GEMTEK — Audit Report / Information 2021

Nov 12, 2021

Stock Code ： 4906

Gemtek Technologies Co., Ltd. and Subsidiary Companies

Consolidated Financial Statements and Audit Report

As of December 31, 2021 and 2020

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§Table of Content§

§TABLE OF CONTENT§ ...................................................................................................... 2 REPRESENTATION LETTER ................................................................................................... 4 INDEPENDENT AUDITORS’ REPORT ................................................................................... 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED ....................................................................................................................................................... 23 I. COMPANY HISTORY ............................................................................ 23 II. APPROVAL OF FINANCIAL STATEMENTS ......................................... 23 III. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS ................................................................................. 23 IV.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES .................... 26 V. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY ......................................................................................... 41 VI. CASH AND CASH EQUIVALENTS ...................................................... 41 VII. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS ..................................................................................... 42 VIII. ................ FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - OTHERS .................................................. 43 IX.FINANCIAL ASSETS MEASURED AT AMORTIZED COST ................. 43 X.NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE 44 XI. INVENTORIES .................................................................................... 45 XII.SUBSIDIARIES ................................................................................... 46 XIII.INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 48 XV.LEASE ARRANGEMENTS ................................................................... 53 XVI.OTHER ASSETS ................................................................................ 54 TABLES ................................................................................................................................... 106 FINANCING PROVIDED TO OTHERS .................................................................. 106 MARKETABLE SECURITIES HELD ...................................................................... 107 TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE

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PAID-IN CAPITAL ......................................................................................................... 109 RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL .............................. 110 INFORMATION ON INVESTEES ............................................................................. 111 INFORMATION ON INVESTMENT IN MAINLAND CHINA ....................... 112 THE BUSINESS RELATIONSHIP BETWEEN THE PARENT AND THE SUBSIDIARIES AND BETWEE EACH SUBSIDIARY, AND THE CIRCUMSTANCES AND AMOUNTS OF ANY SIGNIFICANT TRANSACTIONS BETWEEN THEM ...................................................................... 114

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CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

REPRESENTATION LETTER

The entities that are required to be included in the consolidated financial statements of Gemtek Technologies Co., Ltd. as of and for the year ended December 31, 2021, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards 10, “Consolidated and Separate Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Gemtek Technologies Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Gemtek Technologies Co., Ltd.

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Chairman

March 17, 2022

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders

Gemtek Technologies Co., Ltd.

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The 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.

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Key Audit Matters

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

We hereby summarize the Key Audit Matters of the 2021 Consolidated Financial Statements of the Group as follows:

Revenue Recognition

The 2021 operating income of Gemtek Technology Co., Ltd. and its subsidairies is NT$22,912,691 thousand, in which NT$5,247,644 thousand sales revenue is attributed to the sale of a major customer product, accounting for 23% of the operating income. Due to the fact that the sales revenue makes up a consequential part of the operating income in contrast to the year 2020, the operating income for the sale to the specific customer product is listed as a Key Audit Matter. For related accounting policies pertaining to revenue recognition, please refer to Note 4 and 22.

Main Audit Procedures conducted by the CPA are as follows:

1.Assess the quality of composition and implementation of the Group’s Internal Control Policy that are related to sales income conjointly with the Group’s Sales Revenue Recognition Policy. 2.Conduct inspections on selected materials acquired from income reports that are related to sales transactions and receivables, etc. to verify whether the origins of the operating income are documented truthfully.

3.Verify whether the customer has received any substantial sales return or discounts after the transaction.

Additional Matters:

The 2021 and 2020 financial statements of Gemtek Vietnam Co., Ltd. has been incorporated in the consolidated financial statements of Gemtek Technologies Co., Ltd. and its subsidiaries. Due to the differences in the respective financial reporting structures, the audit engagement for the financial statements of Gemtek Vietnam Co., Ltd. was performed by a separate CPA firm other

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than us. The financial statements of Gemtek Vietnam Co., Ltd. was audited by the appointed CPA in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Therefore, when issuing our opinions for the consolidated financial statements, the opinions for the financial statements of Gemtek Vietnam Co., Ltd. is based on the audit report given by the appointed CPA. The total asset of Gemtek Vietnam Co., Ltd. as of December 31, 2021 and 2020 was NT$2,091,260 thousand and NT$2,232,563 thousand respectively, accounting for 10% and 12% of the total consolidated assets. The net operating income from January 1 to December 31, 2021 and 2020 was NT$1,104 thousand NT$70 thousand respectively, accounting for 0% of both consolidated net operating income.

We have audited the individual financial statements of Gemtek Technologies Co., Ltd. as of and for the years December 31, 2021 and 2020 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

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conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our 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.

Deloitte & Touche Taiwan Certified Public Accountant Ching-zen Yang

Deloitte & Touche Taiwan Certified Public Accountant Jing-ting Yang

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Securities and Futures Commission Approved Document Number: 6-0920123784

Securities and Futures Commission Approved Document Number: 6-0930128050

Date: March 17, 2022

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GEMTEK TECHNOLOGY CO., LTD. Parent Company and Subsidiaries Balance Sheets December 31,2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

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December 31,2021 December 31,2020
code ASSETS AMOUNT ％ AMOUNT ％
CURRENT ASSETS
1100 Cash and cash equivalents （ note 4 and 6 ） $ 1,275,808 6 $ 1,925,250 10
1110 Financial assets at fair value through profit or loss - current
（ note 4 and 7 ） 142,860 1 160,308 1
1136 Financial assets at amortized cost – current （ note 4, 9 and 33 ） 137,291 1 3,274 -
1160 Notes receivable from related parties , net （ note 32 ） - - 11,250 -
1170 Accounts receivable, net （ note 4 、 10 and 22 ） 6,157,358 30 5,888,372 32
1180 Accounts receivable from related parties （ note 4 、 22 and 32 ） 201,980 1 112,537 1
1200 Other receivables （ note 4 、 32 ） 113,617 1 65,196 -
1220 Current tax assets （ note 4 and 24 ） 324 - 1,236 -
130X Inventories （ note 4 and 11 ） 3,748,983 18 4,189,305 22
1470 Other current assets （ note 4 and 16 ） 231,273 1 316,917 2
11XX Total current assets 12,009,494 59 12,673,645 68
NON-CURRENT ASSETS
1517 Financial assets at fair value through other comprehensive
income - non-current （ note 4 and 8 ） 2,823,493 14 925,288 5
1535 Financial assets at amortized cost - non-current （ note 4 、 9 and
33 ） 20,000 - 172,652 1
1550 Investments accounted for using the equity method （ note 4 ,12
and 13 ） 1,109,983 6 1,111,163 6
1600 Property, plant and equipment （ note 4 and 14 ） 3,471,538 17 3,325,158 18
1755 Right-of-use assets （ note 4 and 15 ） 137,653 1 111,160 1
1805 Goodwill （ note 4 and27 ） 265,224 1 72,845 -
1821 Other intangible assets 83,817 1 6,918 -
1840 Deferred tax assets （ note 4 and 24 ） 48,005 - 40,841 -
1990 Other non-current assets （ note 4 、 16 and 20 ） 247,823 1 216,706 1
15XX Total non-current assets 8,207,536 41 5,982,731 32
1XXX Total assets $ 20,217,030 100 $ 18,656,376 100
code LIABILITIES AND EQUITY
CURRENT LIABILITIES
2100 Short-term borrowings （ note 17 ） $ 2,108,520 10 $ 1,082,240 6
2120 Financial liabilities at fair value through profit or loss - current
（ note 4 and 7 ） - - 7,278 -
2130 Contract liabilities - current （ note 4 and 22 ） 307,167 2 218,433 1
2170 Accounts payable 3,944,962 20 5,697,231 31
2180 Accounts payable to related parties （ note 32 ） 5,667 - 304 -
2219 Other payables （ note 19 and 32 ） 713,200 4 713,758 4
2230 Current tax liabilities （ note 4 and 24 ） 25,910 - 80,331 1
2280 Current lease liabilities （ note 4 and 15 ） 14,918 - 3,012 -
2321 Current portion of bonds payable （ note 18 ） 857,842 4 1,179,157 6
2399 Other current liabilities （ note 19 ） 78,522 - 61,869 -
21XX Total current liabilities 8,056,708 40 9,043,613 49
NON-CURRENT LIABILITIES
2570 Deferred tax liabilities （ note 4 and 24 ） 218,933 1 222,621 1
2580 Non-current lease liabilities （ note 4 and 15 ） 24,102 - 4,528 -
2670 Other non-current liabilities （ note 19 ） 1,466 - 1,479 -
25XX Total non-current liabilities 244,501 1 228,628 1
2XXX Total liabilities 8,301,209 41 9,272,241 50
EQUITY （ note 4 、 18 、 21 and 26 ）
Share capital
3110 Ordinary shares 3,661,188 18 3,575,905 19
3140 Capital collected in advance 44,798 1 - -
3200 Capital surplus 4,441,626 22 4,606,007 25
Retained earnings
3310 Legal reserve 878,269 4 750,939 4
3320 Special reserve 1,305,902 7 559,574 3
3350 Unappropriated earnings 696,971 3 1,273,304 7
3300 Total retained earnings 2,881,142 14 2,583,817 14
3490 Other equity 661,073 3 ( 1,381,726 ) ( 8 )
31XX Total equity attributable to owners of parent 11,689,827 58 9,384,003 50
36XX Non-controlling interests （ note 21 ） 225,994 1 132 -
3XXX Total equity 11,915,821 59 9,384,135 50
Total liabilities and equity $ 20,217,030 100 $ 18,656,376 100
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The accompanying notes are an integral part of the consolidated financial statements.

Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

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GEMTEK TECHNOLOGY CO., LTD.

Parent Company and Subsidiaries Statements of Comprehensive Income For the Years Ended December 31,2021and 2020

(Expressed in thousands of New Taiwan Dollars, Except Earnings Per Share)

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2021 2020
c o d e Amount ％ Amount ％
4000 Operating revenue （ note 4 、
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22 and 32） 5000 Operating costs（note 11、20、 23 and 32） ( 5900 Gross profit Operating expenses（note 20、23 and 32） 6100 Selling expenses ( 6200 General and administrative expenses ( 6300 Research and development expenses ( 6450 Expected credit losses reversed on receivables 6000 Total operating expenses ( 6900 Profit from operations Non-operating income and expenses 7100 Interest income（note 23） 7010 Other income（note 23 and 32） 7020 Other gains and losses （note 23、28 and 32） 7050 Finance costs（note 23） ( 7060 Share of profit of subsidiaries and associates （note 4 and 13） 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax（note 4 and 24） (	$ 22,912,691 100 20,852,099) (91) ( 2,060,592 9 401,480 ) ( 2 ) ( 549,607 ) ( 3 ) ( 753,460 ) ( 3 ) ( 48 - 1,704,499) ( 8) ( 356,093 1 21,290 - 65,953 - 129,803 1 30,803 ) - ( 181,117 1 367,360 2 723,453 3 41,869) - (	$ 19,929,372 100 17,663,796) (89) 2,265,576 11 389,400 ) ( 2 ) 533,312 ) ( 3 ) 874,998 ) ( 4 ) 47 - 1,797,663) ( 9) 467,913 2 27,033 - 117,205 1 960,490 5 30,843 ) - 31,374 - 1,105,259 6 1,573,172 8 165,598) ( 1)

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8200 Net profit for the period

681,584 3 1,407,574

7

(Continued)

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（Brought forward）

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2021 2020
c o d e Amount ％ Amount ％
Other comprehensive income
/(loss)
8310 Items that will not be
reclassified subsequently to
profit or loss
8311 Remeasurement of defined
benefit plans （ note 20 ） ( $ 3,527 ) - ( $ 1,928 ) -
8316 Unrealized loss on
investments in equity
instruments at fair value
through other comprehensive
income 2,038,535 9 ( 160,503 ) ( 1 )
8330 Share of other comprehensive
loss of subsidiaries and
associates accounted for using
the equity method 64 - 73 -
8360 Items that may be reclassified
subsequently to profit or loss
8361 Exchange differences on
translation of the financial
statements of foreign
operations ( 63,871 ) - ( 21,747 ) -
8370 Share of other comprehensive
loss of subsidiaries and
associates accounted for using
the equity method ( 3,032 ) - ( 85 ) -
8300 Other comprehensive
income/(loss) 1,968,169 9 ( 184,190 ) ( 1 )
8500 Total comprehensive income $ 2,649,753 12 $ 1,223,384 6
Profit, attributable to:
8610 Profit, attributable to
owners of parent $ 679,793 3 $ 1,370,155 7
8620 Profit, attributable to
non-controlling interests 1,791 - 37,419 -
8600 $ 681,584 3 $ 1,407,574 7
Profit, attributable to:
8710 Comprehensive income,
attributable to owners of
parent $ 2,647,962 12 $ 1,186,605 6
8720 Comprehensive income,
attributable to
non-controlling interests 1,791 - 36,779 -
8700 $ 2,649,753 12 $ 1,223,384 6
Earnings per share （ note 25 ）
9750 Basic earnings per share $ 1.89 $ 3.86
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Diluted earnings per share

9850

$

$

1.69

3.36

The accompanying notes are an integral part of the consolidated financial statements.

Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

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GEMTEK TECHNOLOGY CO., LTD CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the Years Ended December 31,2021and 2020

(Expressed in thousands of New Taiwan Dollars)

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Share Capital （ note 21 and 26 ） 、 Retained Earnings （ note21 ） Other Equity （ note4and 21 ）
Unrealized
Exchange Valuation
Differences on Gain/(Loss) on
Translation of the Financial Assets
Financial at Fair Value
Shares （ in Advance Statements of Through Other Unearned
Receipts for Capital Surplus Unappropriated Foreign Comprehensive Employee Non-controlling
code thousand ） Common Stock Share Capital (note 4 、 18 and 21) Legal Reserve Special Reserve Earnings Operation Income Compensation Total Treasury Shares equity Total Equity
A1 BALANCE AT JANUARY 1, 2020 356,884 $ 3,568,835 $ - $ 4,761,281 $ 730,820 $ 375,960 $ 203,733 ( $ 497,082 ) ( $ 726,028 ) $ - ( $ 1,223,110 ) $ - $ 270,356 $ 8,687,875
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Appropriation of 2019 earnings B1 Legal reserve B3 Special reserve B5 Cash dividends of share holder Subtotal C15 Cash distribution from capital surplus D1 Net profit for the year ended December 31, 2020 D3 Other comprehensive loss for the year ended December 31, 2020 D5 Total comprehensive income/(loss) for the year ended December 31, 2020 L1 Buy-back of ordinary shares L3 Cancelation of treasury shares ( M3 Disposals of subsidiaries N1 Issuance of restricted share plan for employees O1 Changes of non-controlling interest Q1 Disposal of investments in equity instruments at fair value through other comprehensive income T1 Share-based payment expenses Z1 BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings B1 Legal reserve B3 Special reserve B5 Cash dividends to shareholders Total Cash distribution from capital surplus D1 Net profit for the year ended December 31, 2021 D3 Other comprehensive loss for the year ended December 31, 2021 D5 Total comprehensive income/(loss) for the year ended December 31, 2021 I1 Convertible bonds converted to ordinary shares	- - - - - - - - - 3,293 ) ( - 4,000 - - - 357,591 - - - - - - - - 8,712	- - - - - - - - - 32,930 ) - 40,000 - - - 3,575,905 - - - - - - - - 87,123	- - - - - ( - - - - - ( - - - - - - - - - - - ( - - - 44,798	- - - - 177,911) - - - - 35,837 ) - 58,474 - - - 4,606,007 - - - - 357,666 ) - - - 204,666	20,119 - - 20,119 - - - - - - - - - - - 750,939 127,330 - - 127,330 - - - - -	- ( 183,614 ( - 183,614 ( - - - ( - - - - ( - - - ( - 559,574 - ( 746,328 ( - ( 746,328 ( - - - ( - -	20,119 ) 183,614 ) - 203,733 ) - 1,370,155 1,855) ( 1,368,300 ( - - 4,636 ) - - 90,360) - 1,273,304 ( 127,330 ) 746,328 ) 357,666 ) 1,231,324 ) - 679,793 3,463) ( 676,330 ( -	- - - - - - 21,779) ( 21,779) ( - - 3,908 - - - - 514,953 ) ( - - - - - - 66,903) 66,903) -	- - - - - - 159,916) 159,916) - - 4,636 - ( - 90,360 - 790,948 ) ( - - - - - - 2,038,535 2,038,535 -	- - - - - - - ( - ( - - - 98,474) ( - - 22,649 75,825 ) ( - - - - - - - - -	- - - - - - 181,695) 181,695) - ( - 8,544 98,474) - 90,360 22,649 1,381,726 ) - - - - - - 1,971,632 1,971,632 -	- - - - - - - ( - 68,767) 68,767 - ( - - - - - - - - - - - - - -	- - - - - ( 37,419 640) ( 36,779 - ( - 307,367 ) ( - 364 - - 132 - - - ( - ( - ( 1,791 - 1,791 -	- - - - 177,911) 1,407,574 184,190) 1,223,384 68,767) - 303,459 ) - 364 - 22,649 9,384,135 - - 357,666 ) 357,666 ) 357,666 ) 681,584 1,968,169 2,649,753 336,587

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M3 Disposals of subsidiaries N1 Cancelation of restricted share plan for employees ( O1 Changes of non-controlling interest Q1 Disposal of investments in equity instruments at fair value through other comprehensive income T1 Share-based payment expenses Z1 BALANCE AT DECEMBER 31, 2021	- 184) ( - - - 366,119	- 1,840) - - - $ 3,661,188	- ( - ( - - - $ 44,798	8,691 ) 2,690) - - - $ 4,441,626	- - - - - $ 878,269	- - - - ( - $ 1,305,902	- - - 21,339) - $ 696,971 (	- - - - - $ 581,856 )	- - - 21,339 - $ 1,268,926 (	- 4,530 - - 45,298 $ 25,997 )	- 4,530 - 21,339 45,298 $ 661,073	- - - - - $ -	- ( - 224,071 - - $ 225,994	8,691 ) - 224,071 - 45,298 $ 11,915,821

The accompanying notes are an integral part of the consolidated financial statements.

Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

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GEMTEK TECHNOLOGY CO., LTD

Parent Company and Subsidiaries Statements of Cash Flows For the Years Ended December 31,2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

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code 2021 2020
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code				2021		2020
	CASH FLOWS FROM OPERATING
	ACTIVITIES
A00010	Income before income tax		$	723,453		$ 1,573,172
A20010	Adjustments for:
A20100	Depreciation expense			369,327		329,409
A20200	Amortization expense			105,618		89,720
A20300	Expected credit losses
	reversed on receivables
	expense	(		48 )	(	47 )
A20400	Net (gain)/loss on fair value
	changes of financial
	[assets/liabilities] at fair value
	through profit or loss	(		31,797 )		7,786
A20900	Finance costs			30,803		30,843
A21200	Interest income	(		21,290 )	(	27,033 )
A21300	Dividend income	(		4,812 )	(	6,552 )
A21900	Share-based payment expenses			45,298		22,649
A22300	Share of profit of subsidiaries
	and associates	(		181,117 )	(	31,374 )
A22500	Gain on disposal of property,
	plant and equipment			4,601		2,480
A23100	Gain on disposal of associates	(		187,819 )		-
A23200	Gain on disposal of subsidiaries			-	(	1,033,557 )
A23700	Write-down of inventories			26,493		30,661
A24100	Net loss on foreign currency
	exchange			29,091		78,756
A30000	Changes in operating assets and
	liabilities
A31115	financial assets at fair value
	through profit or loss			41,312	(	30,571 )
A31130	Notes receivable			-		43,732
A31140	Notes receivable from related
	parties			11,250	(	11,250 )
A31150	Accounts receivable	(		534,077 )	(	2,548,429 )
A31160	Accounts receivable from related
	parties	(		89,683 )	(	54,104 )
A31180	Other receivables	(		58,510 )	(	67,899 )
A31200	Inventories			311,581	(	2,180,699 )
A31240	Other current assets			69,951	(	122,204 )
A31990	Prepaid pension			1,384	(	2,246 )
A32125	Contract liabilities			33,581	(	20,735 )
A32130	Notes payable			-	(	21,345 )

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A32150 Accounts payable ( 1,696,546 ) 2,708,434 A32160 Accounts payable to related parties 197,502 44,481

(Continued)

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（Brought Forward）

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C o d e 2021 2020
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C o d e				2021			2020
A32180	Other payables		$	186,460		$	236,628
A32230	Other current liabilities			132,598			69,310
A33000	Cash used in operations	(		485,396 )	(		889,984 )
A33100	Interest received			29,156			37,771
A33200	Dividends received			4,812			6,552
A33300	Interest paid	(		15,248 )	(		13,621 )
A33500	Income tax paid	(		106,230)	(		47,414)
AAAA	Net cash used in operating activities	(		572,906)	(		906,696)
	CASH FLOWS FROM INVESTING ACTIVITIES
B00010	Purchase of financial assets at fair
	value through other comprehensive
	income	(		25,593 )	(		27,336 )
B00020	Proceeds from sale of financial
	assets at fair value through other
	comprehensive income			219,349			98,471
B00040	Purchase of financial assets at
	amortized cost			-	(		20,016 )
B00050	Proceeds from disposal of financial
	assets at amortized cost			20,000			-
B02200	Net cashinflowfrom acquisition of
	subsidiaries (note 27)			219,968			7,696
B02300	Net cash inflow on disposal of
	subsidiaries			-			477,364
B02700	Acquisition of property, plant and
	equipment	(		550,512 )	(		823,641 )
B02800	Proceeds from disposal of
	property, plant and equipment			13,872			32,317
B04500	Acquisition of intangible assets	(		652 )	(		652 )
B06700	Increase in other non-current
	assets	(		144,810)	(		145,034)
BBBB	Net cashused ininvesting
	activities	(		248,378)	(		400,831)
	CASH FLOWS FROM FINANCING ACTIVITIES
C00100	Increase short-term borrowings			1,026,280			745,360
C04020	Repayment of the principal portion
	of lease liabilities	(		4,803 )	(		6,035 )
C04300	Increase in other non-current
	liabilities			2,478			366
C04500	Cash dividends paid	(		715,332 )	(		177,911 )
C04900	Payments for buy-back of ordinary
	shares			-	(		68,767)
CCCC	Net cash generated from
	financing activities			308,623			493,013

• 21 -

DDDD	Effect of exchange rate changes on cash
	and cash equivalents	(	136,781)		8,646
EEEE	NET DECREASE IN CASH AND
	CASH EQUIVALENTS	(	649,442 )	(	805,868 )
E00100	CASH AND CASH EQUIVALENTS AT
	THE BEGINNING OF THE YEAR		1,925,250		2,731,118
E00200	CASH AND CASH EQUIVALENTS AT
	THE END OF THE YEAR		$ 1,275,808		$ 1,925,250

The accompanying notes are an integral part of the consolidated financial statements.

Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

• 22 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

I. COMPANY HISTORY

Gemtek Technologies Co., Ltd. (the “Company”) was incorporated on June 29, 1988. It researches, develops, manufactures, purchases, sells, exports, and imports electronic components, semi-finished products, finished products, computer software, hardware and peripheral equipment. The Company’s shares was listed on the Taipei Exchange (OTC) in January of 2002, and have been listed on the Taiwan Stock Exchange (TWSE) since June 30, 2003.

The consolidated financial statements of the Company and its subsidiaries (collectively, referred to as the “Group”) are presented in the Company’s functional currency, the New Taiwan dollar.

II. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors and authorized for issuance on March 17, 2022.

III. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• (1) Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed

• 23 -

and issued into effect by the FSC did not have material impact on the Group’s accounting policies:

• (2) New, Amended and Revised Standards and Interpretions of IFRSs endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretions Annual Improvements to IFRS Standards 2018–2020

Amendments to IFRS 3-- Reference to the Conceptual Framework Am[Amendments to IAS 16 -- Property, Plant and ] Equipment — Proceeds before Intended Use Amendments to IAS 37 --Onerous Contracts — Cost of Fulfilling a Contract

Effective Date per IASB The amendments are effective for annual reporting periods beginning on or after 1 January 2022. (Note 1) The amendments are effective for annual reporting periods beginning on or after 1 January 2022. (Note 2) The amendments are effective for annual reporting periods beginning on or after 1 January 2022. (Note 3) The amendments are effective for annual reporting periods beginning on or after 1 January 2022. (Note 4)

• Note 1: The Group shall apply IFRS9 amendments prospectively for annual reporting periods beginning on or after January 01, 2022; the Group shall apply IAS41 amendments prospectively for annual reporting periods beginning on or after January 01, 2022; the Group shall apply IFRS1 amendments prospectively for annual reporting periods beginning on or after January 01, 2022.

• Note 2: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period

• 24 -

beginning on or after January 01, 2022 and to asset acquisitions that occur on or after the beginning of that period.

• Note 3: The Group shall apply these amendments retrospectively for annual reporting periods beginning on or after January 01, 2021.

• Note 4: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 01, 2022.

As of the date that the accompanying consolidated financial statements were approved and authorized for issue, the Group shall evaluate the impact on its financial position and financial performance as a result of the amendment of the above standards or interpretations.

• (3) New, Amended and Revised Standards and Interpretions of IFRSs Announced by the IASB but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards Effective Date per IASB and Interpretions (Note1) Amendments to IFRS 10 and IAS 28 --Sale or To be determined by IASB Contribution of Assets between an Investor and its Associate or Joint Venture IFRS 17 Insurance Contracts January 01, 2023 Amendments to IFRS 17 January 01, 2023 Amendments to IFRS 17 – Initial application of January 01, 2023 IFRS 17 and IFRS 9 -- Comparison Amendments to IAS 1 -- Classification of January 01, 2023 Liabilities as Current or Non-current Amendments to IAS 1 -- Disclosure of January 01, 2023 (Note 2) Accounting Policies Amendments to IAS 8 -- Definition of January 01, 2023 (Note 3) Accounting Estimates Amendments to IAS 12 -- Deferred Tax related January 01, 2023 (Note 4) to Assets and Liabilities arising from a Single Transaction

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 01, 2023.

Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 01, 2023.

• 25 -

Note 4: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 01, 2022 aside from recognized deferred tax on transactions such as leases and decommissioning obligations.

As of the date the accompanying consolidated financial statements were authorized for issue, the Group continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Group completes the evaluation.

IV.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(I)Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed by the FSC.

(II)Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

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

3. Level 3 inputs are unobservable inputs for the asset or liability.

(III) Classification of current and non-current assets and liabilities

Current assets include:

1. Assets held primarily for the purpose of trading;

2. Assets expected to be realized within twelve months after the reporting period; and

3. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

1. Liabilities held primarily for the purpose of trading;

2. Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after

3. 26 -

the reporting period and before the consolidated financial statements are authorized for issue; and

1. Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

(IV) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e., its subsidiaries, including special purpose entities). Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to shareholders of the parent.

See Note 12, Attachment 5, and Attachment 6 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

(V) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s previously held equity interests in the acquire over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

For each business combination, the Group measures the non-controlling interests at either fair value or the share in the recognized amounts of the acquiree’s identifiable net assets. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets, in the event of liquidation, may be initially measured at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of the measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value.

• 27 -

When a business combination is achieved in stages, the Group’s previously held equity interest in an acquiree is remeasured to fair value at the acquisition date, and the resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are recognized on the same basis as would be required if those interests were directly disposed of by the Group.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted retrospectively during the measurement period or additional assets or liabilities are recognized to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

(VI) Foreign Currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, and in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting consolidated financial statements, the functional currencies of the Corporation and the group entities (including subsidiaries and associates in other countries that use currencies that are different from the currency of the Corporation) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Corporation and non-controlling interests as appropriate).

• 28 -

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

(VII) Inventories

Inventories consist of raw materials, supplies, finished goods and work in process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the end of reporting period.

(VIII)Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Group uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and joint venture are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of the equity of associates and joint ventures.

Any excess of the cost of an acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the acquisition, after reassessment, is recognized immediately in profit or loss.

When the Group subscribes for additional new shares of an associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in that associate and joint venture. The Group records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus - changes in the Group’s share of equity of associates and joint ventures. If the Group’s

• 29 -

ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for by using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate and joint venture), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on its initial recognition as a financial asset. The difference between the previous carrying amount of the associate and joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

When a group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’ consolidated financial statements only to the extent that interests in the associate and the joint venture are not related to the Group.

(IX)Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation is recognized using the straight-line method with their estimated useful lives. Each significant part is depreciated separately. If the lease term is shorter than its estimated useful life, an item of property, plant and equipment is depreciated over the lease term. The estimated useful lives, residual values and depreciation method are

• 30 -

reviewed at least once at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(X)Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of the acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit or groups of cash-generating units was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit or groups of cash-generating units is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation that is disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

(XI) Intangible assets

• 1.Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss. When the Group has a right to charge for usage of concession infrastructure (as a consideration for providing construction services in a service concession arrangement), it is initially recognized as an intangible asset at its fair value. The intangible asset is subsequently measured at cost less accumulated amortization and any accumulated impairment loss.

• 31 -

2.Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

3.Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(XII) Impairment of tangible assets (property, plant, and equipment), right-of-use assets, and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets, and other intangible assets (excluding goodwill) to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of an asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (less amortization expenses or depreciation expenses) that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• (XIII) Financial instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1.Financial assets

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

• 32 -

(1)Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

A.Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 31.

B.Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

a.The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

b.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets measured at amortized cost, including cash and cash equivalents, note receivables, account receivables, account receivables-related party, other receivables, other receivables-related party, and refundable deposits, which equals the gross carrying amount determined using the effective interest method less any impairment loss measured at amortized cost. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

a.Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

b.Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

• 33 -

Evidence of impairment may include indications that the debtor is experiencing significant financial difficulty, default or delinquency in interest or principal payments, indications that the debtor or issuer will probably enter bankruptcy or other financial reorganization, and the disappearance of an active market for that financial asset because of financial difficulties

Cash equivalents include time deposits and bank acceptances with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

C.Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

(2)Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivables).

The Group always recognizes lifetime expected credit losses (ECLs) for accounts receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. The Group recognizes an

• 34 -

impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

For internal credit risk management purposes, the Group determines that the following situation indicate that a financial asset is in default (without taking into account any collateral held by the Group):

A.Internal or external information shows that the debtor is unlikely to pay its creditors. B.When a financial asset is more than 365 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The Group recognizes an impairment loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investmens in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in the other comprehensive incomeand does not reduce the carrying amount of the financial assets.

(3)Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2. Equity instruments

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

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Corporation’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Corporation’s own equity instruments.

3. Financial liabilities

(1)Subsequent measurement

All the financial liabilities are measures at amortized cost using the effective interest method.

• 35 -

Financial liabilities at FVTPL.

Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.

Financial liabilities held for trading are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. The fair value is determined in the manner described in Note 31.

(2)Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

4. Convertible bonds

The component parts of compound instruments (i.e. convertible bonds) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

5. Derivative financial instruments

The Group enters into foreign exchange forward to manage its exposure to foreign exchange rate risks.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of

• 36 -

each reporting period. The resulting gain or loss is recognized in profit or loss immediately. When the fair value of derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instrument is negative, the derivative is recognized as a financial liability.

(XIV)Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of wireless gateways and wlan cards. Sales of wireless gateways and wlan cards are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently. The transaction price received is recognized as a contract liability until the customer acquires control of the good.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

(XV)Leasing

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

For a contract that contains a lease component and non-lease components, the Group allocates the consideration in the contract to each component on the basis of the relative stand-alone price and accounts for each component separately.

