 103,360 1 226,264 1 (147,714) (1) (33,413) - 148,497 1 24,726 - (20,976) - 45,702 - 5,647 - 1,129 - 4,518 - (84,391) - - - (84,391) - (79,873) - (34,171) - 46,118 - (416) - 45,702 - (33,504) - (667) - (34,171) - 0.12 0.12

See accompanying notes to the consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(All amounts expressed in thousands of New Taiwan dollars)

Balance at January 1, 2020 Appropriation and distribution: Legal reserve Special reserve Cash dividends Net income for the year Other comprehensive income for the year Total comprehensive income for the year Changes in non-controlling interests Non-payment of expired cash dividends from previous years transferred to capital surplus Balance at December 31, 2020 Appropriation and distribution: Legal reserve Special reserve Cash dividends Net income for the year Other comprehensive income for the year Total comprehensive income for the year Changes in non-controlling interests Non-payment of expired cash dividends from previous years transferred to capital surplus Balance at December 31, 2021			Equity attributable to shareholders of the Company	Equity attributable to shareholders of the Company	Equity attributable to shareholders of the Company	Equity attributable to shareholders of the Company		Total equity attributable to shareholders of the Company 15,735,751 - - (397,495) 46,118 (79,622) (33,504) (31) 425 15,305,146 - - (198,748) 337,782 (173,367) 164,415 40 433 15,271,286	Non-controlling interests 1,547 - - - (416) (251) (667) 78 - 958 - - - (82) (326) (408) 1 - 551	Total equity
	Common stock $ 3,974,954 - - - - - - - - 3,974,954 - - - - - - - - $ 3,974,954	Capital surplus 1,578,800 - - - - - - - 425 1,579,225 - - - - - - 40 433 1,579,698		Retained	earnings	Subtotal 10,532,226 - - (397,495) 46,118 4,518 50,636 (31) - 10,185,336 - - (198,748) 337,782 (35,991) 301,791 - - 10,288,379	Other equity Foreign currency translation differences for foreign operations (350,229) - - - - (84,140) (84,140) - - (434,369) - - - - (137,376) (137,376) - - (571,745)
			Legal reserve 2,335,852 68,403 - - - - - - - 2,404,255 5,060 - - - - - - - 2,409,315	Special reserve 142,180 - 208,049 - - - - - - 350,229 - 84,140 - - - - - - 434,369	Unappropriated earnings 8,054,194 (68,403) (208,049) (397,495) 46,118 4,518 50,636 (31) - 7,430,852 (5,060) (84,140) (198,748) 337,782 (35,991) 301,791 - - 7,444,695
										15,737,298 - - (397,495) 45,702 (79,873) (34,171) 47 425 15,306,104 - - (198,748) 337,700 (173,693) 164,007 41 433 15,271,837

See accompanying notes to the consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(All amounts expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Income before tax Adjustments: Adjustments to reconcile profit and loss Depreciation expenses Expected credit losses (reversal of expected credit losses) Net gains on financial assets measured at fair value through profit or loss Interest expense Interest income Losses on disposal of property, plant and equipment Unrealized losses (gains) on foreign exchange Total adjustments to reconcile profit and loss Changes in operating assets and liabilities relating: Net changes in operating assets: Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Total net changes in operating assets Net changes in operating liabilities: Notes payable Accounts payable Other payable Other current liabilities Net defined benefit liability Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest income received Interest paid Income tax received (paid) Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of financial assets measured at fair value through profit or loss Proceeds from disposal of financial assets measured at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other financial assets－non-current Increase in prepayments for equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Payment of lease liabilities Cash dividends paid Change in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 460,664 1,103,977 7,395 (2,792) 21,907 (100,890) 5,322 11,088 1,046,007 30,420 (882,004) (25,313) (1,349,592) (8,918) (57,943) (2,293,350) 331,700 297,520 (66,867) 4,824 (10,389) 556,788 (1,736,562) (690,555) (229,891) 35,583 (22,357) 50,246 (166,419) - 419,567 (297,637) 5,313 358,613 (361,913) 123,943 3,769,572 (3,741,889) (49,541) (198,748) 41 (220,565) (22,794) (285,835) 4,110,135 $ 3,824,300	2020 24,726 1,125,070 (8,722) (2,860) 33,413 (103,360) 13,976 (36,960)
		1,020,557
		(4,926) 152,416 (50,868) 196,449 22,093 (15,770)
		299,394
		(28,537) 186,085 (111,431) 71,081 (15,292)
		101,906
		401,300
		1,421,857
		1,446,583 47,583 (37,309) (118,920)
		1,337,937
		(626,162) 1,055,357 (347,129) 41,786 (781,056) (346,326)
		(1,003,530)
		4,254,356 (4,330,665) (47,008) (397,495) 47
		(520,765)
		(24,109)
		(210,467) 4,320,602
		4,110,135

See accompanying notes to the consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(All amounts expressed in thousands of New Taiwan dollars, unless otherwise stated)

(1) Company history

CHIN-POON INDUSTRIAL CO., LTD. ("the Company") was incorporated in the Republic of China (ROC) on September 26, 1979, as a corporation limited by shares in accordance with the ROC Company Act. The consolidated entities in the consolidated financial statements include the Company and its subsidiaries (collectively referred to as "the Consolidated Company"). The Consolidated Company is mainly engaged in the Manufacturing, producing and selling electronic printed circuit boards.

(2) Approval date and procedures of the consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on March 14, 2022.

(3) Application of new and revised standards, amendments and interpretations:

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

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

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”

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

• ●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

• (b) The impact of IFRS issued by the FSC but not yet effective

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

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• －

• ●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

• ●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies

The significant accounting policies applied in the preparation of the consolidated financial statements are set out below. Except for those specially indicated, the significant accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

(a) Statement of compliance

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

(b) Basis of preparation

(i) Basis of measurement

The accompanying consolidated financial statements have been prepared on a historical cost basis except otherwise specified in the notes to accounting policies.

(ii) Functional and presentation currency

The functional currency of each individual consolidated entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan dollars, which is the Company's functional currency. The assets and liabilities of foreign operations are translated to the Company's functional currency using the exchange rates on reporting date. The income and expenses of foreign operations are translated to the Company's functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(Continued)

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Basis of consolidation

• (i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and its subsidiaries. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances, and transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Consolidated Company.

Changes in the Consolidated Company's ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions. 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 and attributed to shareholders of the parent.

• (ii) List of subsidiaries in the consolidated financial statements

List of subsidiaries in the consolidated financial statements were as follows:

Name of investor	Name of subsidiary	Business activities	Percentage of ownership December 31, 2021 December 31, 2020 Remarks % 100.00 % 100.00 % 99.78 % 99.73 (Note) % 100.00 % 100.00 % 100.00 % 100.00
			December 31, 2021
The Company The Company VEGA International Enterprise Co., Ltd. Chin-Poon Holdings Cayman Limited	VEGA International Enterprise Co., Ltd. (VEGA) Draco PCB Public Co., Ltd. (Draco) Chin-Poon Holdings Cayman Limited (CPCH) Chin-Poon (Changshu) Electronic Co., Ltd (CPCS)	Investment Production and trading of PCB Investment Production and trading of PCB	% 100.00 % 99.78 % 100.00 % 100.00

Note: In May 2020, Draco increased its capital by issuing 121,574 thousand shares amounting to $281,760 thousand (approximately THB 300,000 thousand). The Company contributed $281,713 thousand in Draco's equity offering and recognized the amount $31 thousand as a reduction of its retained earnings.

In July 2021, Draco increased its capital by issuing 132,159 thousand shares amounting to $261,270 thousand (approximately THB 300,000 thousand). The Company contributed $261,228 thousand in Draco's equity offering and recognized the amount of $40 thousand as an increase of its capital surplus.

Subsidiaries excluded from the consolidated financial statements: None.

(Continued)

12

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Foreign currencies

Transactions in foreign currencies are translated to the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of translation. Foreign currency differences arising from retranslated are recognized in profit or loss, except for the financial assets measured at fair value through other comprehensive income differences, which are recognized in other comprehensive income arising on the retranslated.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income and presented in the translation reserve in equity.

(e) Assets and liabilities classified as current and non-current

Cash or cash equivalents, assets held for trading purposes or short-term and expected to be converted to cash within twelve months after the reporting period or for intention of sales or consumption within its normal operating cycle are classified as current assets; all other assets are classified as noncurrent assets.

Liabilities that must be fully liquidated within twelve months after the reporting period are classified as current liabilities; all other liabilities are classified as non-current liabilities.

(f) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and demand deposits. Cash equivalents are shortterm, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits are classified as cash and cash equivalents only when they satisfy the aforementioned definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

(g) Financial instruments

(i) Financial assets

The Consolidated Company classifies financial assets into the following categories: financial assets measured at amortized cost and financial assets measured at fair value through profit or loss (FVTPL). A regular way purchase or sale of financial assets is recognized and derecognized, as applicable using trade date accounting.

(Continued)

13

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 1) Financial assets measured at amortized cost

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

• ●it is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and

• ●its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Financial assets measured at fair value through profit or loss

All financial assets not classified as measured at amortized cost as described above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest income, are recognized in profit or loss.

• 3) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, refundable deposits and other financial assets, etc.).

Loss allowance for notes and accounts receivable are measured at an amount equal to lifetime ECL. Other financial assets measured at amortized cost are considered reasonable and supportable information that are relevant and available, without undue cost or effort. This includes both quantitative and qualitative information, as well as analysis, based on the Consolidated Company's historical experience, informed credit assessment, and forward-looking information. Loss allowance for other financial assets measured at amortized cost are measured by using the 12-month ECL, in which the credit risk did not increase significantly since initial recognition. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to the lifetime ECL.

(Continued)

14

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. The Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures for recovery of amounts due.

