cpc — Audit Report / Information 2021

Dec 20, 2021

CHIEFTEK PRECISION CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2021 AND 2020

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of CHIEFTEK PRECISION CO., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of CHIEFTEK PRECISION CO., LTD. (the “Company”) as of December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

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

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Adequacy of allowance for valuation loss on individually recognized obsolete or damaged inventories

Description

Refer to Note 4(10) for the accounting policy on inventory, Note 5 for the information on accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6(4) for the details of inventory. As of December 31, 2021, the balances of inventories and allowance for inventory valuation losses were NT$421,291 thousand and NT$35,136 thousand, respectively.

The Company engages primarily in the manufacture and sales of linear guides and linear blocks. As the end-users require high-quality performances, there is a risk of inventory devaluation or obsolescence. The Company measures its inventories at the lower of cost and net realizable value. The net realizable value of the Company’s inventories aged over a certain period is calculated based on the historical extent of inventory clearance and degree of price markdown. The allowance for valuation loss mainly arises from individually identified obsolete inventories, and the procedures of such identification involves subjective judgment, which might result in high degree of estimation uncertainty. Considering that the Company’s inventory and the allowance for inventory valuation losses are material to the financial statements, we considered the allowance for inventory valuation loss as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in response to the abovementioned key audit matter:

• A. We obtained understanding of the Company’s operations and its industry characteristics to assess the reasonableness of the Company’s policies on and procedures for allowance for inventory valuation loss.

• B. We verified whether the dates used in the inventory aging reports that the Company applied to value inventories were accurate and complete. We recalculated and evaluated the reasonableness of allowance for inventory valuation losses in order to confirm whether the reported information was in line with the Company’s policies.

• C. We selected samples from inventory items by each sequence number to verify its net realizable value and to evaluate the reasonableness of allowance for inventory valuation loss.

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Authenticity of sales revenue

Description

Refer to Note 4(24) for the accounting policy on revenue recognition and Note 6(17) for the details of operating revenue.

The Company sells a variety of linear guides, ball screws and linear modules with a global target market, including Taiwan, Asia, Europe, America and so forth. Since the customers are numerous and located in different countries, and the number of transactions is voluminous, it takes longer time to verify the existence of sales revenue. Thus, we considered the existence of sales revenue as one of the key audit matters for this year’s audit.

How our audit addressed the matter

We performed the following audit procedures in response to the abovementioned key audit matter:

• A. We confirmed the process of revenue recognition, including reviewing customer basic information and credit limit table, revenue recognition basis, authorization procedures and collection processes. Also, we selected samples from different customers to evaluate the management’s effectiveness of internal controls over sales revenue recognition.

• B. We performed a series verification sample test for the sales revenue transactions of the year, including vouching customers’ orders, shipping orders, export declaration documents, customer receipt records and sales invoices or subsequent receipts, to confirm whether the sales revenue transactions really occurred.

• C. We tested the manual accounting entries recognized for sales revenue, including verifying the transactions nature of the relevant manual entries and checking the relevant supporting documents. For the same purpose, we also checked the relevant supporting documents and the reasonableness of the debit notes issued after the balance sheet date.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

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

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

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

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

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

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

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

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

• D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’

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report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

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

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

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Lin, Yung-Chih

Independent Accountants

Tien, Chung-Yu

PricewaterhouseCoopers, Taiwan Republic of China March 2, 2022

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

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

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(3) and 12 6(3) and 7 7 6(24) 5 and 6(4) 6(5) 6(6) and 8 6(7) 6(8)(9) 6(24) 6(6)	December31,2021 AMOUNT % $ 558,638 15 63,206 2 29,896 1 246,415 7 150,487 4 2,955 - - - 386,155 10 41,001 1 1,478,753 40 381,910 11 1,549,834 42 123,377 4 79,576 2 12,919 - 43,508 1 3,941 - 3,730 - 2,198,795 60 $ 3,677,548 100	December31,2020	December31,2020
		AMOUNT $ 558,638 63,206 29,896 246,415 150,487 2,955 - 386,155 41,001 1,478,753 381,910 1,549,834 123,377 79,576 12,919 43,508 3,941 3,730 2,198,795 $ 3,677,548	AMOUNT $ 399,455 - 15,480 170,192 210,545 8,983 3,380 450,017 33,329 1,291,381 412,044 1,361,380 129,601 101,250 25,160 48,474 3,237 4,462 2,085,608 $ 3,376,989	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortized cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1920 Guarantee deposits paid 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				12 - 1 5 6 - - 13 1
				38
				12 40 4 3 1 2 - -
				62
				100

(Continued)

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December31,2021 December31,2020 Notes AMOUNT % AMOUNT % 6(10)(27) $ 230,000 6 $ 358,000 11 6(17) 1,741 - 97 - 161,421 5 77,992 2 49,114 1 47,725 1 6(11) and 7 137,871 4 94,979 3 6(24) 43,987 1 - - 6(7)(20)(27) 5,308 - 5,214 - 6(12)(27), 8 and 9 76,174 2 92,278 3 705,616 19 676,285 20 6(12)(27), 8 and 9 546,250 15 434,924 13 6(24) 10,968 1 18,973 - 6(7)(20)(27) 121,278 3 126,586 4 6(13) 7,481 - 7,163 - 685,977 19 587,646 17 1,391,593 38 1,263,931 37 6(14) 811,876 22 811,876 24 6(15) 440,667 12 440,667 13 6(16) 182,266 5 162,016 5 36,323 1 29,394 1 891,999 24 731,978 22 6(5) ( 50,626) ( 1 ) ( 36,323) ( 1) 6(14) ( 26,550) ( 1 ) ( 26,550) ( 1) 2,285,955 62 2,113,058 63 6(7), 7 and 9 $ 3,677,548 100 $ 3,376,989 100

Liabilities Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital reserves 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contract Commitments 3X2X Total liabilities and equity

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

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

YearendedDecember31 2021 2020 Notes AMOUNT % AMOUNT % 6(17) and 7 $ 1,443,674 100 $ 1,068,294 100 6(4)(13)(22)(23) ( 939,851 ) ( 65) ( 703,276 ) ( 66) 503,823 35 365,018 34 6(5) ( 44,889 ) ( 3) ( 68,823 ) ( 7) 6(5) 68,823 5 82,238 8 527,757 37 378,433 35 6(8)(13)(22)(23) and 7 ( 39,307 ) ( 3) ( 32,598 ) ( 3) ( 73,696 ) ( 5) ( 80,601 ) ( 7) ( 70,437 ) ( 5) ( 61,232 ) ( 6) 12 245 - ( 320 ) - ( 183,195 ) ( 13) ( 174,751 ) ( 16) 344,562 24 203,682 19 6(18) 138 - 473 - 6(19) 6,831 - 8,667 1 6(7)(8)(9)(20) and 12 ( 42,633 ) ( 3) ( 32,061 ) ( 3) 6(6)(7)(21) ( 4,443 ) - ( 7,077 ) ( 1) 6(5) 86,306 6 74,062 7 46,199 3 44,064 4 390,761 27 247,746 23 6(24) ( 81,972 ) ( 6) ( 44,651 ) ( 4) $ 308,789 21 $ 203,095 19 6(13) ( $ 593 ) - ($ 750 ) - 6(24) 118 - 150 - 6(5) ( 14,303 ) ( 1) ( 6,929 ) ( 1) ( $ 14,778 ) ( 1) ($ 7,529 ) ( 1) $ 294,011 20 $ 195,566 18 6(25) $ 3.82 $ 2.51 $ 3.81 $ 2.51

4000 Sales revenue 5000 Operating costs 5900 Gross profit 5910 Unrealized gain from inter-affiliate accounts 5920 Realized gain from inter-affiliate accounts 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain (loss) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income (loss)(Net) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial loss on defined benefit plan 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8300 Other comprehensive loss for the year 8500 Total comprehensive income for the year Earnings per share (in dollars) 9750 Basic 9850 Diluted

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

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the year Appropriations of 2019 earnings: Legal reserve Special reserve Cash dividends Purchase of treasury stocks Balance at December 31, 2020 2021 Balance at January 1, 2021 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the year Appropriations of 2020 earnings: Legal reserve Special reserve Cash dividends Balance at December 31, 2021	Notes		Share capital - commonstock	Capital reserve	Capital reserve				RetainedEarnings	RetainedEarnings	RetainedEarnings	Financial statements translation differences of foreignoperations	Treasury stocks		Total
						Legal reserve			Special reserve		Unappropriated retained earnings
	6(5) 6(16) 6(16) 6(14) 6(5) 6(16) 6(16)		$ 811,876 - - - - - - - $ 811,876 $ 811,876 - - - - - - $ 811,876		$ 440,667 - - - - - - - $ 440,667 $ 440,667 - - - - - - $ 440,667		$ 144,552 - - - 17,464 - - - $ 162,016 $ 162,016 - - - 20,250 - - $ 182,266		$ 17,047 - - - - 12,347 - - $ 29,394 $ 29,394 - - - - 6,929 - $ 36,323	$ 640,037 203,095 ( 600 ) 202,495 ( 17,464 ) ( 12,347 ) ( 80,743 ) - $ 731,978 $ 731,978 308,789 ( 475 ) 308,314 ( 20,250 ) ( 6,929 ) ( 121,114 ) $ 891,999		($ 29,394 ) - ( 6,929 ) ( 6,929 ) - - - - ($ 36,323 ) ($ 36,323 ) - ( 14,303 ) ( 14,303 ) - - - ($ 50,626 )	$ - - - - - - - ( 26,550 ) ($ 26,550 ) ($ 26,550 ) - - - - - - ($ 26,550 )	$ 2,024,785 203,095 ( 7,529 ) 195,566 - - ( 80,743 ) ( 26,550 ) $ 2,113,058 $ 2,113,058 308,789 ( 14,778 ) 294,011 - - ( 121,114 ) $ 2,285,955

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

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Expected credit impairment (gain) loss Loss on inventory market price decline Share of profit of subsidiaries, associates and joint ventures accounted for under equity method Unrealized gain from inter-affiliate accounts Realized gain from inter-affiliate accounts Depreciation Gain arising from lease modifications Amortization Impairment loss Interest income Interest expense Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Changes in operating liabilities Current contract liabilities Notes payable Accounts payable Other payables Net defined benefit liabilities Cash inflow generated from operations Dividends received Interest received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2021 2020 $ 390,761 $ 247,746 12 ( 245 ) 320 6(4) 7,542 15,354 6(5) ( 86,306 ) ( 74,062 ) 6(5) 44,889 68,823 6(5) ( 68,823 ) ( 82,238 ) 6(6)(7)(22) 71,412 72,342 6(7)(20) - ( 251 ) 6(8)(22) 10,153 10,627 6(8)(9)(20) 12,874 9,049 6(18) ( 138 ) ( 473 ) 6(21) 4,443 7,077 ( 14,416 ) 3,504 ( 75,978 ) ( 15,779 ) 60,058 56,825 6,028 ( 7,353 ) 56,320 44,062 ( 7,672 ) ( 9,725 ) 1,644 ( 2,252 ) 59,595 12,357 1,389 30,680 32,936 1,010 ( 275 ) ( 251 ) 506,191 387,392 6(5) 126,071 - 138 473 ( 4,451 ) ( 7,246 ) ( 30,251 ) ( 47,328 ) 597,698 333,291

