Infortrend - Audit Report / Information 2021

Stock Code: 2495

Infortrend Technology Inc.

Parent Company Only Financial Statements and Independent Auditors' Report

2021 and 2020

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

Company address: 8F., No. 102, Sec. 3, Zhongshan Rd., Zhonghe Dist., New Taipei City 235010, Taiwan (R.O.C.) Telephone No.: (02) 22260126

Item	Page
I. Cover II. Contents III. Independent Auditors' Report IV. Balance Sheet V. Statement of Comprehensive Income VI. Statement of Changes in Equity VII. Statement of Cash Flow VIII. Notes to Parent Company Only Financial Statements 1. Company Overview 2. Date and Procedures for the Adoption of the Financial Statements 3. Application of New and Revised Standards and Interpretations 4. Summary of Significant Accounting Policies 5. Significant accounting assumptions and Judgments, and major sources uncertainty 6. Descriptions of Significant Account 7. Related-Party Transactions 8. Pledged Assets 9. Significant Contingent Liabilities and Unrecognized Contractual Commitments 10. Losses due to Major Disasters 11. Significant Subsequent Events 12. Others 13. Supplementary Disclosures a. Information on significant transactions b. Information on investments in other companies c. Information on investments in mainland China d. Information on major shareholders 14. Segment information IX. Tables of Significant Accounting Items	1 2 3-6 7 8 9 10 11 11 11-12 12-25 25-26 26-56 56-58 58 58 58 58 59-60 60-63 63 63-64 64 64 65-76

Item

**Page **

I.
Cover
II.
Contents
III.
Independent Auditors' Report
IV. Balance Sheet
V.
Statement of Comprehensive Income
VI. Statement of Changes in Equity
VII. Statement of Cash Flow
VIII. Notes to Parent Company Only Financial Statements
1. Company Overview
2. Date and Procedures for the Adoption of the Financial Statements
3. Application of New and Revised Standards and Interpretations
4. Summary of Significant Accounting Policies
5. Significant accounting assumptions and Judgments, and major sources
uncertainty
6. Descriptions of Significant Account
7. Related-Party Transactions
8. Pledged Assets
9. Significant Contingent Liabilities and Unrecognized Contractual
Commitments
10. Losses due to Major Disasters
11. Significant Subsequent Events
12. Others
13. Supplementary Disclosures
a.
Information on significant transactions
b. Information on investments in other companies
c.
Information on investments in mainland China
d. Information on major shareholders
14. Segment information
IX. Tables of Significant Accounting Items

1
2
3-6
7
8
9
10
11
11
11-12
12-25
25-26
26-56
56-58
58
58
58
58
59-60
60-63
63
63-64
64
64
65-76

Independent Auditors' Report

To the Board of Directors of Infortrend Technology Inc.,

Opinion

The Balance Sheet as of December 31, 2021 and 2020, and the Statement of Comprehensive Income, Statement of Changes in Equity, and Statement of Cash Flow for the period from January 1 to December 31, 2021 and 2020, as well as the Notes to Parent Company Only Financial Statements (including the Summary of Significant Accounting Policies) of Infortrend Technology Inc., have been audited and attested by us.

In our opinion, the aforementioned Parent Company Only Financial Statements are prepared in all material respects in accordance with the "Regulations Governing the Preparation of Financial statements by Securities Issuers," which properly present the financial position of Infortrend Technology Inc. as of December 31, 2021 and 2020, and the financial performance and cash flows for the period from January 1 to December 31, 2021 and 2020.

Basis for Opinion

We performed the audit in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and the Generally Accepted Auditing Standards. Our responsibility under those standards will be further described in the section titled "CPA's responsibility for the audit on the Parent Company Only Financial Statements." We, subject to the codes of independence of the accounting firm which we are affiliated with, have kept absolute independent relationship with Infortrend Technology Inc. in accordance with the CPA Code of Professional Ethics, and have performed other obligations under this Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters refer to those matters that, in our professional judgment, are of most significance for our audit on the Parent Company Only Financial Statements for 2021 of Infortrend Technology Inc. These matters have been addressed in the course of our audit of the Parent Company Only Financial Statements as a whole and in forming our opinion thereon. We do not express a separate opinion on such matters individually. In our judgment, the key audit matters to be communicated in the audit report are as follows:

Valuation of the allowance for inventory loss from market price decline

Please refer to Note 4 (7) to the Parent Company Only Financial Statements for the accounting policy regarding the inventory evaluation. Please refer to Note 5 (2) to the Parent Company Only Financial Statements for the uncertainties of accounting estimates and assumptions regarding the realizability of inventory assessment. Please refer to Note 6 (5) to the financial statement for an explanation of the inventory assessment.

Description of key audit matters:

Infortrend Technology Inc. offers a wide range of products for sale to its customers. Its inventory is measured by cost and the net realized value, whichever is lower. In order to improve the service quality, the Company has spared no effort to improve the product efficiency. The introduction of new products may lead to a drop in the price of old products, resulting in the uncertainty of inventory loss from market price decline and of obsolete and slow-moving inventories.

How the matter was addressed in our audit:

Our main audit procedures regarding the aforementioned key audit matters included the following:

Understand the Company's provision policy for allowance for inventory loss from market price decline and for loss on obsolete and slow-moving inventories and evaluate the appropriateness of the policy; Obtain the evaluation form prepared by the Company to evaluate the performance of the Company, check and verify the data used, and evaluate the correctness of the source data used; Recalculate and evaluate the correctness of the calculation according to the evaluation data used by the Company; Obtain the disclosure information of the Company's financial statements on allowance for inventory, and assess whether the disclosure is appropriate.

Evaluation of impairment of trade receivables

Please refer to Note 4 (6) to the Parent Company Only Financial Statements for the accounting policy regarding the asset impairment evaluation. Please refer to Note 5 (1) to the Parent Company Only Financial Statements for the accounting estimates and assumptions regarding the evaluation of trade receivables. Please refer to Note 6 (3) to the financial statement for an explanation of the evaluation of trade receivables.

Description of key audit matters:

As the overall industry is still in the downturn, some customers are affected by the economic climate, and their repayment is not as fast as expected. The provision of allowance for bad debts of trade receivables depends on the Company's policy and the evaluation of the management, which indirectly increases the uncertainty of the evaluation of trade receivables since the evaluation involves human subjective judgment.

How the matter was addressed in our audit:

Our main audit procedures regarding the aforementioned key audit matters included the following:

Understand the Company's evaluation policy for allowance for trade receivables and evaluate the appropriateness of the policy; Obtain the evaluation form prepared by the Company to evaluate the performance of the Company, check and verify the data used, and evaluate the correctness of the source data used; Recalculate and evaluate the correctness of the calculation according to the evaluation data used by the Company; Obtain the disclosure information of the Company's financial statements on allowances for trade receivables and impairment losses, and assess whether the disclosure is appropriate.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

It is the responsibility of management to prepare and fairly present the Parent Company Only Financial Statements in accordance with the "Regulations Governing the Preparation of Financial statements by Securities Issuers," and to maintain internal controls which are necessary for the preparation of the Parent Company Only Financial Statements to ensure that there are no material misrepresentations that are attributed to fraud or error therein.

In the preparation of the Parent Company Only Financial Statements, it is also the responsibility of management to assess the ability of Infortrend Technology Inc. to continue as a going concern, to disclose relevant matters, and to adopt the accounting basis for going concern, unless the management intends to liquidate Infortrend Technology Inc., Ltd. or discontinue operations, or has to do so without any other practical alternatives.

The governing body of Infortrend Technology Inc. (including the audit committee) has the responsibility to supervise the reporting process of financial statement.

CPA's responsibility for the audit on the Parent Company Only Financial Statements

Our audit on the Parent Company Only Financial Statements aims to obtain reasonable assurance on whether the Parent Company Only Financial Statements as a whole are free from material misstatement arising from fraud or error, and to issue an audit report. Reasonable assurance refers to high level of assurance. However, our audit conducted in accordance with Generally Accepted Auditing Standards does not guarantee that material misrepresentations in the Parent Company Only Financial Statements will be detected. Misrepresentations may be attributable to fraud or error. A misrepresentation of an individual amount or amount in aggregate is considered as materiality if it is reasonably expected to affect the economic decisions made by users on the basis of the Parent Company Only Financial Statements.