• 4) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire or when the Group transfers substantially all the risks and rewards of ownership of the financial assets.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

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

• 2) Equity instruments

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

3) Financial liabilities

Financial liabilities not classified as held-for-trading or designated as at fair value through profit or loss, which comprise long-term and short-term loans, accounts payable and other payables, are measured at fair value plus any directly attributable transaction costs at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit and loss.

4) Derecognition of financial liabilities

The Consolidated Company derecognizes a financial liability when its contractual obligation has been discharged or cancelled or has expired. The difference between the carrying amount of a financial liability removed and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 5) Offsetting of financial assets and liabilities

The Consolidated Company presents financial assets and liabilities on a net basis when the Consolidated Company has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(Continued)

15

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are initially measured at fair value. Any attributable transaction costs thereof are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss and are included in the line item of non-operating income and expenses in the statement of comprehensive income. When the fair value of a derivative instrument is positive, it is classified as a financial asset, whereas when the fair value is negative, it is classified as a financial liability.

(h) Inventories

The cost of inventories consists of all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories includes an appropriate share of fixed production overhead based on normal capacity and allocated variable production overhead based on actual output. However, unallocated fixed production overhead arising from lower or idle capacity is recognized in cost of goods sold during the period. If actual capacity is higher than normal capacity, fixed production overhead should be allocated based on actual capacity. The method of valuing inventories is the weighted-average method.

Inventories are measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses at the end of the period. When the cost of inventories is higher than the net realizable value, inventories are written down to net realizable value, and the write-down amount is charged to current year's cost of goods sold. If net realizable value increases in the future, the cost of inventories is reversed within the original write-down amount, and such reversal is treated as a reduction of cost of goods sold.

(i) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset, and any borrowing cost that is eligible for capitalization.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and the depreciation method of a significant part of an item of property, plant and equipment are the same as those of another significant part of that same item.

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as other gains and losses.

(Continued)

16

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Consolidated Company. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(iii) Depreciation

The depreciable amount of an asset is determined after deducting its residual amount, and it shall be allocated on a straight-line basis over its useful life. Items of property, plant and equipment with the same useful life may be grouped in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

Land has an unlimited useful life and therefore is not depreciated.

Buildings	8~60 years
Machinery equipment	2~15 years
Other equipment	2~20 years
Leasehold equipment	5~30 years

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

－ (j) Leases as a leasee

At inception of a contract, the Group assesses whether a contract is, or contains, a lease.

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at, or before, the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by using the impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Group's incremental borrowing rate. Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term and in future lease payments the lease liability is remeasured, the Consolidated Company remeasures the lease liabilities with a corresponding adjustment to the carrying amount of the right-of-use asset, or in profit and loss, if the carrying amount of the right-of-use asset has been reduced to zero.

(Continued)

17

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group has elected not to recognize the right-of-use assets and lease liabilities for its short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

－ (k) Impairment non-financial assets

With regard to non-financial assets (other than inventories, deferred tax assets and employee benefits), the Consolidated Company assesses at the end of each reporting period whether there is any indication that an impairment loss has occurred and estimates the recoverable amount for assets with an indication of impairment. If it is not possible to determine the recoverable amount for the individual asset, then the Consolidated Company will have to determine the recoverable amount for the asset's cash-generating unit.

The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair value less costs to sell or it's value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss shall be recognized immediately in profit or loss.

The Consolidated Company assesses at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the entity shall estimate the recoverable amount of that asset. Impairment loss is reversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount, increasing the individual asset's or cash-generating unit's carrying amount to its estimated recoverable amount. The reversal of an impairment loss of an individual asset or cash-generating unit cannot exceed the carrying amount of the individual asset or cash-generating unit, less any depreciation or amortization, had it not recognized an impairment loss.

(l) Revenue recognition

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

(i) Sale of goods

The Consolidated Company is mainly engaged in the manufacture and sale of electronic printed circuit boards and electronic materials. The Consolidated Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer's acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer.

(Continued)

18

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company's estimated future sales returns and discounts for various goods are generally made and adjusted based on historical trend and other known factors that would significantly affect the sales returns and discounts. A reduction of revenue and refund liabilities (recorded under other current liabilities) are only recognized to the extent that it is highly probable that a significant reversal will not occur.

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

(ii) Financing components

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

(m) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Consolidated Company's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date (market yields of high-quality corporate bonds or government bonds) on bonds that have maturity dates approximating the terms of the Consolidated Company's obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Consolidated Company, the recognized asset is limited to the total of any unrecognized past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Consolidated Company. An economic benefit is available to the Consolidated Company if it is realizable during the life of the plan, or on settlement of the plan liabilities.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in profit or loss.

(Continued)

19

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Remeasurements of the net defined benefit liability (asset), which comprise (1) actuarial gains and losses; (2) the return on plan assets excluding the amounts included in net interest on the net defined benefit liability (assets); and (3) any change in the effect of the asset ceiling, excluding the amounts included in net interest on the net defined benefit liability (assets); The Consolidated Company recognizes the remeasurements of the defined benefit liability (asset) in other comprehensive.

The Consolidated Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation, and any related actuarial gains or losses and past service cost that had not previously been recognized.

• (iii) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Consolidated Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(n) Income taxes

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

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the exceptions below:

• (i) Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) during the transaction.

• (ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.

• (iii) Initial recognition of goodwill.

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

(Continued)

20

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

• (i) The Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

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

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

(o) Earnings per share

Earnings per share (EPS) of common stock are calculated by dividing net income (or loss) for the reporting period attributable to common stockholders by the weighted-average number of common shares outstanding during that period. The weighted-average number of common shares outstanding is adjusted retroactively for the increase in common shares outstanding from stock issuance arising from the capitalization of retained earnings, or additional paid-in capital.

Employee bonuses in the form of stock of the Company are potential stock. If the potential stock does not have a dilutive effect, only the basic earnings per share are disclosed; otherwise, diluted earnings per share are disclosed in addition to the basic earnings per share. When computing diluted earnings per share with regard to employee bonuses in the form of stock, the closing price at the reporting date is used as the basis of computation of the number of shares to be issued. When computing diluted earnings per share prior to the following Board of Directors, the effect of dilution from these potential shares is taken into consideration.

(p) Segment information

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

(Continued)

21

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

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

There are no critical judgments in applying accounting policies that have significant effect on the amounts recognized in the consolidated financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Subsequent measurements of inventories

As inventories are stated at the lower of cost or net realizable value, the Consolidated Company assesses the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The subsequent measurements of inventories are mainly determined based on the current market price. Therefore, there may be significant changes in the net realizable value of inventories due to the rapid change of industrial environment.

(b) Refund liability of sales returns and discounts

The Consolidated Company records a refund liability for its estimated future sales returns and discounts in the same period when related revenues are recorded. Refund liability for estimated sales returns and discounts is generally made and adjusted based on historical trend and other known factors that would significantly affect the sales returns and discounts. The adequacy of estimations is reviewed periodically. Any changes in these estimates might significantly affect the refund liability for sales returns and discounts.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash on hand Demand deposits Time deposits Checking deposits Cash and cash equivalents per consolidated statements of cash flows	December 31, 2021 $ 14,351 3,211,434 395,418 203,097 $ 3,824,300	December 31, 2020
		15,226 2,932,726 1,080,701 81,482
		4,110,135

(Continued)

22

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Please refer to note 6(r) for the disclosure of the Consolidated Company's interest rate risk and sensitivity analysis related to financial assets and liabilities.

Please refer to note 6(c) for the disclosure of the Consolidated Company's time deposits with a maturity of three months to one year and above one year were recorded under other financial assets － － current and other financial assets non-current.

• (b) Financial assets measured at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Current: Beneficiary certificates Financial assets held for trading: Derivative instruments not used for hedging Forward contracts Financial liabilities held for trading: Derivative instruments not used for hedging Forward contracts	December 31, 2021 $ - $ 34 $ -	December 31, 2020 416,822 - (182)

Please refer to note 6(q) for net gains or losses from financial assets measured at fair value through profit or loss.

As of December 31, 2020, the Consolidated Company did not pledge its financial assets measured at fair value through profit or loss as collateral.

The Consolidated Company uses derivative financial instruments to manage the exposures due to fluctuations of foreign exchange risk from its operating activities. As of December 31, 2021 and 2020, the Consolidated Company reported the following derivatives financial instruments as financial assets and liabilities at fair value through profit or loss without the application of hedge accounting.

accounting.
Forward contracts	December 31, 2021
	Contract amount (thousand dollars) USD THB 82 / 2,753	Currency Maturity dates USD/THB 2022.05

(Continued)

23

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Forward contracts	December 31, 2020	December 31, 2020
	Contract amount (thousand dollars) USD THB 1,831 / 55,009	Currency Maturity dates USD/THB 2021.06

During the years ended December 31, 2021 and 2020, the realized exchange gains of $972 thousand and $199 thousand, respectively, related to mandatorily measured at fair value through profit or loss held on the years then ended, were recognized as other gains and losses by the Group.

(c) Other financial assets

Current: Bank's time deposit Segregated foreign exchange deposits Subtotal Non-current: Bank's time deposit Segregated foreign exchange deposits Refundable deposits Subtotal Total	December 31, 2021 $ 1,286,487 376,821 1,663,308 738,437 - 19,180 757,617 $ 2,420,925	December 31, 2020
		416,415 240,187
		656,602
		1,810,982 222,581 20,586
		2,054,149
		2,710,751

According to the Management, Utilization, and Taxation of Repatriated Offshore Funds Act, the Company repatriated its offshore funds back to Taiwan at February 17, 2020, and recorded it under － － other financial assets current and other financial assets non-current based on the Company's investment plan schedule.

As of December 31, 2021 and 2020, the Consolidated Company did not pledge its other financial assets as collateral.