1.The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operatin leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2.The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

• 37 -

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

(XVI)Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the year in which they are incurred.

(XVII)Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related cost for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no

• 38 -

future related costs are recognized in profit of loss in the period in which they become receivable.

(XVIII) Employee benefits

1.Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2.Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service costs, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs and net interest on the net defined benefit liability (asset) are recognized as an employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

The net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plan or reductions in future contributions to the plan.

(XIX)Share-based payment arrangements

Employee share options

The fair value at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Group’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in non-controlling interest; it is recognized as an expense in full at the grant date if vested immediately.

At the end of each reporting period, the Group revises its estimates of the number of employees share options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus-employee share options.

(XX)Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1.Current tax

• 39 -

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable in respect of previous years.

According to the Income Tax Law, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2.Deferred tax

Deferred tax is recognized on temporary differences between the consolidated financial statement carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carryforwards and unused tax credits for research and development expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. For deferred tax assets arising from deductible temporary differences associated with such investments and equity, the interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3.Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, and in

• 40 -

which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity.

V. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed by the Group on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

VI. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits with original maturities of less than 3 months Market rate intervals of cash in banks at the end of the reporting period	December 31, 2021 $ 2,570 1,178,548 94,690 $ 1,275,808 0.001%~2.85%	December 31, 2020
		$ 2,117 1,884,043 39,090 $ 1,925,250 0.001%~2.75%

• 41 -

VII. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

December 31, 2021 December 31, 2020 Financial assets - current Mandatorily classified as at FVTPL Non-derivative financial assets － Domestic listed shares $ 123,612 $ 120,131 － Financial Products - 23,745 Hybrid Financial Assets － Convertible Bonds 16,974 15,592 Derivative instruments （ non hedge accounting ） － Forward Contract 2,274 - － Convertible option - 840 $ 142,860 $ 160,308 December 31, 2021 December 31, 2020 Financial liabilities - current Held for trading Derivative instruments （ nonhedge accounting ） － Foreign Exchange Forward Contract $ - $ 7,278

At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting for the balance sheet were as follows:

December 31, 2021

==> picture [426 x 37] intentionally omitted <==

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

Notional Amount
Currency Maturity Date （ In Thousands ）
Sell USD/NTD 2021.12.09-2022.02.11 USD 10,000/NTD 276,840
----- End of picture text -----

Sell		USD/NTD	2021.12.09-2022.02.11	USD	10,000/NTD	276,840
Sell		USD/NTD	2021.12.09-2022.02.11	USD	10,000/NTD	276,840
Sell		USD/NTD	2021.12.09-2022.02.11	USD	10,000/NTD	276,840
December	31,	2020

Sell Sell	Currency USD/NTD USD/NTD	Maturity Date 2020.11.15-2021.01.11 2020.11.19-2021.01.25	Notional Amount （In Thousands）
			USD 20,000/NTD 571,840 USD 10,000/NTD 285,060

The Group entered into foreign exchange forward contracts to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities.

• 42 -

VIII. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - OTHERS

E-OTHERS
Non-current Domestic Investments Listed shares Unlisted shares Total Overseas Investment Listed shares Unlisted shares Total	December 31, 2021 $ 2,581,092 101,695 2,682,787 13,357 127,349 140,706 $ 2,823,493	December 31, 2020
			$ 664,480 70,214 734,694 74,926 115,668 190,594 $ 925,288

Foreign investments are held for medium- to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

IX.FINANCIAL ASSETS MEASURED AT AMORTIZED COST

Current Domestic Investment Time deposits with original maturities of more than 3 months (1) Standard Chartered Subordinated Bond (2) Non-current Domestic Investment Time deposits with original maturities of more than 3 months (1) Standard Chartered Subordinated Bond (2)	December 31, 2021 $ 9,879 127,412 $ 137,291 $ 20,000 - $ 20,000	December 31, 2020	December 31, 2020
			$ 3,274 - $ 3,274 $ 40,000 132,652 $ 172,652

• 43 -

(I) As of 2021 and December 31, 2020, the annual interest rate for time deposits with original maturities of more than 3 months are 0.35% and within the ranges of 0.18%~0.35%.

(II) In February 2016, the Group purchased Standard Chartered Bank Subordinated Bond at a nominal value of USD4,600 thousand. The maturity date is January 25, 2022. The coupon rate is 5.7%, and the effective interest rate is 4.49%.

(III)Please see Note 33 for more details on financial assets pledged as collateral measured at amortized cost.

X. ACCOUNTS RECEIVABLE

December 31, 2021 December 31, 2020 Accounts Receivable At Amortized Cost $ 6,158,061 $ 5,888,881 Less: Allowance for impairment loss ( 703 ) ( 509 ) $ 6,157,358 $ 5,888,372

The average credit period on sales of goods is 90 days with no accrued interest. The allowance for doubtful receivables was assessed by referring to the collectability of receivables based on an individual trade term analysis, aging analysis, the historical payment behavior and current financial condition of customers.

The Group measures the loss allowance for accounts receivables at an amount equal to lifetime expected credit losses.The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

In the event there is an evidence indicating that the customer is under severe financial difficulty and the Group cannot reasonably estimate the recoverable amounts, the Group writes off relevant accounts receivable. However, the Group continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, the recoverable amounts are recognized in profit or loss.

• 44 -

The following table details the loss allowance of note receivables and accounts receivables based on the Group’s provision matrix.

December 31, 2021

December 31, 2021
Expected Credit Loss Rate Gross carrying amount Loss allowance (Lifetime ECL） Amortized cost December 31, 2020 Expected Credit Loss Rate Gross carrying amount Loss allowance (Lifetime ECL） Amortized cost		Less than 180 Days	Less than 181～365 Days 1.75% $ 457 ( 8) $ 449 Less than 181～365 Days 0.33% $ 303 ( 1) $ 302		Over 366 Days	( (	Total
	(	0.01% $ 6,157,234 325) $ 6,156,909 Less than 180 Days		(	100% $ 370 370) $ - Over 366 Days		$ 6,158,061 703) $ 6,157,358 Total
	(	0.01% $ 5,888,511 441) $ 5,888,070		(	100% $ 67 67) $ -		$ 5,888,881 509) $ 5,888,372

The movements of the loss allowance of account receivables were as follows:

Balance, beginning of year Add: Acquire Subsidiary Less: Net remeasurement of loss allowance Less: Disposal of Subsidiary Balance, end of year	December 31, 2021 $ 509 242 ( 48 ) - $ 703	December 31, 2020
		$ 21,119 - ( 47 ) ( 20,563) $ 509

XI. INVENTORIES

ENTORIES
Finished goods Work in process Raw materials and supplies Inventory in transit	December 31, 2021 $ 390,932 446,730 2,911,249 72 $ 3,748,983	December 31, 2020
			$ 365,620 596,129 3,180,444 47,112 $ 4,189,305

• 45 -

As of December 31, 2021 and 2020, the cost of inventories recognized as cost of goods sold were NT$20,852,099 thousand and NT$17,663,796 thousand, respectively. Cost of goods sold include allowance for inventory write-downs and inventory obsolescence were $26,493 thousand and $30,661 thousand, respectively.

XII.SUBSIDIARIES

(I) Subsidiaries included in consolidated financial statements:

==> picture [412 x 52] intentionally omitted <==

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

% of Ownership
2021 2020
Main Decem December
Investor Investee Business ber 31 31
Gemtek Technologies Co., Ltd. Brightech International Co., Investment 100.0 100.00%
----- End of picture text -----

Investor Gemtek Technologies Co., Ltd.	Investee Brightech International Co.,	Main Business Investment	2021 Decem ber 31 100.0	2020 December 31 100.00%
	Ltd.		0%
Gemtek Technologies Co., Ltd.	G-Technology Investment Co.,	Investment	100.0	100.00%
	Ltd.		0%
Gemtek Technologies Co., Ltd.	Gemtek Investment Co.,Ltd	Investment	100.0	100.00%
			0%
Gemtek Technologies Co., Ltd.	Gemtek Vietnam Co., Ltd.	Telecommu	100.0	100.00%
		nications	0%
Gemtek Technologies Co., Ltd.	AMPAK Technology Inc.	Telecommu	-	-
		nications
Gemtek Technologies Co., Ltd.	BROWAN Communications	Telecommu	33.68	-
	Incorporation	nications	%
Gemtek Investment Co.,Ltd	5V Technologies, Ltd.	Telecommu	97.92	97.92%
		nications	%
Gemtek Investment Co.,Ltd	AMPAK Technology Inc.	Telecommu	-	-
		nications
Gemtek Investment Co.,Ltd	BROWAN Communications	Telecommu	16.81	-
	Incorporation	nications	%
Brightech International Co., Ltd.	Gemtek Electronics Suzhou	Telecommu	80.46	80.46%
	Co. Ltd.	nications	%
G-Technology Investment Co.,	Gemtek Electronics Kunshan	Telecommu	100.0	100.00%
Ltd.	Co., Ltd.	nications	0%
G-Technology Investment Co.,	AMPAK International	Investment	100.0	100.00%
Ltd.	Holdings Ltd.		0%
G-Technology Investment Co.,	Primax Communication	Investment	100.0	100.00%
Ltd.	(B.V.I.) Inc.		0%
G-Technology Investment Co.,	Gemtek CZ., s.r.o.	Telecommu	100.0	100.00%
Ltd.		nications	0%
AMPAK International Holdings	Gemtek Electronics	Telecommu	100.0	100.00%
Ltd.	(ChangShu) Co., Ltd.	nications	0%
Primax Communication (B.V.I.)	Gemtek Electronics Suzhou	Telecommu	19.54	19.54%
Inc.	Co. Ltd.	nications	%

• 46 -

On December 27, 2021, the Company obtained 9.35% of the shareholdings of Browan Communications Incorporation (hereinafter as Browan) by NTD153,000 thousand in cash, increasing its shareholding ratio from 24.33% to 33.68%. The Company and Gemtek Investment Co.,Ltd. collectively own a total of 50.49% of Browan’s shareholdings. In addition, due to the fact that over half of Browan’s Board of Directors are representatives appointed by the Company, establishing substantial control over Browan, therefore is regarded as a subsidiary of the Company. Browan’s financial statements are included in this consolidated financial report as a result. Please see Note 27 for more details on acquisition of equity shares from Browan Communications Incorporation.

On June 9, 2020, the shareholders meeting of the Group passed the resolution proposed by the Company and Gemtek Investment Co.,Ltd to release a total of 25,000 thousand shares from AMPAK Technology Inc. In August 2020, 26.61% and 14.90% of the shareholdings of AMPAK Technology Inc. were sold respectively, and the subscription of shares was completed, decreasing its shareholding ratio from 74.88% to 33.37%. As a result, the Group lost control over AMPAK Technology Inc. and its subsidiaries, hence, the above companies are excluded from the combined entity. Please see Note 28 for more details regarding equity shares of AMPAK Technology Inc.

In January 2020, the Group acquired 97.92% of the shareholdings of 5V TECHNOLOGIES, TAIWAN LTD. by NT$90,000 thousand in cash. Please see Note 27 for more details on the acquisition of 5V TECHNOLOGIES, TAIWAN LTD.

The condolidated financial statements of the Group as of December 31, 2021 and 2020, which includes the financial statements of its subsidiaries, have been duly audited for the same year.

(II) Subsidiaries not included in consolidated financial statements

Investor Gemtek Technologies Co., Ltd. G-Technology Investment Co., Ltd.	Investee Wi Tek Investment Co., Ltd. PT. South Ocean	Main Business Investmen t Telecomm un	%o f O w	n e r s h ip
			2021 December 31 100.00% 95.00%	2020 December 31
				100.00% 95.00%

• 47 -

Wi Tek Investment Co., Ltd.

ications Browan Communications (Xi'An) Telecomm 100.00% 100.00% Inc. un ications

As of 2021 and December 31, 2020, the Group held 100% of Wi Tek Investment Co., Ltd., and its total assets were NT$8,082 thousand and NT$20,951 thousand, accounting for 0.04% and 0.11% of consolidated assets, respectively. Operating incomes were NT$0 for both years, accounting for 0% of the consolidated total operating income. As a result, Wi Tek Investment Co., Ltd. was not included in the consolidated financial statements of the Group.

As of 2021 and December 31, 2020, the Group held 95% of PT. South Ocean, and its total assets were NT$2,540 thousand and NT$2,614 thousand, accounting for 0.01% and 0.01% of consolidated assets, respectively. Operating incomes were NT$0 for both years, accounting for 0% of the consolidated total operating income. As a result, PT. South Ocean was not included in the consolidated financial statements of the Group.

As of 2021 and December 31, 2020, the Group held 100% of the shares of Browan Communications (Xi'An) Inc. through Wi Tek Investment Co., Ltd., and its total assets were NT$9,703 thousand and NT$22,831 thousand, accounting for 0.05% and 0.12% of consolidated assets, respectively. Operating incomes were NT$2,227 thousand and NT$1,421 thousand, accounting for 0.01% and 0.01% of the consolidated total operating income, respectively. As a result, Browan Communications (Xi'An) Inc. was not included in the consolidated financial statements of the Group.

XIII. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investment in subsidiaries Investment in associates	December 31, 2021 $ 10,622 1,099,361 $ 1,109,983	December 31, 2020	December 31, 2020
			$ 23,565 1,087,598 $ 1,111,163

• 48 -

(I) Investment in subsidiaries

December 31, 2021 December 31, 2020 Unlisted Company Wi Tek Investment Co., Ltd. $ 8,082 $ 20,951 PT. South Ocean 2,540 2,614 $ 10,622 $ 23,565

Proportion of ownership and voting rights:

WiTek Investment Co., Ltd. PT. South Ocean	December 31, 2021 100.00% 95.00%	December 31, 2020
		100.00% 95.00%

The investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the year ended December 31, 2021 and 2020 was based on the subsidiaries’ financial statements which have been audited for the same year.

Please refer to Note 12 for details on subsidiaries that are not included in the consolidated financial statement. For more information regarding the nature of activities, principal place of business and country of incorporation of the associates, please refer to Attachment 5. 。

(II) Investments in associates

nvestments in associates
Material associate AMPAK Technology Inc. Associate that is not individually material Free PP Worldwide Co., Ltd. BANDRICH, INC. BROWAN Communications Incorporation	December 31, 2021 $ 1,082,428 13,065 3,868 - $ 1,099,361	December 31, 2020
			$ 1,048,268 13,930 5,389 20,011 $ 1,087,598

• 49 -

1. Material associate ：

al associate：
Company Name AMPAK Technology Inc.	Proportion of ownership and voting rights December 31, 2021 33.37%	Proportion of ownership and voting rights
		December 31, 2020
		33.37%

For more information regarding the nature of activities, principal place of business 。 and country of incorporation of the associates, please refer to Table 5.

In August 2020, the Group sold 41.51% of the shareholdings of AMPAK Technology Inc., its shareholding ratio was decreased to 33.37% as a result. The dramatic change in ownership percentage is presumed to have significant influence over the investee, therefore the change of percentage was included in the investment in associates using the equity method.

Summarized financial information in respect of each of the Group’s material associates is set out below. The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Group for equity accounting purposes.

AMPAK Technology Inc.

AMPAK Technology Inc.
Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Group’s ownership Equity attributable to the Group Goodwill Carrying amount	December 31, 2021 $ 2,051,030 476,082 ( 1,171,712 ) ( 20,255) $ 1,335,145 33.37% $ 445,557 636,871 $ 1,082,428	December 31, 2020
		$ 1,336,964 524,035 ( 619,704 ) ( 8,511) $ 1,232,784 33.37% $ 411,397 636,871 $ 1,048,268

• 50 -

Operating revenue Net profit for the year Other comprehensive income Total comprehensive income for the year Equity obtained from AMPAK Technology Inc.	December 31, 2021 $ 3,104,597 $ 408,182 ( 29,016) $ 379,166 $ 80,402	December 31, 2020 $ 2,417,460 $ 286,468 4,158 $ 290,626 $ 40,201

1. Aggregate information of associates that are not individually material

The Group’s share of: Total comprehensive income		2021 $ 67,980		2020
				$ 40,996

The investments in associates accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the year ended December 31, 2021 and 2020 were based on the associates’ financial statements which have been audited for the same year.