(Continued)

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CHIEFTEK PRECISION CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets at amortized cost - current Cash paid for acquisition of investments accounted for under equity method - subsidiaries Cash paid for acquisition of property, plant and equipment Interest paid for acquisition of property, plant and equipment Acquisition of intangible assets Increase in prepayments for equipment Increase in guarantee deposits paid Decrease (Increase) in other non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Payments of lease liability Increase in long-term borrowings Decrease in long-term borrowings Payments of cash dividends Buy-back of treasury shares Net cash flows (used in) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 ($ 63,206 ) $ - 6(5) - ( 48,503 ) 6(26) ( 201,501 ) ( 299,522 ) 6(6)(21)(26) ( 7,479 ) ( 5,627 ) 6(8) ( 1,353 ) ( 783 ) ( 5,898 ) ( 46,597 ) ( 704 ) ( 1,102 ) 732 ( 2,537 ) ( 279,409 ) ( 404,671 ) 6(27) 934,000 1,241,000 6(27) ( 1,062,000 ) ( 1,103,000 ) 6(27) ( 5,214 ) ( 4,869 ) 6(27) 240,000 400,000 6(27) ( 144,778 ) ( 374,028 ) 6(16) ( 121,114 ) ( 80,743 ) 6(14) - ( 26,550 ) ( 159,106 ) 51,810 159,183 ( 19,570 ) 6(1) 399,455 419,025 6(1) $ 558,638 $ 399,455

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

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CHIEFTEK PRECISION CO., LTD.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

1. HISTORY AND ORGANIZATION

• (1) CHIEFTEK PRECISION CO., LTD. (the “Company”) was incorporated on October 19, 1998 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) and other related regulations. The Company primarily engages in the research, development, manufacture and sales of miniature linear guides, miniature ball screws, miniature linear modules, electro-optics equipment and semiconductor process equipment.

• (2) The common stocks of the Company were originally listed on the Taipei Exchange from December 28, 2012, and have been authorized to trade in Taiwan Stock Exchange since December 23, 2020.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company only financial statements were authorized for issuance by the Board of Directors on March 2, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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

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

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

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

the Company

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

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

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

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

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

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Statement of compliance

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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(2) Basis of preparation

• A. Except for the defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation, these parent company only financial statements have been prepared under the historical cost convention.

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

• (3) Foreign currency translation

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

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

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon retranslation at the balance sheet date are recognized in profit or loss.

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

• D. All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.

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(4) Classification of current and non-current items

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

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

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realized within 12 months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than 12 months after the balance sheet date.

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

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

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within 12 months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (5) Cash equivalents

• A. Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amount of cash and subject to an insignificant risk of changes in value.

• B. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitment in operations are classified as cash equivalents.

• (6) Financial assets at amortized cost

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

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

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

• B. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(7) Accounts and notes receivable

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

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured

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at initial invoice amount as the effect of discounting is immaterial.

(8) Impairment of financial assets

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

(9) Derecognition of financial assets

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

• (10) Inventories

• Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. When the cost of inventory is higher than net realizable value, a write-down is provided and recognized in operating costs. If the circumstances that caused the write-down cease to exist, such that all or part of the write-down is no longer needed, it should be reversed to that extent and recognized as deduction of operating costs.

(11) Investments accounted for using equity method / subsidiaries

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

• B. Unrealized gains or losses resulting from inter-company transactions with subsidiaries are eliminated. Necessary adjustments are made to the accounting policies of subsidiaries, to be consistent with the accounting policies of the Company.

• C. After acquisition of subsidiaries, the Company recognizes proportionately the share of profit and loss and other comprehensive income in the income statement as part of the Company’s profit and loss and other comprehensive income, respectively. When the share of loss from a subsidiary exceeds the carrying amount of Company’s interest in that subsidiary, the Company continues to recognize its share in the subsidiary’s loss proportionately.

• D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing

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• control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• E. According to Regulations Governing the Preparation of Financial Statements by Securities Issuers, “ Profit for the year” and “Other comprehensive income for the year” reported in an entity's nonconsolidated statement of comprehensive income, shall equal to “profit for the year” and “Other comprehensive income” attributable to owners of the parent reported in that entity's consolidated statement of comprehensive income. Total equity reported in an entity's nonconsolidated financial statements, shall equal to equity attributable to owners of parent reported in that entity’s consolidated financial statements.

(12) Property, plant and equipment

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

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

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

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

Assets Buildings and structures Machinery and equipment Transportation equipment Office equipment Other equipment	Useful lives
	2 ～ 50 years 2 ～ 10 years 5 ～ 8 years 1 ～ 5 years 2 ～ 10 years

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

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at

~19~

which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable;

• (b) Amounts expected to be payable by the lessee under residual value guarantees; and

• (c) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date;

• (c) Any initial direct costs incurred by the lessee; and

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

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

• (14) Intangible assets

• A. Trademarks and patents

Separately acquired trademarks of corporate identity system and patents are stated initially at cost. Trademarks and patents have a finite useful life and are amortized on a straight-line basis over their estimated useful lives of 10 to 20 years.

• B. Computer software

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

• C. Turn-key professional technique

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The subsidiary, CSM Maschinen GmbH, which has been merged into cpc Europa GmbH with the approval of the local authority since 2020, was commissioned by the Company to develop and design linear guide, robotic arm and equipment for exhibition which are stated initially at cost and amortized over the economic life of Turn-key professional technique of 10 years.

• D. Other intangible assets

  • Technology contribution is stated initially at cost and regarded as having an indefinite useful life as it was assessed to generate continuous net cash inflow in the foreseeable future. Technology contribution is not amortized but is tested annually for impairment.

• (15) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• (16) Borrowings

• A. Borrowings comprise long-term and short-term banks loans. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a other non-current assets for liquidity services and amortized over the period of the facility to which it relates.

• (17) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

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

(18) Derecognition of financial liabilities

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

(19) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle

~21~

on a net basis or realize the asset and settle the liability simultaneously.

(20) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plan

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

• (b) Defined benefit plan

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

  • ii. Remeasurements arising on defined benefit plan are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ remuneration

• Employees’ compensation and directors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(21) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions

~22~

where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

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

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

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

• F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

• (22) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is resolved from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(23) Dividends

Cash dividends are recorded as liabilities in the Company’s financial statements in the period in

~23~

which they are resolved by the Board of Directors. Stock dividends are recorded as stock dividends to be distributed in which they are resolved by the Company’s shareholders and are reclassified to ordinary shares on the effective date of new shares issuance.

• (24) Revenue recognition

Sales of goods

• A. The Company manufactures and sells linear guides, ball screws and linear modules. Sales are recognized when control of the products has been transferred, being when the products are delivered to the external customer, and there is no unfulfilled obligation that could affect the buyer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. Sales revenue is recognized based on the contract price, net of output tax and sales returns and discounts. The sales are made with a credit term of 30 ~ 180 days after monthly closing. As the time interval between the transfer of committed goods and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(25) Government grants

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

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

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies None.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

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• A. As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is calculated based on the inventory clearance and historical date of discounts. Therefore, there might be material changes to the evaluation.

• B. As of December 31, 2021, the carrying amount of inventories was $386,155.

6. DETAILS OF SIGNIFICANT ACCOUNTS

• (1) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits	December 31,2021 1,183 $ 557,455 558,638 $	December 31,2020 1,249 $ 398,206
		399,455 $

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

• B. The Company has no cash and cash equivalents pledged to others as of December 31, 2021 and 2020.

(2) Financial assets at amortized cost - current

2020. Financial assets at amortized cost-current
Restricted demand deposits (Note)	December 31,2021 63,206 $	December 31,2020
		- $

Note: The demand deposits were restrictrd due to the Company’s application of repatriating offshore funds according to “The Management, Utilization, and Taxation of Repatriated Funds Act”.

• A. The Company recognized interest income of $9 from financial assets at amortized cost for the year ended December 31, 2021, shown as part of “Interest Income”.

• B. As of December 31, 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost held by the Group was its book value.

• C. The Company has no financial assets at amortized cost pledged to others as of December 31, 2021.

• D. Information relating to credit risk of financial assets at amortized cost is provided in Note 12(2), ‘Financial instruments’.

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(3) Notes and accounts receivable, net

Notes and accounts receivable, net
		December	31,2021		December	31,2020
Notes receivable		$	29,896		$	15,480
		December	31,2021		December	31, 2020
Accounts receivable		$	247,248		$	171,312
Less: Allowance for doubtful accounts	(		833)	(		1,120)
		$	246,415		$	170,192

• A. The ageing analysis of notes receivable and accounts receivable (including related parties) that were past due is as follows:

Not past due Less than 30 days 31 to 90 days 91 to 180 days Over 180 days	December	Notes receivable 29,896 $ - - - - 29,896 $ 31, 2021	December	Notes receivable 15,480 $ - - - - 15,480 $ 31, 2020
	Accounts receivable 396,219 $ 837 306 373 - 397,735 $		Accounts receivable 375,121 $ 602 6,021 1 112 381,857 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2021, December 31, 2020 and January 1, 2020, the balances of notes receivable and accounts receivable (including related parties) from contracts with customers amounted to $427,631, $397,337 and $441,887, respectively.

• C. Without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes and accounts receivable were its book value.

• D. As of December 31, 2021 and 2020, the Company does not hold any collateral as security for accounts receivable.

• E. Information relating to credit risk is provided in Note 12(2), ‘Financial instruments’.

(4) Inventories

Inventories
Raw materials Supplies Work in progress Finished goods		December31,2021
	Allowance for Cost market price decline 64,678 $ 3,540) ($ 74,877 9,836) ( 230,343 19,498) ( 51,393 2,262) ( 421,291 $ 35,136) ($		Bookvalue
			61,138 $ 65,041 210,845 49,131
			386,155 $

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			December31,2020	December31,2020
				Allowance for
		Cost	market price decline			Book value
Raw materials	$	80,104	($	2,714)	$	77,390
Supplies		59,355	(	10,048)		49,307
Work in progress		272,410	(	12,981)		259,429
Finished goods		65,742	(	1,851)		63,891
	$	477,611	($	27,594)	$	450,017

The cost of inventories recognized as expense for the year:

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2021			2020
Cost of goods sold		$	931,685		$	688,270
Allowance for inventory market price decline			7,542			15,354
Loss (gain) on physical inventory			1,237	(		9)
Revenue from sale of scraps	(		613)	(		339)
		$	939,851		$	703,276

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(5) Investments accounted for under equity method

• A. Movements in investments accounted for under equity method were as follows:

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2021			2020
At January 1		$	412,044		$	282,993
Addition of investments accounted for using
equity method			-			48,503
Share of profit or loss of subsidiaries,
associates and joint ventures accounted
for under equity method			86,306			74,062
Cash dividends under equity method	(		126,071)			-
Other equity interest-financial statements
translation differences of foreign operations	(		14,303)	(		6,929)
Unrealized gain from downstream sales	(		44,889)	(		68,823)
Realized gain from downstream sales			68,823			82,238
At December 31		$	381,910		$	412,044

• B. Details of investments accounted for under equity method (Negative amounts were listed as “Other non-current liabilities”)

CHIEFTEK PRECISION HOLDING CO., LTD. CHIEFTEK PRECISION INTERNATIONAL LLC CHIEFTEK PRECISION USA CO., LTD. cpc Europa GmbH	December31,2021 188,567 $ 99,817 48,358 45,168 381,910 $	December31,2020
		268,728 $ 101,592 32,543 9,181
		412,044 $

• C. For more information regarding the subsidiaries of the Company, please refer to Note 4(3), ‘Basis of consolidation’ in the 2021 consolidated financial statements.