• (d) Notes receivable and accounts receivable

Notes receivable Accounts receivable Less: loss allowance	December 31, 2021 $ 4,337 4,309,307 79,476 $ 4,234,168	December 31, 2020
		34,747 3,455,653 72,625
		3,417,775

(Continued)

24

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company applies the simplified approach of IFRS 9 to provide for its expected credit losses, i.e. the use of lifetime expected credit loss provision for notes and accounts receivable. To measure the expected credit losses, notes and accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward-looking information.

The Consolidated Company's analysis of the expected credit loss on its notes and accounts receivable in the regions of Taiwan were as follows:

Not past due Past due 1~30 days Past due 31~60 days Past due 61~90 days Past due 91~120 days Past due 121 to 180 days Past due over 181 days Not past due Past due 1~30 days Past due 31~60 days Past due 61~90 days Past due 91~120 days Past due 121 to 180 days Past due over 181 days	December 31, 2021	December 31, 2021
	Gross carrying amount of notes and accounts receivable Weighted- average expected credit loss rate $ 2,893,955 0.0432% 115,616 1.6389% 15,080 7.8282% 841 25.4704% 568 41.0772% 194 62.5075% 67,553 100% $ 3,093,807 December 31, 2020		Loss allowance for lifetime expected credit losses
			1,253 1,895 1,180 214 233 121 67,553
			72,449
	Gross carrying amount of notes and accounts receivable $ 2,342,037 45,918 8,397 736 125 944 67,577 $ 2,465,734	Weighted- average expected credit loss rate 0.0010% 0.00271% 0.3577% 0.7923% 3.8780% 3.8780% 100%	Loss allowance for lifetime expected credit losses
			24 12 30 6 5 37 67,577
			67,691

(Continued)

25

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company's analysis of the expected credit loss on its notes and accounts receivable in the regions of China were as follows:

Not past due Past due 1~30 days Past due 31~60 days Past due 61~90 days Past due 91~120 days 121 to 180 days past due Not past due Past due 1~30 days Past due 31~60 days	December 31, 2021	December 31, 2021
	Gross carrying amount of notes and accounts receivable Weighted- average expected credit loss rate $ 766,460 0.0176% 36,033 0.7587% 6,258 3.8197% 2,077 11.4864% 1,193 19.9406% 1,318 34.7338% $ 813,339 December 31, 2020		Loss allowance for lifetime expected credit losses
			136 273 239 239 238 458
			1,583
	Gross carrying amount of notes and accounts receivable $ 641,634 27,061 1,154 $ 669,849	Weighted- average expected credit loss rate 0% 0% 0%	Loss allowance for lifetime expected credit losses
			- - -
			-

The Consolidated Company's analysis of the expected credit loss on its notes and accounts receivable in the regions of other were as follows:

Not past due Past due 1~30 days Past due 31~60 days Past due 61~90 days Past due 91~120 days Past due 121~180 days Past due over 181 days	December 31, 2021	December 31, 2021
	Gross carrying amount of notes and accounts receivable $ 336,562 40,415 10,510 9,147 4,446 2,405 3,013 $ 406,498	Weighted- average expected credit loss rate 0.0256% 0.2054% 0.2379% 0.7434% 5.2857% 14.8441% 100%	Loss allowance for lifetime expected credit losses
			86 83 25 68 235 357 3,013
			3,867

(Continued)

26

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Not past due Past due 1~30 days Past due 31~60 days Past due 61~90 days Past due 91~120 days Past due 121~180 days Past due over 181 days	December 31, 2020	December 31, 2020
	Gross carrying amount of notes and accounts receivable $ 298,193 43,513 5,539 382 1,625 1,999 3,566 $ 354,817	Weighted- average expected credit loss rate 0.0711% 0.5837% 0.6680% 2.0942% 11.4462% 31.0655% 100%	Loss allowance for lifetime expected credit losses
			212 254 37 8 186 621 3,566
			4,884

The movement in the loss allowance for impairment with respect to notes and accounts receivable was as follows:

Balance at beginning of the period Impairment loss (reversal gain) Amounts written off Translation effect Balance at end of the period	2021 $ 72,625 7,395 - (544) $ 79,476	2020 83,496 (8,745) (1,854) (272) 72,625

As of December 31, 2021 and 2020, the Consolidated Company had not provided its notes and accounts receivable as collateral or factored them for cash.

(e) Other receivables

Other receivables Less: loss allowance	December 31, 2020 $ 138,836 - $ 138,836	December 31, 2020
		113,631 -
		113,631

As of December 31, 2021 and 2020, the Consolidated Company had no other receivables that were past due. Therefore, no provisions for doubtful debt were required after the management's assessment.

(Continued)

27

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movement in the loss allowance for impairment with respect to other receivables was as follows:

Balance at beginning of the period Impairment loss recognized Amounts written off Balance at end of the period	2021 $ - - - $ -	2020 1,058 23 (1,081) -

• (f) Inventories

Finished goods Work in progress Raw materials	December 31, 2021 $ 2,029,774 1,523,599 703,316 $ 4,256,689	December 31, 2020
		1,176,484 1,255,692 509,379
		2,941,555

Due to the decrease in the realizable value of inventories, the Consolidated Company recognized the inventory pricing loss as cost of goods sold. The amounts were as follows:

Loss on decline in market value of inventory Income from sale of scrap Unallocated production overhead Total	2021 $ 66,131 (710,844) 285,037 $ (359,676)	2020 14,209 (422,684) 521,793 113,318

As of December 31, 2021 and 2020, the Consolidated Company did not pledge its inventories as collateral.

(Continued)

28

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Property, plant and equipment

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

Cost: Balance at January 1, 2021 Additions Disposals Reclassification Translation effect Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Translation effect Balance at December 31, 2020 Accumulated depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposal Reclassification Translation effect Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposals Reclassification Translation effect Balance at December 31, 2020 Carrying amount: Balance at December 31, 2021 Balance at December 31, 2020 Balance at January 1, 2020	Land $ 841,237 - - - (9,122) $ 832,115 $ 846,661 - - - (5,424) $ 841,237 $ - - - - - $ - $ - - - - - $ - $ 832,115 $ 841,237 $ 846,661	Buildings 4,121,031 36,291 (412,779) 6,291 (32,941) 3,717,893 4,055,145 44,703 - 32,753 (11,570) 4,121,031 1,710,833 119,657 (412,780) - (20,898) 1,396,812 1,600,025 118,828 - - (8,020) 1,710,833 2,321,081 2,410,198 2,455,120	Machinery equipment		Other equipment 3,210,709 38,011 (262,458) 63,908 (24,998) 3,025,172 3,120,586 54,669 (26,365) 70,632 (8,813) 3,210,709 2,457,569 200,624 (259,448) (289) (23,750) 2,374,706 2,280,023 206,311 (23,112) 1,368 (7,021) 2,457,569 650,466 753,140 840,563	Leasehold improvement 46,999 1,167 - - - 48,166 39,982 5,901 - 1,116 - 46,999 14,762 6,935 - - - 21,697 8,697 6,065 - - - 14,762 26,469 32,237 31,285	Construction in progress and Equipment to be inspected 4,549 281,857 - 294,669 (1,875) 579,200 22,240 11,321 - (27,774) (1,238) 4,549 - - - - - - - - - - - - 579,200 4,549 22,240	Total 20,337,821 488,691 (2,104,732) 703,514 (199,107) 19,226,187 20,145,686 308,759 (361,147) 331,679 (87,156) 20,337,821 13,006,665 1,048,556 (2,094,097) - (123,340) 11,837,784 12,282,674 1,071,551 (305,385) - (42,175) 13,006,665 7,388,403 7,331,156 7,863,012
			12,113,296 131,365 (1,429,495) 338,646 (130,171) 11,023,641 12,061,072 192,165 (334,782) 254,952 (60,111) 12,113,296 8,823,501 721,340 (1,421,869) 289 (78,692) 8,044,569 8,393,929 740,347 (282,273) (1,368) (27,134) 8,823,501 2,979,072 3,289,795 3,667,143

(i) Loss and gain on disposal

For the years ended December 31, 2021 and 2020, the Consolidated Company recognized loss and gain on disposal of property, plant and equipment, please refer to note 6(q).

(Continued)

29

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Impairment loss

The movements in accumulated impairment loss of the Consolidated Company's property, plant and equipment were as follows:

Balance at beginning of the period Disposals during the period Translation effect Balance at end of the period	2021 $ 458,119 (443,234) (1,752) $ 13,133	2020 459,388 (214) (1,055) 458,119

On April 28, 2018, a fire broke out at the Company's Pingzhen Plant and caused some damage to the buildings, equipment and inventories, incurring related repairs and compensation costs, estimated at the amount of $902,744 thousand, of which the amount of $443,234 thousand was recognized as accumulated impairment losses on property, plant, and equipment.

The Company has sought insurance claim for the relevant damages. As the claim involved disaster assessment, the Company recognized the relevant claim settlement income only when it was almost certain that the amounts could be collected.

On July 20, 2021, the Company confirmed with both the insurer and the loss adjuster that the amount of claim settlement was finalized at $1,093,409 thousand, with the remaining uncollected amount of $393,409 thousand after deducting accumulated insurance claims of $700,000 thousand received by the Company during 2018 and 2019. On July 21, 2021, the Company has collected and recognized the income arising from the insurance claim as other gains and losses. Thereafter, the Company derecognized the relevant property, plant and equipment and the accumulated impairment losses.

(iii) Collateral

As of December 31, 2021 and 2020, the Consolidated Company pledged its property, plant and equipment as collateral for short-term loans, please refer to note 8.