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

Identified and assessed the risk of a material misrepresentation attributable to fraud or errors in the Parent Company Only Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit opinion. As fraud may involve collusion, forgery, intentional omission, misrepresentation, or override of internal control, the risk of a material misrepresentation that is not attributable to fraud is higher than that which is attributable to error.
Obtained necessary understanding of internal controls pertaining to the audit in order to develop audit procedures appropriate for the circumstances. Nevertheless, the purpose of such understanding is not to express an opinion on the effectiveness of the internal controls of Infortrend Technology Inc.
Assessed the appropriateness of the accounting policies adopted by the management, as well as the reasonableness of their accounting estimates and relevant disclosures.
Concluded, based on the audit evidence available, on the appropriateness of management's adoption of the accounting basis for going concern and whether material uncertainties exist where events or circumstances that may cause material doubt on the ability of Infortrend Technology Inc. to continue as a going concern. If, in our opinion, there is material uncertainty about such events or circumstances, we are required to remind the user of the Parent Company Only Financial Statements of the relevant disclosure therein, or amend our audit opinion if such disclosure is inappropriate. Our conclusion is based on the audit evidence acquired as of the date of the audit report. However, future events or circumstances may result in that Infortrend Technology Inc. may cease to continue as a going concern.
Evaluated the overall presentation, structure and content of the Parent Company Only Financial Statements (including relevant notes), and whether the Parent Company Only Financial Statements present the relevant transactions and events fairly.
Obtained sufficient and appropriate audit evidence of the financial information of the investee using the equity method to express an opinion on the Parent Company Only Financial Statements. We are responsible for the direction, supervision and performance of the audit and the formation of our audit opinion on Infortrend Technology Inc.

We communicated matters with the governing body, including the planned scope and timing of the audit, as well as the material audit findings (including material deficiencies in internal control identified during our audit).

We also provided the governing body the declaration of independence of the CPA subject to the codes of independence of the accounting firm which the CPA is affiliated with, that we have complied with the CPA Code of Professional Ethics concerning independence, and communicated with the governing body all the relationships and other matters that may be considered to affect our independence (including relevant preventive measures).

From the matters communicated with the governing body, we determined the key audit matters for the Parent Company Only Financial Statements in 2021 of Infortrend Technology Inc. We have stated such matters in the audit report. Unless public disclosure of a particular matter is prohibited by law or, in very rare circumstances, we determined not to communicate such matter in the audit report where it can reasonably be expected that the negative impact of such communication will outweigh the public benefits.

KPMG

Taipei, Taiwan (Republic of China) March 10, 2022

Infortrend Technology Inc.

Balance Sheet December 31, 2021 and 2020 Unit: NT$ Thousands

2021.12.31 Amount % $ 297,752 5 3,761,155 68 113,263 2 133,731 3 22,524 1 47 - 351,271 6 121,691 2 9,039 -	2021.12.31 Amount % $ 297,752 5 3,761,155 68 113,263 2 133,731 3 22,524 1 47 - 351,271 6 121,691 2 9,039 -	2020.12.31 Amount % 207,967 4 3,494,414 69 108,333 2 104,108 2 101,500 2 27,815 1 307,143 6 - - 7,159 - 4,358,439 86 27,547 - 50,075 1 591,332 12 12,876 - 721 - 37,047 1 3,596 - 723,194 14 5,081,633 100 2021.12.31 Liabilities and equity Amount % Current liabilities: 2100 Short-term loans (Note 4, 6 (10) and 8) $ 1,200,000 22 2120 Financial liabilities measured at fair value through profit or loss - current (Note 4 and 6 (2)) 247 - 2130 Contract liabilities - current (Note 4, 6 (18) and 7) 11,948 - 2170 Trade payables 72,927 1 2200 Other payables (Note 7) 152,062 3 2230 Current tax liabilities 1,557 - 2280 Lease liabilities - current (Note 4 and 6 (11)) 6,358 - 2300 Other current liabilities 927 - 1,446,026 26 Non-current liabilities: 2527 Contract liabilities - non-current (Note 4, 6 (18) and 7) 22,788 - 2550 Provisions - non-current (Note 4 and 6 (12)) 2,657 - 2570 Deferred tax liabilities (Note 4 and 6 (14) 260 - 2580 Lease liabilities - non-current (Note 4 and 6 (11)) 11,460 - 2640 Net defined benefit liabilities - non-current (Note 4 and 6 (13)) 29,324 1 2650 Investment credit balance accounted for using equity method (Note 4 and 6 (6)) 2,926 - 2670 Other non-current liabilities - others 7 - 69,422 1 Total liabilities 1,515,448 27 Equity: 3100 Common stock (Note 6 (15)) 2,735,515 49 3200 Capital surplus (Note 6 (15)): 88,804 2 Retained earnings: 3310 Legal reserve (Note 6 (15)) 1,052,617 19 3350 Unappropriated earnings (Note 6 (15)) 143,880 3 3400 Other equity (Note 6 (15)) 4,202 - Total equity 4,025,018 73 Total liabilities and equity $ 5,540,466 100	2021.12.31 Amount % $ 1,200,000 22 247 - 11,948 - 72,927 1 152,062 3 1,557 - 6,358 - 927 -	2021.12.31 Amount % $ 1,200,000 22 247 - 11,948 - 72,927 1 152,062 3 1,557 - 6,358 - 927 -	2020.12.31 Amount % 850,000 17 - - 8,795 - 48,359 1 130,017 3 481 - 6,085 - 866 -	2020.12.31 Amount % 850,000 17 - - 8,795 - 48,359 1 130,017 3 481 - 6,085 - 866 -
Amount $ 297,752 3,761,155 113,263 133,731 22,524 47 351,271 121,691 9,039		Amount 207,967 3,494,414 108,333 104,108 101,500 27,815 307,143 - 7,159	Amount $ 1,200,000 247 11,948 72,927 152,062 1,557 6,358 927		Amount 850,000 - 8,795 48,359 130,017 481 6,085 866
			1,446,026	26	1,044,603	21
4,810,473	87	4,358,439		- - - - 1 - -	23,306 2,657 16 6,922 29,940 9,835 7	- - - - 1 - -
27,534 66,752 577,688 17,704 298 36,471 3,546	1 1 10 - - 1 -	27,547 50,075 591,332 12,876 721 37,047 3,596
			69,422	1	72,683	1
729,993	13	723,194	1,515,448	27	1,117,286	22
			2,735,515 88,804 1,052,617 143,880 4,202	49 2 19 3 -	2,735,515 88,802 1,172,751 (38,069) 5,348	54 2 23 (1) -
			4,025,018	73	3,964,347	78
$ 5,540,466	100	5,081,633	$ 5,540,466	100	5,081,633	100

(Please refer the accompanying notes to financial statements)

Infortrend Technology Inc.

Statement of Comprehensive Income From January 1 to December 31, 2021 and 2020 Unit: NT$ Thousands

2021	% 100 60	2020	% 100 60
Amount $ 1,043,482 628,999		Amount 966,383 583,240
414,483 8,848 13,893	40 1 1	383,143 13,893 27,166	40 1 2
419,528	40	396,416	41
39,150 83,084 297,675 364	4 8 28 -	48,182 80,169 299,039 1,800	5 9 31 -
420,273	40	429,190	45
(745)	-	(32,774)	(4)
32,898 116,800 (4,503) (10,174) 20,200	3 11 - (1) 2	43,496 80,595 (153,631) (7,627) 7,032	5 8 (16) (1) 1
155,221	15	(30,135)	(3)
154,476 8,448	15 1	(62,909) 2,510	(7) -
146,028	14	(65,419)	(7)
(2,685) 537	- -	(6,698) 1,340	(1) -
(2,148)	-	(5,358)	(1)
(1,098) (48) -	- - -	(2,373) 135 -	- - -
(1,146)	-	(2,238)	-
(3,294)	-	(7,596)	(1)
$ 142,734	14	(73,015)	(8)
$	0.53		(0.24)
$	0.53

(Please refer the accompanying notes to financial statements)

Infortrend Technology Inc.