• D. As of December 31, 2021 and 2020, no investments accounted for under equity method held by the Company were pledged to others.

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(6) Property, plant and equipment

AtJanuary1,2021 Cost Accumulated depreciation 2021 At January 1 Additions Transferred from prepayments for equipment Transferred after acceptance inspection Depreciation Disposals－Cost ' －Accumulated depreciation At December 31 At December31,2021 Cost Accumulated depreciation

Construction in progress Buildings and equipment and Machinery and Transportation Office Other before acceptance Land structures equipment equipment equipment equipment inspection Total 316,864 $ 619,511 $ 915,439 $ 4,917 $ 17,112 $ 150,659 $ 443,763 $ 2,468,265 $ - 145,779) ( 810,686) ( 3,185) ( 14,558) ( 132,677) ( - 1,106,885) ( 316,864 $ 473,732 $ 104,753 $ 1,732 $ 2,554 $ 17,982 $ 443,763 $ 1,361,380 $ 316,864 $ 473,732 $ 104,753 $ 1,732 $ 2,554 $ 17,982 $ 443,763 $ 1,361,380 $ - 668 7,204 285 100 3,148 231,373 242,778 - - - - - - 10,864 10,864 - 193 9,734 - - 16,337 26,264) ( - - 17,301) ( 34,845) ( 525) ( 1,184) ( 11,333) ( - 65,188) ( - - 1,976) ( 790) ( 108) ( - - 2,874) ( - - 1,976 790 108 - - 2,874 316,864 $ 457,292 $ 86,846 $ 1,492 $ 1,470 $ 26,134 $ 659,736 $ 1,549,834 $ 316,864 $ 620,372 $ 930,401 $ 4,412 $ 17,104 $ 170,144 $ 659,736 $ 2,719,033 $ - 163,080) ( 843,555) ( 2,920) ( 15,634) ( 144,010) ( - 1,169,199) ( 316,864 $ 457,292 $ 86,846 $ 1,492 $ 1,470 $ 26,134 $ 659,736 $ 1,549,834 $

~29~

AtJanuary1,2020 Cost Accumulated depreciation 2020 At January 1 Additions Transferred from prepayments for equipment Transferred after acceptance inspection Depreciation Disposals－Cost ' －Accumulated depreciation At December 31 At December31,2020 Cost Accumulated depreciation

Construction in progress Buildings and equipment and Machinery and Transportation Office Other before acceptance Land structures equipment equipment equipment equipment inspection Total 316,864 $ 468,307 $ 867,890 $ 4,822 $ 16,167 $ 140,817 $ 335,290 $ 2,150,157 $ - 131,987) ( 771,297) ( 2,687) ( 13,253) ( 124,990) ( - 1,044,214) ( 316,864 $ 336,320 $ 96,593 $ 2,135 $ 2,914 $ 15,827 $ 335,290 $ 1,105,943 $ 316,864 $ 336,320 $ 96,593 $ 2,135 $ 2,914 $ 15,827 $ 335,290 $ 1,105,943 $ - 7,560 9,026 95 1,025 6,701 241,864 266,271 - - - - - - 55,284 55,284 - 143,644 41,409 - - 3,622 188,675) ( - - 13,792) ( 42,275) ( 498) ( 1,385) ( 8,168) ( - 66,118) ( - - 2,886) ( - 80) ( 481) ( - 3,447) ( - - 2,886 - 80 481 - 3,447 316,864 $ 473,732 $ 104,753 $ 1,732 $ 2,554 $ 17,982 $ 443,763 $ 1,361,380 $ 316,864 $ 619,511 $ 915,439 $ 4,917 $ 17,112 $ 150,659 $ 443,763 $ 2,468,265 $ - 145,779) ( 810,686) ( 3,185) ( 14,558) ( 132,677) ( - 1,106,885) ( 316,864 $ 473,732 $ 104,753 $ 1,732 $ 2,554 $ 17,982 $ 443,763 $ 1,361,380 $

~30~

• A. Property, plant and equipment of the Company were all for operating purposes as of December 31, 2021 and 2020.

• B. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitalization are as follows:

	For the years ended December 31,	For the years ended December 31,
	2021	2020
Amount capitalized	7,479 $	5,627 $
Range of the interest rates for capitalization	1.05%	1.12%

• C. Information about the property, plant and equipment that were pledged to others as collateral as of December 31, 2021 and 2020 is provided in Note 8, ‘Pledged assets’.

• －

• (7) Leasing arrangements lessee

• A. The Company leases land in Southern Taiwan Science Park of Ministry of Science and Technology. Rental contracts are typically made for a period of 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

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

Carrying amount:
Land Depreciation charge: Land	December31,2021 December31,2020 123,377 $ 129,601 $ Forthe years endedDecember31,	December31,2020
		129,601 $
	2021 6,224 $	2020
		6,224 $

• C. For the years ended December 31, 2021 and 2020, the Company has no additions to right-of-use assets.

• D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Gain from lease modification	2021 2020 2,326 $ 2,418 $ 2,425 $ 2,077 $ - $ 251) ($ For theyears ended December 31,

• E. For the years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $9,965 and $9,364, respectively.

• F. The Company has applied the practical expedient to “Covid-19-related rent concessions”, and recognized the gain from changes in lease paymants arising from the rent concessions amounting to $251 for the year ended December 31, 2020, shown as part of “Other gains and losses”.

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(8) Intangible assets

Trademarks Patents Software At January 1, 2021 Cost 578 $ 10,106 $ 10,369 $ Accumulated amortization 578) ( 3,724) ( 10,021) ( Accumulated impairment - - - Net value - $ 6,382 $ 348 $ 2021 Net value - $ 6,382 $ 348 $ Additions－acquired separately - 1,226 127 Amortization - 705) ( 376) ( Impairment loss - - - Net value at December 31, 2021 - $ 6,903 $ 99 $ At December 31, 2021 Cost 578 $ 11,332 $ 10,496 $ Accumulated amortization 578) ( 4,429) ( 10,397) ( Accumulated impairment - - - Net value - $ 6,903 $ 99 $

Turn-key professional technique Others Total 90,718 $ 60,000 $ 171,771 $ 9,072) ( 13,500) ( 36,895) ( - 33,626) ( 33,626) ( 81,646 $ 12,874 $ 101,250 $ 81,646 $ 12,874 $ 101,250 $ - - 1,353 9,072) ( - 10,153) ( - 12,874) ( 12,874) ( 72,574 $ - $ 79,576 $ 90,718 $ 60,000 $ 173,124 $ 18,144) ( 13,500) ( 47,048) ( - 46,500) ( 46,500) ( 72,574 $ - $ 79,576 $

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Trademarks Patents Software At January 1, 2020 Cost 578 $ 9,323 $ 10,369 $ Accumulated amortization 578) ( 3,114) ( 9,076) ( Accumulated impairment - - - Net value - $ 6,209 $ 1,293 $ 2020 Net value at January 1, 2020 - $ 6,209 $ 1,293 $ Additions－acquired separately - 783 - Amortization - 610) ( 945) ( Impairment loss - - - Net value at December 31, 2020 - $ 6,382 $ 348 $ At December 31, 2020 Cost 578 $ 10,106 $ 10,369 $ Accumulated amortization 578) ( 3,724) ( 10,021) ( Accumulated impairment - - - Net value - $ 6,382 $ 348 $

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• A. For the years ended December 31, 2021 and 2020, no borrowing costs were capitalized as part of intangible assets.

• B. Details of amortization on intangible assets are as follows:

		For theyears ended	For theyears ended	December31,
		2021		2020
General and administrative expenses	$	340	$	386
Research and development expenses		9,813		10,241
	$	10,153	$	10,627

• C. Impairment information on the intangible assets is provided in Note 6(9) ‘Impairment of nonfinancial assets’.

• (9) Impairment of non-financial assets

• A. The Company recognized impairment loss for the years ended December 31, 2021 and 2020 of $12,874 and $9,049 (listed as “Other gains and losses”), respectively. Details of such loss are as follows:

follows:
Impairment loss–intangible assets Impairment loss–intangible assets	For the year ended December 31, 2021
	Recognized in profit Recognized in other or loss comprehensive income 12,874 $ - $ For the year ended December 31, 2020	Recognized in other comprehensive income
		- $
	Recognized in profit or loss 9,049 $	Recognized in other comprehensive income
		- $

• B. The recoverable amount of the special technology (shown as “intangible assets-other intangible assets”) acquired by the Company was assessed to be impaired based on the residual life of the patent. For the years ended December 31, 2021 and 2020, the Company recognized impairment loss of $12,874 and $9,049, respectively.

• C. The recoverable amount was assessed based on the use right of the intangible assets. For the year －

• ended December 31, 2021, the recoverable amount was $ because the patent is about to expire. For the year ended December 31, 2020, the discount rate was 9.4%.

(10) Short-term borrowings

Short-term borrowings
Nature Bank unsecured borrowings Nature Bank unsecured borrowings	December31,2021 230,000 $ December31,2020 358,000 $	Interestraterange 0.57%～0.85% Interestraterange 0.52%～0.95%	Collateral
			None Collateral
			None

For more information about interest expense recognized by the Company for the years ended December 31, 2021 and 2020, please refer to Note 6(21), ‘Finance costs’.

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(11) Other payables

Accrued salaries and bonuses Employees’ compensation and directors’ and supervisors’ remuneration payable Equipment payable Miscellaneous payable Others	December31,2021 December31,2020 63,981 $ 46,589 $ 27,000 20,500 15,207 5,243 6,380 5,386 25,303 17,261 137,871 $ 94,979 $

- (12) Long term borrowings

				Interest rate
Nature	Expiry date	December	31,2021	range	Collateral
Long-term bank borrowings
Secured borrowings	February 21, 2023～	$	412,424	1.04%～	Land, buildings and
	May 15, 2027			1.35%	structures
Unsecured borrowings	November 20, 2023～			1.14%～
	May 15, 2027		210,000	1.30%	None
			622,424
Less: Current portion		(	76,174)
		$	546,250
				Interest rate
Nature	Expiry date	December	31,2020	range	Collateral
Long-term bank borrowings
Secured borrowings	August 21, 2023～	$	354,702	1.04%～	Land, buildings and
	May 15, 2027			1.35%	structures
Unsecured borrowings	February 22, 2022～			1.25%～
	May 15, 2027		172,500	1.30%	None
			527,202
Less: Current portion		(	92,278)
		$	434,924

For more information about interest expense recognized by the Company for the years ended December 31, 2021 and 2020, please refer to Note 6(21),‘Finance cost’.