(h) Right-of-use assets

The Consolidated Company leases its assets including its use right of land and buildings. Information about leases for which the Consolidated Company is the lessee is as follow:

Cost: Balance at January 1, 2021 Additions Reductions Translation effect Balance at December 31, 2021	Use right of land $ 54,867 - - 198 $ 55,065	Buildings 456,032 3,370 (6,770) - 452,632	Total 510,899 3,370 (6,770) 198 507,697

(Continued)

30

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance at January 1, 2020 Additions Translation effect Balance at December 31, 2020 Accumulated depreciation: Balance at January 1, 2021 Depreciation Translation effect Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Translation effect Balance at December 31, 2020 Carrying amount: Balance at December 31, 2021 Balance at December 31, 2020 Balance at January 1, 2020	Use right of land $ 54,499 - 368 $ 54,867 $ 2,888 1,444 15 $ 4,347 $ 1,434 1,424 30 $ 2,888 $ 50,718 $ 51,979 $ 53,065	Buildings 428,240 27,792 - 456,032 99,004 53,977 - 152,981 46,909 52,095 - 99,004 299,651 357,028 381,331	Total
			482,739 27,792 368
			510,899
			101,892 55,421 15
			157,328
			48,343 53,519 30
			101,892
			350,369
			409,007
			434,396

• (i) Short-term and long-term loans

• (i) Short-term loans

Secured loans Unsecured loans Unsecured loans Unsecured loans Total Secured loans Unsecured loans Unsecured loans Unsecured loans Total		December	31, 2021	31, 2021
	Currency	Range of interest rates (%)	Year of maturity Amount 2022 $ 108,629 2022 1,111,692 2022 62,614 2022 69,400 $ 1,352,335 31, 2020
	THB USD EUR THB	2.10 0.55~0.70 0.22 2.75~2.90 December
	Currency	Range of interest rates (%)	Year of maturity Amount 2021 $ 50,820 2021 1,105,979 2021 69,334 2021 85,093 $ 1,311,226	Amount
	THB USD EUR THB	2.10~3.25 0.67~0.94 0.44 3.00

(Continued)

31

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2021 and 2020, the unused credit facilities of the Consolidated Company's short-term loans amounted to $4,662,500 thousand and $4,803,728 thousand, respectively.

Please refer to note 6(r) for related information of risk exposure to interest risk, currency risk and liquidity risk.

(ii) Collateral of loans

As of December 31, 2021 and 2020, the Consolidated Company has mortgaged its assets as collateral of loans, please refer to note 8.

(j) Lease liabilities

The carrying amounts of lease liabilities for the Consolidated Company were as follows:

Current Non-current For the maturity analysis, please refer to note 6(r).	December 31, 2021 $ 52,542 $ 260,234	December 31, 2020
		49,387
		316,330

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	2021 $ 7,388 $ 5,076 $ 4,803	2020
		8,144
		3,055
		10,148

short-term leases of low-value assets	$		4,803	10,148
The amounts recognized in the statement	of cash flows for	the	Consolidated	Company were as
follows:
			2021	2020
Total cash outflow for leases	$		66,808	68,355

(k) Employee benefits

(i) Defined benefit plans

The present value of the defined benefit obligations and the fair value adjustments of the plan assets for the Consolidated Company were as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit asset	December 31, 2021 $ 405,334 (470,341) $ (65,007)	December 31, 2020 374,442 (470,074) (95,632)

(Continued)

32

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2021 and 2020, the Consolidated Company's net defined benefit assets amounted to $65,007 thousand and $95,632 thousand, respectively, deriving from the net defined benefit assets of $95,926 thousand and $128,510 thousand, respectively, recorded by the Company, less, the net defined benefit liabilities of $30,919 thousand and $32,878 thousand, respectively, under Draco's management.

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan and Chunghwa Post Co., Ltd. that provides pensions for employees and managers upon retirement. The plans (covered by the Labor Standard) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

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

The Company's Bank of Taiwan and Chunghwa Post Co., Ltd. labor pension reserve account balance amounted to $434,304 thousand and $36,037 thousand, respectively, as of December 31, 2021. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of the Consolidated Company's defined benefit obligations for the years ended December 31, 2021 and 2020 were as follows:

Defined benefit obligation at January 1 Current service costs and interest Remeasurements of the net defined benefit liability (asset) －Actuarial gains and losses arising from changes in financial assumptions Benefits paid Defined benefit obligation at December 31	2021 $ 374,442 6,924 49,584 (25,616) $ 405,334	2020 385,385 9,174 6,665 (26,782) 374,442

(Continued)

33

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 3) Movements in fair value of plan assets

The movements in the fair value of the Consolidated Company's plan assets for the years ended December 31, 2021 and 2020 were as follows:

Fair value of plan assets at January 1 Remeasurements of the net defined benefit liability (asset) －The return on plan assets (excluding amounts included in the interest during this period) －Actuarial gains and losses arising from changes in financial assumptions Contributions made Benefits paid Fair value of plan assets at December 31	2021 $ 470,074 4,028 4,595 17,260 (25,616) $ 470,341	2020 463,576 5,752 12,312 15,216 (26,782) 470,074

• 4) Expenses recognized in profit or loss

The Consolidated Company's expenses recognized on profit or loss for the years ended December 31, 2021 and 2020 were as follows:

Current service costs Net interest on the defined benefit liability (asset) Past service cost and settlement gains Operating costs Selling expenses Administrative expenses	2021 $ 1,919 977 - $ 2,896 $ 268 1,798 830 $ 2,896	2020
		2,468 954 -
		3,422
		1,869 251 1,302
		3,422

• 5) Actuarial assumptions

The Consolidated Company's assumptions used on calculating the present value of the defined benefit obligation at reporting date were as follows:

Discount rate Future salary increases rate	2021.12.31 2020.12.31 0.50%~1.51% 0.50%~1.51% 1.55%~5.00% 1.00%~5.00%

(Continued)

34

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The expected contribution to be made by the Consolidated Company to the defined benefit plans for the next annual reporting period is $11,898 thousand.

The Consolidated Company's weighted average duration of the defined benefit obligation of employee and manager are 16.38 years and 5.54 years, respectively.

6)

Sensitivity analysis for actuarial assumption

As of December 31, 2021 and 2020, the effect of changes in actuarial assumptions on the present value of the defined benefit obligations were as follows:

At December 31, 2021 Discount rate (changes 0.25%) Future salary increase rate (changes 0.25%) At December 31, 2020 Discount rate (changes 0.25%) Future salary increase rate (changes 0.25%)	The impact of defined benefit obligation Increase Decrease $ (12,455) 13,007 12,817 (12,335) $ (11,683) 12,216 12,058 (11,593)

The above sensitivity analysis is based on the effect of changes in a single assumption under the condition that other assumptions remain constant. In practice, many changes in assumptions may be linked together. The method used for the sensitivity analysis and calculation of the net defined benefit pension liability (asset) is the same.

The method used for sensitivity analysis for this year is the same as the method used in the previous year.

(ii) Defined contribution plans

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

The Consolidated Company's pension costs under the defined contribution method were $143,381 thousand and $118,030 thousand for the years ended December 31, 2021 and 2020, respectively.

(Continued)

35

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (iii) Short-term employee benefit

Annual leave benefit (recorded under other payables)	December 31, 2021 $ 40,257	December 31, 2020
		36,151

• (l) Income taxes

• (i) Income tax expense (benefit)

The amounts of the Consolidated Company's income tax expense (benefit) for the years ended December 31, 2021 and 2020 were as follows:

Current tax expense (benefit) Current period Surtax on unappropriated retained earnings Adjustment for prior periods Subtotal Deferred tax expense (benefit) Origination and reversal of temporary differences Adjustment for prior years' deferred income tax Subtotal Income tax expense (benefit) from continuing operations	2021 $ 46,468 - 52,112 98,580 7,792 16,592 24,384 $ 122,964	2020 98,674 504 2,193 101,371 (122,347) - (122,347) (20,976)

The amounts of the Consolidated Company's income tax expense recognized under other comprehensive income for the years ended December 31, 2021 and 2020 were as follows:

Items that may not be reclassified into profit and loss: Remeasurements of defined benefit plan	2021 $ (8,998)	2020
		1,129

(Continued)

36

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Reconciliations of the Consolidated Company's income tax expense (benefit) and income before tax for the years ended December 31, 2021 and 2020 were as follows:

Income before tax Income tax using the Company's domestic tax rate Effect of tax rates in foreign jurisdiction Underestimated prior years' income tax Tax-exempt income Tax expense recognized based on the management, utilization, and taxation of repatriated offshore fund act Current-year for which no deferred tax asset was recognized Surtax on unappropriated retained earnings Adjustment according to tax low Tax credits utilized Underestimated prior years' deferred income tax Income tax expense (benefit)	2021 $ 460,664 $ 92,133 6,257 52,112 (697) - 5,258 - (35,730) (12,961) 16,592 $ 122,964	2020
		24,726
		4,945 (108,554) 2,193 (1,252) 47,990 27,999 504 15,418 (10,219) -
		(20,976)

• (ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred income tax assets

The Consolidated Company's deferred tax assets have not been recognized in respect of the following items:

The carryforward of unused tax losses	December 31, 2021 $ 460,458	December 31, 2020
		922,926

Deferred tax assets have not been recognized in respect of these items because it is not probable that the future taxable profit will be available against which the Consolidated Company can utilize the benefits therefrom.