Statement of Changes in Equity From January 1 to December 31, 2021 and 2020 Unit: NT$ Thousands

Share capital	Capital surplus	Retained	earnings	Other equity items	Other equity items	Treasury stock
				Exchange differences resulting from translating the financial statements of foreign operations	Unpaid employee remuneration
Common stock		Legal reserve	Unappropriated earnings
$ 2,762,907	89,704	1,152,494	222,680	7,586	(597)	-
- -	- -	- -	(65,419) (5,358)	- (2,238)	- -	- -
-	-	-	(70,777)	(2,238)	-	-
- - - (27,360) (32)	- - - (881) (21)	20,257 - - - -	(20,257) (165,773) - (3,942) -	- - - - -	- - - - 597	- - (32,183) 32,183 -
2,735,515 - -	88,802 - -	1,172,751 - -	(38,069) 146,028 (2,148)	5,348 - (1,146)	- - -	- - -
-	-	-	143,880	(1,146)	-	-
- - -	- - 2	(82,065) (38,069) -	- 38,069 -	- - -	- - -	- - -
$ 2,735,515	88,804	1,052,617	143,880	4,202	-	-

(Please refer the accompanying notes to financial statements )

Infortrend Technology Inc. Statement of Cash Flow From January 1 to December 31, 2021 and 2020

Unit: NT$ Thousands

Cash flow from operating activities: Net profit (net loss) before tax for the current period Reconciliation items: Income and expenses items Depreciation expenses Amortization expenses Interest expenses Interest income Dividend income Remuneration costs of share-based payment Valuation loss on financial assets measured at fair value through profit or loss Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method Gain on disposal and retirement of property, plant and equipment Expected credit impairment loss Others Total income and expense items Changes in assets/liabilities related to operating activities: Net changes in assets related to operating activities Trade receivables Other receivables Inventories Other current assets Total net changes in assets related to operating activities Net change in liabilities related to operating activities: Contract liabilities Trade payables Other payables Other current liabilities Net defined benefit liabilities Other non-current liabilities - others Total net changes in liabilities related to operating activities Total net changes in assets and liabilities related to operating activities Total adjustments Cash (outflow) generated from operations Interest received Interest paid Income taxes refund (paid) Net cash inflow from operating activities Cash flow from investing activities: Purchase of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Disposal of property, plant and equipment Other financial assets Dividends received Net cash outflow from investment activities Cash flow from financing activities Increase in short-term loans Repayment of leasing liabilities Cash dividends paid Repurchase of treasury stock Receipt of overdue dividends Net cash inflow (outflow) from financing activities Increase in cash and cash equivalents Balance of cash and cash equivalents at the beginning Balance of cash and cash equivalents at the end	2021 $ 154,476 24,452 423 10,174 (32,898) (99,391) - 4,462 (20,200) (64) 364 (5,045)	2020 (62,909) 25,668 787 7,627 (43,496) (64,030) 544 134,054 (7,032) - 1,800 (13,273)
	(117,723)	42,649
	(34,917) (202) (44,128) (1,880)	131,434 1,624 956 2,946
	(81,127)	136,960
	2,635 24,568 9,268 61 (3,301) -	525 (22,693) (16,105) (32) (16) (3)
	33,231	(38,324)
	(47,896)	98,636
	(165,619)	141,285
	(11,143) 32,210 (9,866) 21,753	78,376 55,453 (7,671) (7,244)
	32,954	118,914
	(1,591,810) 1,413,202 (4,512) 64 (121,641) 99,904	(1,587,596) 1,472,295 (3,841) - 500 65,994
	(204,793)	(52,648)
	350,000 (6,313) (82,065) - 2	195,000 (6,231) (165,773) (32,183) -
	261,624	(9,187)
	89,785 207,967	57,079 150,888
	$ 297,752	207,967

(Please refer the accompanying notes to financial statements )

Infortrend Technology Inc.

Notes to Parent Company Only Financial Statements

2021 and 2020

(Unless otherwise indicated, all amounts are in NT$ Thousands)

1. Company Overview

Infortrend Technology Inc. (hereinafter referred to as "the Company") was established on January 19, 1993 with the approval of the Ministry of Economic Affairs at the registered address of 8F., No. 102, Sec. 3, Zhongshan Rd., Zhonghe Dist., New Taipei City 235010, Taiwan (R.O.C.). The Company is mainly engaged in research and development, manufacturing and trading business of all kinds of computer peripherals (RAID storage system), etc. The Company's shares were officially listed on the Taiwan Stock Exchange Corporation (TWSE) on March 25, 2002.

2. Date and Procedures for the Adoption of the Financial Statements

The Parent Company Only Financial Statements were approved and issued by the board of directors on March 10, 2022.

3. Application of New and Revised Standards and Interpretations

a. The impact of newly issued and revised standards and interpretations that have been adopted by the Company as endorsed by the Financial Supervisory Commission

The Company has adopted the following revised IFRS since January 1, 2021, without any material impact on the Parent Company Only Financial Statements.

Amendments to IFRS 4 - Extension of the Temporary Exemption from Applying IFRS 9
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform-Phase 2

The Company has adopted the following revised IFRS since April 1, 2021, without any material impact on the Parent Company Only Financial Statements.

Amendments to IFRS 16 - COVID-19-Related Rent Concessions after June 30, 2021
b. The impact of IFRS endorsed by the FSC but yet to be adopted by the Company

The Company has evaluated that the adoption of the following revised IFRSs, effective from January 1, 2022 will not have a material impact on the Parent Company Only Financial Statements.

Amendment to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use
Amendment to IAS 37 - Onerous Contracts—Cost of Fulfilling a Contract
Annual Improvements to IFRSs 2018-2020 Cycle
Amendments to IFRS 3 - Updating a Reference to the Conceptual Framework
c. Newly issued and revised standards and interpretations yet to be endorsed by the FSC

The Company anticipates that the following newly issued and revised standards, which have not yet been endorsed by the FSC, will not have a material impact on the Parent Company Only Financial Statements.

Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

IFRS 17 Insurance Contracts and Amendments to IFRS 17
Amendment to IAS 1 - Classification of Liabilities as Current or Non-current
Amendments to IAS 1 - Disclosure Initiative-Accounting Policies
Amendments to IAS 8 - Definition of Accounting Estimates
Amendments to IAS 12 - Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

4. Summary of Significant Accounting Policies

The significant accounting policies adopted in the Parent Company Only Financial Statements are summarized as follows. Unless otherwise stated, the following accounting policies have been consistently applied to all periods of presentation of the Parent Company Only Financial Statements.

a. Statement of compliance

The Parent Company Only Financial Statements are prepared in accordance with the Regulations Governing the Preparation of Financial statements by Securities Issuers.

b. Basis of preparation
1) Basis of measurement

The Parent Company Only Financial Statements have been prepared on a historical cost basis except for the following important items in the balance sheet:

a) Financial assets measured at fair value through profit or loss are measured at fair value;
b) The net defined benefit liabilities are measured by deducting the present value of the defined benefit obligations and the cap impact as described in Note 4 (15) from the fair value of the pension plan assets.
2) Functional Currency and Presentation Currency

Each individual entity of the Company adopts the currency of the major economic environment in which it operates as its functional currency. The Parent Company Only Financial Statements are presented in the New Taiwan dollar, the Company's functional currency. All financial information presented in New Taiwan Dollars is in NT$ Thousands.

c. Foreign currency
1) Foreign currency transactions

Transactions in foreign currency are translated into the functional currency at exchange rates prevailing at the transaction dates. Foreign currency monetary items are translated into functional currency at the end date of each subsequent reporting period (hereinafter referred to as the reporting date) at the exchange rate on that day. Foreign currency non-monetary items measured at fair value are translated into functional currency at the exchange rate on the date when their fair value is measured, while foreign currency non-monetary items measured at historical cost are translated at the exchange rate prevailing at the transaction date.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Exchange difference are generally recognized in profit or loss, except for the those differences relating to the following which are recognized in other comprehensive income:

a) An investment in equity securities designated as at fair value through other comprehensive income;
b) A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedges is effective e; or
c) Qualifying cash flow hedges to the extent the hedges are effective.
2) Foreign operations

The assets and liabilities of the foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into NTD at the exchange rate at the reporting date; The income and expense of foreign operations are translated into New Taiwan dollars at the average exchange rate. Exchange differences are recognized in other comprehensive income.