(13) Pensions

A.(a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law,

covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to

~35~

retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contribution for the deficit by next March.

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

	December	31,2021	December	31, 2020
Present value of defined benefit obligations	($	13,487)	($	12,772)
Fair value of plan assets		6,006		5,609
Net defined benefit liability	($	7,481)	($	7,163)

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

Year ended December 31, 2021 Balance at January 1 Interest (expense) income Remeasurements: Return on plan assets Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Balance at December 31	Present value of defined benefit obligations		Fair value of planassets Net defined benefitliability 5,609 $ 7,163) ($ 16 22) ( 5,625 7,185) ( 84 84 - 11) ( - 468 - 1,134) ( 84 593) ( 297 297 6,006 $ 7,481) ($
	12,772) ($ 38) ( 12,810) ( - 11) ( 468 1,134) ( 677) ( - 13,487) ($

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==> picture [450 x 229] intentionally omitted <==

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

Present value of
defined benefit Fair value of Net defined
obligations plan assets benefit liability
Year ended December 31, 2020
Balance at January 1 ($ 11,769) $ 5,105 ($ 6,664)
Interest (expense) income ( 82) 36 ( 46)
( 11,851) 5,141 ( 6,710)
Remeasurements:
Return on plan assets - 171 171
-
Change in financial assumptions ( 401) ( 401)
Experience adjustments ( 520) - ( 520)
( 921) 171 ( 750)
Pension fund contribution - 297 297
Balance at December 31 ($ 12,772) $ 5,609 ($ 7,163)
----- End of picture text -----

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Forthe years endedDecember31,	Forthe years endedDecember31,
	2021 0.70% 3.25%	2020
		0.30%
		3.25%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with Taiwan Life Insurance 6th and 5th Mortality Table.

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

		Discountrate	Discountrate			Future salaryincreases	Future salaryincreases
	Increase	0.25%	Decrease	0.25%	Increase 0.25%		Decrease 0.25%
December 31, 2021
Effect on present value of
defined benefit obligation	($	269)	$	282	$	243	($	233)
December 31, 2020
Effect on present value of
defined benefit obligation	($	254)	$	265	$	225	($	217)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once.The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2022 amount to $297.

• (g) As of December 31, 2021, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 2-5 years Over 6 years	6,462 $ 1,030 6,818
	14,310 $

B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2021 and 2020 were $14,119 and $11,251, respectively.

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(14) Share capital

• A. Movements in the number of the Company’s ordinary shares outstanding are as follows (in thousands of shares):

thousands of shares):
	For theyears ended December31,
	2021	2020
Balance at beginning of year	80,743	81,188
Purchase of treasury stocks	-	445) (
Balance at end of year	80,743	80,743

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows (in thousands of shares):

Reason for reacquisition To be reissued to employees Reason for reacquisition To be reissued to employees	Forthe yearendedDecember31,2021	Forthe yearendedDecember31,2021	Forthe yearendedDecember31,2021	Forthe yearendedDecember31,2021
	Shares at beginning Shares at ofyear Increase Decrease end ofyear 445 - - 445 Forthe yearendedDecember31,2020			Shares at end ofyear
				445
	Shares at beginning ofyear -	Increase 445	Decrease -	Shares at end ofyear
				445

  - (b) Pursuant to the R.O.C Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus. As of December 31, 2021 and 2020, the treasury shares amounted to $26,550.

  - (c) Pursuant to the R.O.C Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

  - (d) Pursuant to the R.O.C Securities and Exchange Act, treasury shares should be reissued to the employees within 5 years from the reacquisition date and shares not reissued within the 5- year period are to be retired.

• D. As of December 31, 2021, the Company’s authorized capital was $1,500,000 (including $30,000 reserved for employee stock options), and the paid-in capital was $811,876 (81,188 thousand shares) with par value of $10 (in dollars) per share.

• (15) Capital reserve

For the years ended December 31, 2021 and 2020 Balances at beginning and end of year	Share premium 440,553 $	Others 114 $	Total
			440,667 $

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Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

• (16) Retained earnings

• A. The legal reserve shall be exclusively used to cover accumulated deficit, to issue new stocks, or to distribute cash to shareholders in proportion to their share ownership. The use of legal reserve for the issuance of stocks or cash dividends to shareholders in proportion to their share ownership is permitted provided that the balance of such reserve exceeds 25% of the Company’s paid-in capital.

• B. According to the Company’s Articles of Incorporation, the Company’s dividend policy is to distribute the current year’s earnings, if any, in the following order:

  • (1) pay all taxes and dues;

  • (2) offset any loss of prior years;

  • (3) set aside 10% as legal reserve;

  • (4) set aside or reverse special reserve as required by regulations or the Competent Authority;

  • (5) The appropriation of the remaining amount after deducting items (1) to (4), along with the unappropriated retained earnings of prior years can be distributed in accordance with a resolution passed during a meeting of the Board of Directors and approved at the shareholders’ meeting. However, the distribution of dividends shall not be lower than 20% of the current year’s profit after deducting items (1) to (4). In order to continually expand the scale of operations, increase competitiveness and support the Company’s long-term development plans, future capital requirements and long-term financial plan, the Company’s dividend policy is to distribute stock dividends and partially as cash dividends. Cash dividends shall not be less than 10% of the total dividends distributed to shareholders. The Board of Directors of the Company shall adopt a resolution by a majority of more than two-thirds of the directors present to distribute whole or a part of the distributable dividends, bonuses, capital reserves or legal reserve in the form of cash, and report to the shareholders during their meetings. The above is not subject to provisions that require shareholders’ approval.

• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. As of December 31, 2020, pursuant to the regulations for the deduction amount to stockholders’ equity from other equity items, the Company has set aside special reserve of $36,323, which cannot be distributed to shareholders.

~40~

• D. The Company recognized cash dividends distributed to owners amounting to $121,114 ($1.5 (in dollars) per share) for the year ended December 31, 2021. The Company recognized cash dividends distributed to owners amounting to $80,743 ($1.0 (in dollars) per share) for the year ended December 31, 2020. On March 2, 2022, the Board of Directors proposed for the distribution of cash dividends from 2021 earnings in the amount of $121,114 ($1.5 (in dollars) per share) and stock dividend distribution in the amount of $80,743 ($1.0 (in dollars) per share).

(17) Operating revenue

• A. Disaggregation of revenue from contracts with customers

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

==> picture [472 x 163] intentionally omitted <==

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

2021 Taiwan Singapore Germany China Others Total
Revenue from external
customer contracts $367,833 $260,570 $239,324 $225,342 $350,605 $ 1,443,674
Timing of revenue
－ At a point in time $367,833 $260,570 $239,324 $225,342 $350,605 $ 1,443,674
2020 China Taiwan Germany Singapore Others Total
Revenue from external
customer contracts $301,828 $263,765 $137,592 $129,071 $236,038 $ 1,068,294
Timing of revenue
－ At a point in time $301,828 $263,765 $137,592 $129,071 $236,038 $ 1,068,294
----- End of picture text -----

B. Contract liabilities

• (1) The Company has recognized revenue-related contract liabilities related to the contract revenue of $1,741, $97 and $2,349 on December 31, 2021, December 31, 2020 and January 1, 2020, respectively.

• (2) The revenue recognized that were included in the contract liability balance at the beginning of 2021 and 2020 amounted to $74 and $2,292 for the years ended December 31, 2021 and 2020, respectively.

(18) Interest income

2020, respectively. Interest income
Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Forthe years endedDecember31,
	2021 119 $ 9 10 138 $	2020
		460 $ - 13
		473 $

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(19) Other income

For the years ended December 31,

Government grants income － Other income others

	Forthe years end	edDec	ember31,
	2021		2020
$	4,684	$	4,800
	2,147		3,867
$	6,831	$	8,667

(20) Other gains and losses

Gain from lease modification Currency exchange loss Impairment loss Other losses

		Forthe years ended	Forthe years ended	Forthe years ended	December31,
		2021			2020
	$	-		$	251
(		29,758)	(		23,262)
(		12,874)	(		9,049)
(		1)	(		1)
($		42,633)	($		32,061)

(21) Finance costs

Interest expense: Interest expense on bank borrowings Interest expense on lease liabilities Less: Capitalization of qualifying assets

		Forthe years ended	Forthe years ended	December31,
		2021		2020
	$	9,596	$	10,286
		2,326		2,418
(		7,479)	(	5,627)
	$	4,443	$	7,077

(22) Expenses by nature

For the year ended December 31, 2021

	Forthe yearendedDecember31,2021	Forthe yearendedDecember31,2021
Employee benefit expense Depreciation Amortization Employee benefit expense Depreciation Amortization	Operatingcost Operatingexpense Total 289,137 $ 97,343 $ 386,480 $ 53,102 18,310 71,412 - 10,153 10,153 342,239 $ 125,806 $ 468,045 $ Operating cost Operating expense Total 206,014 $ 91,152 $ 297,166 $ 60,163 12,179 72,342 - 10,627 10,627 266,177 $ 113,958 $ 380,135 $ For theyear ended December31,2020
	Operating cost 206,014 $ 60,163 - 266,177 $	Operating expense 91,152 $ 12,179 10,627 113,958 $

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(23) Employee benefit expense

Wages and salaries Labor and health insurance expense Pension costs Directors’ remuneration Other personnel expenses Wages and salaries Labor and health insurance expense Pension costs Directors’ remuneration Other personnel expenses

Operatingcost Operatingexpense Total 245,456 $ 80,068 $ 325,524 $ 24,200 6,410 30,610 11,156 2,985 14,141 - 5,612 5,612 8,325 2,268 10,593 289,137 $ 97,343 $ 386,480 $ Operatingcost Operating expense Total 172,036 $ 75,321 $ 247,357 $ 18,458 5,878 24,336 8,275 3,022 11,297 - 4,452 4,452 7,245 2,479 9,724 206,014 $ 91,152 $ 297,166 $ For theyear ended December 31,2021 For theyear ended December 31,2020

• A.As of December 31, 2021 and 2020, the Company had 429 and 394 workers, among these, 6 directors were not full-time employees, respectively.

• B. The average employee benefit expense for the years ended December 31, 2021 and 2020 was $900 and $754, respectively. The average wages and salaries for the years ended December 31, 2021 and 2020 was $770 and $638, respectively with a decrease of 20.69%. The supervisor’s －

• remuneration for the years ended December 31, 2021 and 2020 was $ and $930, respectively.

• C. Remuneration policies, standards and packages, procedures of determining remuneration, and the relevance between the Company’s operating performance and future risk exposure:

• (a) The Company’s remuneration to the directors is examined and reviewed by the Remuneration Committee. The committee makes recommendations for the board discussions. The resolution made the Board will be based on the individual’s degree of participation in and contribution to the Company’s daily operations, as well as the industry’s standard.

