GEMTEK — Audit Report / Information 2021

Nov 12, 2021

Stock Code ： 4906

Gemtek Technologies Co., Ltd.

Individual Financial Statements and Audit Report

As of December 31, 2021 and 2020

• 1 -

§Table of Content§

§Table of Content§ .................................................................................................................... 2 INDEPENDENT AUDITORS’ REPORT ....................................................................................... 4 NOTES TO INDIVIDUAL FINANCIAL STATEMENTS FOR THE YEARS ENDED ............. 16 I. COMPANY HISTORY ...................................................................................................... 16 II. APPROVAL OF FINANCIAL STATEMENTS ............................................................... 16 III. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS ........................................................................................................... 16 IV.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........................................ 19 V. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY ................................................................................................................... 33 VI. CASH AND CASH EQUIVALENTS ............................................................................. 34 VII. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS ............................................................................................................................... 34 VIII. .. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - OTHERS ............................................................................................................ 35 IX.FINANCIAL ASSETS MEASURED AT AMORTIZED COST .................... 35 X.NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE .............................. 36 XI. INVENTORIES ......................................................................................................... 37 XII.INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD . 38 XIII.PROPERTY, PLANT AND EQUIPMENT ........................................................ 41 XIV.LEASE ARRANGEMENTS .................................................................................. 43 XV.OTHER ASSETS ....................................................................................................... 43 TABLES ...................................................................................................................................... 87 FINANCING PROVIDED TO OTHERS ........................................................... 87 MARKETABLE SECURITIES HELD ................................................................ 88 TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL .................................................................................................. 90 RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL ........... 91 INFORMATION ON INVESTEES ...................................................................... 92 INFORMATION ON INVESTMENT IN MAINLAND CHINA .................. 93 THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS .. 94 STATEMENT OF CASH AND CASH EQUIVALENTS ......................................... 96 STATEMENT OF ACCOUNTS RECEIVABLE ...................................................... 98 STATEMENT OF INVENTORIES ........................................................................... 99 STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME-NON-CURRENT ........... 100 STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD .................................................................................................. 101 STATEMENT OF SHORT-TERM BORROWINGS ............................................. 102 STATEMENT OF ACCOUNTS PAYABLE ............................................................ 103 STATEMENT OF OPERATING REVENUE ......................................................... 104 STATEMENT OF OPERATING COSTS ............................................................... 105 STATEMENT OF SELLING EXPENSES .............................................................. 106 STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES .............. 107

• 2 -

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES ............... 108 STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION ..................................................................................................... 109

• 3 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Gemtek Technologies Co., Ltd.

Opinion

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

In our opinion, the accompanying individual financial statements present fairly, in all material respects, the individual financial position of the Company as of December 31, 2021 and 2020, and its individual financial performance and its individual 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).

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 Individual Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

• 4 -

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s individual financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the individual 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 Individual Financial Statements of the Company as follows:

Revenue Recognition

The 2021 operating income of Gemtek Technology Co., Ltd. is NT$20,562,652 thousand, in which NT$5,247,644 thousand sales revenue is attributed to the sale of a major customer product, accounting for 26% 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 21.

Main Audit Procedures conducted by the CPA are as follows:

1.Assess the quality of composition and implementation of the Company’s Internal Control Policy that are related to sales income conjointly with the Company’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:

As of December 31, 2021 and 2020 in relation to investee companies that have adopted the equity method for investments, 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 than us. The financial statements of Gemtek Vietnam

• 5 -

Co., Ltd. was audited by a designated CPA in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Therefore, our opinion for the financial statements of Gemtek Vietnam Co., Ltd. derives from the audit report given by its designated CPA where the equity method had been applied to investments and recognized comprehensive income. The total amount of investments by investee companies that have adopted the equity method as of December 31, 2021 and 2020 was NT$579,584 thousand and NT$514,927 thousand respectively, accounting for 3% and 3% of the total assets of the individual. The recognized comprehensive income of investments by investee companies as of December 31, 2021 and 2020 was NT$79,878 thousand and NT$53,960 thousand respectively, accounting for 3% and 5% of the total comprehensive income of the individual.

Duties and Responsibilities of Management and Corporate Governance

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

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

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

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual 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,

• 6 -

individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual 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 individual 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 Company’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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the individual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the individual 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.

• 7 -

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 individual 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

Securities and Futures Commission Approved Document Number: 6-0920123784

Securities and Futures Commission Approved Document Number: 6-0930128050

Date: March 17, 2022

• 8 -

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

(Expressed in thousands of New Taiwan Dollars)

==> picture [716 x 909] intentionally omitted <==

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

December 31,2021 December 31,2020
ASSETS AMOUNT ％ AMOUNT ％
CURRENT ASSETS
1100 Cash and cash equivalents （ note 4 and 6 ） $ 306,549 2 $ 855,028 5
1110 Financial assets at fair value through profit or loss - current
（ note 4 and 7 ） 125,886 1 120,971 1
1160 Notes receivable from related parties , net （ note 4 、 21 and 31 ） - - 11,250 -
1170 Accounts receivable, net （ note 4 、 10 and 21 ） 5,443,505 29 5,468,334 32
1180 Accounts receivable from related parties （ note 4 、 21 and 31 ） 1,045,699 6 1,327,557 8
1200 Other receivables 44,455 - 66,284 -
1210 Other receivables from related parties （ note 4 and 31 ） 13,342 - 9,516 -
1220 Current tax assets （ note 4 and 23 ） - - 1,236 -
130X Inventories （ note 4 and 11 ） 601,047 3 787,994 4
1470 Other current assets （ note 4 and 15 ） 98,586 - 121,574 1
11XX Total current assets 7,679,069 41 8,769,744 51
NON-CURRENT ASSETS
1517 Financial assets at fair value through other comprehensive
income - non-current （ note 4 and 8 ） 171,508 1 206,283 1
1535 Financial assets at amortized cost - non-current （ note 4 、 9 and
32 ） 20,000 - 40,000 -
1550 Investments accounted for using the equity method （ note 4 and
12 ） 9,036,521 49 6,823,820 39
1600 Property, plant and equipment （ note 4 、 13 and 31 ） 1,457,078 8 1,321,057 8
1755 Right-of-use assets （ note 4 and 14 ） 13,873 - 7,705 -
1840 Deferred tax assets （ note 4 and 23 ） 45,910 - 37,713 -
1990 Other non-current assets （ note 4 、 15 and 19 ） 151,780 1 127,235 1
15XX Total non-current assets 10,896,670 59 8,563,813 49
1XXX Total assets $ 18,575,739 100 $ 17,333,557 100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
2100 Short-term borrowings （ note 16 ） $ 2,108,520 11 $ 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 21 ） 155,147 1 191,941 1
2170 Accounts payable 1,081,326 6 1,714,603 10
2180 Accounts payable to related parties （ note 31 ） 1,909,016 10 2,975,357 17
2219 Other payables （ note 18 and 31 ） 452,864 3 474,098 3
2230 Current tax liabilities （ note 4 and 23 ） 21,071 - 51,830 -
2280 Current lease liabilities （ note 4 and 14 ） 5,425 - 2,746 -
2321 Current portion of bonds payable （ note 17 ） 857,842 5 1,179,157 7
2399 Other current liabilities （ note 18 ） 77,575 - 56,499 1
21XX Total current liabilities 6,668,786 36 7,735,749 45
NON-CURRENT LIABILITIES
2580 Non-current lease liabilities （ note 4 and 14 ） 8,053 - 4,161 -
2570 Deferred tax liabilities （ note 4 and 23 ） 208,258 1 208,820 1
2670 Other non-current liabilities （ note 18 ） 815 - 824 -
25XX Total non-current liabilities 217,126 1 213,805 1
2XXX Total liabilities 6,885,912 37 7,949,554 46
EQUITY （ note 4 、 17and 20 ）
Share capital
3110 Ordinary shares 3,661,188 20 3,575,905 21
3140 Capital collected in advanced 44,798 - - -
3200 Capital surplus 4,441,626 24 4,606,007 26
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 4 1,273,304 8
3300 Total retained earnings 2,881,142 15 2,583,817 15
3490 Other equity 661,073 4 ( 1,381,726 ) ( 8 )
3XXX Total equity 11,689,827 63 9,384,003 54
Total liabilities and equity $ 18,575,739 100 $ 17,333,557 100
----- End of picture text -----

The accompanying notes are an integral part of the parent company only financial statements. Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

• 9 -

GEMTEK TECHNOLOGY CO., LTD.

Parent Company Only Statements of Comprehensive Income

For the Years Ended December 31,2021and 2020

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

==> picture [472 x 41] intentionally omitted <==

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

2021 2020
代 碼 AMOUNT ％ AMOUNT ％
4000 Operating revenue （ note 4 、
----- End of picture text -----

代 碼 4000	Operating revenue（note 4、		AMOUNT		％		AMOUNT		％
	21 and 31）		$ 20,562,652		100		$ 16,484,007		100
5000	Operating costs（note 11、19、
	22 and 31）	(	19,038,109)	(	93)	(	14,915,008)	(	91)
5900	Gross profit		1,524,543		7		1,568,999		9
	Operating expenses（note
	19、22 and 31）
6100	Selling expenses	(	343,402 )	(	2 )	(	305,084 )	(	2 )
6200	General and
	administrative
	expenses	(	277,481 )	(	1 )	(	267,323 )	(	1 )
6300	Research and
	development expenses	(	720,649 )	(	3 )	(	765,731 )	(	5 )
6450	Expected credit losses
	reversed on
	receivables		48		-		47		-
6000	Total operating
	expenses	(	1,341,484)	(	6)	(	1,338,091)	(	8)
6900	Profit from operations		183,059		1		230,908		1
	Non-operating income and
	expenses
7100	Interest income（note 22）		2,416		-		5,720		-
7010	Other income（note 22
	and 31）		28,975		-		77,870		1
7020	Other gains and losses
	（note 22 and 31）		50,764		-		840,986		5
7050	Finance costs（note 22）	(	30,586 )		-	(	30,356 )		-
7070	Share of profit of
	subsidiaries and
	associates（note 4 and
	12）		472,392		2		334,512		2
7000	Total non-operating
	income and
	expenses		523,961		2		1,228,732		8

(Continued)

• 10 -

（ Brought Forward）

==> picture [472 x 605] intentionally omitted <==

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

2021 2020
AMOUNT ％ AMOUNT ％
7900 Profit before income tax $ 707,020 3 $ 1,459,640 9
7950 Income tax （ note 4 and 23 ） ( 27,227 ) - ( 89,485 ) ( 1 )
8200 Net profit for the period 679,793 3 1,370,155 8
Other comprehensive income
/(loss)
8310 Items that will not be
reclassified subsequently to
profit or loss
8311 Remeasurement of defined
benefit plans （ note 19 ） ( 3,527 ) - ( 1,928 ) -
8316 Unrealized loss on
investments in equity
instruments at fair value
through other comprehensive
income ( 29,987 ) - ( 143,312 ) ( 1 )
8330 Share of other comprehensive
loss of subsidiaries and
associates accounted for using
the equity method 2,068,586 10 ( 16,531 ) -
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 ) - ( 32 ) -
8300 Other comprehensive
income/(loss) 1,968,169 10 ( 183,550 ) ( 1 )
8500 Total comprehensive income $ 2,647,962 13 $ 1,186,605 7
Earnings per share （ note 24 ）
9750 Basic earnings per share $ 1.89 $ 3.86
9850 Diluted earnings per
share $ 1.69 $ 3.36
----- End of picture text -----

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

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

• 11 -

GEMTEK TECHNOLOGY CO., LTD Parent Company Only Statements of Changes in Equity For the Years Ended December 31,2021and 2020

(Expressed in thousands of New Taiwan Dollars)