In the event of loss of control, joint control or material impact as a result from the disposal of a foreign operation, the cumulative exchange difference related to the foreign operation is fully reclassified into profit or loss. In the case of partial disposal of a subsidiary with a foreign operation, the accumulated exchange difference is reclassified into non-controlling interest in proportion. In the case of partial disposal of investments in an affiliated enterprise or joint venture with a foreign operation, the accumulated exchange difference is reclassified into profit or loss in proportion.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

d. Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non current:

1) The asset is expected to be realized, or intended to be sold or consumed in the normal operating cycle;
2) The asset is held primarily for trading purposes;
3) The asset is expected to be realized within 12 months after the reporting period; or
4) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to pay off a liability for at least 12 months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non current:

1) The liability is expected to be paid off in the normal operation cycle;
2) The liability is held primarily for trading purposes;
3) The liability is expected to be paid off within 12 months after the reporting period; or

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

4) The liability of which the settlement term cannot be deferred unconditionally to at least 12 months after the date of the balance sheet. The terms of a liability which may result in the settlement of an equity instrument at the option of the counterparty will not affect its classification.
e. Cash and cash equivalents

Cash includes cash on hand and demand deposits. Cash equivalents refer to short-term investments with highly liquidity that can be converted into quota cash at any time with little risk of change in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

f. Financial instruments

Trade receivables are initially recognized at the time of generation. All other financial assets and financial liabilities are initially recognized when the Company became a party to the financial instrument contract. Financial assets that are not measured at fair value through profit or loss (other than trade receivables that do not contain material financial components) or financial liabilities are initially measured at fair value plus transaction costs directly attributable to the acquisition or issuance. Trade receivables that do not contain material financial components are initially measured at transaction prices.

1) Financial assets

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

On initial recognition a financial asset is classified as measured: amortized cost and fair value through profit or loss. The Company will reclassify all the affected financial assets from the first day of the next reporting period only when changing its business model for managing financial assets.

a) Financial assets measured at amortized cost

Financial assets are measured at amortized cost when they meet all the following conditions and are not designated as measured at fair value through profit or loss:

The financial asset is held under a business model for the purpose of collecting contract cash flows.
The cash flow generated on a specific date from the contract terms of the financial asset is solely for the payment of principal and interest on outstanding principal.

Such assets are subsequently measured at the initially recognized amount plus or minus the accumulated amortization calculated by the effective interest method, and at the amortized cost after adjustments for any loss allowances. Interest income, foreign currency exchange gains and losses and impairment losses are recognized in profit and loss. When derecognizing, the profit or loss is recognized in profit and loss.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

a) Fair value through profit or loss (FVTPL)

Financial assets that are not measured at amortized cost or measured at fair value through other comprehensive income are measured at FVTPL, including derivative financial assets. Trade receivables, which the Company intends to sell immediately or in the near future, are measured at FVTPL but are included under trade receivables. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or measured at fair value through other comprehensive income, as a financial asset measured at FVTPL so as to eliminate or materially reduce improper accounting matching.

Such assets are subsequently measured at fair value, and their net benefits or losses (including any dividend and interest income) are recognized as profit and loss.

b) Financial assets held for trading and managed and evaluated on a fair value basis are measured at fair value through profit or loss.
c) Impairments of financial assets

The Company recognizes the expected credit loss of financial assets (including cash and cash equivalents, trade receivables, other receivables and other financial assets, etc.) measured at amortized cost as allowance for loss.

The allowance for losses of the following financial assets is measured by the amount of expected credit losses in 12 months, and the remaining are measured by the amount of expected credit losses in the duration:

The credit risk of debt securities was determined to be low at the reporting date; and

 The credit risk of other debt securities and bank deposits (i.e., the risk of default during the expected duration of the financial instrument) has not increased significantly since the initial recognition.

The allowance for losses on trade receivables is measured by the amount of expected credit losses in the duration.

In determining whether the credit risk of a financial asset has increased significantly since the initial recognition, the Company considers reasonable and verifiable information which is available without excessive cost or effort, including qualitative and quantitative information, as well as analysis based on the Company's historical experience, credit assessments and forward-looking information.

If the contract payment is more than 90 days overdue, the Company assumes that the credit risk of the financial assets has increased significantly.

If the contract payment is more than 120 days overdue or the borrower is unlikely to fulfill its credit obligation to pay the Company in full, the Company considers that default occurs on the financial asset.

Expected credit losses over the duration refer to the expected credit losses arising from all possible defaults during the expected duration of a financial instrument.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Expected credit losses in 12 months refer to the expected credit losses arising from the possible defaults of a financial instrument within 12 months (or shorter period, if the expected duration of the financial instrument is less than 12 months) after the reporting.

The maximum period over which expected credit losses are measured is the maximum contractual period over which the Company is exposed to credit risk.

Expected credit losses are the weighted estimates of the probability of credit losses over the expected duration of a financial instrument. The credit loss is measured by the present value of all cash shortfall, that is, the difference between the cash flows that the Company can collect under the contract and the cash flows that the Company expects to receive. Expected credit losses are discounted at the effective interest rate on financial assets.

The Company evaluates whether there is a credit impairment of financial assets as measured at amortized cost on each reporting date. When one or more events that have an adverse effect on the estimated future cash flow of a financial asset have occurred, the financial asset has suffered a credit impairment. Evidence of a credit impairment of a financial asset includes the observable information for the following events:

 Major financial difficulties of the borrower or issuer;

 Default, such as delay or overdue for more than 120 days;

 The Company makes concessions for the borrower that would not have been considered for economic or contractual reasons related to the borrower's financial difficulties;

 The borrower is most likely to file for bankruptcy or conduct other financial restructuring; or

 The active market for the financial asset disappears due to financial difficulties.

The allowance for loss of a financial asset measured at amortized cost are deducted from the carrying amount of the asset.

When the Company cannot reasonably anticipate the recovery of financial assets in whole or in part, it directly reduces the total carrying amount of its financial assets. The Company analyzes the timing and amount of the write-off on the basis of whether it is reasonably expected to be recovered. The Company expects that the amount written off will not be materially reversed. However, the written-off financial assets may still be enforced to comply with the procedures for the Company to recover the overdue amount.

d) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights derived from the cash flows of the asset are terminated, or it has transferred a financial asset and virtually has transferred all the risks and rewards of the ownership of the asset to another enterprise, or virtually has neither transferred nor retained the ownership of all of the risks and rewards and nor retained the control of the financial asset.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

If all or substantially all of the risks and rewards associated with ownership of a transferred financial asset in transactions entered into by the Company are retained, the financial asset is constantly recognized on the balance sheet.

2) Financial liabilities and equity instruments
a) Classification of liabilities or equities

The debt and equity instruments issued by the Company are classified as financial liabilities or equity according to the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

b) Equity instruments

Equity instruments refer to any contract that recognizes the residual equity in the Company's assets after the deduction of all its liabilities. The equity instruments issued by the Company are recognized as the amount of the proceeds obtained after deducting the direct cost of issuance.

c) Treasury stock

In the repurchase of the equity instruments recognized by the Company, the consideration paid, including direct attributed costs, is recognized as a reduction in equity. The repurchased shares are classified as treasury shares. When treasury stock are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

d) Financial liabilities

Financial liabilities are classified as measured at amortized cost or measured at FVTPL. Financial liabilities, if held for trading, are derivatives or designated at the time of initial recognition, are classified as measured at FVTPL. Financial liabilities at FVTPL are measured at fair value and the related net profits and losses, including any interest expense, are recognized in profit and loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and exchange gains and losses are recognized as profit and loss. Any gain or loss on derecognition is also recognized in profit and loss.

e) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expired. The Group also derecognize a financial liability when its terms are modified and cash flow of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

When derecognizing a financial liability, the difference between its carrying amount and the total consideration paid or payable (including any non-cash assets transferred or liabilities assumed) is recognized as profit and loss.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

3) Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures.

Derivatives are recognized initially at fair value. Subsequent to initial recognition derivatives are measured at fair value, and changes therein are recognized in profit or loss.

g. Inventories

Inventories are measured at the lower of cost and net realized value, whichever is lower. Costs include costs and other costs for acquisition, manufacturing or processing incurred in bringing them to the place and condition where they are available for use, and are calculated by a weighted average method. The cost of inventory of finished goods and work in process includes manufacturing expenses apportioned to normal capacity in appropriate proportion.

New realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses at the end of the period.

h. Investments in subsidiaries

In the preparation of the Parent Company Only Financial Statements, the Company adopts the equity method to evaluate the investee companies that it has control over. Under the equity method, the current profit and loss and other comprehensive profit and loss of the Parent Company Only Financial Statements are the same as the apportionment of the current profit and loss and other comprehensive income attributable to the owners of the parent company in the financial statements prepared on a consolidated basis, and the owner's equity of the Parent Company Only Financial Statements is the same as the owner's equity attributable to the owners of the parent company in the financial statements prepared on the consolidated basis.

If the change in the ownership interest of a subsidiary does not result in the loss of control, the Company accounts for it as an equity transaction with the owner.

i. Property, plant and equipment

1) Recognition and measurement

Property, plant, and equipment items are measured at cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

The material components of property, plant and equipment with different useful lives are treated as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of the property, plant, and equipment is recognized as profit and loss.

2) Subsequent costs

Subsequent expenditures are capitalized only when their future economic benefits are likely to flow into the Company

3) Depreciation

Depreciation is calculated at the cost of the asset minus the residual value and is recognized as profit and loss over the estimated useful lives of each component using a

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

straight-line method.

No depreciation provision will be made for the land.

The estimated useful lives of the current period and the comparative period are as follows:

a) Buildings and structures 5 ~ 50 years b) Machinery equipment 2 ~ 7 years c) Transportation equipment 5 ~ 10 years d) Office equipment 3 ~ 4 years e) Other equipment 2 ~ 8 years

The Company shall review the depreciation method, useful life, and residual value on each reporting date, and make appropriate adjustments as necessary.

j. Leases

The Company evaluates whether the contract is a lease or contains a lease upon the conclusion of the contract. If the contract transfers control over the use of the identified assets for a period of time in exchange for consideration, the contract is a lease or contains a lease.

1) Lessee

The Company recognizes the right-of-use assets and lease liabilities on the commencement date of the lease, initially measures the right-of-use assets at cost, which includes the initial measured amount of the lease liabilities, adjusts any lease payments made on or before the commencement date of the lease, and adds the initial direct costs incurred and the estimated costs of dismantling and removing the underlying assets, and restoring the underlying assets and their locations, and deducts any leasing incentives received.

The right-of-use assets are subsequently depreciated using the straight-line method from the commencement date of the lease to the expiration of the useful lives of the use right assets or the expiration of the lease term, whichever is earlier. In addition, the Company regularly evaluates whether there is any impairment of the right assets and treats with any impairment losses that have been incurred, and adjusts the right assets in the event of remeasurement of the lease liabilities.

The lease liability is measured at the present value of the outstanding lease payments at the commencement date of the lease. If the implicit interest rate of the lease is easy to determine, it is applied as the discount rate; if not, the Company's incremental borrowing rate is applied. In general, the Company adopts the incremental borrowing rate as the discount rate.

Lease payments included in the measure of lease liabilities include:

a) Fixed payments, including substantial fixed payments;
b) Variable lease payments subject to an index or rate are initially measured by the index or rate on the commencement date of the lease;
c) Residual value guaranteed amount expected to be paid, and;
d) Payments or penalties for purchase or termination options that are reasonably

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

a) Changes in future lease payments resulting from changes in the index or rate used to determine lease payments;
b) Changes in the residual value guaranteed amount expected to be paid;
c) Changes in the Group's evaluation of purchase options ;
d) Changes in the estimate of whether or not to exercise the extension or termination option may alter the assessment of the lease term; or
e) There is any lease modifications to the assets, scope or other terms of the lease.

When the lease liabilities are remeasured as a result of the foregoing changes in the index or rate used to determine lease payments, changes in the residual value guaranteed amount, and changes in the estimate of the call option, extension or termination option, the carrying amount of the right-of-use assets are adjusted accordingly, and the remaining remeasured amount is recognized as profit and loss when the carrying amount of the right-of-use assets are reduced to zero.

For a lease modification that reduces the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect the partial or full termination of the lease, and the difference between the carrying amount and the remeasured amount of the lease liability is recognized as the profit and loss.

The Company presents the right-of-use assets and lease liabilities that do not meet the definition of investment properties respectively in the balance sheet as separate-line items.

If the agreement contains leasing and non-leasing components, the Company apportions the consideration in the agreement to the individual leasing components on a relatively separate price basis. However, in the case of leasing the land and the building, the Company elects not to classify the non-leasing components and treat the leasing components and the non-leasing components as the single leasing components.

For the short-term lease of the premises and equipment, the Company chooses not to recognize the right-of-use assets and lease liabilities, but recognizes the relevant lease payments as expenses on a straight-line basis during the lease term in instead.

2) Lessor

For transactions in which the Company is the lessor, the lease contract is classified according to whether almost all risks and rewards attached to the ownership of the underlying asset are transferred on the commencement date of the lease. If so, it is classified as a financial lease; otherwise, it is classified as an operating lease. At the time of evaluation, the Company considers relevant specific indicators, including whether the lease term covers a major part of the economic life of the underlying asset.

k. Intangible assets
1) Recognition and measurement

Goodwill arising on the acquisition of a subsidiary is measured at cost, less accumulated impairment losses.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc.

(Continued)

Expenditures related to research activities are recognized as profit and loss when incurred.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Development expenditures are only capitalized when they can be reliably measured, when the technical or commercial feasibility of the product or process has been achieved, when the future economic benefits are likely to flow into the Company, and when the Company intends and has sufficient resources to complete the development and to use or sell the asset. Other development expenditures are recognized as profit and loss as incurred. After the initial recognition, capitalized development expenditures are measured by the amount of their costs less accumulated amortization and accumulated impairment.

Other intangible assets with limited life that are acquired by the Company are measured by the amount of cost less accumulated amortization and accumulated impairment.

2) Subsequent expenditures

Subsequent expenditures are capitalized only to the extent that they will increase the future economic benefits of the specific asset concerned. All other expenditures, including internally developed goodwill and brand, are recognized as profit and loss as incurred.

3) Amortization

Except goodwill, amortization is calculated on the basis of the cost of the asset less the estimated residual value and is recognized as profit and loss over the estimated useful lives of the intangible assets by the straight-line method from the time the assets reach the serviceable state.

The estimated useful lives of the current period and the comparative period are as follows:

Computer software 3 ~ 5 years

The Company reviews the amortization method, service life and residual value of intangible assets on each reporting date and makes appropriate adjustments if necessary.

l. Impairment of non-financial assets

At each reporting date, the Company assesses whether there is any indication that the carrying amount of non-financial assets (other than inventory and deferred tax assets) may be impaired, and estimates the recoverable amount of the asset if any impairment indication.

For the purpose of the impairment test, the minimum identifiable group of assets is defined as one of the groups of cash inflows that are largely independent of other individual assets or asset groups. Goodwill derived from the business combination is apportioned to the CGUs or groups of CGUs that are expected to benefit from the overall benefits of the business combination.

The recoverable amount is the fair value of individual assets or CGUs less disposal costs, and its use value, whichever is higher. In assessing the use value, it is estimated that the future cash flows are translated to present value at the pre-tax discount rate, which shall reflect the current market's assessment of the time value of money and the specific risk of the asset or CGU.

If the recoverable amount of an individual asset or CGU is lower than the carrying amount, the impairment loss will be recognized.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

Non-financial assets other than goodwill are reversed only to the extent not exceeding the carrying amount of the asset determined when the impairment loss has not been recognized in the previous year (less depreciation or amortization).

m. Provisions

The recognition of a provision for liabilities means that the Company has a present obligation arising from a past event, and it is likely that the Company will have to discharge resources with economic benefit in the future to fulfill the obligation, the amount of which can be reliably estimated.

1) Warranty

Provision for warranty liabilities is recognized at the time of sale of goods or services and is measured on a weighted basis according to its relative probability based on historical warranty information and all possible outcomes.

n. Recognition of income
1) Revenue from contracts with customers

Revenue is measured at the consideration to which it is expected to be entitled in transferring the goods or services. The Company recognizes revenue only when the control of goods or services is transferred to customers and the performance obligations are fulfilled. According to the main revenue items of the Company, it is described as follows:

a) Sales of goods - computer peripherals

The Company conducts research and development, manufacturing, and sales to the downstream manufacturers. The Company recognizes income only when the control of goods is transferred. The control transfer of the product means that the product has been delivered to the customer, the customer is fully in a position to determine the distribution channel and price of the product and there are no outstanding obligations which would affect the acceptance of the product by the customer. Delivery mainly occurs when the product is shipped from the point of departure, its obsolescence and the risk of loss has been transferred to the customer, the customer has accepted the product in accordance with the sales contract, the acceptance terms have lapsed, or the Company considers that all the acceptance conditions have been met with objective evidence.