XIV.PROPERTY, PLANT AND EQUIPMENT

Cost Balance on January 01, 2020 Additions Disposals Acquired from business combination Prepayments for business facilities	Land $ 259,279 - - - -	Buildings $ 3,048,729 18,748 ( 6,138 ) - -	Machinery and Equipment $ 1,581,044 246,929 ( 123,231 ) 2,934 14,359	Miscellaneous Equipment $ 1,302,996 184,594 ( 142,584 ) 1,038 494	Construction in progress and equipments pending acceptance $ 60,980 373,370 - - -	Total
						$ 6,253,028 823,641 ( 271,953 ) 3,972 14,853

• 51 -

Disposal of subsidiary Reclassification Effect of foreign currency exchange differences Balance on December 31, 2020 Accumulated depreciation and impairment Balance on January 01, 2020 Disposals Depreciation expenses Acquired from business combination Disposal of subsidiary Effect of foreign currency exchange differences Balance on December 31, 2020 Net value on December 31, 2020 Cost Balance on January 01, 2021 Additions Disposals Acquired from business combination Prepayments for business facilities Reclassification Effect of foreign currency exchange differences Balance on December 31, 2021 Accumulated depreciation and impairment Balance on January 01, 2021 Disposals Depreciation expenses Acquired from business combination Effect of foreign currency exchange differences Balance on December 31, 2021 Net value on December 31, 2021

- - ( 53,891 ) ( 14,438 ) - ( 68,329 ) - 69,818 251,624 22,310 ( 343,752 ) - - 7,397 3,238 12,734 ( 3,850) 19,519 $ 259,279 $ 3,138,554 $ 1,923,006 $ 1,367,144 $ 86,748 $ 6,774,731 $ - $ 1,272,181 $ 1,080,979 $ 1,032,392 $ - $ 3,385,552 - ( 3,909 ) ( 111,858 ) ( 121,389 ) - ( 237,156 ) - 112,264 124,330 83,777 - 320,371 - - 582 833 - 1,415 - - ( 41,349 ) ( 11,752 ) - ( 53,101 ) - 10,295 12,496 9,701 - 32,492 $ - $ 1,390,831 $ 1,065,180 $ 993,562 $ - $ 3,449,573 $ 259,279 $ 1,747,723 $ 857,826 $ 373,582 $ 86,748 $ 3,325,158 $ 259,279 $ 3,138,554 $ 1,923,006 $ 1,367,144 $ 86,748 $ 6,774,731 109,440 49,891 90,191 114,115 186,875 550,512 - - ( 20,343 ) ( 69,285 ) - ( 89,628 ) - - 141 3,045 - 3,186 - - 2,663 178 - 2,841 - 19,822 152,004 11,368 ( 183,194 ) - - ( 15,170) ( 40,755) 14,804 ( 2,392) ( 43,513) $ 368,719 $ 3,193,097 $ 2,106,907 $ 1,441,369 $ 88,037 $ 7,198,129 $ - $ 1,390,831 $ 1,065,180 $ 993,562 $ - $ 3,449,573 - - ( 12,878 ) ( 58,277 ) - ( 71,155 ) - 104,255 151,238 105,792 - 361,285 - - 6 2,470 - 2,476 - ( 4,509) ( 6,767) ( 4,312) - ( 15,588) $ - $ 1,490,577 $ 1,196,779 $ 1,039,235 $ - $ 3,726,591 $ 368,719 $ 1,702,520 $ 910,128 $ 402,134 $ 88,037 $ 3,471,538

No impairment assessment was performed for the years ended December 31, 2021 and 2020 as there were no indication of impairment.

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The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful life of the asset:

Building
Main buildings	50 years
Others	3~50 years
Machinery and equipment	2~10 years
Miscellaneous equipment	2~10 years

XV.LEASE ARRANGEMENTS

(I) Right-of-use Assets

ht-of-use Assets
Carrying amounts Land Building Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment	December 31, 2021 $ 98,330 33,974 5,349 $ 137,653 2021 $ 36,902 $ 2,799 4,549 694 $ 8,042	December 31, 2020
			$ 102,854 6,893 1,413 $ 111,160 2020 $ 11,847 $ 2,860 5,343 835 $ 9,038

• (II) Lease Liabilities

(II) Lease Liabilities
December 31, 2021 Carrying amounts Current $ 14,918 Non-current $ 24,102 Range of discount rate for lease liabilities was as follows: December 31, 2021 Buildings 0.67%~4.34% Transportation equipment 0.67%~4.41%	December 31, 2020
	$ 3,012 $ 4,528 December 31, 2020
	0.79%~1.39% 0.79%~4.41%

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(III) Other lease information

December 31, 2021 December 31, 2020 Total cash outflow for leases ( $ 4,972 ) ( $ 6,170 )

XVI. OTHER ASSETS

THER ASSETS
Current Prepaid expenses Prepayments Temporary Payments Offset Against Business Tax Payable Non-current Deferred expenses Refundable deposits Overdue receivables Allowance for overdue receivables Defined Benefit Asset (Note20) Others	December 31, 2021 $ 51,985 20,523 6,247 152,518 $ 231,273 $ 162,548 7,627 196,741 ( 196,741 ) 9,212 68,436 $ 247,823	December 31, 2020
		$ 29,717 9,742 9,555 267,903 $ 316,917 $ 150,154 6,084 196,741 ( 196,741 ) 10,596 49,872 $ 216,706

XVII.BORROWINGS

Short-term borrowings

Short-term borrowings
Unsecured borrowings Line of credit borrowings Rate of interest per annum (%)	December 31, 2021 $ 2,108,520 0.61%~0.85%	December 31, 2020
		$ 1,082,240 0.64%~0.75%

XVIII.BONDS PAYABLE

December 31, 2021 December 31, 2020

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5th Domestic unsecured convertible bonds $ 857,842 $ 1,179,157 Due within 1 year ( 857,842 ) ( 1,179,157 ) $ - $ -

On March 15, 2019, the Company issued its 5th domestic unsecured convertible bond in the amount of $1,200,000 thousand at 100.2% of its par value for 12 thousand units, in which the denomination for the bond is NT$100 thousand. The maturity period is 3 years, with a zero coupon rate.

On December 31, 2021, the conversion price was NT$24.8 per common share, conversion period was from June 16, 2019 to March 15, 2022. After the convertible bonds are issued for 2 years, bondholders may request the Company to redeem the convertible bonds in cash at 100.5% of the bond's face value per sale base date. After 3 months following the offering date of the convertible bonds and up until 40 days prior to its maturity date, if the closing price of the Company’s common stock exceeds the current conversion price by 30% (inclusive) for 30 consecutive business days, the Company may, based on the face value of the bond, exercise its rights to redeem all convertible bonds in cash. After 3 months following the offering date of the convertible bonds and up until 40 days prior to its maturity date, if the outstanding balance of the convertible bonds is less than 10% of the total amount issued, the Company may, based on the face value of the bond, exercise its rights to redeem all convertible bonds in cash. Except for conversions into common stock and early redemptions made by the Company, a lump-sum payment will be given in cash upon maturity.

This convertible bond includes liability and equity components. The equity components are expressed as capital reserve-stock options under equity. The effective interest rate originally recognized for the liability component is 1.46%.

Proceeds from issuance (Less: NT$5,084 thousand transaction cost) $ 1,197,316 Equity component (Less: NT$193 thousand trading cost allocated to the equity component) ( 45,527 )

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Financial liabilities at fair value through profit or loss－
current (Less: NT$13 thousand transaction cost)	(	3,107)
Liability component at issue date (Less: NT$4,878 thousand
transaction cost allocated to the liability component)		1,148,682
Interest charged at Effective interest rate 1.46%		13,400
Liability component on December 31, 2019		1,162,082
Interest charged at Effective interest rate 1.46%		17,075
Liability component on December 31, 2020		1,179,157
Interest charged at Effective interest rate 1.46%		15,340
Financial asset at fair value through profit or loss	(	68 )
Bonds payable converted to common shares	(	336,587)
Liability component on December 31, 2021		$ 857,842

XIX.OTHER LIABILITIES

THER LIABILITIES
Other payables-current Other payables Payables for salaries or bonuses Other payables to related parties (Note 32) Other liabilities－current Temporary credits Others Other liabilities－non-current Deposits received	December 31, 2021 $ 288,792 421,121 3,287 $ 713,200 December 31, 2021 $ 67,638 10,884 $ 78,522 $ 1,466	December 31, 2020
		$ 263,946 449,812 - $ 713,758 December 31, 2020
			$ 52,858 9,011 $ 61,869 $ 1,479

XX.RETIREMENT BENEFIT PLANS

(I)Defined contribution plans

The Company and its subsidiaries adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an

• 56 -

entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

(II) Defined benefit plans

The defined benefit plan adopted by the Company and its subsidiaries in accordance with the Labor Standards is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Group contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”) and the Group has no right to influence the investment policy and strategy.

Among the Group’s subsidiaries, Gemtek Electronics (Kunshan) Co., Ltd. and Gemtek Electronics (Changshu) Co., Ltd. follow the above plans to contribute an amount equal to the proportion allocated from their employees' salaries, and deposit the total amount into a special pension account. The pension fund is managed by the local statutory insurance agency. When an employee retires, he/she will be eligble to receive the employee's personal pension savings and the Group's relative contributions, plus its accrued interest from the past years.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Asset	December 31, 2021 $ 67,550 (76,762) ( $ 9,212 )	December 31, 2020	December 31, 2020
	( (	( (	$ 64,604 75,200) $ 10,596 )

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Movements in net defined benefit assets were as follows:

Balance on January 01, 2020 Disposal of subsidiary Service cost Current service cost Interest expense(Income) Recognized in profit or loss Remeasurement Return on plan assets Actuarial gains and losses －Change in demographic assumptions －changes in financial assumptions －experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance on December 31,2020 Current service cost Interest expense(income) Recognized in profit or loss Remeasurement Return on plan assets Actuarial gains and losses －changes in demographic assumptions －changes in financial assumptions －experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance on December 31, 2021	Present Value of the Defined Benefit Obligation $ 67,264 ( 4,387) 573 503 1,076 - 444 2,219 1,578 4,241 ( 3,590) - 64,604 575 226 801 - 2,969 ( 2,117 ) 3,737 4,589 - ( 2,444) $ 67,550	Fair Value of the Plan Assets ($ 83,450) 10,295 - ( 585) ( 585) ( 2,313 ) - - - ( 2,313) 3,590 ( 2,737) ( 75,200) - ( 268) ( 268) ( 1,062 ) - - - ( 1,062) ( 2,676) 2,444 ( $ 76,762 )	Net Defined Benefit Asset ( $ 16,186 ) 5,908 573 ( 82) 491 ( 2,313 ) 444 2,219 1,578 1,928 - ( 2,737) ( 10,596) 575 ( 42) 533 ( 1,062 ) 2,969 ( 2,117 ) 3,737 3,527 ( 2,676) - ( $ 9,212 )

• 58 -

The amounts of defined benefit plans recognized in profit or loss by function were as follows:

Operation cost Selling and marketing expenses General and administrative expenses R&D expense		2021 $ 165 39 107 222 $ 533		2020
				$ 154 36 104 197 $ 491

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

1. Investment risk: The plan assets are invested in domestic/and foreign/equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds, Ministry of Labor or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

2. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

3. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rates of future salary increase	December 31, 2021 0.75% 3.25%	December 31, 2020
		0.35% 3.25%

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If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate Increase 0.25% Decrease 0.25% Expected rates of future salary increase Increase 0.25% Decrease0.25%	December 31, 2021 ( $ 1,349 ) $ 1,393 $ 1,324 ( $ 1,290 )	December 31, 2020	December 31, 2020
	( (	( (	$ 1,254 ) $ 1,298 $ 1,227 $ 1,193 )

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation	December 31, 2021 $ 2,676 11years	December 31, 2020 $ 2,737 12years

XXI.EQUITY

(I)	Share capital Common stock Authorized shares（in thousands） Authorized capital Issued and paid shares (in thousands) Issued capital	December 31, 2021 500,000 $ 5,000,000 366,119 $ 3,661,188	December 31, 2020 500,000 $ 5,000,000 357,591 $ 3,575,905

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Advance Receipts for Share Capital	44,798 $ 3,705,986	- $ 3,575,905

A holder of issued ordinary shares with par value of NT$10 is entitled to the proportional rights to vote and to dividends.

On June 09, 2020, the Company’s regular shareholders’ meeting approved the issuance of employee restricted stock at an estimated total of 4,000 thousand shares, with a par value of NT$10, which the total amount is NT$40,000 thousand.The above transaction was approved by the FSC, under Authorization Letter Jinguanzheng Fazi No. 1090349323 effective on July 14, 2020, and the subscription base date was to be set on August 07, 2020 as determined by the Board of Directors. In addition, on August 7, 2020, the Company's Board of Directors resolved to reduce capital by cancelling 3,293 thousand treasury shares. The base date for capital reduction was on August 7, 2020.

In 2021, due to the fact that a portion of the new employee restricted stock did not meet the vested conditions, therefore on May 6, 2021 and November 11, 2021, the Board of Directors resolved to withdraw 110 thousand and 74 thousand new employee restricted stocks respectively and reduce capital. The respective base dates for capital reduction are May 6, 2021 and November 15, 2021.

Bondholders had exercised the right to convert the Company’s 5th domestic unsecured convertible bonds, the number of ordinary shares exchanged were 5,441 thousand shares and 3,271 thousand shares, in which the capital increase base dates were scheduled on May 6, 2021 and November 15, 2021 respectively..

(II) Capital Surplus

Capital Surplus
Shares premium from issuance Conversion premium Recognition of changes in ownership interests in subsidiaries Recognition of changes in	December 31, 2021 $ 1,090,775 3,063,571 36,197 11,618	December 31, 2020
		$ 1,448,441 2,846,020 50,516 5,990

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investment in subsidiaries and associates by using the equity method Share option Employee restricted stock Expired share option Others	32,642 55,784 150,566 473 $ 4,441,626	45,527 58,474 150,566 473 $ 4,606,007

The capital surplus arising from shares issued in excess of par value (including share premium from issuance of ordinary shares), and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

The capital surplus arising from investments, employee share options, and convertible bonds options accounted for equity method may not be used for any purpose.

(III) Retained earnings and dividends policy

Under the dividends policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For information on the accrual basis of the employees’ compensation and remuneration of directors and the actual appropriations, refer to Note 23-8 employee benefits and remuneration of directors.

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Appropriation of earnings to legal reserve shall be made until the reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash

Under FSC Authorization Letters Jinguanzheng Fazi No. 1010012865 and No. 1010047490, and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, the Company should appropriate or reverse to a special reserve. On January 01, 2003, a total of NT$195,638 thousand earnings was appropriated to special reserve.

The appropriation of earnings for 2020 and 2019 were approved by the shareholders’ general meetings on July 08, 2021 and June 09, 2020, respectively. The appropriations were as follows:

Legal reserve Special reserve Cash dividend	Appropriation of Earnings	Appropriation of Earnings
	For the year ended 2021 $ 127,330 746,328 357,666	For the year ended 2020
		$ 20,119 183,614 -

On June 09, 2020, the shareholders’ meeting resolved to distribute NT$177,911 thousand capital reserve in cash by allocating NT$0.5 per share.

On July 08, 2021, the shareholders’ meeting resolved to distribute NT$357,666 thousand capital reserve in cash by allocating NT$1 per share.