As of December 31, 2021, the expiration period for abovementioned unrecognized deferred tax assets of unused tax losses carryforwards were as follows:

Year of loss 2017 2018 2021	Unused amount Year of expiry $ 197,104 2022 237,065 2023 26,289 2026 $ 460,458

(Continued)

37

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Recognized deferred tax assets and liabilities

Changes in the amount of recognized deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 were as follows:

Deferred tax assets:

Balance at January 1, 2021 Recognized in profit or loss Translation effect Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020		Defined benefit plans $ 6,576 403 (795)	Allowance for inventory devaluation loss 33,980 7,565 (1,037) 40,508 33,348 632 33,980	Loss allowance 18,326 319 (108) 18,537 20,113 (1,787) 18,326	Refund liabilities 143,515 4,413 120 148,048 129,088 14,427 143,515	Loss carryforwards 3,511 (3,511) -	Others 2,086 3,665 (103) 5,648 6,274 (4,188) 2,086	Total 207,994 12,854 (1,923)
		$ 6,184				-		218,925
		$ 6,547 29				- 3,511		195,370 12,624
		$ 6,576				3,511		207,994

Deferred tax liabilities:

Balance at January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Translation effect Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance at December 31, 2020	Gain from investment using equity method $ 534,389 4,607 - - $ 538,996 $ 646,310 (111,921) - $ 534,389	Defined benefit plans	Unrealized interest income - 30,150 ) - 116 30,266 - - - -	Others - - - - - 190 (190) - -	Total 560,091 37,238 (8,998) 116 588,447 668,685 (109,723) 1,129 560,091
		25,702 2,481 (8,998 -
		19,185
		22,185 2,388 1,129
		25,702

• (iii) Examination and approval

The ROC income tax authorities have examined the Company's income tax returns through 2019.

• (m) Share capital and other equity

• (i) Common stock

As of December 31, 2021 and 2020, the total value of authorized nominal ordinary shares amounted to $4,500,000 thousand, with par value of $10 per share, of which 397,495 thousand shares of common stocks were outstanding. All issued shares were paid up upon issuance.

(Continued)

38

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Capital surplus

The balances of the Company's capital surplus were as follows:

Paid-in capital in excess of par value Conversion of convertible bonds ordinary shares Changes in equity of subsidiaries Non-payment of expired cash dividends from previous years	December 31, 2021 $ 630,382 937,936 10,522 858 $ 1,579,698	December 31, 2020
		630,382 937,936 10,482 425
		1,579,225

In accordance with the ROC Company Act, realized capital surplus can be used to increase share capital or to distribute as cash dividends after offsetting losses. The aforementioned capital surplus includes share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital surplus to increase share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

1) Legal reserve

If the Company experienced profit for the year, the distribution of the statutory earnings reserve, either by new shares or by cash, shall be decided at the shareholders' meeting, and the distribution amount is limited to the portion of legal reserve which exceeds 25 percent of the paid-in capital.

2) Special earnings reserve

In accordance with the rules issued by the FSC, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of other shareholders' equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders' equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

(Continued)

39

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Distribution of earnings

According to the Company's Articles of Incorporation, when allocating the net profits for each fiscal year, the Company should first pay income tax, offset its prior years' losses, and appropriate 10% of net income to legal reserve. Legal reserve should be appropriated until the reserve equals to the Company's paid-in capital. The remainder, if necessary, is subject to special reserve. The distribution of remainder earning should be amounts directors' and supervisors' remuneration, employee bonuses and stockholders' dividends and bonuses in the percentage amounts of 20% to 80%. After the distribution, the remainder is unappropriated earnings.

According to the Company's Articles of Incorporation, the Company's dividend policy will consider its operating environment, steady profitability, sufficiency of its cash for future expansion, financial plan and the balance of dividends. The Board of Directors then proposes the appropriations and presents this proposal for approval at the shareholders' meeting. The Company stipulated a dividend policy that at least 20% of income after tax may be distributed as cash dividends, and if the Company has sufficient cash acquired from the outer, the ratio of distribution as cash dividends will be 50%. The actual appropriations are based on profit and the requirement of cash which are adjusted and approved by the stockholders' meeting.

The appropriations of 2020 and 2019 earnings have been approved by the Company's shareholders in its meetings held on July 30, 2021, and June 23, 2020 respectively. The appropriations and dividends per share were as follows:

Dividends distributed to common stockholders: Cash	2020 Amount per share (NT dollars) Total Amount $ 0.50 199,748	2020 Amount per share (NT dollars) Total Amount $ 0.50 199,748	2019	2019
	Amount per share (NT dollars)		Amount per share (NT dollars) 1.00	Total Amount
	$ 0.50			397,495

On March 14, 2022, the Company's Board of Directors resolved to appropriate the 2021 earnings. These earnings were appropriated as follows:

Dividends distributed to common shareholders: Cash	2021 (Proposed)	2021 (Proposed)
	Amount per share (NT dollars) $ 0.50	Total amount
		198,748

(Continued)

40

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Other equities (net of tax)

Balance at January 1, 2021 Foreign exchange differences arising from foreign operation Balance at December 31, 2021 Balance at January 1, 2020 Foreign exchange differences arising from foreign operation Balance at December 31, 2020	Foreign exchange differences arising from foreign $ (434,369) (137,376) $ (571,745) $ (350,229) (84,140) $ (434,369)	Non-controlling interests (7,307) (326) (7,633) (7,056) (251) (7,307)	Total (441,676) (137,702) (579,378) (357,285) (84,391) (441,676)

(n) Earnings per share

The calculation of the Company's basic and diluted earnings per share for years ended December 31, 2021 and 2020 were as follows:

(i) Basic EPS

Net income attributable to common shareholders of the Company Weighted-average number of common shares outstanding Basic EPS (New Taiwan dollars) (ii) Diluted EPS Net income attributable to common shareholders of the Company Weighted-average number of common shares outstanding Influence of potentially dilutive shares－ Remuneration to employees Weighted-average number of shares outstanding－ diluted Diluted EPS (New Taiwan dollars)

Unit: thousand shares 2021 2020 $ 337,782 46,118 397,495 397,495 $ 0.85 0.12 Unit: thousand shares 2021 2020 $ 337,782 46,118 397,495 397,495 254 182 397,749 397,677 $ 0.85 0.12

(Continued)

41

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (o) Revenue from contracts with customers

• (i) Disaggregation of revenue

The Consolidated Company is engaged in one industry which manufactures and sells printed circuit boards. The disaggregation of revenue by primary geographical markets for the years ended December 31, 2021 and 2020 were as follows:

Taiwan United states Germany Japan Hungary China Others Taiwan United states Germany Japan Hungary China Others		2021	2021
	Taiwan $ 829,556 2,838,217 1,878,371 1,343,865 740,102 1,835,152 4,530,121 $ 13,995,384	China Others 10,586 - 8,256 174,162 191,560 128,167 159,443 - 45,801 - 1,396,242 17,347 739,138 1,353,194 2,551,026 1,672,870 2020		Total
				840,142 3,020,635 2,198,098 1,503,308 785,903 3,248,741 6,622,453
				18,219,280
		China - 5,358 123,371 72,667 42,703 1,117,475 592,296 1,953,870	Others - 143,072 110,218 86 - 5,645 1,236,635 1,495,656	Total
				447,922 2,596,314 1,778,176 1,137,202 768,031 2,839,135 5,746,505
				15,313,285

(ii) Contract balances

Notes receivable Account receivable Less: loss allowance Total	December 31, 2021 $ 4,337 4,309,307 79,476 $ 4,234,168	December 31, 2020 34,747 3,455,653 72,625 3,417,775	January 1, 2020
			29,586 3,683,528 83,496
			3,629,618

For the details on accounts receivable and allowance for impairment, please refer to note 6(d).

(Continued)

42

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Refund liabilities (recorded under other current liabilities)

Sales return and discounts	December 31, 2021 $ 707,189	December 31, 2020
		691,518

The refund liabilities are expected payment to customers contingent on sales returns and discounts in the future. The amount recognized for refund liabilities is based on historical experience and other known factors and is treated as reduction of operating revenue when products are sold.

(p) Remuneration to employees and directors

In accordance with the Company's articles of incorporation, the Company should contribute no less than 2%~10% of profit as employee remuneration and less than 3% as directors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. Employees who are entitled to receive the above- mentioned employee remuneration, in share or cash, include the employees of the subsidiaries of the Company who meet certain specific requirement.

For the year ended December 31, 2021, the Company accrued and estimated the remuneration to employees and directors amounting to $9,304 thousand and $3,240 thousand, respectively. These amounts are calculated by using the Company's pre-tax net profit for the period before deducting the amount of the remuneration to the employees and directors, multiplied by the distribution ratio of remuneration to the employees and directors under the Company's articles of association, and expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

The Company had net loss before income tax for the year ended December 31, 2020, and thus, no remunerations to employees and directors were accrued and estimated during the year in accordance with the Company's articles of incorporation.

(q) Non-operating income and expenses

(i) Interest income

The details of the Consolidated Company's interest income for the years ended December 31, 2021 and 2020 were as follows:

Interest income from bank deposits Other interest income Total Interest income	2021 $ 100,851 39 $ 100,890	2020
		103,320 40
		103,360

(Continued)

43

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other income

The details of the Consolidated Company's other income for the years ended December 31, 2021 and 2020 were as follows:

Rental income Gains on writ-off from accrued expense Other income－other Compensation income Others Subtotal other income－other Total other income	2021 $ 865 - 68,070 243,620 311,690 $ 312,555	2020
		543 75,949 17,045 132,727
		149,772
		226,264

• (iii) Other gains and losses

The details of the Consolidated Company's other gains and losses for the years ended December 31, 2021 and 2020 were as follows:

Loss on disposal of property, plant and equipment Net on foreign exchange loss Gain on financial assets measured at fair value through profit and loss Miscellaneous disbursements Settlement of insurance claim income Other gains and losses, net	2021 $ (5,322) (113,581) 2,792 (22,518) 393,409 $ 254,780	2020 (13,976) (70,733) 2,860 (65,865) - (147,714)

。 For details on settlement of insurance claim income, please refer to note 6(g)

(iv) Finance costs

The details of the Consolidated Company's finance costs for the years ended December 31, 2021 and 2020 were as follows:

Interest expense	2021 $ 21,907	2020
		33,413

(r) Financial instruments

• (i) Credit risk

1) Credit risk exposure

The book value of financial assets and contract assets represents the maximum risk exposure. The maximum risk exposure amounts were $10,618,229 thousand and $10,352,292 thousand as at December 31, 2021 and 2020, respectively.