The Company provides standard warranty for computer peripherals and therefore assures a refund obligation for defects, and has recognized the provision for warranty liabilities in respect of this obligation. Please refer to Note 6 (12) for details.

The Company recognizes the trade receivables at the time of delivery of goods, since the Company reserves the right to collect consideration unconditionally at that time.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

b) Rendering of services

The Company provides software updates and product maintenance services for enterprises, and recognizes the relevant income during the financial statement period for the rendering of services. For fixed-price contracts, income is recognized on the basis of the percentage of services actually rendered to total services as of the reporting date, as determined by the percentage of costs incurred to the estimated total costs of the transaction.

Under a fixed price contract, the customer pays a fixed amount at the agreed time. Contract assets are recognized when the value of services rendered exceeds the payments, while contract liabilities are recognized when payments exceed the value of services rendered.

c) Financial component

The Company expects that the time between the transfer of goods or services to the customer under all customer contracts and the payment for such goods or services by the customer is not exceed one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

o. Employee benefits
1) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

2) Defined benefit plans

The Company calculates the net obligation for the defined benefit plans by converting the amount of future benefits earned by the employee' service in the current or previous periods to the present value for each benefit plan separately and deducting the fair value of any plan assets.

Defined benefit obligations are calculated on an actuarial and annual basis by a qualified actuary using the estimated unit benefit method. Where the calculation is likely to be favorable to the Company, the recognized assets are limited to the present value of any economic benefit available in the form of a refund of contributions from the plan or a reduction in future contributions to the plan. The present value of economic benefits is calculated by taking into account any minimum capital contributions.

Remeasurement of the net defined benefit liabilities, including actuarial gains and losses, returns on planned assets (excluding interest), and any changes in the cap impact of the asset (excluding interest), is immediately recognized as other comprehensive income and accumulated in retained earnings. The Company determines the net interest expense (income) of the net defined benefit liabilities by using the net defined benefit liabilities and the discount rate determined at the beginning of the annual reporting period. The net interest expense and other expenses of the net defined benefit plan are recognized as profit and loss.

Changes in benefits related to the service costs or reduction of benefits or losses in previous period arising from a plan modification or reduction are immediately recognized as profit and loss. The Company recognizes the settlement gains and losses of the defined benefit plan at the time of settlement.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

3) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. If the Company has a present statutory or constructive payment obligation arising out of the services rendered by an employee in the past and such obligation can be reliably estimated, the amount will be recognized as a liability.

p. Share-based payment transaction

For the share-based payment agreement for the equity delivery, the expenses are recognized at fair value at the grant date and the relative equity is increased within the vesting period of the award. The recognized expenses are adjusted according to the amount of awards expected to meet the service conditions and non-market vesting conditions, and the final recognized amount is measured on the basis of the amount of awards that meet the service conditions and non-market vesting conditions on the vesting day.

Non-vesting conditions relating to share-based awards are reflected in the fair value measurement of the share-based payments on the grant date, and the difference between the expected and actual results is not subject to verification and adjustment.

The fair value of the share appreciation right in cash delivery to be paid to the employee is recognized as expenses and increased to relative liabilities during the period in which the employee is entitled to unconditionally receive remuneration. The liability is remeasured at the fair value of the share appreciation right at each reporting date and closing date and any change is recognized as profit and loss.

The date on which the share-based payment is made is the date approved by the board of directors.

q. Income tax

Income tax includes current and deferred income tax. Current income tax and deferred income tax are recognized as profit and loss, except for those related to business combination and items directly recognized as equity or other comprehensive income.

The Company determines that any interest or penalty (including uncertain tax treatment) related to income tax does not meet the definition of income tax and is therefore subject to the accounting treatment of IAS 37.

Current income tax includes the estimated income tax payable or tax refunds receivable based on tax gains (losses) for the current year and any adjustments to income taxes payable or tax refunds receivable for previous years. The amount of current income tax is the best estimate of the amount expected to be paid or received as measured by the statutory or substantive legislative tax rates at the reporting date.

Deferred income tax is measured and recognized at the temporary difference between the carrying amount and the tax basis of assets and liabilities on the financial statement date. Temporary differences arising from the following circumstances are not recognized as deferred income tax:

1) Temporary differences arising from the initial recognition of assets or liabilities other than in the transaction of a business combination which do not affect accounting profits and tax gains (losses) at the time of the transaction;

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Temporary differences arising from investment in subsidiaries, affiliates and joint venture equity, of which the Company can control the timing and which are unlikely to reverse in the foreseeable future; and
3) Taxable temporary differences arising from the initial recognition of goodwill.

Unused tax losses, unused income tax credits transferred in later period and deductible temporary differences are recognized as deferred tax assets to the extent that future tax income is likely to be available, are reassessed at each reporting date and reduced to the extent that the relevant income tax benefit is not likely to be realized, or reversed on the amount originally reduced to the extent that there is likely to be sufficient taxable income.

Deferred income tax is measured at the tax rate at the time of reversal of expected temporary differences based on the statutory or substantive legislative tax rate at the reporting date.

The Company will offset deferred tax assets and deferred tax liabilities against each other only if all of the following conditions are satisfied:

1) Has the legal executive power to offset the current income tax assets and current income tax liabilities; and
2) Deferred tax assets and deferred tax liabilities are related to one of the following taxpayers of income tax levied by the same tax authority:
- a) The same taxpayer; or
- b) Different taxpayers, but each taxpayer intends to pay off the current income tax liabilities and assets on a net basis or realize the assets and settle the liabilities at the same time during each future period when the deferred tax assets of a significant amount are expected to be recovered and the deferred tax liabilities are expected to be paid off.
r. Earnings per share

The Company presents the basic and diluted earnings per share attributable to the ordinary equity holders of the Company. The basic earnings per share of the Company is calculated by dividing the profit and loss attributable to the ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the current period. Diluted earnings per share calculated by adjusting the profit and loss attributable to the ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares. The dilutive potential ordinary shares of the Company include new restricted employee shares granted to employees.

s. Segment information

The Company has disclosed the segment information in consolidated financial statements, therefore, such information is not disclosed in the Parent Company Only Financial Statements.

5. Major Sources of Uncertainty in Material Accounting Judgments, Estimates and Assumptions

When preparing the Parent Company Only Financial Statements in accordance with the Regulations Governing the Preparation of Financial statements by Securities Issuers, the management must make judgments, estimates and assumptions that will affect the adoption of accounting policies and the reported amounts of assets, liabilities, earnings and expenses.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Actual results may differ from estimates.

Management continually reviews estimates and underlying assumptions, and recognizes the changes in accounting estimates in the period of change and in the affected future periods.

The Company has no accounting policies that involve material judgments and have material impact on the amounts recognized in the Parent Company Only Financial Statements.

For the uncertainties in the assumptions and estimates, the information related to the material risk that will result in a material adjustment in the next fiscal period is as follows:

a. Allowance for loss of trade receivables

The Company's allowance for losses on trade receivables is estimated based on the assumption of default risk and expected loss ratio. The Company considers historical experience, current market conditions and forward-looking estimates for each reporting date to determine the assumptions to be adopted and the input values to be selected in calculating the impairment. Please refer to Note 6 (3) for details of the relevant assumptions and input values.

b. Valuation of inventory

Since inventory must be measured at the lower of cost and net realized value, the Company evaluates the amount of inventory for normal wear and wear, obsolescence, or without market value on the reporting date and deducts the cost of inventory to net realized value. This inventory valuation is based on product demand during a specific period in the future and may be subject to change due to rapid industrial changes. Please refer to Note 6 (5) for details of inventory valuation.