==> picture [1066 x 663] intentionally omitted <==

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

Other Equity （ note4and 20 ）
Unrealized
Valuation
Gain/(Loss) on
Exchange Financial Assets
Differences on at Fair Value
Translation of the
Financial
Share Capital （ note17 and 20 ） Retained Earnings （ note20 ） Statements of Through Other Unearned
Shares Common Stock Advance Receipts Capital Surplus Legal Reserve Special Reserve Unappropriated Foreign Comprehensive Employee Total Treasury Shares T o t a l E q u i t y
（ in thousands ） for Share Capital (note 4 、 17 and Earnings Operations Income Compensation
20)
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 ) $ - $ 8,417,519
Appropriation of 2019 earnings
B1 Legal reserve - - - - 20,119 - ( 20,119 ) - - - - - -
B3 Special reserve - - - - - 183,614 ( 183,614 ) - - - - - -
Total - - - - 20,119 183,614 ( 203,733 ) - - - - - -
C15 Cash distribution from capital
surplus - - - ( 177,911 ) - - - - - - - - ( 177,911 )
D1 Net profit for the year ended
December 31, 2020 - - - - - - 1,370,155 - - - - - 1,370,155
D3 Other comprehensive loss for
the year ended December 31,
2020 - - - - - - ( 1,855 ) ( 21,779 ) ( 159,916 ) - ( 181,695 ) - ( 183,550 )
D5 Total comprehensive
income/(loss) for the year
ended December 31, 2020 - - - - - - 1,368,300 ( 21,779 ) ( 159,916 ) - ( 181,695 ) - 1,186,605
L1 Buy-back of ordinary shares - - - - - - - - - - - ( 68,767 ) ( 68,767 )
L3 Cancelation of treasury shares ( 3,293 ) ( 32,930 ) - ( 35,837 ) - - - - - - - 68,767 -
M3 Disposals of subsidiaries - - - - - - ( 4,636 ) 3,908 4,636 - 8,544 - 3,908
N1 Issuance of restricted share plan
for employees
4,000 40,000 - 58,474 - - - - - ( 98,474 ) ( 98,474 ) - -
T1 Share-based payment expenses - - - - - - - - - 22,649 22,649 - 22,649
Q1 Disposal of investments in equity
instruments at fair value
through other comprehensive
income - - - - - - ( 90,360 ) - 90,360 - 90,360 - -
Z1 BALANCE AT DECEMBER 31,
2020 357,591 3,575,905 - 4,606,007 750,939 559,574 1,273,304 ( 514,953 ) ( 790,948 ) ( 75,825 ) ( 1,381,726 ) - 9,384,003
Appropriation of 2020 earnings
B1 Legal reserve - - - - 127,330 - ( 127,330 ) - - - - - -
B3 Special reserve - - - - - 746,328 ( 746,328 ) - - - - - -
B5 Cash dividends to
shareholders - - - - - - ( 357,666 ) - - - - - ( 357,666 )
Total - - - - 127,330 746,328 ( 1,231,324 ) - - - - - ( 357,666 )
C15 Cash distribution from capital
surplus - - - ( 357,666 ) - - - - - - - - ( 357,666 )
D1 Net profit for the year ended
December 31, 2021 - - - - - - 679,793 - - - - - 679,793
D3 Other comprehensive
income/(loss) for the year
ended December 31, 2021 - - - - - - ( 3,463 ) ( 66,903 ) 2,038,535 - 1,971,632 - 1,968,169
D5 Total comprehensive
income/(loss) for the year
ended December 31, 2021 - - - - - - 676,330 ( 66,903 ) 2,038,535 - 1,971,632 - 2,647,962
I1 Convertible bonds converted to
ordinary shares 8,712 87,123 44,798 204,666 - - - - - - - - 336,587
N1 Cancelation of restricted share
plan for employees
( 184 ) ( 1,840 ) - ( 2,690 ) - - - - - 4,530 4,530 - -
M3 Disposals of subsidiaries - - - ( 8,691 ) - - - - - - - - ( 8,691 )
Q1 Disposal of investments in equity
instruments at fair value
through other comprehensive
income - - - - - - ( 21,339 ) - 21,339 - 21,339 - -
T1 Share-based payment expenses - - - - - - - - - 45,298 45,298 - 45,298
Z1 BALANCE AT DECEMBER 31,
2021 366,119 $ 3,661,188 $ 44,798 $ 4,441,626 $ 878,269 $ 1,305,902 $ 696,971 ( $ 581,856 ) $ 1,268,926 ( $ 25,997 ) $ 661,073 $ - $ 11,689,827
----- End of picture text -----

The accompanying notes are an integral part of the parent company only financial statements. Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

• 12 -

GEMTEK TECHNOLOGY CO., LTD

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

(Expressed in thousands of New Taiwan Dollars)

==> picture [469 x 15] intentionally omitted <==

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

2021 2020
----- End of picture text -----

				2021			2020
	CASH FLOWS FROM OPERATING
	ACTIVITIES
A00010	Income before income tax		$	707,020		$	1,459,640
A20010	Adjustments for:
A20100	Depreciation expense			105,137			85,173
A20200	Amortization expense			52,287			51,308
A20300	Expected credit losses
	reversed on receivables	(		48 )	(		47 )
A20400	Net (gain)/loss on fair value
	changes of financial
	[assets/liabilities] at fair
	value through profit or loss	(		29,958 )			9,201
A20900	Finance costs			30,586			30,356
A21200	Interest income	(		2,416 )	(		5,720 )
A21300	Dividend income	(		4,491 )	(		4,491 )
A21900	Share-based payment expenses			45,298			22,649
A22400	Share of profit of subsidiaries
	and associates	(		472,392)	(		334,512)
A22500	Gain on disposal of property,
	plant and equipment	(		83 )	(		113 )
A23100	Disposal in in subsidiaries and
	associates accounted for
	using the equity method	(		105,631)			-
A23200	Gain on disposal of subsidiaries			-	(		833,061)
A23800	(Reversal of) write-down of
	inventories			6,434	(		3,121 )
A24100	Net (gain)/loss on foreign
	currency exchange			31,686	(		2,772 )
A30000	Changes in operating assets and
	liabilities
A31115	financial assets at fair value
	through profit or loss			17,696	(		17,967 )
A31130	Notes receivable			-			43,346
A31140	Notes receivable from related
	parties			11,250	(		11,250 )
A31150	Accounts receivable	(		32,716 )	(		2,191,180)
A31160	Accounts receivable from
	related parties			272,547	(		1,317,036)
A31180	Other receivables			18,007	(		34,706 )
A31200	Inventories			180,513	(		129,152)
A31240	Other current assets			22,730	(		22,350 )
A31990	Prepaid pension	(		2,143 )	(		2,246 )
A32125	Contract liabilities	(		28,096 )	(		14,743 )
A32130	Notes payable			-	(		21,345 )

• 13 -

A32150	Accounts payable	(	626,683)	1,388,758
A32160	Accounts payable to related
	parties	(	1,053,977 )	208,585
A32180	Other payables	(	21,371 )	187,965
A32230	Other current liabilities		24,559	27,603

(Continued)

• 14 -

（ Brought Forward）

==> picture [477 x 639] intentionally omitted <==

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

2021 2020
A33000 Cash used in operations ( $ 854,255) ( $ 1,431,228)
A33100 Interest received 2,412 5,972
A33200 Dividends received 4,491 4,491
A33300 Interest paid ( 14,966 ) ( 13,437 )
A33500 Income tax paid ( 65,509 ) ( 8,443 )
AAAA Net cash used in operating activities ( 927,827 ) ( 1,442,645 )
CASH FLOWS FROM INVESTING ACTIVITIES
B00010 Purchase of financial assets at fair value
through other comprehensive income ( 3,592 ) ( 22,953 )
B00020 Proceeds from sale of financial assets at fair
value through other comprehensive
income 8,380 7
B00040 Purchase of financial assets at amortized cost - ( 20,000 )
B00050 Proceeds from disposal of financial assets at
amortised cost 20,000 -
B01800 Acquisition of investments accounted for
-
using the equity method ( 153,000)
B02400 Capital reduction in subsidiary and refund to
shareholders 300,000 -
B02700 Payments for property, plant and equipment ( 243,271) ( 278,072)
B02300 Net cash inflow on disposal of subsidiary - 830,760
B02800 Proceeds from disposal of property, plant
and equipment 5,674 6,381
B03700 Decrease (Increase) in refundable deposits ( 2,198 ) 737
B05350 Payments for right-of-use assets - ( 943 )
B06700 Increase in other non-current assets ( 76,018 ) ( 65,526 )
B07600 Dividends received from subsidiaries 211,314 151,422
BBBB Net cash generated from investing
activities 67,289 601,813
CASH FLOWS FROM FINANCING
ACTIVITIES
C00100 Increase short-term borrowings 1,030,475 786,370
C04020 Repayment of the principal portion of lease
liabilities ( 3,075 ) ( 3,216 )
C04300 Increase （ Decrease ） in other non-current
liabilities ( 9 ) 795
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 312,059 537,271
EEEE NET DECREASE IN CASH AND CASH
EQUIVALENTS ( 548,479 ) ( 303,561 )
E00100 CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR 855,028 1,158,589
E00200 CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR $ 306,549 $ 855,028
----- End of picture text -----

The accompanying notes are an integral part of the parent company only financial statements Chairman: Hong-wen Chen General Manager: Rong-chang Li Accounting Supervisor: Zhi-hong Lin

• 15 -

GEMTEK TECHNOLOGIES CO., LTD.

NOTES TO INDIVIDUAL 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 were 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 individual financial statements of Gemtek Technologies Co., Ltd. are presented in the Company’s functional currency, the New Taiwan dollar.

II. APPROVAL OF FINANCIAL STATEMENTS

The individual 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

• 16 -

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

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

==> picture [446 x 40] intentionally omitted <==

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

New, Amended and Revised Standards and
Interpretions Effective Date per IASB
Annual Improvements to IFRS Standards 2018–2020 The amendments are
----- End of picture text -----

		effective for annual
		reporting periods
		beginning on or after 1
		January 2022. (Note 1)
Amendments to IFRS 3-- Reference to the Conceptual		The amendments are
	Framework	effective for annual
		reporting periods
		beginning on or after 1
		January 2022. (Note 2)
AmAmendments to IAS 16 -- Property, Plant and		The amendments are
	Equipment — Proceeds before Intended Use	effective for annual
		reporting periods
		beginning on or after 1
		January 2022. (Note 3)
Amendments to IAS 37 --Onerous Contracts — Cost of		The amendments are
	Fulfilling a Contract	effective for annual
		reporting periods
		beginning on or after 1
		January 2022. (Note 4)

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

• Note 2: The Company shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 01, 2022 and to asset acquisitions that occur on or after the beginning of that period.

• 17 -

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

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

As of the date that the accompanying financial statements were approved and authorized for issue, the Company 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

==> picture [440 x 40] intentionally omitted <==

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

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
----- End of picture text -----

New, Amended and Revised Standards and Interpretions Amendments to IFRS 10 and IAS 28 --Sale or	Effective Date per IASB (Note1) 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 Company shall apply these amendments prospectively for annual reporting periods beginning on or after January 01, 2023.

• 18 -

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

• Note 4: The Company 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 financial statements were authorized for issue, the Company 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 Company completes the evaluation.

IV.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(I)Statement of Compliance

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

(II)Basis of Preparation

The individual 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.

When preparing its financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in its financial statements to be the same as the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for by using the equity method, share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates and related equity items, as appropriate, in these financial statements.

• 19 -

• (III) Classification of current and non-current assets and liabilities Current assets include:

• Assets held primarily for the purpose of trading;

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

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

3. Liabilities for which the Company 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) 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 Company 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.

When a business combination is achieved in stages, the Company’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 Company.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company 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

• 20 -

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.

(V) Foreign Currencies

In preparing the financial statements, transactions in currencies other than the Company’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.

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 individual financial statements, the functional currencies of the Company and the group entities (including subsidiaries and associates in other countries that use currencies that are different from the currency of the Company) 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.

On the disposal of a foreign operation (i.e. a disposal of the Company’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 Company losing control over the subsidiary, the proportionate share of accumulated exchange differences 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.