• (b) The Company has set up related guidelines in appointment, termination, and remuneration of general manager and vice general managers. The standard of remuneration is aligned with the key performance indicators scheme set by human resource department of the Company. Before the rewarding principle being approved by the Board, individual’s performance and contribution to overall business operation, as well as the peer industry norm are put into consideration by the Remuneration Committee.

• (c) Employees’ reward policy:

  • i. As there is a positive correlation between the Company’s operation capacity and the employees’ personal ability, contribution and individual performance, and considering the future risks, the employees’ compensation policy is relatively irrelevant to future.

~43~

• ii. The total salaries primarily consist of fixed wages, short-term stimulatory rewards, such as performance bonus, employees’ compensation, etc., and long-term stimulatory rewards, such as employee stock options, treasury stock transfer, etc.

• iii. According to the Articles of Incorporation, the Company should appropriate 3% to 15% of net profits of the year for employees’ companion.

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

• E.For the years ended December 31, 2021 and 2020, the Company’s employees’ compensation was accrued at $22,000 and $16,000, respectively; while directors’ remuneration was accrued at $5,000 and $4,500, respectively. The aforementioned amounts were recognized in salary expenses. The expenses recognized for 2021 were accrued based on the earnings of current year and the percentage specified in the Articles of Incorporation of the Company. The employees’ compensation and directors’ remuneration for 2021 as resolved by the Board of Directors were $22,000 and $5,000, respectively. The employees’ compensation will be distributed in the form of cash.

• The employees’ compensation and directors’ remuneration for 2020 as resolved by the Board of

• Directors were $16,000 and $4,500, respectively, and the employees’ compensation was distributed in the form of cash. Employees’ compensation and directors’ remuneration for 2020 as resolved by the Board of Directors were equal to the amounts recognized in the 2020 financial statements.

Information about the appropriation of employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

~44~

(24) Income tax

A. Income tax expense:

(a) Components of income tax expense:

omponents of income tax expense:
Current income tax: Income tax incurred in current year Prior year’s income tax under estimation Total current income tax Deferred income tax: Origination and reversal of temporary differences Income tax expense	2021 2020 74,288 $ 27,791 $ 3,330 1,048 77,618 28,839 4,354 15,812 81,972 $ 44,651 $ Forthe years endedDecember31,
	$
		15,812
	$	44,651 $

(b) The income tax relating to components of other comprehensive income is as follows:

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2021			2020
Remeasurement of defined benefit obligations	($		118)	($		150)
Reconciliation between income tax expense and accounting profit
			For the years ended			December 31,
			2021			2020
Tax calculated based on profit before tax and
statutory tax rate		$	78,152		$	49,549
Effect of items disallowed by tax regulation			10,836	(		490)
Effect from investment tax credits	(		3,329)	(		5,456)
Effect from application of repatriating
offshore funds	(		7,017)			-
Prior year's income tax under estimation			3,330			1,048
Income tax expense		$	81,972		$	44,651

B. Reconciliation between income tax expense and accounting profit

~45~

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

						2021	2021
							Recognized
					Recognized			in other
					in	profit or	comprehensive
			January1			loss		income		December31
Temporary differences:
Deferred tax assets:
Loss on inventory market
value decline		$	5,519		$	1,508	$	-		$	7,027
Unused compensated
absences			3,116			280		-			3,396
Unrealized gain on inter
affiliates			13,764	(		13,714)		-			50
Pensions			2,059			-		118			2,177
Unrealized loss on foreign
currency exchange			702	(		433)		-			269
		$	25,160	($		12,359)	$	118		$	12,919
Deferred tax liabilities:
Investment (income) loss	($		17,123)		$	7,953	$	-	($		9,170)
Depreciation	(		1,850)			52		-	(		1,798)
	($		18,973)		$	8,005	$	-	($		10,968)
		$	6,187	($		4,354)	$	118		$	1,951

~46~

2020

January1 Recognized in profit or loss Temporary differences: Deferred tax assets: Loss on inventory market value decline 2,448 $ 3,071 $ Unused compensated absences 3,185 69) ( Unrealized gain on inter affiliates 16,447 2,683) ( Pensions 1,909 - Rent expense 219 219) ( Unrealized loss on foreign currency exchange 1,852 1,150) ( 26,060 $ 1,050) ($ Deferred tax liabilities: Investment (income) loss 2,310) ($ 14,813) ($ Depreciation 1,901) ( 51 4,211) ($ 14,762) ($ 21,849 $ 15,812) ($

Recognized in other comprehensive income December31 - $ 5,519 $ - 3,116 - 13,764 150 2,059 - - - 702 150 $ 25,160 $ - $ 17,123) ($ - 1,850) ( - $ 18,973) ($ 150 $ 6,187 $

D. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority. There were no disputes existing between the Company and the Tax Authority as of March 2, 2022.

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(25) Earnings per share (“EPS”)

For the year ended December 31, 2021

Earnings per share (“EPS”)	Forthe yearendedDecember31,2021
Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of shares outstanding EPS Amount aftertax (sharesinthousands) (indollars) 308,789 $ 80,743 3.82 $ 308,789 $ 80,743 - 269 308,789 $ 81,012 3.81 $ Forthe yearendedDecember31,2020
	Weighted average number of shares outstanding EPS Amount aftertax (sharesinthousands) (indollars) 203,095 $ 80,847 2.51 $ 203,095 $ 80,847 - 227 203,095 $ 81,074 2.51 $

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(26) Supplemental cash flow information

A. Investing activities with partial cash payments

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2021			2020
Purchase of property, plant and equipment		$	242,778		$	266,271
Add: Opening balance of notes payable			11,803			25,323
Opening balance of payable for
equipment			5,243			30,601
Less: Ending balance of notes payable	(		35,637)	(		11,803)
Ending balance of payable for
equipment	(		15,207)	(		5,243)
Capitalization for interest	(		7,479)	(		5,627)
Cash paid during the year		$	201,501		$	299,522

B. Operating, investing, and financing activities with no cash flow effects

(a) Write-offs of allowance for bad debts (b) Prepayments for equipment reclassified to property, plant and equipment	Forthe years endedDecember31,	Forthe years endedDecember31,
	2021 42 $ 10,864 $	2020
		- $
		55,284 $

(27) Changes in liabilities from financing activities

At January 1, 2021 Changes in cash flow from financing activities At December 31, 2021 At January 1, 2020 Changes in cash flow from financing activities Changes in cash flow from other non-financing activities At December 31, 2020	Short-term borrowings 358,000 $ 128,000) ( 230,000 $ Short-term borrowings 220,000 $ 138,000 - 358,000 $	Lease liabilities		Long-term borrowings	Liabilities from financingactivities-gross	Liabilities from financingactivities-gross
		131,800 $ 5,214) ( 126,586 $ Lease liabilities		527,202 $ 95,222 622,424 $ Long-term borrowings	1,017,002 $ 37,992) ( 979,010 $ Liabilities from financingactivities-gross
		131,343 $ 4,869) ( 5,326 131,800 $		501,230 $ 25,972 - 527,202 $		852,573 $ 159,103 5,326 1,017,002 $

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7. RELATED PARTY TRANSACTIONS

(3) Names of related parties and relationship

Names of related parties Relationshipelationshiplationshipationshipionshiponshipnshipshiphipp with theith theth theh thethehee Companmpanpanny cpc Europa GmbH A subsidiary of the Company CHIEFTEK PRECISION INTERNATIONAL LLC A subsidiary of the Company CHIEFTEK PRECISION USA CO., LTD. A subsidiary of the Company Chieftek Machinery (Kunshan) Co., Ltd. A subsidiary of the Company

Relationshipelationshiplationshipationshipionshiponshipnshipshiphipp with theith theth theh thethehee Companmpanpanny

(2) Key management compensation

• A. Sales of goods and services

cpc Europa GmbH Chieftek Machinery (Kunshan) Co., Ltd. CHIEFTEK PRECISION USA CO., LTD.	2021 2020 239,324 $ 137,592 $ 224,509 282,865 116,153 84,631 579,986 $ 505,088 $ For theyears ended December31,

Prices of goods sold to related parties are determined based on mutual agreement at each time, and the credit term is 180 days after monthly-closing, T/T. For third parties, the credit terms ranged from 30 to 180 days after monthly-closing.

• B. Purchases

from 30 to 180 days after monthly-closing. B. Purchases
C. Commission cpc Europa GmbH cpc Europa GmbH	2021 2020 1,304 $ - $ For theyears ended December31, For theyears ended December31,
	2021	-	2020
	$		438 $

The commissions paid to subsidiary is on normal commercial terms.

• D. Receivables from related parties

Receivables from related parties
Accounts receivable: cpc Europa GmbH CHIEFTEK PRECISION USA CO., LTD. Chieftek Machinery (Kunshan) Co., LTD. Other receivables: CHIEFTEK PRECISION USA CO., LTD.	December31,2021 59,642 $ 45,887 44,958 150,487 $ December31,2021 43 $	December31,2020
		69,311 $ 28,814 112,420
		210,545 $
		December31,2020
		30 $

The receivables from related parties arise mainly from sale transactions and sales of property.

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The receivables are unsecured in nature and bear no interest. There are no provisions held against receivables from related parties.

• E. Other payables

eceivables from related parties. Other payables
cpc Europa GmbH	December31,2021 - $	December31,2020
		438 $

• F. Endorsements and guarantees provided to subsidiaries

Nature cpc Europa GmbH Guarantee for financing	December31,2021 - $	December31,2020
		157,590 $

As of December 31, 2021 and 2020, the subsidiaries have drawn from the endorsements and － guarantees, which are provided by the Company, in the amount of $ and $21,012, respectively.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits	For the years ended December 31,
	2021 18,381 $	2020
		16,980 $

8. PLEDGED ASSETS

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

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Book value
Asset pledged December 31, 2021 December 31, 2020 Purpose of collateral
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Land (Note) Buildings and structures-net (Note)	316,864 $ 435,198 752,062 $	316,864 $ Guarantee for long－ term borrowings 446,355 Guarantee for long－ term borrowings 763,219 $

(Note) Listed as ‘Property, plant and equipment’.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

• (1) For details of endorsements and guarantees provided to others by the Company, please refer to Note 7(2) F. ‘Endorsements and guarantees provided to subsidiaries’.

• (2) As of December 31, 2021 and 2020, the Company’s remaining balance due for construction in progress and prepayments for equipment were $165,890 and $373,754, respectively.

• (3) On February 19, 2020, the Company entered into a mid-term secured syndicated loan contract for a credit line facility of $2,900,000 with 11 financial institutions including Mega International Commercial Bank Co., Ltd. The credit term is 7 years. Under the terms of the syndicated loan, the Company agrees that:

• A. The financial ratios stated in the Company’s semi-annual reviewed financial statements and annual audited financial statements shall meet the following financial ratios which will be assessed semi-annually:

  • (a) Current ratio (current assets/current liabilities): At least 100%.

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• (b) Liability ratio (total liabilities/net equity): Less than 220% in 2020; less than 200% in 2021 and 2022; less than 180% from 2023.