6. Descriptions of Material Accounting Subjects

a. Cash and cash equivalents

2021.12.31 Cash $ 26 Demand and check deposit 67,507 Foreign currency deposit 204,388 Time deposits 25,831 Cash and cash equivalents presented in the Statement of Cash Flow $ 297,752	2021.12.31 $ 26 67,507 204,388 25,831	2020.12.31 27 97,871 96,569 13,500 207,967

Please refer to Note 6 (21) for the disclosure of sensitivity analysis of financial assets and liabilities of the Company.

b. Financial assets (liabilities) at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss: Non-derivative financial assets Beneficiary certificate - fund	2021.12.31 $ 381,384	2020.12.31 749,872

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Investment on bonds Preferred shares Ordinary shares Non-hedging derivative instruments Perpetual bonds Subtotal Financial liabilities held for trading: Non-hedging derivative instruments Swap contracts Total Current Non-current Total	2021.12.31 725,841 2,653,882 48 27,534	2020.12.31 659,967 2,072,879 11,696 27,547 3,521,961 - 3,521,961 3,494,414 27,547 3,521,961
	3,788,689
	(247)
	$ 3,788,442
	$ 3,760,908 27,534
	$ 3,788,442

1) Preferred shares

The Company holds preferred shares issued by domestic listed companies, all of which are non-cumulative preferred shares, and the dividends are paid at the agreed annual rate, which is adjusted and reset periodically in accordance with the agreed period. None of the shares has a maturity date, but the issuing company may recover all or part of the issued preferred shares at the original issue price upon the expiration of the agreed term, and its rights and obligations shall continue under the original terms and conditions of issuance if the shares are not recovered. The preferred shares held by the Company are non-voting and non-convertible preferred shares, except for the Non-cumulative Convertible Class A Preferred Shares issued by O-Bank which are convertible into ordinary shares commencing on the day following the one-year expiry of the issue.

2) Perpetual bonds

On July 14, 2017, the Company purchased the perpetual bonds issued by SoftBank Group Corp. on July 12, 2017 through Rich Union Securities (H.K.) Limited or a transaction amount of NT$30,749 thousand, at the initial distribution ratio of 6.000%, which will expire on December 29, 2049. The issuer is entitled to the first right of redemption on July 19, 2023, and will be charged additional interest at 4.226% if it fails to repurchase by the expiration date.

On August 2, 2017, the Company purchased the perpetual bonds issued by Radiant Access Ltd. on May 11, 2017 through Yuanta Asset Management (H.K.) Limited for a transaction amount of NT$44,572 thousand, at the initial distribution ratio of 4.600%, which will expire on December 29, 2049. The issuer has repurchased the perpetual bonds on November 19, 2020 for a transaction amount of NT$43,058 thousand.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

3) Swap contracts

Engaging in derivative financial instruments aims to avoid exchange rate risks arising from operating activities. The details of the derivatives presented as financial liabilities measured at fair value through profit or loss due to the fact that the Company does not apply hedging accounting are as follows:

Swap contracts:

Swap contracts:
2021.12.31	Contract amount (NT$ Thousands) Currency Maturity period
Swap	USD 5,000 NTD to USD 2022/3/7~2022/6/7

The Company has disclosed the exposure to risks of credit, currency and interest rate associated with financial instruments in Note 6 (21).

On December 31, 2021, the Company mortgaged 5,333 thousand Class A preferred shares issued by Fubon Financial Holding, 3,493 thousand Class A preferred shares issued by Cathay Financial Holdings, 5,551 thousand Class A preferred shares issued by Union Bank, 7,729 thousand Class E Registered preferred shares issued by Taishin Holdings and 5,400 thousand Class A preferred shares of Shin Kong Financial Holding as the guarantee for short-term loans and financing amount. On December 31, 2020, the Company mortgaged 3,333 thousand Class A preferred shares issued by Fubon Financial Holding, 2,493 thousand Class A preferred shares issued by Cathay Financial Holdings, 5,551 thousand Class A preferred shares issued by Union Bank, 7,729 thousand Class E Registered preferred shares issued by Taishin Holdings and 5,400 thousand Class A preferred shares of Shin Kong Financial Holding as the guarantee for short-term loans and financing amount. Please refer to Note 8 for the disclosure of collateral mortgage.

c. Trade receivables

collateral mortgage. Trade receivables
Trade receivables - related parties Trade receivables - non-related parties Less: allowance for losses	2021.12.31 $ 133,731 113,713 (450)	2020.12.31 104,108 112,153 (3,820) 212,441
	$ 246,994

The Company estimates the expected credit losses for all trade receivables using a simplified approach, that is, measures by the expected credit loss over the duration. For the measurement, such trade receivables are grouped according to the common credit risk characteristics represent the ability of customers to pay all amounts due under the contract terms and have been included in the forward-looking information. The expected credit loss analysis of the Company's trade receivables - non-related parties is as follows:

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

	2021.12.31	Allowance for expected credit losses over the duration - - 450
Carrying amount of trade receivables $ 110,787 1,235 1,691	Weighted average expected credit loss rate
	0.00% 0.00% 100.00% 2020.12.31
$ 113,713		450
		Allowance for expected credit losses over the duration - - - - 86 3,734
Carrying amount of trade receivables $ 106,728 - - 1,293 398 3,734	Weighted average expected credit loss rate
	0.00% 0.00% 0.00% 0.00% 42.11% 100.00%
$ 112,153		3,820

The expected credit loss analysis of the Company's trade receivables - related parties is as follows:

	2021.12.31	Allowance for expected credit losses over the duration - - - - - -
Carrying amount of trade receivables $ 93,511 12,094 9,082 2,315 8,151 8,578	Weighted average expected credit loss rate
	0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
$ 133,731		-

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

	2020.12.31	Allowance for expected credit losses over the duration - - - - - -
Carrying amount of trade receivables $ 58,038 - - - - 46,070	Weighted average expected credit loss rate
	0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
$ 104,108		-

The statement of changes in the allowance for losses on the trade receivables of the Company is as follows:

Beginning balance Recognized impairment loss Amount written off as a result of being unrecoverable Ending balance	2021 $ 3,820 364 (3,734)	2020 2,020 1,800 -
	$ 450	3,820

Allowance for losses on trade receivables is used to record expected credit losses, but if and when the Company believes that the relevant amount may not be recoverable, it will be directly credited to financial assets. The overdue trade receivables of the Company as of December 31, 2021 and 2020 were mainly payments 2021 and to related parties, and the Company has determined that there is no doubt about recovery based on the overall fund utilization of the Group. As of February 28, 2022 and March 5, 2021, the Company has recovered NT$73,357 thousand and NT$36,775 thousand from related parties after the period, respectively.

d. Other receivables

Other receivables	2021.12.31 $ 22,524	2020.12.31 101,500

Based on historical experience, no expected credit loss arising from default events is expected to incur from the above-mentioned other receivables during their existence, thus it is estimated that their expected credit loss rate is zero.

Please refer to Note 6 (21) for further information on the remaining credit risks.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

e. Inventories

Inventories
Raw materials and consumables Work in process Finished products	2021.12.31 $ 291,819 30,589 28,863	2020.12.31 243,265 36,611 27,267 307,143
	$ 351,271

The cost of goods sold of the Company in 2021 and 2020 are as follows:

Cost of goods sold Gain on physical inventory Inventory scrap loss Inventory loss from market price decline and loss on obsolete and slow-moving inventories Total	2021 $ 615,151 (51) 9,279 4,620	2020 571,468 (45) 6,797 5,020 583,240
	$ 628,999

As of December 31, 2021 and 2020, the Company's inventory has not been pledged as collateral.

f. Investment and investment credit balance accounted for using equity method

The investments accounted for using equity method of the Company as of the reporting date are presented as follows:

Subsidiary Subsidiary	2021.12.31 $ 66,752 (2,926)	2020.12.31 50,075 (9,835) 40,240
	$ 63,826

1) Subsidiary

Please refer to the Consolidated Financial statements for 2021.

As of December 31, 2021 and 2020, the investments accounted for using equity method of the Company have not been subject to pledges, guarantees or restrictions.

g. Property, plant and equipment

The breakdown of changes in cost and depreciation of the Company's property, plant and equipment for 2021 and 2020 is as follows:

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc.