(VI) Inventories

• 21 -

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.

• (VII)Investment in subsidiaries

Subsidiaries are the entities controlled by the Company. Investments in subsidiaries are accounted for by the equity method.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company's share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s loss of control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary 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 Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized

• 22 -

as a gain or loss in profit or loss. Besides this, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Company directly disposed of the related assets or liabilities.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only

(VIII)Investments in associates and joint ventures

An associate is an entity over which the Company 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 Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Company 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 Company’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 Company’s share of the equity of associates and joint ventures.

Any excess of the cost of an acquisition over the Company’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 Company’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 Company 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 Company’s proportionate interest in that associate and joint venture. The Company records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus - changes in the Company’s share of equity of associates and joint ventures. If the Company’s 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 Company’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

• 23 -

investment accounted for by using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate and joint venture), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company 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 Company discontinues the use of the equity method from the date on which its investment ceases to be an associate. 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 attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate 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 Company continues to apply the equity method and does not remeasure the retained interest.

When an entity in the Company transacts with its associate, profit and loss resulting from the transactions with the associate are recognized in the Company’s individual financial statements only to the extent that interests in the associate are not related to the Company.

(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 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) Impairment of tangible assets (property, plant, and equipment), right-of-use assets, and intangible assets

• 24 -

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets, and other intangible assets 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 Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Company assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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.

(XI) 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.

(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

• 25 -

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 30.

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 at amortized cost, including cash and cash equivalents, note receivables, account receivables, account receivables-related party, other receivables, other receivables-related party, financial asset measured at amortized cost, and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. 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.

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,

• 26 -

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

The Company always recognizes lifetime expected credit losses (ECLs) for accounts receivables. For all other financial instruments, the Company 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 Company 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 Company recognizes an 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 Company determines that the following situation indicate that a financial asset is in default (without taking into account any collateral held by the Company):

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.

• 27 -

The Company 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 income and does not reduce the carrying amount of the financial assets.

(3)Derecognition of financial assets

The Company 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 Company 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 Company are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’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 Company’s own equity instruments.

3. Financial liabilities

(1)Subsequent measurement

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

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 30.

• 28 -

(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 Company 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 Company 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 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.

(XII)Revenue recognition

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

• 29 -

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

(XIII)Leasing

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

For a contract that contains a lease component and non-lease components, the Company 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 Company 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 Company as lessee

The Company 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.

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, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. 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 individual balance sheets.

• 30 -

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 Company 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 Company 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 individual balance sheets.

(XIV)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.

(XV)Government grants

Government grants are not recognized until there is reasonable assurance that the Company 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 Company 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 Company with no future related costs are recognized in profit of loss in the period in which they become receivable.

• (XVI) Employee benefits

• 1.Short-term employee benefits

• 31 -

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 Company’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.

(XVII)Share-based payment arrangements Restricted stock units

The fair value at the grant date of the restricted stock units is expensed on a straight-line basis over the vesting period, based on the Company’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding adjustment in other equity items –unearned compensation; it is recognized as an expense in full at the grant date if vested immediately.

At the end of each reporting period, the Company revises its estimates of the number of employee restricted stock units 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 restricted stock units.

(XVIII)Taxation

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

1.Current tax

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

• 32 -

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 Company 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 Company 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 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 Company’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.

• 33 -

The estimates and underlying assumptions are reviewed on an ongoing basis by the Company. 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 $ 1,111 283,718 21,720 $ 306,549 0.001%~2.85%	December 31, 2020
		$ 1,624 831,519 21,885 $ 855,028 0.001%~2.75%

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

Financial assets–current mandatorily classified as at FVTPL Derivative instruments（non- hedge accounting） －Convertible option －Foreign Exchange Forward Contract Non-derivative financial assets －Domestic listed shares Financial liabilities-current Held for trading Derivative instruments（non- hedge accounting） －Foreign Exchange Forward Contract	December 31, 2021 $ - 2,274 123,612 $ 125,886 $ -	December 31, 2020	December 31, 2020
			$ 840 - 120,131 $ 120,971 $ 7,278

• 34 -

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

==> picture [410 x 27] intentionally omitted <==

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

Notional Amount
Currency Maturity Date （ In Thousands ）
----- End of picture text -----

			Currency	Maturity Date		（In Thousan	ds）
December	31,	2021
Sell			USD/NTD	2021.12.09~2022.02.11	USD	10,000/NTD	276,840
			USD/NTD	2021.12.09~2022.02.11	USD	10,000/NTD	276,840
			USD/NTD	2021.12.09~2022.02.11	USD	10,000/NTD	276,840
December	31,	2020
Sell			USD/NTD	2020.11.05~2021.01.11	USD	20,000/NTD	571,840
			USD/NTD	2020.11.19~2021.01.25	USD	10,000/NTD	285,060

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

VIII. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE

INCOME - OTHERS

Non-current Domestic Investments Listed shares Unlisted shares Total Overseas Investment Listed shares Unlisted shares Total	December 31, 2021 $ 27,741 3,061 30,802 13,357 127,349 140,706 $ 171,508	December 31, 2020
		$ 15,270 419 15,689 74,926 115,668 190,594 $ 206,283

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 Company’s strategy of holding these investments for long-term purposes.

IX.FINANCIAL ASSETS MEASURED AT AMORTIZED COST

Non-current Domestic investment Time deposits with original maturities of more than 3 months Interest Rate	December 31, 2021 $ 20,000 0.35%	December 31, 202)
		$ 40,000 0.18%~0.35%

• 35 -

Please see Note 32 for more details on financial assets pledged as collateral measured at amortized cost.

X. ACCOUNTS RECEIVABLE

OUNTS RECEIVABLE
Accounts Receivables At Amortized Cost Less: Allowance for impairment loss	December 31, 2021 $ 5,443,966 ( 461) $ 5,443,505	December 31, 2020
	(	(	$ 5,468,843 509) $ 5,468,334

Trade receivables measured at amortized cost.

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 Company 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 Company’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 Company’s different customer base.

In the event there is an evidence indicating that the customer is under severe financial difficulty and the Company cannot reasonably estimate the recoverable amounts, the Company writes off relevant accounts receivable. However, the Company 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.

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

• 36 -

December 31, 2021

December 31, 2021
Expected Credit Loss Rate Gross carrying amount Loss allowance (Lifetime ECL） Amortized cost		Less than 180 Days	181～365 Days - $ - - $ -		Over 366 Days		Total
	(	0.05% $ 5,443,596 91) $ 5,443,505		(	100% $ 370 370) $ -	(	$ 5,443,966 461) $ 5,443,505

December 31, 2020

December 31, 2020
Expected Credit Loss Rate Gross carrying amount Loss allowance (Lifetime ECL） Amortized cost		Less than 180 Days	181～365 Days 0.33% $ 304 ( 1) $ 303		Over 366 Days		Total
	(	0.01% $ 5,468,472 441) $ 5,468,031		(	100.00% $ 67 67) $ -	(	$ 5,468,843 509) $ 5,468,334

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

Balance, beginning of year Less:Net remeasurement of loss allowance Less：disposal of subsidaries Balance, end of year	December 31, 2021 $ 509 ( 48 ) - $ 461	December 31, 2020
		$ 21,119 ( 47 ) (20,563) $ 509

XI. INVENTORIES

ENTORIES
Finished goods Work in process Raw materials and supplies	December 31, 2021 $ 120,624 88,906 391,517 $ 601,047	December 31, 2020
			$ 6,039 211,369 570,586 $ 787,994

As of December 31, 2021 and 2010, the cost of inventories recognized as cost of goods sold were NT$19,038,109 thousand and NT$14,915,008 thousand, respectively. Loss (gain) on reversal of write-downs were $6,434 thousand and $(3,121) thousand, respectively. Increase in net realisable value of inventories was due to inventory write-off.

• 37 -

XII.INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investment in subsidiaries Investment in associates	December 31, 2021 $ 7,954,093 1,082,428 $ 9,036,521	December 31, 2020	December 31, 2020
			$ 5,764,896 1,058,924 $ 6,823,820

(I) Subsidiaries

Gemtek Investment Co.,Ltd. G-Technology Investment Co.,Ltd. Gemtek Vietnam Co., Ltd. Brightech International Co., Ltd. Wi Tek Investment Co., Ltd BROWAN Communications Incorporation	December 31, 2021 $ 1,154,450 5,848,180 579,584 68,176 8,082 295,621 $ 7,954,093	December 31, 2020	December 31, 2020
			$ 846,419 4,313,409 514,927 69,191 20,950 - $ 5,764,896

Proportion of ownership and voting rights

==> picture [412 x 14] intentionally omitted <==

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

Subsidiaries December 31, 2021 December 31, 2020
----- End of picture text -----

Subsidiaries	December 31, 2021	December 31, 2020
Gemtek Investment Co.,Ltd.	100%	100%
G-Technology Investment
Co.,Ltd.	100%	100%
Brightech International Co.,
Ltd.	100%	100%
Wi Tek Investment Co., Ltd.	100%	100%
Gemtek Vietnam Co., Ltd.	100%	100%
BROWAN Communications
Incorporation	33.68%	-

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

• 38 -

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, hence Browan Communications Incorporation is regarded as a subsidiary of the Company. A total of NTD105,631 thousand for the disposal of investment profits and loss was rendered when remeasuring the equity of the acquiree previously held based on fair value on the date of acquisition. Please see Note 26 for more details.

On June 9, 2020, the shareholders meeting of the Company 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 27 for more details regarding equity shares of AMPAK Technology Inc.

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.

• (II) Investments in associates

Investments in associates
Material associate AMPAK Technology Inc. Associate that is not individually material BROWAN Communications Incorporation 1. Material associate	December 31, 2021 $ 1,082,428 - $ 1,082,428	December 31, 2020
			$ 1,048,268 10,656 $ 1,058,924

Proportion of ownership and voting rights Company Name December 31, December 31,

• 39 -

AMPAK Technology Inc.	2021 33.37%	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 December 2021, the Company increased its shareholding percentage over Browan Communications Incorporation to gain substantial control and recognize Browan as its subsidiary.

In August 2020, the Company sold 26.61% 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 Company’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 Company for equity accounting purposes.

AMPAK Technology Inc.

AMPAK Technology Inc.
Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Corporation’s ownership Equity attributable to the the Corporation 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

• 40 -

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 Corporation’s share of: Total comprehensive income for the year

	$	For the Year Ended December 31 2021 2020 35,025 $ 1,678	For the Year Ended December 31 2021 2020 35,025 $ 1,678
		2021 35,025

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments attributable to the Company were based on the associates’ financial statements which have been audited for the same year.