• (c) Tangible net value (shareholders’ equity less intangible assets): At least $1,000,000.

• B. If the Company violates the above financial covenants, the Company should improve within 9 months after the fiscal year or half fiscal year. It will not be considered to default, if the audited or reviewed financial rates comply with the covenants after the improvement period. During the improvement period, the credit line which has not been withdrawn will be frozen, until the financial covenants are met. In addition, for withdrawn credit, its financing rate shall be increased by an additional 0.125% per annum from the date after the notification by the management bank to the date after the completion of improvement.

As of December 31, 2021, the Company has not violated any of the above covenants.

• －

• (4) For the details of operating lease agreements, please refer to Note 6(7), ‘Leasing arrangements lessee’.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce the level of debt.

(2) Financial instruments

• A. Details of the Company’s financial instruments by category are provided in Note 6.

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks (a) Market risk

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I. Foreign exchange risk

• (i) The Company operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company used in various functional currency, primarily with respect to USD, EUR and JPY. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities.

• (ii) Management has set up a policy to require the Company to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Company treasury.

• (iii)The Company treasury’s risk management policy is to hedge anticipated cash flows (mainly sale export and purchase of inventory) in the major foreign currency in the future so as to decrease the risk exposure in the major foreign currency.

• (iv)The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. However, as the objective of the net investments in foreign operations is for strategic purposes, the Company does not hedged the investments.

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

exchange rate fluctuations is as follows:	llows:	llows:
Exchange rate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 20,170 $ 27.68 JPY:NTD 86,149 0.2405 EUR:NTD 6,625 31.32 Investments accounted for under equity method USD:NTD 12,166 27.68 EUR:NTD 1,442 31.32 Financial liabilities Monetary items JPY:NTD 4,840 0.2405 EUR:NTD 753 31.32 December31,2021 Foreign currency amount(in thousands)	December31,2021		Book value (NTD)
		Exchange rate
		27.68 0.2405 31.32 27.68 31.32 0.2405 31.32	558,315 $ 20,719 207,496 336,742 45,168 1,164 23,905

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December 31, 2020
Foreign currency Exchange Book value
amount (in thousands) rate (NTD)
(Foreign currency: functional currency)
Financial assets
Monetary items
USD:NTD $ 15,710 28.48 $ 447,419
JPY:NTD 32,962 0.2763 9,107
EUR:NTD 2,708 35.02 94,836
Investments accounted for
under equity method
USD:NTD 14,146 28.48 402,864
EUR:NTD 262 35.02 9,180
Financial liabilities
Monetary items
USD:NTD 3 28.48 83
JPY:NTD 5,274 0.2763 1,457
EUR:NTD 939 35.02 32,944
----- End of picture text -----

Sensitivity analysis of foreign exchange risk is primarily for foreign currency monetary items at financial reporting date. If the exchange rate of NTD to other currencies had appreciated/depreciated by 1% with all other factors remaining constant, the Company’s net profit after tax for the years ended December 31, 2021 and 2020 would increase/decrease by $6,130 and $4,076, respectively.

• (vi)The total exchange loss, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2021 and 2020 amounted to $29,758 and $23,262, respectively.

II. Price risk

The Company is not engaged in any financial instruments with price variations, thus, the Company does not expect market risk arising from variations in the market prices.

III. Cash flow and fair value interest rate risk

• (i) The Company’s main interest rate risk arises from short-term and long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. However, partial interest rate risk is offset by cash and cash equivalents held at variable rates. For the years ended December 31, 2021 and 2020, the Company’s borrowings at variable rate were mainly denominated in NTD.

• (ii)The Company’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• (iii)If the borrowing interest rate had increased/decreased by 10% with all other variables held constant, profit, net of tax for the years ended December 31, 2021 and 2020 would

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have decreased/increased by $768 and $823, respectively. The main factor is that changes in interest expense result from floating rate borrowings.

• (b) Credit risk

• I. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• II. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilization of credit limits is regularly monitored.

• III. The Company manages its credit risk, whereby if the contract payments are past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition and the impairment is assessed when the contract payments are past due over certain days.

• IV. The Company classifies customers’ accounts receivable in accordance with credit rating of customer and credit risk on trade. The Company applies the simplified approach using the provision matrix and the forecastability to adjust historical and timely information to estimate expected credit loss. The expected credit loss ranges from 2% to 100%. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

			Forthe years ended	Forthe years ended	December31,
			2021		2020
		Accounts receivable		Accounts receivable
At January 1		$	1,120	$	800
Reversal of provision for
impairment loss	(		245)		320
Write-offs	(		42)		-
At December 31		$	833	$	1,120

(c) Liquidity risk

• I. Cash flow forecasting is performed in Finance division of the Company. Finance division monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

• II. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Company treasury. Company treasury invests

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surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. The Company is expected to readily generate cash inflows for managing liquidity risk.

III. The Company has the following undrawn borrowing facilities:

The Company has the following undrawn borrowing facilities:
December 31, 2021 Floating rate: Expiring within one year 976,000 $ Expiring beyond one year 2,760,000 3,736,000 $	December 31, 2020
	1,047,000 $ 2,600,000 3,647,000 $

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

December31,2021	Less than 1year	Between 1 and2years	Between 2 and 5 years	More than 5 years
Short-term borrowings Notes payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) December31,2020 Non-derivative financial liabilities:	230,181 $ 161,421 49,114 137,871 7,539 83,493 Less than 1year	- $ - - - 7,539 145,497 Between 1 and 2 years	- $ - - - 22,618 415,594 Between 2 and 5 years	- $ - - - 113,090 - More than 5 years
Short-term borrowings Notes payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Non-derivative financial liabilities:	358,453 $ 77,992 47,725 94,979 7,539 98,310	- $ - - - 7,539 109,885	- $ - - - 22,618 309,018	- $ - - - 120,629 31,331

• V. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash

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flow amount will be significantly different.

(3) Fair value information

• A. As of December 31, 2021 and 2020, the Company had no fair value financial instruments.

• B. Financial instruments not measured at fair value

• The carrying amount of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, financial assets at amortized cost-current, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term borrowings, notes payable, accounts payable, other payables and long-term borrowings (including current portion)) are approximate to their fair values.

13. SUPPLEMENTARY DISCLOSURES

(According to the regulatory requirement, only information related to the year ended December 31, 2021 is disclosed.)

(1) Significant transactions information

• A. Loans to others: None

• B. Provision of endorsements and guarantees to others: Please refer to table 1.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): None.

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

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 2.

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

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

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

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

• J. Significant inter-company transactions during the reporting period: Please refer to table 4.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 5.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 6.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 7.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. SEGMENT INFORMATION

• Not applicable.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Cash: Cash on hand Checking Deposits Demand Deposits－New Taiwan dollar －Foreign Currency	Description Including USD10,720 thousand @27.68, JPY59,288 thousand @0.2405 and EUR4,507 thousand @31.32	Amount
		1,183 $ 2,223 103,081 452,151
		558,638 $

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CHIEFTEK PRECISION CO., LTD.

－ STATEMENT OF FINANCIAL ASSETS AT AMORTIZED COST CURRENT

DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Number Of Accumulated Name Description Sheets Fair Value Gross Value Interest rate Book Value Impairment Footnote Demand Deposits－USD Restricted demand deposits due to the Company’s application of repatriating offshore funds. － $ 63,206 $ 63,206 0.02% $ 63,206 － －

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE, NET DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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

Client Name Description Amount Footnote
Company A Accounts receivable $ 60,774 －
Company B 〞 42,218 －
Company C 〞 28,748 －
Company D 〞 12,930 －
〞 102,578 －
Others (Note)
247,248
－
Less: Allowance for doubtful accounts ( 833)
$ 246,415
----- End of picture text -----

Note: The amount of individual client included in others does not exceed 5% of the account balance.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE-RELATED PARTIES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Client Name	Description		Amount	Footnote
cpc Europa GmbH	Accounts receivable	$	59,642	－
CHIEFTEK	〞		45,887	－
PRECISION USA
CO., LTD
Cheiftek Machinery
(Kunshan) Co., Ltd.	〞		44,958	－
		$	150,487

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF INVENTORIES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Cost Net Realizable Value Raw materials 64,678 $ 64,812 $ Supplies 74,877 84,721 Work in progress 230,343 267,591 Finished goods 51,393 78,857 421,291 495,981 $ Less: Allowance for inventory valuation losses 35,136) ( 386,155 $ Amount	Footnote
	(Note) 〞 〞 〞

Note: Refer to Note 4(10) ‘Inventories’ of parent company only financial statements for the way the Company determines net realizable value of inventories.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF PREPAYMENTS DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Prepaid input tax Other prepaid expense Prepayment for purchases Others (Note)	Description － － － －	Amount 30,888 $ 5,402 2,769 1,942 41,001 $	Footnote
			－ － － －

Note: The amount of individual expense included in others does not exceed 5% of the account balance.

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CHIEFTEK PRECISION CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Name	Balance as ofJanuary1,	Amount 268,728 $ 101,592 32,543 9,181 412,044 $ 2021	Additions	Amount 50,052 $ 1,091 21,689 41,688 114,520 $	Decreases	Amount 130,213) ($ 2,866) ( 5,874) ( 5,701) ( 144,654) ($	Balance as of D	ecember31,2021	Amount 188,567 $ 99,817 48,358 45,168 381,910 $	Market price or Equity of subsidiaries and Associates	Market price or Equity of subsidiaries and Associates	Collateral	Footnote
	Number of shares (thousands of shares) 5,100 - 1,660 - 6,760		Number of shares (thousands of shares) - - - - -		Number of shares (thousands of shares) - - - - -		Number of shares (thousands of shares) 5,100 - 1,660 - 6,760	Percentage of ownership 100% 100% 100% 100%		Unit Price (NTD) - $ - - -	Totalprice
CHIEFTEK PRECISION HOLDING CO., LTD. CHIEFTEK PRECISION INTERNATIONAL LLC CHIEFTEK PRECISION USA CO.,LTD cpc Europa GmbH Total											188,567 $ 99,817 48,358 45,168	None 〞 〞 〞	－ － － －
											381,910 $

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CHIEFTEK PRECISION CO., LTD.

STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT-COST FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

[Refer to Note 6(6) ‘Property, plant and equipment’ of parent company only financial statements.]

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT-ACCUMULATED DEPRECIATION

FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Refer to Note 6(6) ‘Property, plant and equipment’ of parent company only financial statements for the change in accumulated depreciation of property, plant and equipment. Refer to Note 4(12) ‘Property, plant and equipment’ of parent company only financial statements for the depreciation method and useful lives of the assets.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS-COST FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

	Item Balance at beginningand end of theyear	Footnote
Land	141,745 $	－

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CHIEFTEK PRECISION CO., LTD.

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSESTS-ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Land

Balance as of Balance as of Item January 1, 2021 Depreciation December 31, 2021 Footnote $ 12,144 $ 6,224 $ 18,368 －

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF CHANGES IN INTANGIBLE ASSETS FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

Refer to Note 6(8) ‘Intangible assets’ of parent company only financial statements for the change in cost and accumulated amortization of intangible assets.