(Continued)

44

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Concentration of credit risk

For the years ended December 31, 2021 and 2020, the Consolidated Company's counterparties of account receivables transaction mainly locate in the United States, China, and Germany. As of December 31, 2021 and 2020, the balance of accounts receivable from those regions accounted for 49%, of the total balance.

• 3) Credit risk of receivables and other financial assets at amortized cost

For the information of credit risk exposure for notes and accounts receivable, please refer to note 6(d).

Other financial assets measured at amortized cost include other receivables, refund deposits and time deposits. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses.

(ii) Liquidity risk

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

December 31, 2021 Non-derivative financial liabilities Secured loans Unsecured loans Notes payable Accounts payable Other payables Lease liabilities Other current liabilities December 31, 2020 Non-derivative financial liabilities Secured loans Unsecured loans Notes payable Accounts payable Other payables Lease liabilities Long-term loans Derivative financial liabilities Other forward contracts: Outflow	Carrying amount $ 108,629 1,243,706 817,394 2,535,350 1,191,452 312,776 275,014 $ 6,484,321 $ 50,820 1,260,406 485,694 2,271,078 1,267,259 365,717 64,469 182 $ 5,765,625	Contractual cash flows 110,910 1,252,752 817,394 2,535,350 1,191,452 335,968 275,014 6,518,840 52,179 1,272,202 485,694 2,271,078 1,267,259 396,591 64,469 182 5,809,654	Within a year 110,910 1,252,752 817,394 2,535,350 1,191,452 58,755 275,014 6,241,627 52,179 1,272,202 485,694 2,271,078 1,267,259 56,765 64,469 182 5,469,828	1-2 years - - - - - 51,851 - 51,851 - - - - - 59,075 - - 59,075	2-5 years - - - - - 135,122 - 135,122 - - - - - 143,545 - - 143,545	Over 5 years
						- - - - - 90,240 -
						90,240
						- - - - - 137,206 - -
						137,206

(Continued)

45

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

• (iii) Currency risk

• 1) Currency risk exposure

The Consolidated Company's financial assets and liabilities exposured to significant foreign currency risk were as follows:

Financial assets: Monetary items: USD JPY EUR THB CNY Financial liabilities: Monetary items: USD JPY EUR THB CNY	December 31, 2021 Foreign currency (in thousands) Exchange rate Amount $ 184,541 27.6600 5,104,404 1,204,623 0.2401 289,230 6,820 31.3072 213,515 2,894 0.8285 2,398 144,575 4.3371 627,036 59,619 27.6600 1,649,062 26,073 0.2401 6,260 2,107 31.3072 65,964 - 0.8285 - 9,194 4.3371 39,875	December 31, 2021 Foreign currency (in thousands) Exchange rate Amount $ 184,541 27.6600 5,104,404 1,204,623 0.2401 289,230 6,820 31.3072 213,515 2,894 0.8285 2,398 144,575 4.3371 627,036 59,619 27.6600 1,649,062 26,073 0.2401 6,260 2,107 31.3072 65,964 - 0.8285 - 9,194 4.3371 39,875	December 31, 2020	December 31, 2020
	Foreign currency (in thousands) $ 184,541 1,204,623 6,820 2,894 144,575 59,619 26,073 2,107 - 9,194	Exchange rate 27.6600 0.2401 31.3072 0.8285 4.3371 27.6600 0.2401 31.3072 0.8285 4.3371	Foreign currency (in thousands) 165,023 1,633,820 13,186 319,639 149,412 85,458 73,626 3,811 78,593 4,270	Exchange rate Amount 28.1020 4,637,476 0.2722 444,726 34.6670 457,119 0.9390 300,141 4.3215 645,684 28.1020 2,401,541 0.2722 20,041 34.6670 132,116 0.9390 73,799 4.3215 18,453

• 2) Sensitivity analysis

The Consolidated Company's exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, other financial assets, loans and accounts and other payables that are denominated in foreign currency. A weakening or strengthening 1% appreciation or depreciation of the NTD against the USD, JPY, EUR, THB and CNY as of December 31, 2021 and 2020, would have increased or decreased the net income before tax by $44,754 thousand and $38,392 thousand, respectively. The analysis is performed on the same basis for both periods.

• 3) Foreign exchange gains and losses on monetary items

Due to the numerous types of functional currency of the Consolidated Company, the Consolidated Company disclose its exchange gains and losses of monetary items aggregately. The Consolidated Company's exchange loss, including realized and unrealized, were $113,581 thousand and $70,733 thousand for the years ended December 31, 2021 and 2020, respectively.

(Continued)

46

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Interest rate analysis

Please refer to the note on liquidity risk management for the interest rate exposure of the Consolidated Company's financial assets and liabilities.

The following sensitivity analysis is based on the risk exposure of the interest rate on derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is on the basis of the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the management of the Consolidated Company's assessment on the reasonably possible interval of interest rate change.

With all other variable factors remain constant. If the interest rate increases or decreases by 1%, the Consolidated Company's net income before tax will have increased or decreased by $10,680 thousand and $19,969 thousand, respectively, for the years ended December 31, 2021, and 2020. This were mainly due from the Consolidated Company's loans and time deposits on floating rates.

(v) Fair value information

• 1) Categories and fair value of financial instruments

The fair value of financial assets at fair value through profit or loss is measured on a recurring basis. The carrying amount and fair value of the financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value and lease liabilities, disclosure of fair value information is not required :

Financial assets measured at fair value through profit or loss Derivative financial assets for hedging		December 31, 2021	December 31, 2021	December 31, 2021
	Carrying amount $ 34		Fair value
		Level 1 -	Level 2 34	Level 3 -	Total
					34

(Continued)

47

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Other financial assets－ current and non- current Subtotal Total Financial liabilities measured at amortized cost Short-term loans Notes and accounts payable Other payables Lease liabilities Other current liabilities Total Financial assets measured at fair value through profit or loss Non derivative financial assets mandatorily measured at fair value through profit or loss			December 31, 2021	December 31, 2021	December 31, 2021
				Fair value
			Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - 34 - - - - - - - - - - - - - - - - - - - December 31, 2020			Total
						- - - -
						-
						34
						- - - - -
						-
				Fair value
			Level 1 416,822	Level 2 -	Level 3 -	Total
						416,822

(Continued)

48

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable Other receivables Other financial assets－ current and non- current Subtotal Total Financial liabilities measured at fair value through profit or loss Derivative financial liabilities for hedging Financial liabilities measured at amortized cost Short-term loans Notes and accounts payable Other payables Lease liabilities Other current liabilities Subtotal Total			December 31, 2020	December 31, 2020	December 31, 2020
				Fair value
			Level 1 - - - - - 416,822 - - - - - - - -	Level 2 - - - - - - 182 - - - - - - 182	Level 3 - - - - - - - - - - - - - -	Total
						- - - -
						-
						416,822
						182
						- - - - -
						-
						182

(Continued)

49

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Valuation techniques and assumptions used in fair value determination

• a) Non-derivative financial instruments

If financial instrument has quoted price in an active market, using the quoted price as fair value.

The fair values of financial assets with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (included open-ended funds).

• b) Derivative financial instrument

The forward exchange contract is usually priced by the forward exchange rate from financial institutions.

• 3) Fair value hierarchy

The Consolidated Company used the fair value that can be observed in the market to measure the value of assets and liabilities. Fair values levels are based on the degree in which the fair value can be observed and grouped in to Levels 1 to 3 as follows:

• a) Level 1: quoted prices (unadjusted) in active markets for identified assets or liabilities.

• b) Level 2: inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• c) Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

• 4) Transfers from Level 1 financial instrument to Level 2 financial instrument

There was no significant transfer from level 2 financial instrument to level 1 financial instrument for the years ended December 31, 2021 and 2020.

(Continued)

50

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (s) Financial risk management

• (i) Overview

The Consolidated Company has exposure to the following risks arising from financial instruments:

• 1) Credit risk

• 2) Liquidity risk

• 3) Market risk

This note discloses information about the Consolidated Company's exposure to each of the above risks, the objectives, policies and processes for measuring and managing risks, and the Consolidated Company's management of capital. Please see other related notes for quantitative information.

(ii) Risk management framework

The Board of Directors of the Consolidated Company is full responsible for the establishment and management of the Consolidated Company's risk management framework and policies. It is developed and managed by the committee which is authorized by the Board of Directors and the committee reports to the Board of Directors regarding the framework's operations regularly.

The Consolidated Company's risk management policies are established to identify and analyze the risks faced by the Consolidated Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Consolidated Company's activities. The Consolidated Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Consolidated Company's Board of Directors oversees how management monitors compliance with the Consolidated Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Consolidated Company. The supervisors are assisted in its oversight role by Internal Audit with undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board of Directors and supervisors.

(Continued)

51

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Credit risk

Credit risk is the risk of financial loss to the Consolidated Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Consolidated Company's receivables from customers and investment in debt securities.

1) Trade and other receivables

The Consolidated Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Consolidated Company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk, particularly during deteriorating economic circumstances.

The Consolidated Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Consolidated Company's standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval; these limits are reviewed on a periodic basis. Customers that fail to meet the Consolidated Company's benchmark creditworthiness may transact with the Consolidated Company only on a prepayment basis.

2) Investments

The credit risk exposure in the bank deposits, fix income investment and other financial instruments are measured and monitored by the Consolidated Company's finance department and reported to the management by authority. Since those who transact with the Consolidated Company are banks and other external parties with good credit standing, financial institutions with a credit rating above investment grade, and government agencies, there are no non-compliance issues. Hence, there is no significant credit risk.