XIII.PROPERTY, PLANT AND EQUIPMENT

Cost Balance on January 01, 2020 Additions Disposals Reclassification of construction in progress Balance on December 31, 2020 Accumulated depreciation Balance on January 01,		Land	Buildings	Machinery and Equipment $ 252,040 161,672 ( 74,775 ) - $ 338,937 $ 223,571	Miscellaneous Equipment	Construction in progress	Construction in progress	Total
		$ 259,279 - - - $ 259,279 $ -	$ 1,414,375 18,748 ( 1,990 ) 16,248 $ 1,447,381 $ 627,240		$ 365,537 79,445 ( 19,818 ) 7,330 $ 432,494 $ 318,682	(	$ 9,340 18,207 - 23,578) $ 3,969 $ -	$ 2,300,571 278,072 ( 96,583 ) - $ 2,482,060 $ 1,169,493

• 41 -

2020 Disposals Depreciation expenses Balance on December 31, 2020 Net value on December 31, 2020 Cost Balance on January 01, 2021 Additions Disposals Reclassification of construction in progress Balance on December 31, 2021 Accumulated depreciation Balance on January 01, 2021 Disposals Depreciation expenses Balance on December 31, 2021 Net value on December 31, 2021		Land	Buildings	Machinery and Equipment	Miscellaneous Equipment	Construction in progress	Construction in progress	Total
		- - $ - $ 259,279 $ 259,279 109,440 - - $ 368,719 $ - - - $ - $ 368,719	( 1,990 ) 37,172 $ 662,422 $ 784,959 $ 1,447,381 49,891 - 3,969 $ 1,501,241 $ 662,422 - 27,133 $ 689,555 $ 811,686	( 69,630 ) 16,337 $ 170,278 $ 168,659 $ 338,937 33,847 ( 8,945 ) - $ 363,839 $ 170,278 ( 3,632 ) 32,156 $ 198,802 $ 165,037	( 18,695 ) 28,316 $ 328,303 $ 104,191 $ 432,494 48,093 ( 9,014 ) - $ 471,573 $ 328,303 ( 8,736 ) 42,370 $ 361,937 $ 109,636	(	- - $ - $ 3,969 $ 3,969 2,000 - 3,969) $ 2,000 $ - - - $ - $ 2,000	( 90,315 ) 81,825 $ 1,161,003 $ 1,321,057 $ 2,482,060 243,271 ( 17,959 ) - $ 2,707,372 $ 1,161,003 ( 12,368 ) 101,659 $ 1,250,294 $ 1,457,078

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	5~50 years
Machinery and equipment	2~6 years
Miscellaneous equipment	2~5 years

• 42 -

XIV. LEASE ARRANGEMENTS

(I) Right-of-use Assets

December 31, 2021 December 31, 2020

Carrying amounts Building $ 8,849 $ 6,893 Transportation equipment 5,024 812 $ 13,873 $ 7,705

Additions to right-of-use assets Depreciation charge for right-of-use assets

Buildings Transportation equipment

For the Year Ended For the Year Ended December 31, 2021 December 31, 2020 $ 9,646 $ 9,215 $ 3,035 $ 2,759 443 589 $ 3,478 $ 3,348

(II) Lease Liabilities

December 31, 2021 December 31, 2020

Carrying amounts Current $ 5,425 $ 2,746 Non-current $ 8,053 $ 4,161

Range of discount rate for lease liabilities was as follows:

December 31, 2021 December 31, 2020 Buildings 0.67%~0.79% 0.79%~1.39% Transportation equipment 0.67%~0.79% 0.79%~1.39%

(III) Other lease information

Total cash outflow for leases

For the year ended For the year ended 2021 2020 ( $ 3,130) ( $ 3,254)

XV.OTHER ASSETS

December 31, 2021 December 31, 2020 Current Prepaid expenses $ 13,702 $ 11,273 Prepayments 2,880 3,168

• 43 -

Offset Against Business Tax Payable Temporary Payments Non-current Defined Benefit Asset(Note19) Overdue receivables Allowance for Overdue Receivable Deferred expenses Others	December 31, 2021 76,717 5,287 $ 98,586 $ 9,212 196,741 ( 196,741 ) 101,259 41,309 $ 151,780	December 31, 2020
		97,606 9,527 $ 121,574 $ 10,596 196,741 ( 196,741 ) 85,085 31,554 $ 127,235

XVI.BORROWINGS

B	Short-term borrowings Unsecured borrowings Line of credit borrowings Rate of interest per annum (%) ONDS PAYABLE 5thDomestic unsecured convertible bonds Due within 1 year	December 31, 2021 $ 2,108,520 0.61%~0.85% December 31, 2021 $ 857,842 ( 857,842) $ -	December 31, 2020	December 31, 2020
			$ 1,082,240 0.64%~0.75% December 31, 2020
		(	(	$ 1,179,157 1,179,157) $ -

XVII.BONDS PAYABLE

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

• 44 -

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 transaction cost
allocated to equity component)	(	45,527 )
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 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

• 45 -

XVIII.OTHER LIABILITIES

OTHER LIABILITIES
Other payables-current Payables for salaries and bonuses Payables for other expenses Other payables – related parties (Note 31) Other liabilities－current Temporary credits Others Other liabilities－non-current Deposits received	December 31, 2021 $ 285,081 164,551 3,232 $ 452,864 $ 67,559 10,016 $ 77,575 $ 815	December 31, 2020
			$ 340,147 131,769 2,182 $ 474,098 $ 47,583 8,916 $ 56,499 $ 824

XIX.RETIREMENT BENEFIT PLANS

(I)Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA). Under the LPA, an 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 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 Company 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 Company 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 Company is required to fund the difference in one appropriation that should be made

• 46 -

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 Company has no right to influence the investment policy and strategy.

The amounts included in the individual balance sheets in respect of the Company’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 )

Movements in net defined benefit assets were as follows:

Balance on January 01, 2020 Service cost 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, 2020 Service cost Current service cost	Present Value of the Defined Benefit Obligation $ 62,877 573 503 1,076 - 444 2,219 1,578 4,241 - ( 3,590) 64,604 $ 575	Fair Value of the Plan Assets ($ 73,155) - ( 585) ( 585) ( 2,313 ) - - - ( 2,313) ( 2,737) 3,590 ( 75,200) $ -	Net Defined Benefit Asset ( $ 10,278 ) 573 ( 82) 491 ( 2,313 ) 444 2,219 1,578 1,928 ( 2,737) - ( 10,596) $ 575

• 47 -

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 226 801 - 2,969 ( 2,117 ) 3,737 4,589 - ( 2,444 ) $ 67,550	Fair Value of the Plan Assets ( 268 ) ( 268 ) ( 1,062 ) - - - ( 1,062 ) ( 2,676 ) 2,444 ( $ 76,762 )	Net Defined Benefit Asset
			( 42 ) 533 ( 1,062 ) 2,969 ( 2,117 ) 3,737 3,527 ( 2,676 ) - ( $ 9,212 )

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	December 31, 2021 $ 165 39 107 222 $ 533	December 31, 2020	December 31, 2020
			$ 154 36 104 197 $ 491

Through the defined benefit plans under the Labor Standards Law, the Company 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.

2. 48 -

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.

1. 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.

2. 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%

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

• 49 -

change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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

XX.EQUITY

• (I) Share capital

Common stock

Authorized shares（in thousands） Authorized capital Issued and paid shares (in thousands) Issued capital Advance Receipts for Share Capital	December 31, 2021 500,000 $ 5,000,000 366,119 $ 3,661,188 44,798 $ 3,705,986	December 31, 2020 500,000 $ 5,000,000 357,591 $ 3,575,905 - $ 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.

• 50 -

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 investment in subsidiaries and associates by using the equity method Share option Employee restricted stock Expired share option Others	December 31, 2021 $ 1,090,775 3,063,571 36,197 11,618 32,642 55,784 150,566 473 $ 4,441,626	December 31, 2020
			$ 1,448,441 2,846,020 50,516 5,990 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).

• 51 -

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 22-8 employee benefits and remuneration of directors.

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:

• 52 -

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 Cash dividend	Appropriation of Earnings $ 65,499 ( 1,110,264 ) 607,738	Dividends per share (NT$)
		$ 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

• 53 -

financial statements of a foreign operation (including subsidiaries) shall be based on the Company’s disposal of ownership. In the event that the Company 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

Beginning balance Recognized for the year Exchange differences on translating the financial statements of foreign operations Share from subsidiaries and associates accounted for using the equity method Disposal of subsidiaries Ending balance	For the year ended 2021 ( $ 514,953 ) ( 63,871 ) ( 3,032 ) - ( $ 581,856 )	For the year ended 2020
		( $ 497,082 ) ( 21,747 ) ( 32 ) 3,908 ( $ 514,953 )

• 54 -

• 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 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 25 for more details.

Beginning balance Issued for the year Cancelled 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 )

• 55 -

(VI) Treasury Stock

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

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 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

XXI.REVENUE

For the year ended For the year ended

• 56 -

2021 Revenue from contracts Revenue from product sales $ 20,562,652 Contract balance December 31, 2021 December 31, 2020 Notes receivable $ - $ - Notes receivable－related parties (Note 30） - 11,250 Accounts receivable (Note10) 5,443,505 5,468,334 Accounts receivable - related parties (Note 31） 1,045,699 1,327,557 $ 6,489,204 $ 6,807,141 Contract liabilities - current Product sales $ 155,147 $ 191,941	2021 Revenue from contracts Revenue from product sales $ 20,562,652 Contract balance December 31, 2021 December 31, 2020 Notes receivable $ - $ - Notes receivable－related parties (Note 30） - 11,250 Accounts receivable (Note10) 5,443,505 5,468,334 Accounts receivable - related parties (Note 31） 1,045,699 1,327,557 $ 6,489,204 $ 6,807,141 Contract liabilities - current Product sales $ 155,147 $ 191,941	2021 Revenue from contracts Revenue from product sales $ 20,562,652 Contract balance December 31, 2021 December 31, 2020 Notes receivable $ - $ - Notes receivable－related parties (Note 30） - 11,250 Accounts receivable (Note10) 5,443,505 5,468,334 Accounts receivable - related parties (Note 31） 1,045,699 1,327,557 $ 6,489,204 $ 6,807,141 Contract liabilities - current Product sales $ 155,147 $ 191,941				2020
					$	16,484,007 January 01, 2020
		$ - 11,250 5,468,334 1,327,557 $ 6,807,141 $ 191,941				$ 43,346 - 3,333,540 68,754 $ 3,445,640 $ 230,022

XXII. PROFIT BEFORE INCOME TAX

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

(I) Interest income

(I) Interest income
Bank deposits (II) Other income Rental incomes Dividend Government grant Other income	For For	the year ended 2021 $ 2,416 the year ended 2021 $ 5,813 4,491 - 18,671 $ 28,975	For For	the year ended 2020 $ 5,720 the year ended 2020
				$ 6,122 4,491 53,402 13,855 $ 77,870

• 57 -

(III) Other gains and losses

Other gains and losses
Gain on disposal of property, plant and equipment Gain on disposal of associates Gain on disposal of subsidiaries Foreign currency exchange gain (loss) Gain (loss) on financial assets and liabilities measured at FVTPL Others	For the year ended 2021 $ 83 105,631 - ( 84,847 ) 29,958 ( 61) $ 50,764	For the year ended 2020
		$ 113 - 833,061 21,828 ( 9,201 ) ( 4,815) $ 840,986

(IV) Finance costs

Finance costs
Interest on convertible bond Interest on bank loans Interest on lease liabilities	For	the year ended 2021	For	the year ended 2020
		$ 15,340 15,191 55 $ 30,586		$ 17,075 13,243 38 $ 30,356

• (V) Impairment losses recognized (reversed)

Accounts Receivable Inventory（includes operating cost）	For (	the year ended 2021 $ 48 ) $ 6,434	For ( (	the year ended 2020 $ 47 ) $ 3,121 )

• (VI) Depreciation and amortization

Depreciation and amortization
Property, plant and equipment Right-of-use assets Deferred expenses	For	the year ended 2021 $ 101,659 3,478 52,287 $ 157,424	For	the year ended 2020
				$ 81,825 3,348 51,308 $ 136,481

Depreciation Expenses by Function

• 58 -

Operating costs Operating expenses Amortization expenses by function Operating costs Operating expenses (VII) Employee Benefits Expenses Post-employment benefits Defined contribution plans Defined benefit plans (Note 19） Share-based payments Equity-settled Other employee benefit Total employee benefits expenses Employee benefits expense by function Operating costs Operating expenses	For	$ 45,532 59,605 $ 105,137 $ 787 51,500 $ 52,287 the year ended 2021 $ 40,931 533 41,464 45,298 1,149,947 $ 1,236,709 $ 290,850 945,859 $ 1,236,709	For	$ 29,819 55,354 $ 85,173 $ 345 50,963 $ 51,308 the year ended 2020
				$ 37,160 491 37,651 22,649 1,135,277 $ 1,195,577 $ 215,152 980,425 $ 1,195,577

(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:

• 59 -

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 individual 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 individual 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.