Refer to Note 4(14) ‘Intangible assets’ of parent company only financial statements for the amortization method and useful lives of the assets.

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CHIEFTEK PRECISION CO., LTD.

STATEMENT OF CHANGES IN PREPAYMENTS FOR EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

Item Prepayments for equipment	Balance as of January 1, 2021 Additions Reclassifications(Note) 48,474 $ 5,898 $ 10,864) ($	Balance as of December 31, 2021
		43,508 $

Note: Transferred to “Property, plant and equipment”.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Nature Unsecured borrowings 〞 〞 〞	Description Citibank Taiwan The Export-Import Bank of the Republic of China DBS Bank Hua Nan Bank	December 31,2021 95,000 $ 70,000 50,000 15,000 230,000 $	Expirydate Interest rate 2021.7.23~2022.1.19 0.75% 2021.4.6~2022.4.6 0.57% 2021.10.26~2022.1.24 0.76% 2021.8.27~2022.2.22 0.85%	Loan Commitments 96,000 $ 150,000 100,000 60,000	Collateral Footnote None － 〞 － 〞 － 〞 －

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF NOTES PAYABLE DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Vendor Name Company E Company F Company G Company H Company I Others (Note)	Description Notes payable 〞 〞 〞 〞 〞	Amount 29,012 $ 15,860 12,548 12,026 9,079 82,896 161,421 $	Footnote
			－ － － － － －

Note: The amount of individual vendor included in others does not exceed 5% of the account balance.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Vendor Name Company J Company F Company G Company K Company H Others (Note)	Description Accounts payable 〞 〞 〞 〞 〞	Amount 21,202 $ 3,742 3,219 2,716 2,602 15,633 49,114 $	Footnote
			－ － － － － －

Note: The amount of individual vendor included in others does not exceed 5% of the account balance.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF OTHER PAYABLES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Refer to Note 6(11) ‘Other payables’ of parent company only financial statements.

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF CURRENT INCOME TAX LIABILITIES

DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item

==> picture [41 x 9] intentionally omitted <==

Profit-seeking Enterprise Income Tax for the year ended December 31, 2021 $ 43,987

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CHIEFTEK PRECISION CO., LTD. STATEMENT OF LONG-TERM LIABILITIES, CURRENT PORTION DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Creditor	Description Secured loan 〞 Unsecured borrowings	Loan amount 25,000 $ 1,174 50,000 76,174 $	Expirydate 2020.3.20~2025.3.20 2018.8.21～2022.2.21 2021.5.20～2023.11.20	Rate 1.04% 1.35% 1.14%	Collateral Buildings and Structures 〞 None	Footnote
Taipei Fubon Commercial Bank Mega International Commercial Bank Taipei Fubon Commercial Bank						－ － －

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CHIEFTEK PRECISION CO., LTD.
STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31, 2021
(Expressed in thousands of New Taiwan dollars)
Creditor Description Loan amount Expiry date Rate Collateral Footnote
----- End of picture text -----

Creditor	Description	Loa	n amount	Expirydate	Rate	Collateral	Footnote
Mega International Commercial Bank	Secured borrowings	$	35,624	2020.5.15~2027.5.15	1.30%	Buildings and	Signed joint loan contracts with eleven financial institutions including Mega
						structures	International Commercial Bank. With Mega International Commercial Bank
Chang Hwa Bank	〞		23,750	〞	〞	〞	as the management bank, it is divided into A, B, C and D. Program A and B
Taipei Fubon Commercial Bank	〞		23,750	〞	〞	〞	are secured borrowings. The Company started borrowing with program B
First Commercial Bank	〞		17,813	〞	〞	〞	since 2020.5.15.The first three years is a grace period, and the first
Cathay United Commercial Bank	〞		17,813	〞	〞	〞	repayment date is 2023.6.15. The loan is repayable quarterly in 48
Bank of Taiwan	〞		11,875	〞	〞	〞	installments.
Hua Nan Bank	〞		11,875	〞	〞	〞
Shanghai Commercial & Savings Bank	〞		11,875	〞	〞	〞
Yuanta Commercial Bank	〞		11,875	〞	〞	〞
E.SUN Commercial Bank	〞		11,875	〞	〞	〞
DBS Bank	〞		11,875	〞	〞	〞
Mega International Commercial Bank	Secured borrowings		26,250	2021.12.15~2027.5.15	1.30%	Buildings and	Signed joint loan contracts with eleven financial institutions including Mega
						structures	International Commercial Bank. With Mega International Commercial Bank
Chang Hwa Bank	〞		17,500	〞	〞	〞	as the management bank, it is divided into A, B, C and D. Program C and D
Taipei Fubon Commercial Bank	〞		17,500	〞	〞	〞	are unsecured borrowings. The Company started borrowing with program C
First Commercial Bank	〞		13,125	〞	〞	〞	since 2020.5.15. The first three years is a grace period, the Compamy
Cathay United Commercial Bank	〞		13,125	〞	〞	〞	increased borrowing with Program B since 2021.12.15, and the first
Bank of Taiwan Hua Nan Bank	〞 〞		8,750 8,750	〞 〞	〞 〞	〞 〞	repayment date is 2023.6.15. The loan is repayable quarterly in 48 installments.
Shanghai Commercial & Savings Bank	〞		8,750	〞	〞	〞
Yuanta Commercial Bank	〞		8,750	〞	〞	〞
E.SUN Commercial Bank	〞		8,750	〞	〞	〞
DBS Bank	〞		8,750	〞	〞	〞

~77~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF LONG-TERM BORROWINGS (Cont.) DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

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Creditor Description Loan amount Expiry date Rate Collateral Footnote
----- End of picture text -----

Creditor	Description	Lo	an amount	Expirydate	Rate	Collateral	Footnote
Mega International Commercial Bank	Unsecured borrowings		20,624	2020.5.15~2027.5.15	1.30%	None	Signed joint loan contracts with eleven financial institutions including Mega
Chang Hwa Bank	〞		13,750	〞	〞	〞	International Commercial Bank. With Mega International Commercial Bank
Taipei Fubon Commercial Bank	〞		13,750	〞	〞	〞	as the management bank, it is divided into A, B, C and D. Program A and B
First Commercial Bank	〞		10,313	〞	〞	〞	are secured borrowings. The Company started borrowing with program B
Cathay United Commercial Bank	〞		10,313	〞	〞	〞	since 2020.5.15.The first three years is a grace period, and the first
Bank of Taiwan	〞		6,875	〞	〞	〞	repayment date is 2023.6.15. The loan is repayable quarterly in 48
Hua Nan Bank	〞		6,875	〞	〞	〞	installments.
Shanghai Commercial & Savings Bank	〞		6,875	〞	〞	〞
Yuanta Commercial Bank	〞		6,875	〞	〞	〞
E.SUN Commercial Bank	〞		6,875	〞	〞	〞
DBS Bank	〞		6,875	〞	〞	〞
Taipei Fubon Commercial Bank	Secured borrowings		81,250	2020.3.20~2025.3.20	1.04%	Buildings and	The first repayment date is 12 months after the first drawdown
						structures	date, and after that, the loan is repayable quarterly in 16 installments.
Mega International Commercial Bank	〞		1,174	2018.8.21~2023.2.21	1.35%	〞	The first repayment date is 12 months after the first drawdown
							date, and after that, the loan is repayable quarterly in 17 installments.
Taipei Fubon Commercial Bank	Unsecured borrowings		100,000	2021.5.20~2023.11.20	1.14%	None	The first repayment date is 6 months after the first drawdown
							date, and after that, the loan is repayable quarterly in 8 installments.
			622,424
	Less：Current portion	(	76,174)
		$	546,250

~78~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Land	Description Lease period Discount rate － 2005.11.25~2041.12.31 1.80% Less：Current portion	Balance as of December 31,2021 Footnote 126,586 $ － 5,308) ( 121,278 $

~79~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF SALES REVENUE FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

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Amount
Item Quantity Subtotal Total Footnote
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Sales: Linear guide 1,063,000 Others Sales Less: Sales returns Sales discounts and allowances Sales revenue, net	1,402,233 $ － 46,310 － 1,448,543 $ － 4,864) ( － 5) ( － 1,443,674 $

~80~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

Item		Amount
Raw materials at January 1, 2021	$	80,104
Add: Raw materials purchased		162,030
Less: Sale of Raw materials	(	275)
Raw materials at December 31, 2021	(	64,678)
Raw materials during the year		177,181
Supplies at January 1, 2021		59,355
Add: Supplies purchased		128,727
Less: Transferred to expenses	(	4,256)
Loss on physical count of supplies	(	1,298)
Sale of supplies	(	6,321)
Supplies at December 31, 2021	(	74,877)
Supplies used during the year		101,330
Direct labor		215,444
Manufacturing overhead		364,590
Manufacturing cost		858,545
Work in progress at January 1, 2021		272,410
Add: Work in progress purchased		16,477
Gain on physical count of work in progress		65
Less: Transferred to expenses	(	3,790)
Sale of work in progress	(	610)
Work in progress at December 31, 2021	(	230,343)
Cost of finished goods		912,754

~81~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF OPERATING COSTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

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Item Amount
Finished goods at January 1, 2021 $ 65,742
Add: Finished goods purchased 410
Less: Transferred to expenses ( 3,030)
Loss on physical count of finished goods ( 4)
Finished goods at December 31, 2021 ( 51,393)
Cost of production and marketing 924,479
Sale of cost of supplies 7,206
Cost of goods sold 931,685
Allowance for inventory market price decline 7,542
Loss on physical count of inventory 1,237
Revenue from sale of scrap ( 613)
Operating costs $ 939,851
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~82~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF MANUFACTURING OVERHEAD FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Wages and salaries Utilities expense Insurance expense Depreciation Miscellaneous purchase expense Processing fee Others (Note)	Description － － － － － － －	Amount 41,168 $ 20,686 24,724 53,102 63,525 128,959 32,426 364,590 $	Footnote
			－ － － － － － －

Note: The amount of individual expense included in others does not exceed 5% of the account balance.

~83~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Wages and salaries Freight Advertisement expense Import/Export expense Others (Note)	Description － － － － －	Amount 19,307 $ 5,511 2,787 2,715 8,987 39,307 $	Footnote
			－ － － － －

Note: The amount of individual expense included in others does not exceed 5% of the account balance.

~84~

CHIEFTEK PRECISION CO., LTD.

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Wages and salaries Director’s remuneration Depreciation Professional service fee Others (Note)	Description － － － － －	Amount 33,940 $ 5,612 5,762 5,228 23,154 73,696 $	Footnote
			－ － － － －

Note: The amount of individual expense included in others does not exceed 5% of the account balance.

~85~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Item Wages and salaries Depreciation Amortization Research material expense Others (Note)	Description － － － － －	Amount 29,806 $ 11,442 9,978 9,081 10,130 70,437 $	Footnote
			－ － － － －

Note: The amount of individual expense included in others does not exceed 5% of the account balance.