The appropriation of the 2021 earnings had been proposed by the Company’s board of directors on March 17, 2022. The appropriation and dividends per share are as follows:

Legal reserve Special Reserve	Appropriation of Earnings $ 65,499 ( 1,110,264 )	Dividends per share (NT$)

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Cash dividend 607,738 $ 1.5

The appropriations of earnings for 2021 are subject to the resolution of the shareholders’ meeting that is to be held on June 09, 2022.

(IV) Special reserve

Special reserve
Beginning balance Appropriated special reserve Other deducted equity items Ending balance	For the year ended 2021 $ 559,574 746,328 $ 1,305,902	For the year ended 2020
			$ 375,960 183,614 $ 559,574

Upon the initial adoption of the IFRSs, the reversal of special reserve appropriated due to exchange differences resulting from translation of financial statements of a foreign operation (including subsidiaries) shall be based on the Group’s disposal of ownership. In the event that the Group loses significant influence, the special reserve will be fully reversed. When distributing the earnings, the difference between the net deduction of other shareholders’ equity and the special reserve appropriated during the initial adoption of the IFRSs should be added to the special reserve at the end of the reporting period. Thereafter, earnings may be distributed based on the reversal of the deduction balance of other shareholders' equity.

(V) Other equity items

1. Exchange differences on translating the financial statements of foreign

operations

operations
Beginning balance Recognized for the year Exchange differences on translating the financial	For the year ended 2021 ( $ 514,953 ) ( 63,871 )	For the year ended 2020
		( $ 497,082 ) ( 21,747 )

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statements of foreign
operations
Share from
subsidiaries and
associates
accounted for using
the equity method	(	3,032 )	(	32 )
Disposal of
subsidiaries		-		3,908
Ending balance	( $ 581,856 )		( $ 514,953 )

1. Unrealized gain (loss) on financial assets at FVTOCI (fair value through other comprehensive income)

comprehensive income)
Beginning balance Recognized for the year Unrealized loss equity instruments Equity instruments Share from subsidiaries and associates accounted for using the equity method Disposal of subsidiaries Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Ending balance	For the year ended 2021 ( $ 790,948 ) ( 29,987 ) 2,068,522 - 21,339 $ 1,268,926	For the year ended 2020
		( $ 726,028 ) ( 143,312 ) ( 16,604 ) 4,636 90,360 ( $ 790,948 )

3. Unearned compensation

On June 9, 2020, the shareholders' meeting resolved to issue employee restricted stocks. Please see Note 26 for more details.

Beginning balance Cancelled for the year Issued for the year Recognized share-based payment expenses Ending balance	For the year ended 2021 ( $ 75,825 ) 4,530 - 45,298 ( $ 25,997 )	For the year ended 2020
		$ - - ( 98,474 ) 22,649 ( $ 75,825 )

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(VI) Non-controlling interests

Non-controlling interests
Beginning balance Net income Other comprehensive income Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss from financial assets measured at fair value through other comprehensive income Disposal of subsidiary Acquisition of non-controlling interests in subsidiaries（Note 27） Ending balance	For	the year ended 2021 $ 132 1,791 - - - 224,071 $ 225,994	For the year ended 2020
			$ 270,356 37,419 ( 53 ) ( 587 ) ( 307,367 ) 364 $ 132

(VII) Treasury Stock

Treasury Stock
Purpose To maintain the company's credit and shareholders' rights and interests Number of shares on January 01, 2020 Increased for the period Decreased for the period Number of shares on December 31, 2020	Cancelled after repurchase （in thousands of shares）
	(	- 3,293 3,293) -

In order to maintain the company’s credit and shareholders’ rights and interests, on March 23, 2020, the Company’s board of directors decided to buy back and cancel 20,000 thousand treasury shares from the centralized securities exchange market beginning from March 24, 2020 to May 23, 2020. The repurchase price was set between NT$13.8~26 per share. In the case that the stock price should be lower than the lowest repurchase price, the company may continue to execute the

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repurchasing of shares. The total amount of shares repurchased is expected to be capped at NT$5,593,801 thousand.

As of December 31, 2020, the Company has repurchased a total of 3,293 thousand shares, amounting to NT$68,767 thousand. On August 7, 2020, the board of directors resolved to cancel the 3,293 thousand treasury shares, in addition to the completion of relevant changes in registration with the authority.

According to the provisions of the Securities Exchange Law, treasury stocks cannot be pledged by the corporation, nor have the eligibility to claim dividends and voting rights.

XXII.REVENUE

EVENUE
Revenue from contracts Revenue from product sales	For the year ended 2021 $ 22,912,691	For the year ended 2020
			$ 19,929,372

(I) Contract balance

ontract balance
Notes receivable Notes receivable－related parties (Note 32） Accounts receivable (Note10) Accounts receivable - related parties (Note 32） Contract liabilities - current Product sales	December 31, 2021 $ - - 6,157,358 201,980 $ 6,359,338 $ 307,167	December 31, 2020 $ - 11,250 5,888,372 112,537 $ 6,012,159 $ 218,433	January 1,2020
				$ 43,732 - 3,978,648 60,969 $ 4,083,349 $ 243,802

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• (II) Details on revenue from contracts

Please see note 37.

XXIII. PROFIT BEFORE INCOME TAX

Net profit (loss) from continuing operations include the following items:

• (I) Interest income

(I) Interest income
Bank deposit (II) Other income Rental incomes Dividends Government grant Other income	For For	the year ended 2021 $ 21,290 the year ended 2021 $ 7,624 4,812 - 53,517 $ 65,953	For For	the year ended 2020 $ 27,033 the year ended 2020
				$ 7,234 6,552 59,630 43,789 $ 117,205

(III) Other gains and losses

Other gains and losses
Gain (loss) on financial assets and liabilities measured at FVTPL Gain on disposal of associates Gain on disposal of subsidiaries Foreign currency exchange loss Loss on disposal of property, plant and equipment Others	For the year ended 2021 $ 31,797 187,819 - ( 80,063 ) ( 4,601 ) ( 5,149) $ 129,803	For the year ended 2020
		( $ 7,786 ) - 1,033,557 ( 50,932 ) ( 2,480 ) ( 11,869) $ 960,490

(IV) Finance costs

For the year ended For the year ended 2021 2020

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Interest on convertible bond Interest on bank loans Interest on lease liabilities	$ 15,340 15,294 169 $ 30,803	$ 17,075 13,633 135 $ 30,843

(V) Impairment losses recognized (reversed)

Accounts Receivable Inventory（includes operating cost）	For (	the year ended 2021 $ 48 ) $ 26,493	For (	the year ended 2020 $ 47 ) $ 30,661

(VI) Depreciation and amortization

Depreciation and amortization
Property, plant and equipment Right-of-use assets Deferred expenses Depreciation Expenses by Function Operating costs Operating expenses Amortization expenses by function Operating costs Operating expenses	For	the year ended 2021 $ 361,285 8,042 105,618 $ 474,945 $ 261,141 108,186 $ 369,327 $ 45,151 60,467 $ 105,618	For	the year ended 2020
				$ 320,371 9,038 89,720 $ 419,129 $ 224,384 105,025 $ 329,409 $ 27,840 61,880 $ 89,720

(VII) Employee Benefits Expenses

Employee Benefits Expenses
Post-employment benefits Defined contribution plans Defined benefit plans (Note 20） Share-based payments Equity-settled Other employee benefit	For the year ended 2021 $ 78,502 533 79,035 45,298 2,382,230	For the year ended 2020
			$ 56,857 491 57,348 22,649 2,112,899

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Total employee benefits expenses Employee benefits expense by function Operating costs Operating expenses	$ 2,506,563 $ 1,422,254 1,084,309 $ 2,506,563	$ 2,192,896 $ 979,369 1,213,527 $ 2,192,896

• (VIII) Employee compensation and Remuneration of Board of Directors In compliance with the Articles of incorporation, the Company shall, after deducting the employee bonuses and renumeration benefits of directors from the current year's pre-tax benefits, allocate at least 13.5% for employee profit sharing bonuses and no more than 1.8% for the renumeration benefits of directors. The board of directors have resolved the accrual of employee compensation and remuneration of board of directors for the years ended December 31, 2021 and 2020 on March 17, 2022 and March 25, 2021, respectively, as follows:

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Accrual Rate

Accrual Rate
Employee compensation Remuneration of Directors Amount Employee compensation Remuneration of Directors	For the year ended 2021 13.5% 1.8% For the year ended 2021 Cash $ 112,689 15,025	For the year ended 2020
		13.5% 1.8% For the year ended 2020
		Cash
		$ 232,646 31,019

If there is a change in the proposed amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in accounting estimate and will be reflected in the following year.

There was no difference between the amounts of the bonus to employees and the remuneration of directors and supervisors approved in the shareholders’ meetings and the amounts recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019.

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Company’s board of directors in 2022 and 2021 are available on the Market Observation Post System website of the Taiwan Stock Exchange.

XXIV. INCOME TAXES

(I) Major components of tax expense recognized in profit or loss:

Current income tax In respect of the current year Income tax on unappropriated	For the year ended 2021 $ 41,865 2,099	For the year ended 2020
		$ 128,147 -

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earnings Adjustments for prior years 10,040 54,004 Deferred tax In respect of the current year ( 12,135 ) Adjustments for prior years - Income tax expense recognized in profit or loss $ 41,869	621 128,768 19,208 17,622 $ 165,598

A reconciliation of accounting profit and income tax expense is as follows:

Income before income tax from continuing operations Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Additional income tax under the basic income Income tax on unappropriated earnings Unrecognized temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss urrent tax asset and liability Current tax asset Tax refund receivable Current tax liability Income tax payable	For the year ended 2021 $ 723,453 $ 208,435 10,478 ( 166,152 ) - 2,099 ( 23,031 ) 10,040 $ 41,869 December 31, 2021 $ 324 $ 25,910	For the year ended 2020 $ 1,573,172 $ 397,572 1,895 ( 273,897 ) 24,322 - ( 2,537 ) 18,243 $ 165,598 December 31, 2020	For the year ended 2020 $ 1,573,172 $ 397,572 1,895 ( 273,897 ) 24,322 - ( 2,537 ) 18,243 $ 165,598 December 31, 2020
			$ 1,236 $ 80,331

(II) Current tax asset and liability

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(III) Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as

follows:

For the year ended December 31, 2021

Deferred tax assets Temporary differences Write-down of inventories Allowance for loss exceeded Loss carryforwards Unrealized exchange losses Others Deferred tax liabilities Temporary differences Gain on foreign investment accounted for under the equity method Unrealized exchange gains Others	Opening Balance $ 2,487 5,542 29,684 - 3,128 $ 40,841 $ 205,313 1,625 15,683 $ 222,621	Disposal of Subsidiary $ - - - - - $ - $ - - - $ -	Recognized in Profit or Loss $ 1,287 624 - 6,286 ( 1,054) $ 7,143 $ - ( 990 ) ( 4,002) ($ 4,992)	Exchange Differences $ - - - - 21 $ 21 $ - - 1,304 $ 1,304	Closing Balance	Closing Balance
						$ 3,774 6,166 29,684 6,286 2,095 $ 48,005 $ 205,313 635 12,985 $ 218,933

For the year ended December 31, 2020

Deferred tax assets Temporary differences Write-down of inventories Allowance for loss exceeded Loss carryforwards Unrealized exchange losses Others Deferred tax liabilities Temporary differences Gain on foreign investment accounted for under the equity method Unrealized exchange gains Others		Opening Balance $ 40,354 15,527 47,306 2,234 3,918 $ 109,339 $ 205,313 1,717 14,667 $ 221,697	Disposal of Subsidiary ( $ 28,631 ) ( 2,856 ) - ( 859 ) - ($ 32,346) $ - ( 28 ) ( 4) ($ 32)	Recognized in Profit or Loss ( $ 9,141 ) ( 7,129 ) ( 17,622) ( 1,375 ) ( 830) ($ 36,097) $ - ( 64 ) 797 $ 733	Exchange Differences ( $ 95 ) - - - 40 ($ 55) $ - - 223 $ 223		Closing Balance
							$ 2,487 5,542 29,684 - 3,128 $ 40,841 $ 205,313 1,625 15,683 $ 222,621

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• (IV) Deductible temporary differences, unused loss carryforwards, and unused investment tax credits for which no deferred tax assets have been recognized in the balance sheets.

sheets.
Loss carryforwards 2023 2027	For the year ended 2021 $ 35,889 14,084 $ 49,973	For the year ended 2020
			$ 35,889 14,084 $ 49,973

• (V) Details on unused loss carryforwards, unused investment tax credits, and tax exemptions.

exemptions.
Loss carryforwards 2027 2029	For the year ended 2021 $ 140,306 8,109 $ 148,415	For the year ended 2020
			$ 140,306 8,109 $ 148,415

• (VI) The information of temporary differences associated with investments for which deferred tax liabilities have not been recognized.

As of December 31, 2021 and 2020, the taxable temporary differences associated with subsidiaries for which no deferred tax liabilities have been recognized were NT$220,107 thousand and NT$109,181 thousand, respectively.

• (VII) Income tax assesments

The tax return filing of the Company, 5V TECHNOLOGIES, TAIWAN LTD., Browan Communications Inc. and Gemtek Investment Co. Ltd. as of 2019 and previous years have been assessed by the tax authorities.

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XXV.EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share from continuing operations Diluted earnings per share from continuing operations	For	the year ended 2021 $ 1.89 $ 1.69	For	the year ended 2020
				$ 3.86 $ 3.36

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Current net income

Current net income
Net income attributable to owners of the company Effect of potentially dilutive ordinary shares: Interest after tax for convertible bonds Net income in computation of diluted earnings per share	For the year ended 2021 $ 679,793 12,273 $ 692,066	For the year ended 2020
			$ 1,370,155 13,660 $ 1,383,815

Ordinary shares Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Convertible bonds Employee restricted stock Employee compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share	For	Unit: Thousand Shares the year ended 2021 For the year ended 2020 359,145 354,868 42,862 45,627 2,687 4,000 5,097 7,909 409,791 412,404	Unit: Thousand Shares the year ended 2021 For the year ended 2020 359,145 354,868 42,862 45,627 2,687 4,000 5,097 7,909 409,791 412,404	Unit: Thousand Shares the year ended 2021 For the year ended 2020 359,145 354,868 42,862 45,627 2,687 4,000 5,097 7,909 409,791 412,404
				354,868 45,627 4,000 7,909 412,404

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If the Group offered to settle compensation or bonuses paid to employees in cash or shares, the Group assumed the entire amount of the compensation or bonuses would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

XXVI.SHARE-BASED PAYMENT ARRANGEMENTS

Restricted Stock Awards

On June 09, 2020, the annual shareholders’ meeting of the Company approved the issuance of Restricted Stock Awards with a total amount of NT$40,000 thousand, that is 4,000 thousand shares to be issued at issue price of NT$10 per share. Followed by the approval letter Jinguanzheng Fazi No. 1090349323 issued by the Financial Supervisory Commission, Executive Yuan on July 14, 2020, the board of directors therefore determined August 7, 2020 as the capital increase base date.

If an employee still serves the Company after the subscription of Retricted Stock Awards, provided that the employee has not violated the Company’s labor contract, work rules, or company regulations, and under the circumstance that the overall business operations and employee performances have reached the reasonable targets set out by the Company for the preceding year, the following ratio of shares for each vesting anniversary are:

(I) 1[st] anniversary ： 30% of subscription ；

(II) 2[nd] anniversary ： 30% of subscription ；

(III) 3[rd] anniversary ： 40% of subscription 。

Vesting restrictions if conditions have not been fulfilled:

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(I) Measures to be taken when employees fail to meet the vesting conditions:

1. Before vesting conditions are met, Restricted Stock Awards received by the employee are not to be sold, mortgaged, transferred, gifted, pledged, or otherwise sanctioned except in the event of inheritance.