• 60 -

XXIII. INCOME TAXES

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

For the year ended 2021 For the year ended 2020 Current income tax In respect of the current year $ 24,998 $ 60,273 Income tax on unappropriated earnings 2,099 - Adjustments for prior years 8,889 3,929 35,986 64,202 Deferred tax In respect of the current year ( 8,759 ) 7,661 Adjustments for prior years - 17,622 Income tax expense recognized in profit or loss $ 27,227 $ 89,485 A reconciliation of accounting profit and income tax expense is as follows: For the year ended 2021 For the year ended 2020 Income before income tax from continuing operations $ 707,020 $ 1,459,640 Income tax expense calculated at the statutory rate $ 141,404 $ 291,928 Nondeductible expenses in determining taxable income 10,430 10,775 Tax-exempt income ( 113,410 ) ( 232,232 ) Income tax on unappropriated earnings 2,099 - Unrecognized deductible temporary differences ( 22,185 ) ( 2,537 ) Adjustments for prior years’ tax 8,889 21,551 Income before income tax from continuing operations $ 27,227 $ 89,485	For	the year ended 2020

• (II) Current tax asset and liability

Current tax asset and liability
Current tax asset Tax refund receivable Current tax liability Income tax payable	December 31, 2021 $ - $ 21,071	December 31, 2020
			$ 1,236 $ 51,830

• 61 -

(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

For the year ended December 31, 2021	For the year ended December 31, 2021
Opening Balance Deferredtax assets Temporary differences Write-down of inventories $ 2,487 Allowance for loss exceeded 5,542 Unrealized exchange losses - Loss carryforwards 29,684 $ 37,713 Deferred tax liabilities Temporary differences Gain on foreign investment accounted for under the equity method $ 205,313 Unrealized exchange gains 836 Others 2,671 $ 208,820 For the year ended December 31, 2020 Opening Balance Deferredtax assets Temporary differences Write-down of inventories $ 3,111 Allowance for loss exceeded 12,221 Loss carryforwards 47,306 $ 62,638 Deferred tax liabilities Temporary differences Gain on foreign investment accounted for under the equity method $ 205,313 Unrealized exchange gains 1,623 Others 1,526		Recognized in Profit or Loss $ 1,287 624 6,286 - $ 8,197 $ - ( 836 ) 274 ( $ 562 ) Recognized in Profit or Loss ( $ 624 ) ( 6,679 ) ( 17,622) ( $ 24,925 ) $ - ( 787 ) 1,145	Closing Balance
			$ 3,774 6,166 6,286 29,684 $ 45,910 $ 205,313 - 2,945 $ 208,258 Closing Balance
Deferredtax assets Temporary differences Write-down of inventories Allowance for loss exceeded Loss carryforwards Deferred tax liabilities Temporary differences Gain on foreign investment accounted for under the equity method Unrealized exchange gains Others
				$ 2,487 5,542 29,684 $ 37,713 $ 205,313 836 2,671

• 62 -

$ 208,462 $ 358 $ 208,820

• (IV) Details on unused loss carryforwards, unused investment tax credits, and tax 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

• (V) 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.

• (VI) Income tax assesments

The tax return filing of the Company as of 2019 and previous years have been assessed by the tax authorities.

XXIV. EARNINGS PER SHARE

EARNINGS 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	Unit: NT$ Per Share For the year ended 2020 $ 3.86 $ 3.36

• 63 -

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

Current net income

Net income in computation of basic earnings per share 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	For the year ended 2020
			$ 1,370,155 13,660 $ 1,383,815

Ordinary shares

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
				354,868 45,627 4,000 7,909 412,404

If the Company offered to settle compensation or bonuses paid to employees in cash or shares, the Company 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

• 64 -

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.

XXV.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 Restricted 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:

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

• 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.

• 65 -

• 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 Restricted Stock Awards shall be placed under the custody of the trust. For those Restricted Stock Awards 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.

XXVI. ACQUISITION OF A SUBSIDIARY - WITH OBTAINED CONTROL

Please see note 27 of the 2021 consolidated financial report for details on acquisition of a subsidiary.

XXVII.DISPOSAL OF SUBSIDIARIES – WITH LOSS OF CONTROL

• 66 -

Please see note 28 of the 2021 consolidated financial report for details on disposal of investments in subsidiaries.

XXVIII. NON-CASH TRANSACTIONS

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

On June 9, 2020, the annual shareholders meeting of the Company resolved the proposed issuance of 4,000 thousand shares of Restricted Stock Awards, 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 Restricted Stock Awards was NT$45,298 thousand and NT$22,649 thousand respectively.

XXIX.CAPITAL MANAGEMENT

In consideration of the industry dynamics and future developments, as well as external environment factors, the Company 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 Company 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 management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders and the amount of new debt issued or existing debt redeemed.

• 67 -

XXX. FINANCIAL INSTRUMENTS

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

• Fair value hierarchy

December 31, 2021		Level 1 $ 123,612 - $ 123,612 $ 41,098 - $ 41,098		Level 2 $ - 2,274 $ 2,274 $ - - $ -		Level 3 $ - - $ - $ - 130,410 $ 130,410		Total
Financial assets at FVTPL Domestic listed stock Forward Exchange Contract total Financial assets at FVTOCI Equity instrument investment －Domestic and overseas listed stock －Domestic and overseas unlisted stock Total
								$ 123,612 2,274 $ 125,886 $ 41,098 130,410 $ 171,508

December 31, 2020

December 31, 2020
Financial assets at FVTPL Domestic listed stock Convertible options Total Financial liabilities at FVTPL Forward Exchange Contract Financial assets at FVTOCI Equity instrument investment		Level 1 $ 120,131 - $ 120,131 Level 1 $ -		Level 2 $ - 840 $ 840 Level 2 $ 7,278		Level 3 $ - - $ - Level 3 $ -		Total
								$ 120,131 840 $ 120,971 Total
								$ 7,278

• 68 -

－ Domestic and overseas listed stock $ 90,196 $ - $ - $ 90,196 － Domestic and overseas unlisted stock - - 116,087 116,087 Total $ 90,196 $ - $ 116,087 $ 206,283

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

==> picture [387 x 26] intentionally omitted <==

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

Financial Instruments Valuation Techniques and Inputs
Derivatives - foreign Discounted cash flow: Future cash flows are
----- End of picture text -----

Financial Instruments Derivatives - foreign	Valuation Techniques and Inputs Discounted cash flow: Future cash flows are
currency forward	estimated based on observable forward
contracts	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 method to calculate the present value of the expected return from holding the investment target.

• 69 -

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 through other comprehensive income Fair value after amortized cost （Note 1） Financial liabilities Fair value through profit or loss Fair value after amortized cost （Note 2）	December 31, 2021 $ 125,886 171,508 6,876,767 - 6,410,383	December 31, 2020
		$ 120,971 206,283 7,778,988 7,278 7,426,279

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

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

• (III) Financial risk management objective and policies

The Company’s major financial instruments include equity instrument investment, accounts receivable, accounts payable, bonds payable, loans and lease liabilities. The

• 70 -

Company’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 Company 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 Company’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 Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Company’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 Company’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 Company’s exposure to market risks or the manner in which these risks were managed and measured.

(1) Foreign Currency Risk

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

The carrying amounts of the significant monetary assets and liabilities not denominated in functional currency and the carrying amounts of derivatives

• 71 -

that are exposed to foreign currency risks at the end of the reporting period are set out in Note 33.

Sensitivity analysis

The Company was mainly exposed to the USD.

The following table details the Company’s sensitivity to a 1% increase and decrease in the New Taiwan dollars (the functional currency) against the relevant foreign currencies. If the sensitivity rate increases or decreases 3%, the situation must be reported to the core management, which also indicates that a reassessment of the exchange rate fluctuation should be made. The sensitivity analysis includes 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 or equity associated with New Taiwan dollars strengthening 1% against the relevant currency; a negative number below indicates a decrease in pre-tax profit or equity associated with New Taiwan dollars weakening 1% against the relevant currency.

Profit or Loss

Impact of USD	Impact of USD
For the year 2021 $ 27,869	For the year 2020
	$ 31,350

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 Company that are still in circulation on the balance sheet date and have not undergone cash flow hedging.

The sensitivity analysis of the current year has not changed when compared to the previous year.

• 72 -

(2) Interest rate risk

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

The carrying amounts of the Company’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 $ 41,720 2,966,362 283,718	December 31, 2020
		$ 61,885 2,261,397 831,519

Sensitivity analysis

The sensitivity analysis below was determined based on the Company’s exposure to interest rates for derivative and 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 Company’s pre-tax profit for the years ended December 31, 2021 and 2020 would increase by NT$2,837 thousand and NT$8,315 thousand, respectively. The main reason for the above derived from the net position of bank deposits measured at fair value interest rate risk of the Company.

• 73 -

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 Company’s investments in equity securities investment. The Company assigns a designated team to monitor price flucutations and evaluate the timing to increase hedge positions.

Sensitivity analysis

The sensitivity analysis below was determined based on the Company’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 $1,715 thousand and $2,063 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 Company. As of the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to discharge an obligation and financial guarantees provided by the Company could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

• 74 -

3. Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’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 Company relies on bank borrowings as a substantial source of liquidity. The detailed information of the Company’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 Company’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 Company 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.

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.

==> picture [112 x 11] intentionally omitted <==

==> picture [268 x 37] intentionally omitted <==

Non-derivative

• 75 -

financial liabilities Non-interest bearing Lease liabilities Fixed interest rate liabilities	$ 1,161,477 458 1,830,978 $ 2,992,913	$ 2,007,822 917 278,502 $ 2,287,241	$ 273,907 4,126 857,842 $ 1,135,875	$ - 8,115 -
				$ 8,115

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

Lease liabilities December 31,	2020 On Demand or Less than 1 Month $ 815,549 233 655,437 $ 1,471,219	Less than 1 year $ 5,501 1-3 Months 3 Months -1 Year $ 4,044,599 $ 303,911 698 1,861 427,798 1,179,157 $ 4,473,095 $ 1,484,929	Less than 1 year $ 5,501 1-3 Months 3 Months -1 Year $ 4,044,599 $ 303,911 698 1,861 427,798 1,179,157 $ 4,473,095 $ 1,484,929	Less than 1 year $ 5,501 1-3 Months 3 Months -1 Year $ 4,044,599 $ 303,911 698 1,861 427,798 1,179,157 $ 4,473,095 $ 1,484,929	1~5Years $ 8,115 1-5 Years $ - 4,187 - $ 4,187	1~5Years $ 8,115 1-5 Years $ - 4,187 - $ 4,187	1~5Years $ 8,115 1-5 Years $ - 4,187 - $ 4,187
Non-derivative financial liabilities Non-interest bearing Lease liabilities Fixed interest rate liabilities
				$ 303,911 1,861 1,179,157			$ - 4,187 - $ 4,187
				$ 1,484,929

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

Lease liabilities	Less than 1 year $ 2,792		1~5Years $ 4,187

• 76 -

(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 )	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 )	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 )		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
Netting settlement Forward exchange
	(	$ 7,278 )		$ -		$ -		$ -		$ -

(3) Financing facilities Credit Lines

Unsecured bank Loan facility －Amount used －Amount unused	December 31, 2021 $ 2,108,520 1,779,080 $ 3,887,600	December 31, 2020	December 31, 2020
			$ 1,082,240 2,661,360 $ 3,743,600

• 77 -

XXXI. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Company and other related parties are disclosed below.