~86~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF OTHER GAINS AND LOSSES FOR THE YEAR ENDED DECEMBER 31, 2021 (Expressed in thousands of New Taiwan dollars)

Refer to Note 6(20) ‘Other gains and losses’ of parent company only financial statements.

~87~

CHIEFTEK PRECISION CO., LTD. STATEMENT OF SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, AND AMORTIZATION EXPENSES IN THE CURRENT PERIOD FOR THE YEAR ENDED DECEMBER 31, 2021

(Expressed in thousands of New Taiwan dollars)

Refer to Note 6(22) ‘Expense by nature’ and Note 6(23) ‘Employee benefit expense’ of parent company only financial statements.

~88~

CHIEFTEK PRECISION CO., LTD.

Provision of endorsements and guarantees to others

For the year ended December 31, 2021

Expressed in thousands of NTD

Table 1

No. (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2021	Outstanding endorsement/ guarantee amount at December 31, 2021	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 2）
0	CHIEFTEK PRECISION CO., LTD.	cpc Europa GmbH	1	1,142,978 $	157,590 $	- $	- $	- $	－	1,142,978 $	Y	N	N	－

(Note 1) The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

(Note 2) The following code respresents the relationship with the Company:

(1) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (Note 3) (1) The total endorsements/guarantees provided shall not exceed 50% of the Companyʼs net assets, and the amount provided for each counterparty shall not exceed 20% of the Companyʼs paid-in capital. However, the limitation is not applied to subsidiaries that the Company directly or indirectly holds more than 50% of the voting shares.

(2) For trading partner, except for the abovementioned limit, the maximum amount for individual trading partner shall not exceed the higher of total purchase and sale transations during the most recent year.

Table 1, Page 1

Table 2

Expressed in thousands of NTD

CHIEFTEK PRECISION CO., LTD.

- Acquisition of real estate reaching NT$300 million or 20% of paid in capital or more For the year ended December 31, 2021

If the counterparty is a related party, information as to the last transaction of

Real estate acquired by	Real estate acquired	Date of the event	Transaction amount	Status of payment	Counterparty	Relationship with the counterparty		the real estate is disclosed below:	the real estate is disclosed below:		Basis or reference used in setting the price	Reason for acquisition of real estate and status of the real estate	Other commitments
							Original owner who sold the real estate to the counterparty	Relationship between the original owner and the acquirer	Date of the original transaction	Amount
CHIEFTEK PRECISION CO., LTD.	Sugu new factory construcion phase II	May 17, 2019	$ 454,419	$ 400,131	Hong Sheng Construction Corp.	–	–	–	–	$ -	Negotiation	Building for operation use	–

Table 2, Page 1

CHIEFTEK PRECISION CO., LTD.

• Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid in capital or more

For the year ended December 31, 2021

Purchaser/seller Table 3	Counterparty	Relationship with the counterparty		Transaction	Transaction		Description and reasons for difference in transaction terms compared to third party transactions	Description and reasons for difference in transaction terms compared to third party transactions	Balance Percentage of total notes/accounts receivable (payable) Footnote Notes/accounts receivable(payable) Expressed in thousands of NTD	Balance Percentage of total notes/accounts receivable (payable) Footnote Notes/accounts receivable(payable) Expressed in thousands of NTD	Balance Percentage of total notes/accounts receivable (payable) Footnote Notes/accounts receivable(payable) Expressed in thousands of NTD
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
CHIEFTEK PRECISION CO., LTD. cpc Europa GmbH CHIEFTEK PRECISION USA CO., LTD. Chieftek Machinery (Kunshan) Co., Ltd.	cpc Europa GmbH CHIEFTEK PRECISION USA CO., LTD. Chieftek Machinery (Kunshan) Co., Ltd. CHIEFTEK PRECISION CO., LTD. CHIEFTEK PRECISION CO., LTD. CHIEFTEK PRECISION CO., LTD.	Subsidiary Subsidiary Subsidiary The Company The Company The Company	(Sales) (Sales) (Sales) Purchases Purchases Purchases	239,324) ($ 116,153) ($ 224,509) ( 239,324 116,153 224,509	(17%) (8%) (16%) 84% 100% 99%	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)	- $ - - - - -	(Note 2) (Note 2) (Note 2) (Note 3) (Note 3) (Note 3)	59,642 $ 45,887 $ 44,958 59,642) ( 45,887) ( 44,958) (	14% 11% 11% (99%) (100%) (100%)	－ － － － － －

(Note 1) 180 days after monthly-closing, T/T.

(Note 2) The collection period for third parties are from 30 days after monthly-closing to 180 days after next monthly-closing. (Note 3) The payment period for third parties are from 30 days after monthly-closing to 60 days after next monthly-closing.

Table 3, Page 1

For the year ended December 31, 2021

Table 4

Expressed in thousands of NTD

CHIEFTEK PRECISION CO., LTD.

- Significant inter company transactions during the reporting period

Number (Note1)	Companyname	Counterparty	Relationship (Note2)		Transaction	Transaction
				General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or totalassets (Note 3)
0 1 2	CHIEFTEK PRECISION CO., LTD. cpc Europa GmbH CHIEFTEK PRECISION USA CO., LTD.	cpc Europa GmbH CHIEFTEK PRECISION USA CO., LTD. Chieftek Machinery (Kunshan) Co., Ltd. CHIEFTEK PRECISION CO., LTD. CHIEFTEK PRECISION INTERNATINAL LLC	1 1 1 2 3	Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Rent payment Refundable deposits	($ 239,324) 59,642 ( 116,153) 45,887 ( 224,509) 44,958 1,304) ( 9,995 1,384	180 days after monthly- closing, T/T － 180 days after monthly- closing, T/T － 180 days after monthly- closing, T/T － 180 days after monthly- closing, T/T － －	(13%) 2% (6%) 1% (12%) 1% － 1% －

(Note 1) The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

(Note 2) Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

(Note 3) Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

(Note 4) Only transactions over million are material.

(Note 5) Foreign currencies were translated into New Taiwan Dollars using the exchange rate (USD:NTD 1:27.68) as at December 31, 2021.

Table 4, Page 1

Table 5 Investor	Investee	Location	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Balance as at December 31,2021 Balance as at December 31,2020 Number of shares Ownership (%) Book value Initial investment amount Shares held as at December 31,2021 CHIEFTEK PRECISION CO., LTD. Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2021 Main business activities	Net profit (loss) of the investee for the year ended December 31,2021	Investment income (loss) recognized by the Company for the year ended December 31,2021 Expressed in thousands of NTD Footnote	Investment income (loss) recognized by the Company for the year ended December 31,2021 Expressed in thousands of NTD Footnote
				Main business activities
					Balance as at December 31,2021	Balance as at December 31,2020	Number of shares	Ownership (%)	Book value
CHIEFTEK PRECISION CO., LTD. CHIEFTEK PRECISION HOLDING CO., LTD.	CHIEFTEK PRECISION HOLDING CO., LTD. CHIEFTEK PRECISION INTERNATIONAL LLC CHIEFTEK PRECISION USA CO., LTD. cpc Europa GmbH Chieftek Precision (Hong Kong) Co., Limited	Samoa United States of America United States of America Germany Hong Kong		Professional investment Lease of real estate property Sale of high precision linear motion components and rendering after -sale services Sale of high precision linear motion components and rendering after -sale services Professional investment	152,263 $ 110,054 50,027 98,695 26	152,263 $ 110,054 50,027 98,695 141,168	5,100,000 - 1,660,000 - 927	100 100 100 100 100	188,567 $ 99,817 48,358 45,168 26	27,162 $ 1,091 21,689 36,364 38,964	27,162 $ 1,091 21,689 36,364 -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (Note 1)

(Note 1) Not required to disclose income (loss) recognized by the Company.

(Note 2) Foreign currencies were translated into New Taiwan Dollars using the exchange rate (USD:NTD 1:27.68) as at December 31, 2021.

Table 5, Page 1

Expressed in thousands of NTD

CHIEFTEK PRECISION CO., LTD.

Information on investments in Mainland China - Basic information

For the year ended December 31, 2021

Table 6

Amount remitted from Taiwan to Investment Accumulated Mainland China/ Accumulated Accumulated income amount Amount remitted back amount of amount (loss) recognized of investment to Taiwan for the year ended remittance from of remittance from Net income of Ownership by the Company Book value of income Taiwan to December 31, 2021 Taiwan to investee for the held by for the year investments in remitted back to Mainland China Mainland China as year ended the Company ended December Mainland China Taiwan as of Investee in Mainland Main business Investment as of January 1, Remitted to Remitted back to of December 31, December 31, (direct or 31, 2021 as of December December 31, China activities Paid-in capital method 2021 Mainland China Taiwan 2021 2021 indirect) （ Note 2 ） 31, 2021 2021 Footnote Chieftek Machinery Production, $ 141,168 Note 1 $ 141,168 $ - $ - $ 141,168 $ 42,871 100% $ 72,871 $ 192,904 $ 221,687 － (Kunshan) Co., Ltd processing and sale of high precision linear motion components and rendering after-sale services

Investment amount approved by the Accumulated amount of remittance Investment Commission of the Ceiling on investments in Mainland from Taiwan to Mainland China as of Ministry of Economic Affairs China imposed by the Investment Company name December 31, 2021 (MOEA) Commission of MOEA (Note 3) CHIEFTEK PRECISION CO., LTD. $ 141,168 $ 141,168 $ 1,371,573

(Note 1) Through investing in an existing company in the third area (CHIEFTEK PRECISION HOLDING CO., LTD.) which then invested in the investee in Mainland China.

(Note 2) The investment income (loss) is recognized based on the investeesʼ financial statements that were audited by the parent company's auditor for the year ended December 31, 2021. (Note 3) The ceiling amount is 60% of the higher of net worth or consolidated net worth.

(Note 4) Foreign currencies were translated into New Taiwan Dollars using the exchange rate (USD:NTD 1:27.68) as at December 31, 2021.

Table 6, Page 1

CHIEFTEK PRECISION CO., LTD.

Information on investments in Mainland China - Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area For the year ended December 31, 2021

Table 7

Expressed in thousands of NTD

Investeein Mainland China	Sales (purchase)	Sales (purchase)	Property transaction	Property transaction	Accountsreceivable (payable)	Accountsreceivable (payable)	Provision of endorsements/guarantees orcollaterals	Provision of endorsements/guarantees orcollaterals		Financing	Financing		Others
	Amount	%	Amount	%	Balance at December31,2021	%	Balance at December 31, 2021	Purpose	Maximum balance during the year ended December31,2021	Balance at December 31, 2021	Interestrate	Interest during the year ended December 31, 2021
Chieftek Machinery (Kunshan) Co., Ltd	$ 224,509	16%	$ -	-	$ 44,958	11%	$ -	-	$ -	- $	-	- $	- $

Table 7, Page 1

CHIEFTEK PRECISION CO., LTD.

Table 8

Expressed in share

Major shareholders information

December 31, 2021

Name of major shareholders	Number of shares	Number of shares
	Common stock	Ownership (%)
Hsu, Ming-Che Xinzhide Investment Co., Ltd.	5,579,338 4,397.000	6.87% 5.41%

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

Table 8, Page 1