2. The attendance, proposal, speech, and voting rights of the shareholders meeting shall be implemented in accordance with the trust custody agreement. Any cash dividends, stock dividends, and capital reserve cash (stocks) allocated to the New Employee Restricted Stock Awards shall be placed under the custody of the trust. For those Restricted Stocks whom their owners have not yet fulfilled the vesting conditions, the cash dividends, stock dividends, and capital reserves (stocks) generated shall be forfeited and being reclaimed or cancelled by the Company in accordance with relevant laws and regulations.

(II) Based upon the above trust custody agreement, employees who have received Restricted Stock Awards are eligible to retain certain rights, including but not limited to: the right to receive dividends, bonuses, and capital reserves, the right to subscribe shares for cash increase, and voting rights, which are equivalent to the rights of common shares issued by the Company.

(III) Restricted Stock Awards that are issued in accordance with this arrangement shall be handled via trust and custody before vesting conditions are fulfilled.

XXVII. STATUS OF NEW SHARES ISSUANCE IN CONNECTION WITH MERGERS AND ACQUISITIONS

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(I) Subsidiaries acquired

BROWAN Communications Incorporation 5V Technologies, Ltd.	Main Operating Activities R&D, production , sales and provision of technical consulting and related services for wireless network products IC design, development of telecommunication products IC	Date of Acquisition December 27,2021 January 30,2020	Proportion of Voting Equity Interests Acquired （％） 50.49 97.92		Consideration Transferred $ 153,000 $ 90,000

The Group acquired Browan Communications Inc. on December 27, 2021 and 5V TECHNOLOGIES, TAIWAN LTD. on January 30, 2020 for the purpose of business expansion.

(II) Consideration Transferred

BROWAN Communications Incorporation 5V Technologies, Ltd. Cash $ 153,000 $ 90,000

(III) Assets acquired and liabilities assumed at the date of acquisition

Assets acquired and liabilities assumed at the date of	acquisition
Current Assets Cash and cash equivalents Account receivables Other receivables Inventory Others Non-current assets Properties, plant and equipment Intangible assets Others Current liabilities Contract liabilities-current	BROWAN Communications Incorporation
	$ 372,968 206,815 3,955 57,602 14,079 710 79,143 5,119 ( 57,643 )

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Accounts payable Other payables Others Current Assets Cash and cash equivalents Account receivables Other receivables Inventory Others Non-current assets Properties, plant and equipment Intangible assets Others Current liabilities Contract liabilities-current Accounts payable Other payables Others	( 197,917 ) ( 31,644 ) ( 659) $ 452,528 5V Technologies,Ltd.
	$ 97,696 28,181 195 192 7,228 2,557 8,975 813 ( 5,139 ) ( 105,031 ) ( 12,025 ) ( 6,123) $ 17,519

The initial accounting treatment for the acquisition of Browan Communications Inc. is only tentative at the end of the reporting period. As of the publication date of this consolidated financial report, the necessary market evaluation and other calculations have not yet been executed fully. Therefore, the presumed taxable value is merely based on the best estimate of the management of the Group.

The fair value of the accounts receivable obtained from these companies in the merger and acquisition transaction is near the book value of the balance sheet. As a result, there are no presumed uncollectible amount from the date of business combination.

(IV) Goodwill recognized on acquisitions

BROWAN Communications Incorporation

Consideration Transferred $ 153,000 Add: Fair value of the 267,836

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acquirer’s previously held equity interests on acquisition-date Add: Non-controlling interest Less：Fair value of identifiable net assets acquired Goodwill recognized on acquisitions Consideration Transferred Add: Non-controlling interest Less：Fair value of identifiable net assets acquired Goodwill recognized on acquisitions	224,071 (452,528) $ 192,379 5V Technologies,Ltd.	224,071 (452,528) $ 192,379 5V Technologies,Ltd.
	(	$ 90,000 364 17,519) $ 72,845

Goodwill is the control premium obtained during business combination. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

(V) Net cash outflow on acquisition of subsidiaries

Net cash outflow on acquisition of subsidiaries
Cash and cash equivalent balances acquired Less: Consideration paid in cash Cash and cash equivalent balances acquired Less: Consideration paid in cash	BROWAN Communications Incorporation
	$ 372,968 (153,000) $ 219,968 5V Technologies,Ltd.
	(	$ 97,696 90,000) $ 7,696

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• (VI) Impact of acquisitions on the results of the Group

The operation results of BROWAN COMMUNICATIONS INC. since the acquisition date included in the consolidated statements of comprehensive income were as follows:

BROWAN Communications Incorporation Operating income $ - Net profit $ -

Had the business combination of BROWAN COMMUNICATIONS INC. been in effect on the date of acquisition, the Company’s net revenue and net income for the year ended 2021 would have been NT$23,733,101 thousand and NT$773,804 thousand, respectively. This pro-forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Company that actually would have been achieved had the acquisition been completed on the date of acquisition, nor is it intended to be a projection of future results. The aforementioned pro-forma net revenue and net income were calculated based on the fair value of assets acquired and liabilities assumed at the date of acquisition.

The operation results of 5V TECHNOLOGIES, TAIWAN LTD. since the acquisition date included in the consolidated statements of comprehensive income were as follows:

5V TECHNOLOGIE S, TAIWAN LTD. Operating income $ 201,272 Net loss ( $ 9,124 )

Had the business combination of 5V TECHNOLOGIES, TAIWAN LTD. been in effect on the date of acquisition, the Company’s net revenue and net income for the

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year ended 2020 would have been NT$19,950,496 thousand and NT$1,404,504 thousand, respectively. This pro-forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Company that actually would have been achieved had the acquisition been completed on the date of acquisition, nor is it intended to be a projection of future results. The aforementioned pro-forma net revenue and net income were calculated based on the fair value of assets acquired and liabilities assumed at the date of acquisition.

XXVIII.DISPOSAL OF SUBSIDIARIES

On JUNE 09, 2020, the Board of Directors of the Group approved the disposal of AMPAK Technology Inc.‘s stock release. Accordingly, in August 2020, 41.51% shareholding was fully transferred, and the Group lost controlling interest over AMPAK Technology Inc. As a result, the financial reports of AMPAK Technology Inc. and its subsidiaries were excluded from the consolidated financial reports of the Group in addition to being recognized by investment in subsidiaries and associates accounted for using equity method thereafter.

(I) Consideration received from disposal

Total consideration received

AMPAK Technology Inc. and its subsidiaries $ 1,296,102

• (II) Analysis of assets and liabilities on the date control was lost

AMPAK Technology Inc. and its subsidiaries

Current assets Cash and cash equivalents

$ 818,738

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Financial assets measured at amortized cost-current		52,001
Accounts receivable		$ 548,633
Inventory		246,581
Others		43,242
Non-current assets
Financial assets at fair value through other
comprehensive income		60,846
Financial assets measured at amortized cost-
non-current		4,343
Property, plant, and equipment		15,228
Right-of-use assets		12,079
Non-tangible assets		446,267
Others		41,578
Current liabilities
Short-term borrowings	(	117,920 )
Accounts payable	(	348,684 )
Others	(	190,997 )
Lease liabilities - current	(	8,158 )
Non-current liabilities
Lease liabilities - current	(	4,001 )
Others	(	8,542)
Net asset disposed		$ 1,611,234

(III) Gain/loss on disposal of subsidiary

Net consideration received Net assets disposed Non-controlling interests Reclassification of other comprehensive income in respect of subsidiaries Fair value of residual interest Gain on disposal	AMPAK Technology Inc. and its subsidiaries
	$ 1,296,102 ( 1,611,234 ) 307,367 ( 3,908 ) 1,045,230 $ 1,033,557

• (IV) Net cash inflow on disposal of subsidiary

AMPAK Technology Inc. and its subsidiaries

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Consideration received in cash or cash equivalent $ 1,296,102 Less:Cash and cash equivalent balances disposed of ( 818,738 ) $ 477,364

XXIX.NON-CASH TRANSACTIONS

For the years ended December 31, 2021 and 2020, the Group entered into the following non-cash investment activities:

On June 9, 2020, the annual shareholders meeting of the Group resolved the proposed issuance of 4,000 thousand shares of New Employee Restricted Stock, totaling NT$40,000 thousand, which was then approved by the board of directors on August 7, 2020. The cost of the 2021 and 2020 New Employee Restricted Stock was NT$45,298 thousand and NT$22,649 thousand, respectively.

XXX.CAPITAL MANAGEMENT

In consideration of the industry dynamics and future developments, as well as external environment factors, the Group maintains an optimal capital structure to enhance long-term shareholder value by managing its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, research and development activities, dividend payments, and other business requirements for continuing operations and to reward shareholders and take into consideration the interests of other stakeholders.

Key management personnel of the Group review the capital structure periodically. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key

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management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders and the amount of new debt issued or existing debt redeemed.

XXXI. FINANCIAL INSTRUMENTS

• (I) Fair value of financial instruments that are measured at fair value on a recurring basis

• Fair value hierarchy

value hierarchy
December 31, 2021 Financial assets at FVTPL Domestic listed stock Foreign Exchange Forward Contract Convertible bond Total Financial assets at FVTOCI Equity instrument investment －Domestic and overseas listed stock －Domestic and overseas unlisted stock Total		Level 1 $ 123,612 - - $ 123,612 $ 2,594,449 - $ 2,594,449		Level 2 $ - 2,274 - $ 2,274 $ - - $ -		Level 3 $ - - 16,974 $ 16,974 $ - 229,044 $ 229,044		Total
								$ 123,612 2,274 16,974 $ 142,860 $ 2,594,449 229,044 $ 2,823,493

December 31, 2020 Financial assets at FVTPL Domestic listed stock Convertible options Financial products Convertible bond Total		Level 1 $ 120,131 - - - $ 120,131		Level 2 $ - 840 23,745 - $ 24,585		Level 3 $ - - - 15,592 $ 15,592		Total
								$ 120,131 840 23,745 15,592 $ 160,308

Financial assets at FVTOCI

Equity instrument investment

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－Domestic and overseas listed stock －Domestic and overseas unlisted stock Total Financial liabilities at FVTPL Foreign Exchange Forward Contract	$ 739,406 - $ 739,406 $ -	$ - - $ - $ 7,278	$ - 185,882 $ 185,882 $ -	$ 739,406 185,882
				$ 925,288
				$ 7,278

There were no transfers between Levels 1 and 2 in 2021 and 2020.

1. Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

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

Financial Instruments Valuation Techniques and Inputs
Derivatives - foreign Discounted cash flow:
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Financial Instruments Derivatives - foreign	Valuation Techniques and Inputs Discounted cash flow:
currency forward	Future cash flows are estimated based on
contracts	observable forward exchange rates at the
	end of the reporting period and contract
	forward rates, discounted at a rate that
	reflects the credit risk of various
	counterparties.
Derivatives- convertible	Binary Tree Model for Convertible Bonds
options	Pricing: Evaluated based on the volatility of
	the conversion price, the risk-free interest
	rate, the risk of discount rate, and the years
	until maturity.

1. Valuation techniques and inputs applied for Level 3 fair value measurement

For stocks of unlisted companies without an active market, their fair value is assessed by using the market method and the income method.

The market approach refers to the market price and related information of listed companies that share a similar background as the unlisted stock in order to estimate its fair value; the income approach uses the discounting cash flow

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method to calculate the present value of the expected return from holding the investment target.

Hybrid financial assets - Convertible corporate bonds have no market price for reference. The Company’s evaluation of fair value is based on the Binomial Tree Model for Convertible Bond Pricing, which factors in the volatility of the conversion price, the risk-free interest rate, the risk of discount rate, and the periods until maturity.

• (II) Categories of financial instrument

Financial assets Fair value through profit or loss Fair value after amortized cost （Note 1） Fair value through other comprehensive income Financial liabilities Fair value through profit or loss Fair value after amortized cost （Note 2）	December 31,2021 $ 142,860 7,913,681 2,823,493 - 7,631,657	December 31,2020 $ 160,308 8,184,615 925,288 7,278 7,959,756

• Note 1: Financial assets measured at fair value after amortized cost include cash and cash equivalents, notes receivables-related parties, accounts receivable, accounts receivables-related parties, other receivables, and refundable deposits etc.

• Note 2: Financial liabilities measured at fair value after amortized cost include short-term loans, accounts payables, accounts payables -related parties, other payables, refundable deposits, and bonds payable etc.

• (III) Financial risk management objective and policies

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The Group’s major financial instruments include equity instrument investment, accounts receivable, accounts payable, bonds payable, loans and lease liabilities. The Group’s Financial Department provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

The Group’s Finance Department seeks to mitigate the effect of these risks by using derivative financial instruments to hedge risk exposures under the policies approved by the board of directors. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Group’s management monitors and reviews the financial activities in accordance with procedures required by relevant regulations and internal controls.

If the Finance Department should engage in derivative transactions, the results are reported to the Board of Directors on a regular basis.

1. Market Risk

The Group’s operating activities exposed it primarily to the financial risks arising from changes in foreign currency exchange rates (see (1) below) and interest rates (see (2) below):

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

(1) Foreign Currency Risk

The Group engages in foreign currency-denominated sales and purchase transactions, therefore exposing the Group to foreign currency fluctuation risks.

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The carrying amounts of the significant monetary assets and liabilities not denominated in functional currency (including those eliminated on consolidation) at the end of the reporting period are set out in Note 35.

Sensitivity analysis

The Group was mainly exposed to the USD.

The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollars (the functional currency) against the relevant foreign currencies. If the loss of the financial asset measured at fair value through profit and loss reaches the 3% cap as laid out in the contract, the situation must be reported to the management, and a reassessment of the exchange rate fluctuation should be made. The sensitivity analysis included only outstanding foreign currency denominated monetary items plus forward exchange contracts designated as a cash flow hedge, and their translations are adjusted at the end of the reporting period for a 1% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit associated with New Taiwan dollars strengthen 1% against the relevant currency; a negative number below indicates a decrease in pre-tax profit associated with New Taiwan dollars weakens 1% against the relevant currency.

Profit or Loss	Impact of	USD
	For the year 2021 $ 57,115	For the year 2020
		$ 66,925

The impact of foreign currencies on profit and loss listed in the above table mainly derived from the USD-denominated non-derivative financial assets and liabilities of the Group that are still in circulation on the balance sheet date and have not undergone cash flow hedging.

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There was no significant changes in the sensitivity analysis of the current year’s foreign exchange rates when compared to the previous year.

(2) Interest rate risk

The Group is exposed to interest rate risk arising from borrowing at both fixed and floating interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

s:
Fair value interest rate risk －Financial assets －Financial liabilities Cash flow interest rate risk －Financial assets	December 31,2021 $ 124,569 2,966,362 1,178,548	December 31,2020
		$ 82,364 2,261,397 1,884,043

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2021 and 2020 would increase by NT$11,785 thousand and NT$18,840 thousand, respectively. The main reason for the above derived from the net

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position of bank deposits and borrowings that are exposed to fluctuating interest rate risks and redeemable bonds attributable to the Group that are measured at fair value.

There was no significant changes in the sensitivity analysis of the current year’s interest rates when compared to the previous year.

• (3) Other market price risk

Equity price risk exposure arises from the Group’s investments in domestic and foreign listed stocks, unlisted stocks, and convertible bonds. The Group assigns relevant personnel to monitor price flucutations and evaluate the timing to increase hedge positions.

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to equity price risks at the end of the reporting period.

If equity prices of financial assets at FVTPL had been 1% higher/lower, profit or loss for the years ended December 31, 2021 and 2020 would increase/decrease by $1,236 thousand and $1,201 thousand, respectively. If equity prices of financial assets at FVTOCI had been higher/lower, other comprehensive income (loss) for the years ended December 31, 2021 and 2020 would increase/decrease by $28,235 thousand and $9,253 thousand, respectively.

There was no significant changes in the sensitivity analysis of the current year’s equity prices when compared to the previous year.

2. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. As of the end of the reporting period, the Group’s maximum exposure to credit risk which will

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cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

3. Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a substantial source of liquidity. The detailed information of the Group’s unused financing facilities as of December 31, 2021 and 2020 is further stated in (3) financing facilities below.

(1)Liquidity and interest risk tables for non-derivative financial liabilities The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

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For interest cash flows paid at floating interest rates, the undiscounted amount of interest can be inferred by the yield curve on the balance sheet date.

December 31, 2021

Non-derivative financial liabilities Non-interest bearing Lease liabilities Fixed interest rate liabilities	On Demand or Less than 1 Month $ 3,555,322 1,985 1,830,978 $ 5,388,285	1-3 Months $ 721,722 2,467 278,502 $ 1,002,691	3 Months -1 Year $ 386,785 10,877 857,842 $ 1,255,504		1-5 Years
					$ - 24,219 - $ 24,219

Further information on the lease liability maturity analysis is as follows:

Lease liabilities	Less than 1 year $ 15,329		1~5Years $ 24,219

December 31, 2020

Non-derivative financial liabilities Non-interest bearing Lease liabilities Fixed interest rate liabilities	On Demand or Less than 1 Month $ 3,950,761 254 655,437 $ 1,471,219	1-3 Months $ 1,936,013 763 427,798 $ 4,473,095	3 Months -1 Year $ 524,519 2,039 1,179,157 $ 1,705,715		1-5 Years
					$ - 4,555 - $ 4,555

Further information on the lease liability maturity analysis is as follows:

Lease liabilities	Less than 1 year $ 3,056		1~5Years $ 4,555

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The aforementioned non-derivative financial liabilities were caluculatedby floating interest rates, therefore the results may differ from the interest rate accounted for the balance sheet date.

(2) Liquidity and interest risk tables for derivative financial liabilities

For the liquidity analysis of derivative financial instruments, for derivative instruments that are settled on a net basis, they are compiled on the basis of undiscounted contract net cash inflows and outflows; for derivatives that are settled on a gross basis, they are compiled on the basis of undiscounted net cash inflows and outflows. It is prepared based on the current total cash inflows and outflows. When the amount payable or receivable is not fixed, the amount disclosed is determined based on the interest rate estimated by the yield curve on the balance sheet date.

December 31, 2021

On Demand or Less than 1 Month Netting settlement Forward exchange $ - December 31, 2020 On Demand or Less than 1 Month Netting settlement Forward exchange ( $ 7,278 )		On Demand or Less than 1 Month		1-3 Months	3 Months -1 Year	3 Months -1 Year	1-5 Years	1-5 Years		Above 5 Years
				$ 2,274 1-3 Months	$ - 3 Months -1 Year		$ - 1-5 Years			$ - Above 5 Years
	(	$ 7,278 )		$ -		$ -		$ -		$ -

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• (3) Financing facilities Credit Lines

December 31,2021 December 31,2020 Unsecured bank Loan facility － Amount used $ 2,108,520 $ 1,082,240 － Amount unused 5,621,293 2,661,360 $ 7,729,813 $ 3,743,600

• XXXII. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

• (I) Related Party Name and Category

Name of related party Relationship with the Group BROWAN Communications Subsidaries (convert into subsidiaries on Incorporation December 27,2021) AMPAK Technology Inc. Associates （ AMPAK Technology Inc. was a former subsidiary of Gemtek Technologies Co., Ltd. and became an associate on August 10, 2020. ） SparkLAN Communications, Inc. Associates （ SparkLAN Communications, Inc. was a former subsidiary of Gemtek Technologies Co., Ltd. and became an associate on August 10, 2020. ） ANTEK NETWORKS INC Associates BandRich Inc. Associates

(II) Sales Revenue

s Revenue
Type/Name of related party	For	the year ended 2021	For	the year ended 2020
Associate Others		$ 756,228		$ 352,971

Sales prices and payment terms for related parties were not significantly different from those for sales to non-related parties.

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(III) Purchase and Processing Fee

Purchase and Processing Fee
Type/Name of related party Associate Others	For	the year ended 2021 $ 42,374	For	the year ended 2020
				$ -

The sales prices and trade term with related parties are not comparable to those with thirdparty customers for certain transactions due to different product specifications; other than that, the determination of sales prices and payment terms for related parties were not significantly different from those for sales to non-related parties.

(IV) Receivables from related parties

Account Accounts receivables – related parties Notes receivables –related parties	Type/Name of related party Associates AMPAK Technology Inc. BROWAN Communications Incorporation Others Associates BROWAN Communications Incorporation	December 31, 2021 $ 189,516 - 12,464 $ 201,980 $ -	December 31, 2020	December 31, 2020
				$ 11,150 91,686 9,701 $ 112,537 $ 11,250

No guarantee is received for the outstanding accounts receivable from related parties. No allowance for losses is provided for accounts receivable from related parties in 2021 and 2020.

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(V) Other receivables from related parties

Type/Name of related party Associate Others	December 31,2021 $ 524	December 31,2020	December 31,2020
			$ 513

Other receivables of the Group to be collected from related parties are the advance payments and purchases of raw materials on behalf of the related parties.

(VI) Payables to related parties

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Type/Name of related December December
Account party 31,2021 31,2020
Accounts Associates
payable-related
parties
AMPAK $ 5,667 $ -
Technology Inc.
BROWAN - 304
Communications
Incorporation
$ 5,667 $ 304
----- End of picture text -----

No guarantees were available for outstanding accounts payables to related parties.

• (VII) Other payables to related parties

ther payables to related parties
Type/Name of related party Associate others	December 31,2021 $ 3,287	December 31,2020
			$ -

Other payables of the Group to be paid to related parties are the accounts payable and procurement made on behalf of the related parties.

• 97 -

(VIII) Other trades with related parties

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For the year ended For the year ended
Type/Name of related party 2021 2020
Rent income
Associates
AMPAK Technology Inc. $ 4,592 $ 1,772
Others 663 465
$ 5,255 $ 2,237
Other income
Associate
Others $ 1,547 $ 251
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Rental income of the Group collected from associates were based on the market price.

(IX) Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For	the year ended 2021 $ 43,927 768 $ 44,695	For	the year ended 2020
				$ 41,165 771 $ 41,936

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

XXXIII. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were pledged or mortgaged as collateral for tariffs on imported raw materials:

Pledged bank deposits (included in financial assets measured at amortized cost)	December 31,2021 $ 23,256	December 31,2020 $ 43,274

• 98 -

XXXIV.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of the balance sheet date were as follows:

As of the year December 31, 2021 and 2020, the limit of guarantee for tariff covenants were NT$23,256 thousand and NT$43,274 thousand, respectively.

XXXV. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Group and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

December 31, 2021

December 31, 2021
Foreign currency asset Monetary items USD USD Non-monetary items Investments accounted for using equity method USD Financial asset measured at fair value through	Foreign Currencies $ 294,698 175,844 856	Exchange Rate 27.68 (USD:NTD) 6.3757 (USD:RMB) 27.68 (USD:NTD)		Carrying Amount
				$ 8,157,247 4,867,365 $ 13,024,612 $ 23,687

• 99 -

other comprehensive income USD Financial asset measures at amortized cost USD Foreign currency liabilities Monetary items USD USD December 31, 2020 Foreign currency asset Monetary items USD USD Non-monetary items Investments accounted for using equity method USD Financial asset measured at fair value through other comprehensive income USD Financial asset measured at amortized cost USD Foreign currency liabilities Monetary items USD	5,083 4,603 183,584 80,617 Foreign Currencies $ 315,929 239,820 $ 1,317 6,692 4,658 205,324	27.68 (USD:NTD) 27.68 (USD:NTD) 27.68 (USD:NTD) 6.3757 (USD:RMB) Exchange Rate 28.48 (USD:NTD) 6.5249 (USD:RMB) 28.48 (USD:NTD) 28.48 (USD:NTD) 28.48 (USD:NTD) 28.48 (USD:NTD)		140,706 127,412 $ 291,805 $ 5,081,592 2,231,486 $ 7,313,078 Carrying Amount
				$ 8,997,667 6,830,084 $ 15,827,751 $ 37,494 190,594 132,652 $ 360,740 $ 5,847,622

• 100 -

USD	Foreign Currencies 115,437	Exchange Rate 6.5249(USD:RMB)		Carrying Amount
				3,287,639 $ 9,135,261

The significant realized and unrealized foreign exchange gains (losses) were as follows:

Foreign Currencies NTD RMB	For theyear ended 2021 Exchange Rate Net Foreign Exchange Gain (Loss) 1（NTD:NTD） ( $ 86,779 ) 4.341（RMB:NTD） 6,716 ( $ 80,063 )	For theyear ended 2021 Exchange Rate Net Foreign Exchange Gain (Loss) 1（NTD:NTD） ( $ 86,779 ) 4.341（RMB:NTD） 6,716 ( $ 80,063 )	For theyear ended 2020	For theyear ended 2020	For theyear ended 2020
	Exchange Rate 1（NTD:NTD） 4.341（RMB:NTD）		Exchange Rate 1（NTD:NTD）） 4.281（RMB:NTD）	Net Foreign Exchange Gain (Loss)
		( (		( (	$ 11,288 62,220) $ 50,932 )

XXXVI. SEPARATELY DISCLOSED ITEMS

• (I) Information on Significant Transactions and (II) Information on Investees:

• Financing provided to others. (Table 1)

• Endorsements/guarantees provided. (None)

• Marketable securities held (excluding investment in subsidiaries, associates and joint ventures). (Table 2)

• Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the share capital. (None)

• Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)

• Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)

• Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)

• Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)

• Trading in derivative instruments. (Note 7 and 31)

• Other: Intercompany relationships and significant intercompany transactions. (Table 7)

• Information on investees. (Table 5)

• 101 -

• (III) Information on investments in mainland China:

  1. Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 6)

  2. Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Tables 3, 4, and 7)

     • (1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year.

     • (2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year.

     • (3) The amount of property transactions and the amount of the resultant gains or losses.

     • (4) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes.

     • (5) The highest balance during the year, the end of year balance, the interest rate range, and total current year interest with respect to financing of funds.

     • (6) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

• (IV) Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder （ None ）

• 102 -

XXXVII.SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on types of goods or services delivered or provided. The Group’s reportable segment is the wireless telecommunication products department.

• (I) Segment revenues and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment:

Wireless telecommunication products department Central administration cost Interest income Other income Other gains and losses Finance cost Share of profit of subsidiaries and associates Profit before income tax	Segment Revenue For the year ended 2021 For the year ended 2020 $ 22,912,691 $ 19,929,372	Segment Revenue For the year ended 2021 For the year ended 2020 $ 22,912,691 $ 19,929,372	Segment Profit	Segment Profit	Segment Profit
	For the year ended 2021 $ 22,912,691		For the year ended 2021 $ 905,700 ( 549,607 ) 21,290 65,953 129,803 ( 30,803 ) 181,117 $ 723,453	For the year ended 2020
			( (	( (	$ 1,001,225 533,312 ) 27,033 117,205 960,490 30,843 ) 31,374 $ 1,573,172

Segment revenues reported above represents revenue generated from external customers. There were no inter-segment sales during the years ended December 31, 2021 and 2020.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs, interest income, other income, other gains or losses, finance cost, share of profit of associates accounted for using the equity method, and income tax expense. This was the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

• (II) Segment total assets and liabilities

• 103 -

The Group had not reported segment assets and liabilities information to the chief operating decision maker. Thus, no disclosure is made.

• (III) Other information

Other information
Depreciation and amortization For the year ended 2021 For the year ended 2020 Wireless telecommunication product department $ 474,945 $ 419,129 Revenue from major products and services For the year ended 2021 For the year ended 2020 CARD $ 2,725,425 $ 2,515,961 GATEWAY 18,208,073 14,924,532 Wireless Telecommunication Module 214,755 1,208,154 Others 1,764,438 1,280,725 $ 22,912,691 $ 19,929,372		Depreciation and amortization
			For For		the year ended 2020 $ 419,129 the year ended 2020
				$ 2,515,961 14,924,532 1,208,154 1,280,725 $ 19,929,372

• (IV) Revenue from major products and services

• (V) Geographical information

The Group operates in three principal geographical areas – Taiwan, China, and the Czech Republic.

The Group’s revenue from continuing operations from external customers by location of operations was detailed below:

Taiwan China Vietnam Czech Republic	Revenues from External Customers	Revenues from External Customers	Revenues from External Customers
	For the year ended 2021 $ 20,636,321 2,274,647 1,104 619 $ 22,912,691	For the year ended 2020
			$ 17,960,631 1,968,569 70 102 $ 19,929,372

• (VI) Information about major customers

Revenues from individual customers that exceeded 10% of the Group’s revenue for the years ended December 31, 2021 and 2020:

• 104 -

Customer A Company B Company C Company	For theyear ended 2021 Sales revenue ％ $ 5,247,644 23 3,020,934 13 2,934,853 13	For theyear ended 2020	For theyear ended 2020
	Sales revenue $ 5,247,644 3,020,934 2,934,853	Sales revenue $ 4,278,475 2,759,107 2,569,367	％
			21 14 13

• 105 -

TABLES

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

FINANC ING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 1

Unit:In Thousands of New Taiwan Dollars, Unless Stated Otherwise

No.	Financing Company Name	Borrower	Financial Statement Account	Related Parties	Parties Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing （Note 2） Business Transacti on Amount	Nature of Financing （Note 2） Business Transacti on Amount	Reasons for Short-term Financing	Allowanc e for Impairme nt Loss	Collateral	Collateral	Financing Limit for Each Borrowing Company (Note 1)	Financing Company's Total Financing Amount Limit (Note 1)
													Item	Value
1 2	Gemtek Electronics (Suzhou) Co. Ltd. Gemtek Electronics (Suzhou) Co. Ltd.	Gemtek Electronics (ChangShu) Co., Ltd Gemtek Electronics (ChangShu) Co., Ltd	Short-ter m financi ng Short-ter m financi ng	Yes Yes	$ 65,160 9,991	$ 65,160 9,991	$ 65,160 9,991	2.25 1.75	2 2	$ - -	Operating capital Operating capital	$ - -	- -	- -	$ 84,440 84,440	$ 84,440 84,440

Note 1 ： Pursuant to the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” of Gemtek Electronics (Suzhou) Co. Ltd., when the parent company directly and indirectly h olds 100% of the voting shares of foreign companies engaged in fund loans, the aggregate amount of loans shall not exceed 100% of the lending company's net worth, and the maximum amount permitted to a single borrower shall not exceed 100% of the lending company's net worth.

Note 2 ： Nature of financing -

1. Enter 1 for Busin ess relationship.

2. Enter 2 for Short-term financing purpose.

Note 3 ： Converted by the exchange rate recorded on the financial reporting date - RMB: New Taiwan Dollar = 1:4.344. Note 4 ： : The above transactions were eliminated during the compilation of this consolidated financial report.