• (I) Name of the related parties and relationship

==> picture [412 x 15] intentionally omitted <==

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

Name of related party Relationship with the Group
----- End of picture text -----

Name of related party	Relationship with the Group
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.）
Gemtek Electronics (Kunshan)	Subsidiary
Co., Ltd.
Gemtek	Subsidiary
Electronics (ChangShu) Co.,
Ltd.
Gemtek Vietnam Co., Ltd.	Subsidiary
Gemtek CZ., s.r.o.	Subsidiary
5V TECHNOLOGIES, TAIWAN	Subsidiary (Became an associate on
LTD	January 30, 2020.）
BROWAN Communications	Associates
Incorporation
ANTEK NETWORKS INC.	Associates
BandRich Inc.	Associates

(II)	Sales Revenue Type/Name of related party Subsidiary Others Associate Others	For	the year ended 2021 $ 368,278 586,142 $ 954,420	For	the year ended 2020
					$ 171,297 297,708 $ 469,005

• 78 -

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

(III) Purchase and Processing Fee

==> picture [412 x 170] intentionally omitted <==

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

Type/Name of related party For the year ended For the year ended
2021 2020
Subsidiary
Gemtek Electronics (Kunshan)
Co., Ltd. $ 5,166,453 $ 4,758,107
Gemtek Electronics (ChangShu)
Co., Ltd. 4,199,079 3,743,950
Gemtek Vietnam Co., Ltd. 7,059,969 1,613,251
Others 188,169 195,315
Associate
Others 33,908 -
$ 16,647,578 $ 10,310,623
----- End of picture text -----

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 prices have no significant objects for comparison. Payment terms are determined by the actual status of the company’s assets.

(IV) Receivables from related parties

==> picture [410 x 79] intentionally omitted <==

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

Type/Name of related December 31, December 31,
Account party 2021 2020
Notes receivables – Associate
related parties
BROWAN $ - $ 11,250
Communications
----- End of picture text -----

related parties	BROWAN Communications	$	-	$ 11,250
	Incorporation
Accounts	Subsidiary
receivables –
related parties
	Gemtek Vietnam Co.,	$	750,502	$ 1,135,169
	Ltd.
	BROWAN		185,112	-
	Communications
	Incorporation
	Others		76,841	85,880

• 79 -

Associate Others	33,244 $ 1,045,699	106,508 $ 1,327,557

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.

(V) Other receivables from related parties

==> picture [412 x 87] intentionally omitted <==

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

Type/Name of related party December 31, 2021 December 31, 2020
Subsidiary
Gemtek CZ., s.r.o. $ 12,918 $ 9,003
Associate
Others 424 513
$ 13,342 $ 9,516
----- End of picture text -----

Other receivables of the Company 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

==> picture [412 x 168] intentionally omitted <==

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

Type/Name of related December 31, December 31,
Account party 2021 2020
Accounts Subsidiary
payable-related
parties
Gemtek Electronics $ 1,596,933 $ 2,710,405
(Kunshan) Co.,
Ltd.
Others 312,083 264,648
Associate
Others - 304
$ 1,909,016 $ 2,975,357
----- End of picture text -----

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

• 80 -

(VII) Other trade payables to related parties

==> picture [412 x 99] intentionally omitted <==

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

Type/Name of related party December 31, 2021 December 31, 2020
Subsidiary
Gemtek Electronics
(Kunshan) Co., Ltd. $ 1,246 $ 2,182
Associate
AMPAK Technology Inc. 1,986 -
$ 3,232 $ 2,182
----- End of picture text -----

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

(VIII) Acquired property, plant, and equipment

Type/Name of related party Subsidiary Gemtek Electronics (ChangShu) Co., Ltd. Gemtek Electronics (Kunshan) Co., Ltd.		Acquired Proceeds	Acquired Proceeds	Acquired Proceeds
	For	the year ended 2021 $ 459 5,198 $ 5,657	For	the year ended 2020
				$ 1,738 4,534 $ 6,272

(IX)Disposal of property, plant, and equipment

Type/Name of related party Subsidiary Gemtek Vietnam Co., Ltd Gemtek Electronics (Kunshan) Co., Ltd.	Disposal ofproceeds For the year ended 2021 For the year ended 2020 $ 262 1,236 5,413 5,145 $ 5,675 $ 6,381	Disposal ofproceeds For the year ended 2021 For the year ended 2020 $ 262 1,236 5,413 5,145 $ 5,675 $ 6,381	Disposal of	gain(loss)	gain(loss)
	For the year ended 2021		For the year ended 2021 $ - 100 $ 100	For the year ended 2020
		$ 262 5,413 $ 5,675			114 - $ 114

• 81 -

(X) Other transactions with related parties

==> picture [412 x 203] intentionally omitted <==

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

For the year ended For the year ended
Type/Name of related party 2021 2020
Rent income
Subsidiary
AMPAK Technology Inc. $ - $ 2,487
Others 241 181
Associate
AMPAK Technology Inc. $ 4,592 $ 1,772
Others 663 465
$ 5,496 $ 4,905
Other income
Subsidiary $ - $ 352
Associate 1,547 251
$ 1,547 $ 603
----- End of picture text -----

Rental income of the Company collected from associates were based on the market price.

(XI) Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For	the year ended 2021 $ 42,583 768 $ 43,351	For	the year ended 2020
				$ 40,325 771 $ 41,096

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

XXXII. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

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

• 82 -

Pledged bank deposits (included in financial assets measured at amortized cost)

December 31, 2021 December 31, 2020 $ 20,000 $ 40,000

XXXIII.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

As of the year December 31, 2021 and 2020, the financial guarantee for tariff covenants were NT$20,000 thousand and NT$40,000 thousand, respectively.

XXXIV. SIGNIFICANT FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company 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

Foreign currency asset Monetary items USD Non-monetary	Foreign Currencies $ 273,504	Exchange Rate 27.68（USD：NTD）		Carrying Amount
				$ 7,570,577

• 83 -

items Investments accounted for using equity method USD 234,972 Financial asset measured at fair value through other comprehensiv e income USD 5,083 Foreign currency liabilities Monetary items USD 172,819 December 31, 2020 Foreign Currencies Foreign currency asset Monetary items USD $ 311,474 Non-monetary items Investments accounted for using equity method USD 172,699 Financial asset measured at fair value through other comprehensiv e income USD 6,692 (Continued)	27.68（USD：NTD） 27.68（USD：NTD） 27.68（USD：NTD） Exchange Rate 28.48(USD:NTD) 28.48(USD:NTD) 28.48(USD:NTD)		$ 6,504,022 140,706 $ 6,644,728 $ 4,783,640 Carrying Amount
Foreign currency asset Monetary items USD Non-monetary items Investments accounted for using equity method USD Financial asset measured at fair value through other comprehensiv e income USD (Continued)
			$ 8,870,768 $ 4,918,477 190,594 $ 5,109,071

• 84 -

(Brought Forward)

Foreign currency liabilities Monetary items USD	Foreign Currencies $ 201,393	Exchange Rate 28.48(USD:NTD)		Carrying Amount
				$ 5,735,670

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

Foreign Currencies USD	For theyear ended 2021 Exchange Rate Net Foreign Exchange Loss 27.68（USD:NTD） ($ 84,847 )	For theyear ended 2020	For theyear ended 2020
	Exchange Rate 27.68（USD:NTD）	Exchange Rate 28.48（USD:NTD）	Net Foreign Exchange Gain $ 21,828

XXXV. 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 investments 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 30)

• Information on investees. (Table 5)

• 85 -

• (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 6)

     • (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 on 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 ）

• 86 -

TABLES

GEMTEK TECHNOLOGIES CO., LTD. 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	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	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 (Cha ngShu) Co., Ltd. Gemtek Electronics (Suzhou) Co. Ltd. Gemtek Electronics (Cha ngShu) 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 for 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.

• 87 -

GEMTEK TECHNOLOGIES CO., LTD.

MARKETAB LE SECUR ITIES HELD

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 2

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

==> picture [732 x 377] intentionally omitted <==

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

Ending Balance on December 31, 2020
Type and Name of Marketable Relationship with the Financial Statement
Holding Company Name Securities Holding Company Account Shares/ Units (in thousands) Carrying Value Percentage of Ownership ％ Fair Value Note
Gemtek Technologies Stock
Co.,Ltd.
ITEQ CORPORATION None Financial assets 871 $ 123,612 0.23 $ 123,612
measured at fair value
through profit and loss
- current
TAI-SAW TECHNOLOGY CO., The Corporation serves as Financial assets 691 27,741 0.67 27,741
LTD. corporate director measured at fair value
through other
comprehensive
income – non-current
Green Packet Bhd. None 〃 26,273 13,357 2.81 13,357
LIONIC CORP. 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 Stock
Co.,Ltd.
Sky Phy Networks Limited 〃 Financial assets 4,943 - 13.82 - Preferred stock
measured 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 - 16,974 - 16,974
measured at fair value ( USD 613 ) ( USD 613 )
----- End of picture text -----

• 88 -

==> picture [732 x 151] intentionally omitted <==

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

through profit and loss
- current
Stock
Polaris Group None Financial assets 26,467 1,947,211 3.68 1,947,211
measured at fair value ( USD 70,347 ) ( USD 70,347 )
through other
comprehensive
income – non-current
Tianhan Technology （ Wujiang ） 〃 〃 - - 11.54 -
Limited Company
UBITUS Inc. 〃 〃 200 - 2.32 -
Bond
Standard Chartered Bank 〃 Financial assets - $ 127,412 - $ 127,412
Subordinate Bond measured at amortized ( USD 4,603 ) ( USD 4,603 )
cost － non-current
----- End of picture text -----

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

• 89 -

GEMTEK TECHNOLOGIES CO., LTD.

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

==> picture [731 x 292] intentionally omitted <==

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

Notes/Accounts Receivable
Transaction Details Abnormal Transaction
(Payable)
Company Name Related Party Relationship Note
Purchases/Sales Amount ％ to Total Payment U n i t P r i c e Payment Terms Ending Balance % to Total
Terms
Gemtek Technologies Gemtek Electronics Investment in subsidiary Purchase and $ 5,166,453 23% Note 1 Note 1 Note 1 ( $ 1,596,933 ) ( 53% ) Note 2
Co., Ltd. (Kunshan) Co., Ltd. through third region processing
expenses
Gemtek Investment in subsidiary Purchase and 4,199,079 18% Note 1 Note 1 Note 1 ( 312,083 ) ( 10% ) Note 2
Electronics (ChangSh through third region processing
u) Co., Ltd. expenses
Gemtek CZ., s.r.o. Investment in subsidiary Purchase and 188,169 1% Note 1 Note 1 Note 1 12,014 - Note 2
through third region processing
expenses
Gemtek Vietnam Co., Ltd. Subsidiary Purchase and 7,059,969 31% Note 1 Note 1 Note 1 750,502 12% Note 2
processing
expenses
Gemtek Electronics Gemtek Technologies Parent company Sale and ( 5,166,453 ) ( 66% ) Note 1 Note 1 Note 1 1,596,933 76% Note 2
(Kunshan) Co., Ltd. Co., Ltd. processing
income
Gemtek Gemtek Technologies Parent company Sale and ( 4,199,079 ) ( 77% ) Note 1 Note 1 Note 1 312,083 68% Note 2
Electronics (ChangSh Co., Ltd. processing
u) Co., Ltd. income
Gemtek CZ., s.r.o. Gemtek Technologies Parent company Sale and ( 188,169 ) ( 99% ) Note 1 Note 1 Note 1 ( 12,014 ) ( 22% ) Note 2
Co., Ltd. processing
income
Gemtek Vietnam Co., Ltd. Gemtek Technologies Parent company Sale and ( 7,059,969 ) ( 95% ) Note 1 Note 1 Note 1 ( 750,502 ) ( 54% ) Note 2
Co., 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 prices have no significant objects for comparison. 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.

.

• 90 -

GEMTEK TECHNOLOGIES CO., LTD.