3) Guarantees

The Consolidated Company's policy allows it to provide financial guarantees to directly and indirectly more them 50% owned subsidiaries. Financial guarantees provided by the Consolidated Company as of December 31, 2021 and 2020, are disclosed in note 13.

(Continued)

52

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Liquidity risk

Liquidity risk is the risk that the Consolidated Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Consolidated Company's approach to managing liquidity is to ensure, as far as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Consolidated Company's reputation.

The Consolidated Company uses activity-based costing to estimate the cost of its products and services, which assists it in monitoring cash flow requirements and optimizing its cash return on investments. The Consolidated Company aims to maintain the level of its cash and cash equivalents at an amount in excess of the expected cash flows on operating expenses and financial liabilities. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. The Consolidated Company has unused short-term bank facilities of $4,662,500 thousand and $4,803,728 thousand, respectively, as of December 31, 2021 and 2020.

(v) Market risk

Market risk represents the potential loss arising from the decrease in the value of a financial instrument caused primarily by changes in interest rates, foreign exchange rates, or the price of financial produces. The Consolidated Company maintains its foreign currency positions within prescribed limits and signs the forward exchange contracts in order to manage market risk from changes in foreign exchange rates.

Financial assets measured at fair value through profit or loss are listed stocks and mutual funds, which may fluctuate with changes in equity price. In order to manage market risk, the Consolidated Company carefully selects trust companies with good reputations to engage in financial instrument transactions.

－ The Consolidated Company' financial assets bank balances and time deposits and financial － liability short-term and long-term loans are exposed to the cash flow risk arising from changes in interest rates. However, the impact of the cash flow risk arising from changes in interest rate is not expected to be significant.

(Continued)

53

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, capital surplus, retained earnings, and non-controlling interests of the Consolidated Company. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Consolidated Company's debt-to-capital ratio at the end of the reporting period were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-capital ratio	December 31, 2021 $ 7,945,106 3,824,300 $ 4,120,806 $ 15,271,837 % 27	December 31, 2020
		7,171,214 4,110,135
		3,061,079
		15,306,104
		% 20

As of December 31, 2021, there were no changes in the Consolidated Company's approach of capital management.

(u) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities arising from financing activities for the years ended December 31, 2021 and 2020 were as follows:

Short-term loans Lease liabilities Total liabilities from financing activities Short-term loans Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 1,311,226 365,717 $ 1,676,943 January 1, 2020 $ 1,447,057 384,933 $ 1,831,990	Cash flows 27,683 (49,541) (21,858) Cash flows (76,309) (47,008) (123,317)	Acquisition of right-of-use assets - 3,370 3,370 Acquisition of right-of-use assets - 27,792 27,792	Non-cash changes	Reduction of right-of-use assets - (6,770) (6,770) Reduction of right-of-use assets - - -	December 31, 2021 1,352,335 312,776
				Foreign exchange movement 13,426 - 13,426 Non-cash changes
						1,665,111
						December 31, 2020 1,311,226 365,717
				Foreign exchange movement (59,522) - (59,522)
						1,676,943

(Continued)

54

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions

(a) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Consolidated Company.

(b) Management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Termination benefits Other long-term benefits	2021 $ 56,165 903 455 3 $ 57,526	2020
		52,034 890 642 4
		53,570

For the years ended December 31, 2021 and 2020, the Consolidated Company provided four and five vehicles, at the costs of $2,054 thousand and $3,268 thousand, respectively, for key management personnel.

(8) Pledged assets

The Consolidated Company's carrying amounts of pledged assets were as follows:

Pledged assets Property, plant and equipment Land Buildings	Object Short-term bank loans Short-term bank loans	December 31, 2021 $ 27,414 73,440 $ 100,854	December 31, 2020
			31,071 98,545
			129,616

(9) Commitments and contingencies

• (a) As of December 31, 2021 and 2020, the Consolidated Company provided guarantee notes, each amounting to $680,000 thousand, for usance letters of credits, domestic letters of credit and guarantees for the Consolidated Company's hiring of foreign labors. The customs duty guaranteed by the Consolidated Company for importing raw materials each amounted to $10,000 thousand for both years.

(Continued)

55

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (b) For expanding the factory, the Consolidated Company entered contracts of construction and purchase of property, plant and equipment. The total contract amount was $62,748 thousand and $761,097 thousand as of December 31, 2021 and 2020, respectively, of which the Consolidated Company had paid $55,668 thousand and $369,726 thousand, respectively, included in the construction in progress and prepayments for equipment accounts.

• (c) On February 25, 2019, the Company received an indictment, with case number 108-Zhen-829 and 108-Zhen-2491, from the Taoyuan District Prosecutors Office. The former chairman of the Consolidated Company's board of directors and 6 former and current employees of the Pingzhen third plant were accused of causing fire disaster, which led to an offense of negligent manslaughter resulting from the fire incident that occurred on April 28, 2018. On April 17, 2019, the former chairman and the said employees received a notice from criminal court of Taoyuan District Court and will fully cooperate with the Court in its investigation on this matter. So far, the incident did not have any significant impact on the Company's operating and financial activities.

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events

The appropriation of 2021 earnings for the Company please refer to note 6(m).

(12) Other

A summary of employee benefit expenses, depreciation, depletion and amortization by function, were as follows:

By function By nature	Year ended December	Year ended December	31 2021	Year ended December 31 2020	Year ended December 31 2020	Year ended December 31 2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Directors' remuneration Others Depreciation Amortization	3,012,384 253,075 121,368 - 216,321 1,046,747 -	402,853 31,458 24,909 12,833 29,087 57,230 -	3,415,237 284,533 146,277 12,833 245,408 1,103,977 -	2,835,395 236,824 106,916 - 185,856 1,075,532 -	330,269 23,190 14,536 11,456 23,822 49,538 -	3,165,664 260,014 121,452 11,456 209,678 1,125,070 -

(Continued)

56

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures

• (a) Information on significant transactions:

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Consolidated Company in 2021:

(i) Loans to other parties:

No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year	Ending balance	Amount actually drawn (Note 4)	Range of interest rates	Purposes of fund financing for the borrowers (Note 3)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Financing limit for each borrowing company	Maximum financing limit for the lender
													Item	Value
0 1	The Company Chin Poon Holdings Cayman Limited	Draco PCB Public Co., Ltd Chin-Poon (Changshu) Electronic Co., Ltd	Other receivables －related parties Other receivables －related parties	Yes Yes	228,928 858,480	221,280 829,800	- 829,800	1.38013~ 1.48838 1.38013~ 1.48838	2 2	- -	Operating Capital Operating Capital	- -	- -	- -	6,108,514 (Note 2) 3,390,838 (Note 1)	6,108,514 (Note 2) 3,390,838 (Note 1)

Note 1: The total amount lending to the subsidiaries and each borrowing company shall not be over 50% of the net worth of Chin Poon Industrial Co., Ltd.

Note 2: The total amount lending to the subsidiaries and each borrowing company shall not be over 40% of the net worth of Chin-Poon Holdings Cayman Limited.

Note 3: Nature of financing activities as follows:

(1) if there are transactions between these two parties, the number is "1".

(2) if it is necessary to loan to other parities, the number is "2".

Note 4: The transaction has already been written off in the consolidated financial statements.

(ii) Guarantees and endorsements for other parties:

No.	Name of company	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for one party (Note 2)	Highest balance for guarantees and endorsements during the year	Ending balance of guarantees and endorsements (Note 2)	Amount actually drawn	Property pledged on guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum allowable amount for guarantees and endorsements (Note 2)	Parent company endorsement / guarantees to third parties on behalf of subsidiary	Subsidiary endorsement / guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of company in Mainland China
		Name	Relationship with the company (Note 1)
0 0	The Company The Company	Chin Poon Holdings Cayman Limited Draco PCB Public Co., Ltd	4 4	3,054,257 3,054,257	572,320 457,856	553,200 442,560	11,064 55,320	- -	% 3.62 % 2.90	3,817,822 3,817,822	Y Y	N N	N N

Note 1: The guarantee's relationship with the guarantor is as follows:

• (1) A company with which it does business.

(2) A company in which the public company directly and indirectly holds more than 50 percent of the voting shares.

(3) A company that directly and indirectly holds more than 50 percent of the voting shares in the public company.

(4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

• (5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

(6) A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

(7) Companies in the same industry provide among themselves joint and several securities for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

Note 2: The total amount of guarantee shall not exceed 25% of the Company's net worth. The total amount of guarantee provided by the Company to any individual entity shall not exceed 20% of the Company's net worth.

• (iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures): None.

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

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

(Continued)

57

CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Counter-party	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Status and reason for deviation from arm's- length transaction	Status and reason for deviation from arm's- length transaction	Account / note receivable (payable)	Account / note receivable (payable)	Remarks
			Purchase / Sale	Amount (Note 2)	Percentage of total purchases / sales	Credit period	Unit price	Credit period	Balance (Note 2)	Percentage of total accounts / notes receivable (payable)
The Company Chin- Poon(Changshu) Electronic Co., Ltd. The Company Draco PCB Public Co.,Ltd.	Chin-Poon(Changshu) Electronic Co., Ltd. The Company Draco PCB Public Co.,Ltd. The Company	Investee controlled by the Company Ultimate parent company of Chin-Poon (Changshu) Electronic Co., Ltd. Investee controlled by the Company Ultimate parent company of Draco PCB Public Co.,Ltd.	Purchase (Sale) Purchase (Sale)	4,126,532 (4,126,532) 133,153 (133,153)	40.85 % (61.52) % 1.32 % (7.37) %	Note 1 Note 1 Note 1 Note 1	Note 1 Note 1 Note 1 Note 1	Note 1 Note 1 Note 1 Note 1	(966,732) 966,732 (18,281) 18,281	(34.41) % 54.85 % (0.65) % 4.34 %

Note 1: The sales and purchase prices are based on the market prices. The terms of collection and payment are not significantly different from those to third parties. Note 2: The transaction has already been written off in the consolidated financial statement.