• 106 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 2

Unit:In Thousands of New Taiwan Dollars/ US Dollars/ RMB.Unless Stated Otherwise

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Holding Company Name Type and Name of Marketable Securities Relationship with the Holding Company Financial Statement Account Note thousandsShares/Units (in ) EndinCarrying Value g Balance on December 31OwnershiPercentage of p, 2021 ％ Fair Value Note
Gemtek Technologies Stock
Co.,Ltd.
ITEQ CORPORATION None Financial assets measured 871 $ 123,612 0.23 $ 123,612
at fair value through
profit and loss - current
TAI-SAW TECHNOLOGY CO., LTD. The Corporation serves as Financial assets measured 691 27,741 0.67 27,741
corporate director at fair value through
other comprehensive
income – non-current
Green Packet Bhd. None 〃 26,273 13,357 2.81 13,357
Tempo Semiconductor, Inc. The Corporation serves as 〃 584 3,061 2.65 3,061
corporate director
SKSpruce Holding Limited None 〃 2,241 32,153 2.32 32,153 Common
stock/Preferred stock
Greenwave holding, Inc. 〃 〃 3,965 95,196 3.30 95,196 Preferred stock
Gemtek Investment Co.,Ltd Stock
Sky Phy Networks Limited 〃 Financial assets measured 4,943 - 13.82 - Preferred stock
at fair value through
other comprehensive
income – non-current
SanJet Corp The Corporation serves as 〃 3,882 60,717 12.33 60,717
corporate director
LIONIC CORP. None 〃 841 4,406 3.82 4,406
Polaris Group The Corporation serves as 〃 8,675 604,822 1.21 604,822
corporate director
AIPTEK, Inc. None 〃 186 1,318 0.43 1,318
PYRAS TECHNOLOGY INC. The Corporation serves as 〃 3,100 33,511 19.52 33,511
corporate director
G-Technology Convertible Bond
Investment Co., Ltd. Greenwave Holding, Inc. None Financial assets measured - 16,974 - 16,974
at fair value through ( USD 613 ) ( USD 613 )
profit and loss - current
Stock
Polaris Group None Financial assets measured 26,467 1,947,211 3.68 1,947,211
at fair value through ( USD 70,347 ) ( USD 70,347 )
other comprehensive
income – non-current
Tianhan Technology （ Wujiang ） 〃 〃 - - 11.54 -
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• 107 -

	Limited Company UBITUS Inc. 〃	〃	200	-	2.32	-
	Bond Standard Chartered Bank Subordinate Bond 〃	Financial assets at amortized cost-non-current	-	$ 127,412 ( USD 4,603 )	-	$ 127,412 ( USD 4,603 )

Note 1: See Tables 5 and 6 for information on investments in subsidiaries, associates and joint ventures.

Note 2: Converted by the exchange rate recorded on the financial rep orting date - USD: NTD = 1: 27.68; RMB: NTD = 1 ： 4.344

• 108 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 3

Unit:In Thousands of New Taiwan Dollars, Unless Stated Otherwise

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Notes/Accounts Receivable
Transaction Details Abnormal Transaction
Company Name Related Party Relationship (Payable) Note
Purchases/Sales Amount ％ to Total Payment Terms Unit Price Payment Terms Ending Balance % to Total
Gemtek Technologies Co., Gemtek Investment in subsidiary Purchase and $ 5,166,453 23% 註 1 註 1 註 1 ( $ 1,596,933 ) ( 53% ) Note 2
Ltd. Electronics(Kunshan)C through third region processing
o., Ltd. expenses
Gemtek Technologies Co., Gemtek Investment in subsidiary Purchase and 4,199,079 18% 註 1 註 1 註 1 ( 312,083 ) ( 10% ) Note 2
Ltd. Electronics(ChangShu) through third region processing
Co., Ltd. expenses
Gemtek CZ., s.r.o. Investment in subsidiary Purchase and 188,169 1% 註 1 註 1 註 1 12,014 - Note 2
through third region processing
expenses
Gemtek Vietnam Co., Ltd. Subsidiary Purchase and 7,059,969 31% 註 1 註 1 註 1 750,502 12% Note 2
processing
expenses
Gemtek Gemtek Technologies Co., Parent company Sale and ( 5,166,453 ) ( 66% ) 註 1 註 1 註 1 1,596,933 76% Note 2
Electronics(Kunshan)C Ltd. processing
o., Ltd. income
Gemtek Gemtek Technologies Co., Parent company Sale and ( 4,199,079 ) ( 77% ) 註 1 註 1 註 1 312,083 68% Note 2
Electronics(ChangShu) Ltd. processing
Co., Ltd. income
Gemtek CZ., s.r.o. Gemtek Technologies Co., Parent company Sale and ( 188,169 ) ( 99% ) 註 1 註 1 註 1 ( 12,014 ) ( 22% ) Note 2
Ltd. processing
income
Gemtek Vietnam Co., Ltd. Gemtek Technologies Co., Parent company Sale and ( 7,059,969 ) ( 95% ) 註 1 註 1 註 1 ( 750,502 ) ( 54% ) Note 2
Ltd. processing
income
----- End of picture text -----

Note 1: The company purchases goods from related parties or entrusts related parties to process and repurchase finished products, which is a corporate strategy used for the purpose of cooperation and division of labor. The transaction price has no significant parties to compare. Payment terms are determined by the actual status of the company’s assets. Note 2 ： Accounts receivables collected from and accounts payables paid to Gemtek Electronics (Kunshan) Co., Ltd., Gemtek Electronics (ChangShu) Co., Ltd., Gemtek CZ., s.r.o., and Gemtek Vietnam Co., Ltd. are expressed in net amount.

Note 3 ： The above transactions were eliminated during the compilation of this consolidated financial report.

• 109 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 4

Unit:In Thousands of New Taiwan Dollars, Unless Stated Otherwise

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment
					Amount	A c t i o n s T a k e n
Gemtek Electronics (Kunshan) Co., Ltd Gemtek Electronics (ChangShu) Co., Ltd. Gemtek Technologies Co., Ltd.	Gemtek Technologies Co., Ltd. Gemtek Technologies Co., Ltd. Gemtek Vietnam Co., Ltd.	Parent company Parent company Subsidiary	$ 1,596,933 312,083 750,502	2.40 14.56 7.49	$ - - -	- - -	$ 439,710 312,083 132,356	$ - - -
Gemtek Technologies Co., Ltd.	BROWAN COMMUNICATIONS INCORPORATIO N	Subsidiary	185,112	3.82	-	-	137,260	-

Note: The above transactions were eliminated during the compilation of this consolidated financial report.

• 110 -

Unit:In Thousands of New Taiwan Dollars/ US Dollars.Unless Stated Otherwise

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 5

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Original Investment Amount As of December 31, 2021
Main Businesses and Net Income (Loss) Share of Profit
Investor Company Investee Company Location Shares/Units (In Note
Products December 31, 2021 December 31, 2020 % Carrying Amount of the Investee (Loss)
Thousands)
Gemtek Technologies Gemtek Investment Co.,Ltd Hsinchu County, Investment $ 469,457 $ 769,457 46,946 100.00 $ 1,154,450 $ 199,276 $ 199,276 Note 3
Co., Ltd. Taiwan
G-Technology Investment Co., Ltd. Cayman Islands Investment 2,484,452 2,484,452 78,600 100.00 5,848,180 44,438 44,438 Note 3
( USD 78,600 ) ( USD 78,600 )
Brightech International Co., Ltd. Republic of Investment 207,969 207,969 6,145 100.00 68,176 ( 634 ) ( 634 ) Note 3
Mauritius ( USD 6,145 ) ( USD 6,145 )
AMPAK Technology Inc. Hsinchu County, Telecommunications 512,854 512,854 20,101 33.37 1,082,428 408,182 124,245
Taiwan (note1)
Wi Tek Investment Co., Ltd. Cayman Islands Investment 132,155 132,155 4,000 100.00 8,082 ( 12,756 ) ( 12,756 )
( USD 4,000 ) ( USD 4,000 )
BROWAN Communications Hsinchu County, Telecommunications 297,826 144,826 11,815 33.68 295,621 163,478 37,945 Note 3
Incorporation Taiwan
Gemtek Vietnam Co., Ltd. Vietnam Telecommunications 616,034 616,034 - 100.00 579,584 79,878 79,878 Note 3
( USD 20,000 ) ( USD 20,000 )
G-Technology Ampak International Holdings Ltd. Independent State Investment 1,099,843 1,099,843 36,000 100.00 1,100,261 41,496 41,496 Note 3
Investment Co., Ltd. of Samoa ( USD 35,561 ) ( USD 35,561 ) ( USD 39,749 ) ( USD 1,491 ) ( USD 1,491 )
Gemtek CZ., s.r.o. Czech Republic Telecommunications 25,351 25,351 12,000 100.00 ( 2,822 ) ( 9,568 ) ( 9,568 ) Note 3
( USD 692 ) ( USD 692 ) ( USD -102 ) ( USD -341 ) ( USD -341 )
Primax Communication (B.V.I.) Inc. British Virgin Investment 73,886 73,886 2,297 100.00 16,500 ( 93 ) ( 93 ) Note 3
Islands ( USD 2,297 ) ( USD 2,297 ) ( USD 596 ) ( USD -3 ) ( USD -3 )
PT. South Ocean Indonesia Telecommunications 7,838 7,838 24 95.00 2,540 - -
( USD 238 ) ( USD 238 ) ( USD 92 ) ( USD - ) ( USD - )
Free PP Worldwide Co.,Ltd. Republic of Investment 30,260 30,260 1,002 30.00 13,065 ( 367 ) ( 110 )
Seychelles ( USD 1,000 ) ( USD 1,000 ) ( USD 472) ( USD -12 ) ( USD -4 )
Gemtek Investment BROWAN Communications Hsinchu County, Telecommunications 141,825 141,825 5,895 16.80 125,216 163,478 33,314 Note 3
Co.,Ltd Incorporation Taiwan
BandRich Inc. New Taipei City, Telecommunications 55,000 55,000 5,500 27.04 3,868 ( 5,623 ) ( 1,520 )
Taiwan
5V Technologies, Ltd. Taipei City, Taiwan Telecommunications 90,000 90,000 9,000 97.92 163,375 88,358 84,323 Note 3
(note2)
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Note 1: Based on the equity holding ratio, the amount is recognized by th e net profit of the investee compan y NT$ 136,216 thousand, less the identifiable intangible assets adjusted amortization of the current period NT$11,971 thousand. Note 2: Based on the equity holding ratio, the amount is recognized by th e net profit of the investee compan y NT$ 86,520 thousand, and less the identifiable intangible assets adjusted amortization of the current period NT$2,197 thousand. Note 3: The above transactions were eliminated during the compilation of this consolidated financial report.

• 111 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 6

Unit:In Thousands of New Taiwan Dollars/ US Dollars.Un less Stated Otherwise

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Investment Flow Accumulated
Accumulated Accumulated
Outward %
Outward Repatriation of
Remittance for Ownership Carrying Amount
Main Businesses Method of Investment Remittance for Net Income (Loss) Investment Gain Investment
Investee Company Share Capital Investment from of Direct or as of December Note
and Products (Note 1) Investment from Outflow Inflow of the Investee (Loss) Income as of
Taiwan as of Indirect 31, 2021
Taiwan as of December 31,
December 31, Investment
January 01, 2021 2021
2021
Gemtek Electronics Manufacturing of $ 231,128 ) Indirect investment in $ 230,270 $ - $ - $ 230,270 ( $ 478 ) 100.00 ( $ 478 ) $ 84,440 $ - Note 3
(Suzhou) Co. Ltd. wireless ( USD 8,350 ) Mainland China through a ( USD 8,319 ) ( USD 8,319 ) ( USD -17 ) ( USD -17 ) ( USD 3,051 )
telecommunication holding company
products such as established in other
wireless network countries － Brightech
cards and wireless International Co Ltd 及
gateways Primx Communication
(BVI) Inc
Gemtek Electronics Manufacturing of 415,200 Indirect investment in 415,200 - - 415,200 25,496 100.00 25,496 2,566,666 - Note 3
(Kunshan) Co., Ltd wireless ( USD 15,000 ) Mainland China through a ( USD 15,000 ) ( USD 15,000 ) ( USD 909 ) ( USD 909 ) ( USD 92,726 )
telecommunication holding company
products such as established in other
wireless network countries － G-Technology
cards and wireless Investment Co Ltd.
gateways
Browan R&D, production , 110,720 Indirect investment in 110,720 - - 110,720 ( 12,756 ) 100.00 ( 12,756 ) 8,076 -
Communications sales and provision ( USD 4,000 ) Mainland China through a ( USD 4,000 ) ( USD 4,000 ) ( USD -456 ) ( USD -456 ) ( USD 292 )
(Xi’An) Inc. of technical holding company
consulting and established in other
related services for countries － Wi Tek
wireless network Investment Co Ltd
products
AIPTEK Technology Manufacturing of 431,808 Indirect investment in 24,912 - - 24,912 - 11.54 - - -
(Wujiang) Co., digital products ( USD 15,600 ) Mainland China ( USD 900 ) ( USD 900 )
Ltd. through a holding
company established in
other countries －
G-Technology
Investment Co Ltd
Gemtek Electronics R&D, production , 996,480 Indirect investment in 996,480 - - 996,480 41,496 100.00 41,496 1,100,261 - Note 3
(ChangSh u) Co., sales and ( USD 36,000 ) Mainland China ( USD 36,000 ) ( USD 36,000 ) ( USD 1,491 ) ( USD 1,491 ) ( USD 39,749 )
Ltd. provision of through a holding
technical company established in
consulting and other countries －
related services G-Technology
for wireless Investment Co Ltd
network
products
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• 112 -

Accumulated Outward Remittance for Investment in Mainland China as of December 31,2021	Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$ 1,793,110 USD 64,780（註1）	$ 1,765,430 USD 63,780		$ 7,013,896
Note 1: (1) The investment amount remitted at the end of the period exceeds the USD 1,000		thousand investment amount approved b y the In vestment Commission of the Ministry of Economic Affairs.
The remittance was made by AMPAK Technology Inc., the parent company of Gemtek Electronics (ChangShu) Co., Ltd., Ltd. from the previous period.

(2) In July 2009, the Company acquired 100% shareholding of AMPAK International Holdings Ltd., an overseas holding company of Gemtek Electronics (ChangShu) Co., Ltd., through an overseas company G-Technology Investment Co., Ltd. for US$561,000 (NT$17,413 thousand), which has been approved by the Investment Commission of the Ministry of Economic Affairs Letter-2 No. 09800283840.

(3) The conversion rate is based on the average spot buying/selling exchange rate of the Bank of Taiwan on December 31, 2021.

Note 2: See Tables 3, 4 and 7 for the information about significant transactions with investees in the mainland China, either directly or indirectly through a third area. Note 3: Amount was recognized based on the audited financial statements of the investee as of December 31, 2021.

• 113 -

GEMTEK TECHNOLOGIES CO., LTD. AND SUBSIDIARIES

THE BUSINESS RELATIONSHIP BETWEEN THE PARENT AND THE SUBSIDIAR IES AND BETWEE EACH SUBSIDIARY, AND THE CIRCUMSTANCES AND AMOUNTS OF ANY SIGNIFICANT TRANSACTIONS BETWEEN THEM

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 7

Unit:In Thousands of New Taiwan Dollars.Unless Stated Otherwise

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Name of Company Engaged in Business Transaction Status
No. Business Transaction Counterparty Relationship Account Amount Transaction Terms % to Total Asset
January 01, 2020 to
December 31, 2020
0 Gemtek Technologies Co., Ltd. Gemtek Electronics (ChangShu) Co., Parent company to Sales revenue － processing $ 3,743,950 Note 1 34%
Ltd. subsidairy expense
Accounts payable 264,649 Note 1 2%
Gemtek Electronics (Kunshan) Co., Parent company to Sales revenue － processing 4,758,107 Note 1 33%
Ltd subsidairy expense
Accounts payable 2,710,405 Note 1 17%
Gemtek CZ., s.r.o. Parent company to Sales revenue － processing 195,307 Note 1 1%
subsidairy expense
Other receivables 9,003 Note 1 -
Gemtek Vietnam Co., Ltd. Parent company to Sales revenue － processing 1,613,251 Note 1 8%
subsidairy expense
Accounts receivable 1,135,169 Note 1 6%
1 AMPAK Technology Inc. Gemtek Technologies Co., Ltd. Subsidiary to parent Sales revenue － processing 16,524 Note 1 -
company expense
Gemtek Electronics (ChangShu) Co., Subsidiary to subsidiary Sales revenue － processing 169,843 Note 1 1%
Ltd. expense
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Note 1: The company purchases goods from related parties or entrusts related parties to process and repurchase finished products, which is a corporate strategy used for the purpose of cooperation and division of labor. The transaction price has no significant parties to compare. Payment terms are determined by the actual status of the company’s assets.

Note 2: The above transactions were eliminated during the compilation of this consolidated financial report.

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