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, Un less Stated Otherwise

==> picture [731 x 150] intentionally omitted <==

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

Overdue Amounts Received in Allowance for
Company Name Related Party Relationship Ending Balance Turnover Rate Amount Actions Taken Subsequent Period Impairment
Gemtek Electronics Gemtek Technologies Parent company $ 1,596,933 2.40 $ - - $ 439,710 $ -
(Kunshan) Co., Ltd Co., Ltd.
Gemtek Gemtek Technologies Parent company 312,083 14.56 - - 312,083 -
Electronics (ChangSh Co., Ltd.
u) Co., Ltd.
Gemtek Technologies Gemtek Vietnam Co., Subsidiary 750,502 7.49 - - 132,356 -
Co., Ltd. Ltd.
Gemtek Technologies BROWAN Subsidiary 185,112 3.82 - - 137,260 -
Co., Ltd. Communications
Incorporation
----- End of picture text -----

• 91 -

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

TABLE 5

GEMTEK TECHNOLOGIES CO., LTD. INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2021

==> picture [1064 x 309] intentionally omitted <==

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

Original Investment Amount As of December 31, 2021
Investor Company Investee Company Location Main Businesses and Products December 31, 2021 December 31, 2020 Shares/Units (In Thousands) % Carrying Amount Net Income (Loss) of the Investee Share of Profit (Loss) Note
Gemtek Technologies Co., Gemtek Investment Co.,Ltd. Hsinchu County, Taiwan Investment $ 469,457 $ 769,457 46,946 100.00 $ 1,154,450 $ 199,276 $ 199,276 Note 3
Ltd.
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 Mauritius Investment 207,969 207,969 6,145 100.00 68,176 ( 634 ) ( 634 ) Note 3
( USD 6,145 ) ( USD 6,145 )
AMPAK Technology Inc. Hsinchu County, Taiwan Telecommunications 512,854 512,854 20,101 33.37 1,082,428 408,182 124,245
（ Note 1 ）
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 Incorporation Hsinchu County, Taiwan Telecommunications 297,826 144,826 11,815 33.68 295,621 163,478 37,945
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 Investment Ampak International Holdings Ltd. Independent State of Investment 1,099,843 1,099,843 36,000 100.00 1,100,261 41,496 41,496 Note 3
Co., Ltd. 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 Islands Investment 73,886 73,886 2,297 100.00 16,500 ( 93 ) ( 93 ) Note 3
( 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 Seychelles Investment 30,260 30,260 1,002 30.00 13,065 ( 367 ) ( 110 )
( USD 1,000 ) ( USD 1,000 ) ( USD 472) ( USD -12 ) ( USD -4 )
Gemtek Investment Co., Ltd. BROWAN Communications Incorporation Hsinchu County, Taiwan Telecommunications 141,825 141,825 5,895 16.81 125,216 163,478 33,314
BandRich Inc. New Taipei City, Taiwan Telecommunications 55,000 55,000 5,500 27.04 3,868 ( 5,623 ) ( 1,520 )
5V TECHNOLOGIES, TAIWAN LTD. Taipei City, Taiwan Telecommunications 90,000 90,000 9,000 97.92 163,375 88,358 84,323 Note 3
（ Note 2 ）
----- End of picture text -----

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, less the identifiable intangible assets adjusted amortization of the current period NT$2,197 thousand.

• 92 -

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

TABLE 6

GEMTEK TECHNOLOGIES CO., LTD.

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2021

==> picture [1079 x 399] intentionally omitted <==

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

Accumulated Outward Investment Flow Accumulated Outward
Remittance for Remittance for % Ownership Accumulated
Main Businesses and Net Income (Loss) of of Direct or Investment Gain Carrying Amount as of Repatriation of
Investee Company Products Share Capital Method of Investment (Note 1) Taiwan as of January Investment from Outflow Inflow Investment from Taiwan as of the Investee Indirect (Loss) December 31, 2021 Investment Income as Note
Investment of December 31, 2021
01, 2021 December 31, 2021
Gemtek Electronics Manufacturing of $ 231,128 Indirect investment in Mainland $ 230,270 $ - $ - $ 230,270 ( $ 478 ) 100.00 ( $ 478 ) $ 84,440 $ - Note 3
(Suzhou) Co. Ltd. wireless China through a holding
telecommunication ( USD 8,350 ) company established in other ( USD 8,319 ) ( USD 8,319 ) ( USD -17 ) ( USD -17 ) ( USD 3,051 )
products such as countries － Brightech
wireless network International Co Ltd and
cards and wireless Primx Communication (BVI)
gateways Inc
Gemtek Electronics Manufacturing of 415,200 Indirect investment in Mainland 415,200 - - 415,200 25,496 100.00 25,496 2,566,666 - Note 3
(Kunshan) Co., Ltd wireless China through a holding
telecommunication ( USD 15,000 ) company established in other ( USD 15,000 ) ( USD 15,000 ) ( USD 909 ) ( USD 909 ) ( USD 92,726 )
products such as countries － G-Technology
wireless network Investment Co Ltd.
cards and wireless
gateways
Browan Communications R&D, production, sales 110,720 Indirect investment in Mainland 110,720 - - 110,720 ( 12,756 ) 100.00 ( 12,756 ) 8,076 -
(Xi’An) Inc. and provision of China through a holding
technical consulting ( USD 4,000 ) company established in other ( USD 4,000 ) ( USD 4,000 ) ( USD -456 ) ( USD -456 ) ( USD 292 )
and related services countries － Wi Tek
for wireless network Investment Co Ltd.
products
AIPTEK Technology Manufacturing of digital 431,808 Indirect investment in Mainland 24,912 - - 24,912 - 11.54 - - -
(Wujiang) Co., Ltd. products China through a holding
( USD 15,600 ) company established in other ( USD 900 ) ( USD 900 )
countries － G-Technology
Investment Co Ltd
Gemtek R&D, production, sales 996,480 Indirect investment in Mainland 996,480 - - 996,480 41,496 100.00 41,496 1,100,261 - Note 3
Electronics (ChangSh and provision of China through a holding
u) Co., Ltd. technical consulting ( USD 36,000 ) company established in other ( USD 36,000 ) ( USD 36,000 ) ( USD 1,491 ) ( USD 1,491 ) ( USD 39,749 )
and related services countries － G-Technology
for wireless network Investment Co Ltd
products
Accumulated Outward Remittance for Investment in Investment Amounts Authorized by Investment Upper Limit on the Amount of Investment Stipulated by
Mainland China as of December 31, 2021 Commission, MOEA Investment Commission, MOEA
$ 1,793,110 $ 1,765,430
$ 7,013,896
USD 64,780 （註 1 ） USD 63,780
----- End of picture text -----

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 4, 5 and 6 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.

• 93 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM STATEMENT INDEX

MAJOR ACCOUNTING ITEMS IN ASSETS,
LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH	Statement 1
EQUIVALENTS
STATEMENT OF ACCOUNTS RECEIVABLE	Statement 2
STATEMENT OF INVENTORIES	Statement 3
STATEMENT OF OTHER CURRENT ASSETS	Note 15
STATEMENT OF CHANGES IN FINANCIAL	Statement 4
ASSETS AT FAIR VALUE THROUGH
OTHER COMPREHENSIVE
INCOME-NON-CURRENT
STATEMENT OF CHANGES IN	Statement 5
INVESTMENTS ACCOUNTED FOR USING
EQUITY METHOD
STATEMENT OF CHANGES IN PROPERTY,	Note 13
PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN	Note 13
ACCUMULATED DEPRECIATION AND
ACCUMULATED IMPAIRMENT OF
PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF DEFERRED TAX ASSETS	Note 23
STATEMENT OF OTHER NON-CURRENT	Note 15
ASSETS
STATEMENT OF SHORT-TERM	Statement 6
BORROWINGS
STATEMENT OF ACCOUNTS PAYABLE	Statement 7
STATEMENT OF DEFERRED TAX	Note 23
LIABILITIES
STATEMENT OF OTHER NON-CURRENT	Note 18
LIABILITIES

• 94 -

MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY

• MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS

• STATEMENT OF OPERATING REVENUE Statement 8 STATEMENT OF OPERATING COSTS Statement 9 STATEMENT OF SELLING EXPENSES Statement 10 STATEMENT OF GENERAL AND Statement 11

• STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES

• STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

• Statement 12

• STATEMENT OF EMPLOYEE BENEFITS, Statement 13 DEPRECIATION AND AMORTIZATION

• 95 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT1

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 129] intentionally omitted <==

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

Item Description Amount
Cash on hand note 1 $ 1,111
Checking accounts and note 2 283,718
demand deposits
Time deposits note 3 21,720
$ 306,549
----- End of picture text -----

Note 1: Foreign currency included and their exchange rates were as follows:

Foreign Currency	Amount	Exchange Rate
USD	$ 7thousand	USD: NTD=1 : 27.68
RMB	$ 1 thousand	RMB: NTD=1 : 4.344
EUR	$ 21 thousand	EUR: NTD=1 : 31.32
JPY	$ 15 thousand	JPY: NTD=1 : 0.2405
VND	$ 26,500 thousand	VND: NTD=1 : 0.0012
Total
Amount in		$900 thousand
NTD

Note 2: Foreign currency included and their exchange rates were as follows:

Foreign Amount Exchange Rate Currency USD $ 5,146 thousand USD: NTD=1 : 27.68

• 96 -

RMB $ 364 thousand RMB: NTD=1 : 4.344 CZK $27,468 thousand CZK: NTD=1 : 1.261 EUR $ 2,164 thousand EUR: NTD=1 : 31.32 JPY $ 7 thousand JPY: NTD=1 : 0.2405 Total Amount in $246,434 thousand NTD

Note 3: Foreign currency included and their exchange rates were as follows:

Foreign Amount Exchange Rate Currency RMB $ 5,000 thousand RMB: NTD=1 : 4.344 Total Amount in $21,720 thousand NTD

• 97 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT2

STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 267] intentionally omitted <==

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

Customer Name Description Amount
－
Non-Related Parties
Compamy A Sale of goods $ 1,232,329
Compamy B Sale of goods 1,230,148
Compamy C Sale of goods 783,203
Compamy D Sale of goods 649,556
Compamy E Sale of goods 474,647
Others （ note ） Sale of goods 1,074,083
Less ： Loss allowance ( 461 )
$ 5,443,505
－
Related Parties
Gemtek Vietnam Co., Ltd. Sale of goods $ 750,502
5V Technologies, Taiwan Ltd. Sale of goods 76,841
Browan Communications Sale of goods 185,112
Incorporation
Others （ note ） Sale of goods 33,244
$ 1,045,699
----- End of picture text -----

Note: The amount for each individual client does not exceed 5% of the account balance.

• 98 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT3

STATEMENT OF INVENTORIES DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 172] intentionally omitted <==

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

Item Description Cost Net Realizable
Value
Raw materials PCB & IC $ 406,348 $ 391,517
Work in progress CARD & GATEWAY 90,924 88,906
Finished goods CARD & GATEWAY 122,646 120,624
Less ： provision for ( 18,871 ) -
inventory devaluation
loss
$ 601,047 $ 601,047
----- End of picture text -----

• 99 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT4 STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME-NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, In Thousands Shares/Units)

Name TAI-SAW Technology Co., Ltd Green Packet Bhd. Lionic Corporation Tempo Semiconductor, Inc. SKSpruce Holding Limited Greenwave Holding Inc.	Balance , January 1,2021 Shares/Units Fair Value 691 $ 15,270 26,273 74,926 225 419 3,276 - 2,241 29,297 3,965 86,371 $ 206,283	Balance , January 1,2021 Shares/Units Fair Value 691 $ 15,270 26,273 74,926 225 419 3,276 - 2,241 29,297 3,965 86,371 $ 206,283	Additions（note 1） Shares/Units Amounts - $ - - - 359 3,592 - - - - - - $ 3,592	Additions（note 1） Shares/Units Amounts - $ - - - 359 3,592 - - - - - - $ 3,592	Decrease（note 2） Shares/Units Collateral - $ - - - - - ( 3,276 ) ( 8,380 ) - - - - ( $ 8,380 )	Decrease（note 2） Shares/Units Collateral - $ - - - - - ( 3,276 ) ( 8,380 ) - - - - ( $ 8,380 )	Evaluation of Profit or (Loss) $ 12,471 ( 61,569 ) ( 950 ) 8,380 2,856 8,825 ( $ 29,987 )	Balance , December 31,2021 Shares/Units Fair Value 691 $ 27,741 26,273 13,357 584 3,061 - - 2,241 32,153 3,965 95,196 $ 171,508	Balance , December 31,2021 Shares/Units Fair Value 691 $ 27,741 26,273 13,357 584 3,061 - - 2,241 32,153 3,965 95,196 $ 171,508	Collateral None 〃 〃 〃 〃 〃	Note
	Shares/Units 691 26,273 225 3,276 2,241 3,965		Shares/Units - - 359 - - -		Shares/Units - - - ( 3,276 ) - -			Shares/Units 691 26,273 584 - 2,241 3,965
						( (	( ( (