• (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of related party	Counter-party	Relationship	Balance of receivables from related party (Note 1)	Turnover rate	Overdue amount	Overdue amount	Amounts received in subsequent period	Allowances for bad debts
					Amount	Action taken
Chin- Poon(Changshu) Electronic Co., Ltd. Chin-Poon Holdings Cayman Limited	The Company Chin- Poon(Changshu) Electronic Co., Ltd.	Ultimate parent company of Chin-Poon (Changshu) Electronic Co., Ltd. Parent Company of Chin- Poon(Changshu) Electronic Co., Ltd.	966,732 832,663 (Note 2)	4.92 -	- -	- -	684,111 (As at February 15, 2022) 2,893 (As at February 15, 2022)	- -

Note 1: The transaction has already been written off in the consolidated financial statement.

Note 2: Included principle $829,800 thousand and other receivables of interest $2,863 thousand.

• (ix) Trading in derivative instruments: Please refer to note 6(b).

(x) Business relationships and significant intercompany transactions:

No. (Note 1)	Name of company	Name of counter- party	Existing relationship with the counter-party (Note 2)	Transaction details	Transaction details	Transaction details	Transaction details
				Account name	Amount (Note 5)	Trading terms	Percentage of the total consolidated revenue or total assets(Note4)
0 0 1	The Company The Company Chin-Poon Holdings Cayman Limited	Chin-Poon(Changshu) Electronic Co., Ltd. Chin-Poon(Changshu) Electronic Co., Ltd. Chin-Poon(Changshu) Electronic Co., Ltd.	1 1 3	Cost of goods sold Account payable - related parties Other payables - related parties	4,126,532 966,732 832,663	Note 3 Note 3 The rate of interests is determined in accordance with mutual agreement.	22.65% 4.16 % 3.59 %

Note 1: Company numbering is as follows:

(1) Parent company - 0.

(2) Subsidiary starts from 1.

(Continued)

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 2: The number of the relationship with the transaction counterparty represents the following:

(1) 1 represents downstream transactions.

• (2) 2 represents upstream transactions.

• (3) 3 represents side stream transactions.

Note 3: The sales and purchase prices are based on the market prices. The terms of collection and payment are not significantly different from those to third parties.

Note 4: For balance sheet items, over 1% of total consolidated assets, and for profit or loss items, over 1% of total consolidated revenue were selected for disclosure.

Note 5: The transactions have already been written off in the consolidated financial statements.

(b) Information on investees:

The following is the information on investees for the year 2021 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Address	Scope of business	Original cost	Original cost	Ending balance	Ending balance	Ending balance	Maximum investment amount in 2021	Net income of investee (Note 1)	Investment income (losses) (Note 1)	Remarks
				December 31, 2021	December 31, 2020	Shares	Percentage of ownership	Book value (Note 1)
The Company The Company VEGA International Enterprise Co., Ltd.	VEGA International Enterprise Co., Ltd. Draco PCB Public Co., Ltd. Chin-Poon Holdings Cayman Limited	British Virgin Islands Thailand Cayman Islands	Investment Production and trading of printed circuit board Investment	3,070,205 2,306,634 2,756,306	3,070,205 2,045,406 2,756,306	131,242,925 670,618,477 92,354,035	% 100.00 % 99.78 % 100.00	6,794,458 1,271,071 6,781,676	131,242,925 670,618,477 92,354,035	65,690 (38,946) 65,688	65,690 (38,864) 65,688	Subsidiary (Note 2) Subsidiary (Note 3) Subsidiary (Note 2)

Note 1: The transaction has already been written off in the consolidated financial statements.

Note 2: The investment income (loss) was based on the financial statements audited by the auditor of the Company.

Note 3: The financial statements were audited by on international accounting firm in cooperation with the R.O.C. accounting firm.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee in Mainland China	Scope of business	Issued capital	Method of investment (Note 1)	Cumulative investment (amount) from Taiwan as of January 1, 2021	Investment flow during current period	Investment flow during current period	Cumulative investment (amount) from Taiwan as of December 31, 2021	Net income of investee (Notes 2 and 3)	Direct / indirect investment holding percentage	Maximum investment in 2021 (Notes 2 and 3)	Investment income (loss) (Notes 2 and 3)	Book value	Accumulated remittance of earnings in current period
					Remittance amount	Repatriation amount
Chin-Poon (Changshu) Electronic Co., Ltd	Production and trading of printed circuit board	3,319,200	(2)	2,351,100	-	-	2,351,100	56,677	100%	2,423,435	56,677	5,953,693	1,347,795

Note 1: The method of investment is divided into the following three categories:

• (1) Invest directly in a company in Mainland China.

(2) Through the establishment of third-region companies then investing in Mainland China. (The Company invests Chin-Poon (Changshu) Electronic Co., Ltd. through Chin Poon Holdings Cayman Limited.)

• (3) Other methods.

Note 2: The investment income was based on the financial statements audited by the auditor of the Company.

Note 3: The transaction has already been written off in the consolidated financial statements.

Note 4: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.660)

(ii) Limitation on investment in Mainland China:

Company name	Accumulated investment amount in Mainland China as of 2021	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
CHIN-POON INDUSTRIAL CO., LTD.	2,351,100	3,457,500	- (Note 1)

Note 1: On November 22, 2021, the Company was certified as an operations center from November 17, 2021 to November 16, 2024 by the Industrial Development Bureau, Ministry of Economic Affairs, with approval letter No. 11020442500. The Company has no limitation on investment in Mainland China during the abovementioned period.

Note 2: Amounts in foreign currencies were translated based on the exchange rate at the reporting date(USD1 to NTD27.66).

• (iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements for the year ended December 31, 2021, please refer to note 13(a).

(Continued)

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (d) Major shareholders:

Unit: Shares	Unit: Shares	Unit: Shares
Shareholding Shareholder's Name	Shares	Percentage
Fubon Insurance Co., Ltd.	26,499,000	% 6.66

(14) Segment information:

• (a) General information

There are three service departments which should be reported: Taiwan, China and Others. Each department manufactures and sells related products respectively. A reportable department is a strategic business unit providing different products and services. Because each strategic business unit requires different kinds of techniques and marketing tactics, it should be separately managed.

• (b) Information on income and loss, assets, liabilities, basis of measurement, and the reconciliation for reportable segments

The Consolidated Company uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The measured amounts of the assets and liabilities of the reportable segments of the Consolidated Company are not provided to the chief operating decision maker. Because taxation is managed on a Consolidated Company basis, it is not able to be allocated to each reportable segment. In addition, all profit or loss from reportable segments includes significant non-cash items such as depreciation and amortization. The reportable amount is consistent with that in the report used by the chief operating decision maker.

The operating segment accounting policies are consistent with those described in note 4 "Significant Accounting Policies".

Information on reportable segments and reconciliation for the Consolidated Company is as follows:

Revenue: Revenue from external customers Inter-segment revenues Interest revenue Total revenue Interest expenses Depreciation and amortization Reportable segment profit or loss			2021		Total 18,219,280 - 100,890
	Taiwan $ 13,995,384 44,483 16,338 $ 14,056,205 $ 15,231 $ 602,488 $ 569,095	China 2,551,026 4,156,812 84,235 6,792,073 12,276 371,864 (50,663)	Others 1,672,870 133,153 12,274 1,818,297 6,333 129,625 (57,768)	Adjustments or elimination - (4,334,448) (11,957) (4,346,405) (11,933) - -
					18,320,170
					21,907
					1,103,977
					460,664

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Revenue: Revenue from external customers Inter-segment revenues Interest revenue Total revenue Interest expenses Depreciation and amortization Reportable segment profit or loss			2020
	Taiwan $ 11,863,759 40,442 20,078 $ 11,924,279 $ 24,167 $ 598,135 $ 42,958	China 1,953,870 3,406,247 81,953 5,442,070 20,602 367,164 121,482	Others 1,495,656 151,104 22,097 1,668,857 10,682 159,771 (139,714)	Adjustments or elimination - (3,597,793) (20,768) (3,618,561) (22,038) - -	Total 15,313,285 - 103,360
					15,416,645
					33,413
					1,125,070
					24,726

The Consolidated Company's chief decision makers create strategies and measure performances based on operating income (losses) before taxation. As the information on segment assets and liabilities was not provided to the chief operating decision maker, the information on segment assets and liabilities was not disclosed.

For the years ended December 31, 2021 and 2020, inter-segment revenues of $4,334,448 thousand and $3,597,793 thousand respectively, should be eliminated from total revenue.

(c) Information on products and services

The Consolidated Company is engaged in one industry which manufactures and sells printed circuit boards. The revenues from outer customers are disclosed on the information of operating segments.

(d) Geographical information

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

Geographical information Revenue from external customers: Taiwan United States Germany Japan Hungary China Others Total	2021 $ 840,142 3,020,635 2,198,098 1,503,308 785,903 3,248,741 6,622,453 $ 18,219,280	2020
		447,922 2,596,314 1,778,176 1,137,202 768,031 2,839,135 5,746,505
		15,313,285

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CHIN-POON INDUSTRIAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Geographical information Taiwan China Thailand Total	December 31, 2021 $ 4,015,846 3,059,047 663,879 $ 7,738,772	December 31, 2020
		4,291,211 3,006,637 807,492
		8,105,340

Non-current assets include property, plant and equipment, right-of-use assets and prepayments for equipment, but do not include financial instruments, and deferred tax assets.

(e) Information about major customers

There was no major customer whose revenue was more than 10% of operating revenue of the Consolidated Company for the years ended December 31, 2021 and 2020.