Note 1: The increase derives from the purchasing of Lionic Corporation ordinary stock

Note 2: The decrease derives from the selling of Tempo Semiconductor, Inc. equity shares

• 100 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT5

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, In Thousands Shares/Units)

Investee Gemtek Investment Co.,Ltd. G-Technology Investment Co., Ltd. Brightech International Co., Ltd. Ampak Technology, Inc. Wi Tek Investment Co., Ltd. Browan Communications Incorporation Gemtek Vietnam Co., Ltd.	Balance, January 1,2021 Shares/Units Amounts 76,946 $ 846,419 78,600 4,313,409 6,145 69,191 20,101 1,048,268 4,000 20,950 11,191 10,656 - 514,927 $ 6,823,820	Balance, January 1,2021 Shares/Units Amounts 76,946 $ 846,419 78,600 4,313,409 6,145 69,191 20,101 1,048,268 4,000 20,950 11,191 10,656 - 514,927 $ 6,823,820	Additions（note 3） Shares/Units Amounts - $ - - - - - - - - - 624 258,631 - - $ 258,631	Additions（note 3） Shares/Units Amounts - $ - - - - - - - - - 624 258,631 - - $ 258,631	Decrease（note 4） Shares/Units Amounts ( 30,000 ) ( $ 430,912 ) - - - - - ( 80,402 ) - - - - - - ( $ 511,314 )	Capital Surplus $ - - - - - ( 8,691 ) - ( $ 8,691 )	Investment Profit or Loss （note 1） $ 199,276 44,438 ( 634 ) 124,245 ( 12,756 ) 37,945 79,878 $ 472,392	Conversion Adjustment （note 1） $ 359 ( 48,515 ) ( 381 ) ( 113 ) ( 112 ) ( 2,920 ) ( 15,221) ( $ 66,903 )	Fair Value through Other Comprehensive income （note 1） $ 539,308 1,538,848 - ( 9,570 ) - - - $ 2,068,586	Balance, December 31,2021 Shares/Units ％of ownership Amounts 46,946 100.00 $ 1,154,450 78,600 100.00 5,848,180 6,145 100.00 68,176 20,101 33.37 1,082,428 4,000 100.00 8,082 11,815 33.68 295,621 - 100.00 579,584 $ 9,036,521	Balance, December 31,2021 Shares/Units ％of ownership Amounts 46,946 100.00 $ 1,154,450 78,600 100.00 5,848,180 6,145 100.00 68,176 20,101 33.37 1,082,428 4,000 100.00 8,082 11,815 33.68 295,621 - 100.00 579,584 $ 9,036,521	Balance, December 31,2021 Shares/Units ％of ownership Amounts 46,946 100.00 $ 1,154,450 78,600 100.00 5,848,180 6,145 100.00 68,176 20,101 33.37 1,082,428 4,000 100.00 8,082 11,815 33.68 295,621 - 100.00 579,584 $ 9,036,521	Market Value or Net Assets Value（note 2） Unit Price （NT） Total Amounts 24.59 $ 1,154,450 74.40 5,848,180 11.09 68,176 118.77 2,387,396 2.02 8,082 25.02 295,621 579,584 $ 10,341,489	Market Value or Net Assets Value（note 2） Unit Price （NT） Total Amounts 24.59 $ 1,154,450 74.40 5,848,180 11.09 68,176 118.77 2,387,396 2.02 8,082 25.02 295,621 579,584 $ 10,341,489	Collateral
	Shares/Units 76,946 78,600 6,145 20,101 4,000 11,191 -		Shares/Units - - - - - 624 -		Shares/Units ( 30,000 ) - - - - - -					Shares/Units 46,946 78,600 6,145 20,101 4,000 11,815 -	％of ownership 100.00 100.00 100.00 33.37 100.00 33.68 100.00		Unit Price （NT） 24.59 74.40 11.09 118.77 2.02 25.02
															None 〃 〃 〃 〃 〃 〃

Note 1. Amount was recognized based on the audited financial statements of the investee as of December 31, 2021.

Note 2. Equity holding ratio is based on the shareholding percentages as stated in the financial reports of the investee and the Company.

Note 3. The increase derives from the acquisition of 9.35% equity shares, NT$153,000 thousand in cash in addition to the disposal of profits NT$105, 631 thousand associated with Browan Communications Incorporation. Note 4. The decrease derives from the acquisition of NT$130,912 thousand stock dividends and withdrawal of NT$300,000 thousand from capital decrease associated with Gemtek Investment Co.,Ltd. in addition to the acquisition of NT$80,402 thousand stock dividends associated with Ampak Technology, Inc.

• 101 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT6

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [1036 x 211] intentionally omitted <==

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

Balance, Range of Interest Rates Loan
Type End of The Year Contract Period （％） Commitments Collateral
Unsecured borrowings
E. Sun Bank $ 276,800 110.12.06~111.01.06 0.61% $ 300,000 None
Land Bank of Taiwan 55,360 110.12.24~111.01.24 0.71% 650,000 〃
Land Bank of Taiwan 83,040 110.12.27~111.01.27 0.69% 650,000 〃
Land Bank of Taiwan 221,440 110.12.30~111.02.07 0.64% 650,000 〃
KGI Bank 581,280 110.12.16~111.01.14 0.65% 600,000 〃
Standard Chartered 553,600 110.12.27~111.01.27 0.85% 830,400 〃
Standard Chartered 80,000 110.12.30~111.01.28 0.85% 830,400 〃
HSBC Bank 200,000 110.11.05~111.01.28 0.65% 276,800 〃
HSBC Bank 57,000 110.12.03~111.03.02 0.75% 276,800 〃
$ 2,108,520 $ 5,064,400
----- End of picture text -----

• 102 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT7

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 202] intentionally omitted <==

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

Vendor Name Description Amount
Non-Related Parties
Compamy A Purchase of goods $ 98,450
Compamy B Purchase of goods 81,079
Compamy C Purchase of goods 76,464
Others （ note ） Purchase of goods 825,333
$ 1,081,326
Related Parties
Gemtek Electronics Purchase of goods $ 1,596,933
(Kunshan) Co., Ltd.
Gemtek Electronics Purchase of goods 312,083
(ChangShu) Co., Ltd.
$ 1,909,016
----- End of picture text -----

Note: The amount for each individual client does not exceed 5% of the account balance.

• 103 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT8

STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 129] intentionally omitted <==

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

Quantity
ITEM (in thousands) Amount
GATEWAY 12,498 $ 17,896,580
CARD 20,331 644,849
Others 5,018 2,021,223
$ 20,562,652
----- End of picture text -----

• 104 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT9

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 369] intentionally omitted <==

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

ITEM Amount
Raw materials
Add: Raw materials, beginning of the
year $ 581,968
Purchase 3,878,746
Less ： Raw materials, end of the year ( 406,348 )
Others ( 3,923 )
4,050,443
Direct labor 96,720
Manufacturing expenses 310,086
Manufacturing cost 4,457,249
Add ： Work in progress, beginning of the year 212,409
Purchase 44
Less ： Transferred to expense and scrapped the
inventory ( 6,779 )
Work in progress, end of the year ( 90,924 )
Cost of finished goods 4,571,999
Add ： Finished goods, beginning of the year 6,054
Purchase 14,020,185
Less ： Transferred to expense and scrapped the
inventory ( 4,668 )
Finished goods, end of the year ( 122,646 )
Inventory devaluation loss 6,434
Others 560,751
Total $ 19,038,109
----- End of picture text -----

• 105 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT10

STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 147] intentionally omitted <==

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

ITEM Amount
Salary $ 168,956
Export expense 75,394
Certification fee 26,352
Others （ note ） 72,700
$ 343,402
----- End of picture text -----

Note: The amount for each individual client does not exceed 5% of the account balance.

• 106 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT11 STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 117] intentionally omitted <==

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

ITEM Amount
Salary $ 191,673
Repairing expense 14,743
Others （ note ） 71,065
$ 277,481
----- End of picture text -----

Note: The amount for each individual client does not exceed 5% of the account balance.

• 107 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT12 STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

==> picture [441 x 147] intentionally omitted <==

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

ITEM Amount
Salary $ 502,183
Insurance 40,060
Depreciation and amortization 84,931
Others （ note ） 93,475
$ 720,649
----- End of picture text -----

Note: The amount for each individual client does not exceed 5% of the account balance.

• 108 -

GEMTEK TECHNOLOGY CO., LTD.

STATEMENT13

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Employee benefits（note） Salary Share-based payment expenses Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	Year Ended December 31,2021	Year Ended December 31,2021	Year Ended December 31,2021	Total $ 988,933 45,298 84,960 41,464 15,025 61,029 $ 1,236,709 $ 105,137 $ 52,287	Year Ended December 31,2020	Year Ended December 31,2020	Year Ended December 31,2020
	Classified as Operating Costs $ 219,303 1,585 22,418 8,253 - 39,291 $ 290,850 $ 45,532 $ 787	Classified as Operating expenses $ 769,630 43,713 62,542 33,211 15,025 21,738 $ 945,859 $ 59,605 $ 51,500			Classified as Operating Costs $ 169,391 793 14,656 6,048 - 24,264 $ 215,152 $ 29,819 $ 345	Classified as Operating expenses $ 819,381 21,856 55,314 31,603 31,019 21,252 $ 980,425 $ 55,354 $ 50,963		Total
								$ 988,772 22,649 69,970 37,651 31,019 45,516 $ 1,195,577 $ 85,173 $ 51,308

Note 1: For the year ended December 31, 2021 and 2020, the average number of Company Employees are 1,079 and 958, respectively, which include 5 directors who are non-employees for both years. Note 2: The average amount of Employee Benefit Expenses for the years 2021 and 2020 were NTD 1,138 thousand and NTD 1,221 thousand, respectively. The average amount of Salary for the years 2021 and 2020 were NTD 963 thousand and NTD 1,060 thousand, respectively. The average salary decreased by 9% year over year.

Note 3: The Company no longer appoints supervisors as members of the Board, in which an audit committee shall be assigned to replace the role of the supervisor as required by law.

Note 4: Compensation and Remuneration of Employees and Directors:

(I) Directors

Pursuant to Article 20 of the Article of Incorporation, the Company shall, after deducting the employee bonuses and renumeration benefits of directors from the current year's pre-tax benefits, allocate 13.5% for employee profit sharing bonuses and 1.8% for the renumeration benefits of directors and supervisors. The aforementioned percentages shall be resolved by a majority vote at a meeting attended by more than two thirds of the total number of directors, and such distribution shall be reported at the shareholders' meeting. Remuneration of Directors shall be determined by the Company’s “Self-Evaluation of the Board of Directors of Gemtek Technology Co., Ltd”.

• (II) Managers

The average salary of the company’s managers provided must be competitive in the industry in order to attract outstanding professionals and increase employee loyalty. Managerial remuneration is determined by the scope of personal responsibilities and performances while taking into account the company's long-term and short-term goals.

• (III) Employees

The overall salary of the company's employees is based on the principle of internal fairness and external competitiveness, including both fixed salary and variable salary. Bonuses are provided to attract, motivate and retain talents. According to the Company’s Articles of Incorporation, the total amount of employee remuneration is distributed by deducting the employee bonuses and renumeration benefits of directors from the current year's pre-tax benefits prior to the allocation of 13.5% for employee profit sharing bonuses. Employee remuneration is determined by the level of personal responsibilities and professional skills. Bonuses and employee compensations are incentives to encourage higher levels of performances and contributions.

• 109 -