(Continued)

Land $ 398,945 - -	Buildings and structures 345,590 - -	Machinery equipment 78,503 88 (1,394)	Transportation equipment 7,833 2,273 (729) 9,377 7,833 - - - 7,833 7,508 672 (729) 7,451 7,021 487 - - 7,508 1,926 812 325	Office equipment 2,661 - -	Other equipment 145,505 2,151 (6,754)	Total 979,037 4,512 (8,877)

$ 398,945	345,590	77,197	9,377	2,661	140,902	974,672
$ 398,945 - - -	344,331 794 465 -	78,566 98 - (161)	7,833 - - -	2,658 181 - (178)	144,624 2,768 - (1,887)	976,957 3,841 465 (2,226)
$ 398,945	345,590	78,503	7,833	2,661	145,505	979,037
$ - - -	167,166 10,970 -	78,286 75 (1,394)	7,508 672 (729)	2,521 46 -	132,224 6,393 (6,754)	387,705 18,156 (8,877)
$ -	178,136	76,967	7,451	2,567	131,863	396,984
$ - - - -	155,917 11,236 13 -	78,089 358 - (161)	7,021 487 - -	2,658 41 - (178)	126,855 7,256 - (1,887)	370,540 19,378 13 (2,226)
$ -	167,166	78,286	7,508	2,521	132,224	387,705
$ 398,945	167,454	230	1,926	94	9,039	577,688
$ 398,945	188,414	477	812	-	17,769	606,417
$ 398,945	178,424	217	325	140	13,281	591,332

As of December 31, 2021 and 2020, they are not provided as guarantee for borrowing and financing amount.

h. Right-of-use assets

The changes in the cost and depreciation of buildings and structures leased by the Company are as follows:

Balance as of January 1, 2021 Additions Decrease Balance as of December 31, 2021 Balance as of December 31, 2020 (i.e., beginning balance) Depreciation of right-of-use assets: Balance as of January 1, 2021 Provision for depreciation Decrease	Buildings and structures $ 23,301 11,124 (7,896) $ 26,529 $ 23,301 $ 10,425 6,296 (7,896)

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Balance as of December 31, 2021 Balance as of January 1, 2020 Provision for depreciation Balance as of December 31, 2020 Carrying value: December 31, 2021 January 1, 2020 December 31, 2020	Buildings and structures $ 8,825 $ 4,135 6,290 $ 10,425 $ 17,704 $ 19,166 $ 12,876

i. Intangible assets

Intangible assets refer to the acquisition costs of computer software. The cost and amortization of the Company's intangible assets for 2021 and 2020 are as follows:

Cost:
Balance as of January 1, 2021
Disposal and retirement
Balance as of December 31, 2021
Balance as of December 31, 2020 (i.e., beginning balance)
Amortization:
Balance as of January 1, 2021
Current amortization
Disposal and retirement
Balance as of December 31, 2021
Balance as of January 1, 2020
Current amortization
Balance as of December 31, 2020
Carrying value:
December 31, 2021
January 1, 2020
December 31, 2020

Cost of
computer
software
$ 35,815
(333)
$
35,482
$
35,815
$ 35,094
423
(333)
$
35,184
$ 34,307
787
$
35,094
$
298
$
1,508
$
721

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

The amortization expenses of intangible assets for 2021 and 2020 are presented in the Statement of Comprehensive Income under the following items:

Operating expenses	2021 $ 423	2020 787

j. Short-term loans

The details, terms and conditions of the short-term loans of the Company are as follows:

	2021.12.31	2021.12.31
Currency	Range of interest rate	Maturity year
TWD TWD		111 111
	1.00%~1.08% 0.90%~1.05%

	2020.12.31	2020.12.31
Currency	Range of interest rate	Maturity year
TWD TWD		110 110
	1.00%~1.08% 1.00%~1.05%

Please refer to Note 6 (21) for further information on the liquidity risk exposure of Company.

Please refer to Notes 6 (2) and 8 for the mortgage of the Company's assets as collateral for bank loans.

k. Lease liabilities

The carrying amount of the Company's leasing liabilities is as follows:

Current Non-current	2021.12.31 $ 6,358	2020.12.31 6,085 6,922
	$ 11,460

Please refer to Note 6 (21) Financial instruments for details of maturity analysis.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

The amount of lease recognized in profit and loss is as follows:

		2021	2020
Interest expense on lease liabilities	$	139	214
Expenses for short-term leases	$	106	128
The amount of lease recognized in the Statement of Cash		Flow is as follows:
		2021	2020
Total cash outflow from leases	$	6,558	6,573

1) Lease of buildings and structures

The Company leases buildings and structures as offices and warehouses for a period of 2~6 years.

2) Other leases

The Company leases the premises and equipment for a period of less than one year, which belong to short-term leases. The Company chooses to apply the exemption from recognition and does not recognize its relevant right-of-use assets and lease liabilities.

l. Provisions

Balance as of December 31, 2021 (i.e., beginning balance) Balance as of December 31, 2020 (i.e., beginning balance)	Warranty $ 2,657 $ 2,657

The Company's provision for warranty liabilities in 2021 and 2020 is primarily related to the sale of products, and is estimated on the basis of historical warranty information for similar goods and services.

m. Employee benefits

1) Defined benefit plans

The adjustment between the present value of defined benefit obligations and the fair value of the plan assets of the Company is as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	2021.12.31 $ 61,842 (32,518)	2020.12.31 59,724 (29,784) 29,940
	$ 29,324

The Company's defined benefit plan is allocated to the labor retirement reserve fund account established in the Bank of Taiwan. The retirement pension payment of each employee who applies the Labor Standards Act is calculated according to the base from years of service and the average salary for the six months prior to retirement.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

a) Composition of plan assets

The pension fund allocated by the Company in accordance with the Labor Standards Act is managed by the Bureau of Labor Funds, Ministry of Labor (hereinafter referred to as the Bureau of Labor Funds). According to the "Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund," for the utilization of the fund, the minimum return distributed in the final accounts each year shall not be lower than the return calculated at the interest rate for two-year fixed deposits at local banks.

As of the reporting date, the balance of the Company's labor retirement reserve fund account established in the Bank of Taiwan is NT$32,518 thousand. Information on the utilization of labor retirement fund assets includes return on funds and fund asset allocation. Please refer to the information published on the website of the Bureau of Labor Funds, Ministry of Labor for more details.

b) Changes in the present value of defined benefit obligations

The changes in the present value of the defined benefit obligations of the Company 2021 and 2020 follows:

Defined benefit obligations as of January 1 Current service cost and interest Remeasurement of the net defined benefit liabilities `－`Actuarial gains and losses arising from changes in demographic assumptions `－`Actuarial gains and losses arising from changes in financial assumptions `－`Experience adjustments Plan benefits paid Defined benefit obligations as of December 31	2021 $ 59,724 444 2,993 (2,297) 2,418 (1,440)	2020 51,374 773 491 2,455 4,631 - 59,724
	$ 61,842

c) Changes in the fair value of plan assets

The changes in the fair value of the defined benefit plan assets of the Company 2021 and 2020 are as follows:

2021 and 2020 are as follows:
Fair value of plan assets as of January 1 Interest income Remeasurement of the net defined benefit liabilities - Return on plan assets (excluding current interest) Amount allocated to the plan Plan benefits paid Fair value of plan assets as of December 31	2021 $ 29,784 105 430 3,639 (1,440)	2020 28,116 228 895 545 - 29,784
	$ 32,518

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

d) Expenses recognized in profit or loss

The expenses recognized as profit and loss in 2021 and 2020 are as follows:

Current service cost Interest on defined benefit liabilities Administrative expenses	2021 $ 235 104	2020 362 183 545 545
	$ 339
	$ 339

e) Actuarial assumption

The material actuarial assumptions used by the Company to determine the present value of the defined benefit obligations on the closing date of financial statement are as follows:

Discount rate Increase in future salary	2021.12.31 0.750% 2.625%	2020.12.31 0.350% 2.625%

The Company expects to make an allocation of NT$454 thousand to the defined benefit plan within one year after the reporting date of 2021.

The weighted average duration of the defined benefit plan is 13 years.

f) Sensitivity analysis

The impact of the changes in the major actuarial assumptions adopted on the present value of defined benefit obligations as of December 31, 2021 and 2020 is as follows:

December 31, 2021 Discount rate (change by 0.25%) Future salary increase (change by 0.25%) December 31, 2020 Discount rate (change by 0.25%) Future salary increase (change by 0.25%)	Impact on the defined benefit obligations	Impact on the defined benefit obligations
	Increase $ (1,458) 1,449 $ (1,383) 1,369	Decrease
		1,511 (1,407) 1,436 (1,326)

The above sensitivity analysis refers to the analysis of the impact of changes in a single assumption under the premise that other assumptions remain unchanged. In practice, many changes in assumptions may be linked. The methods used for sensitivity analysis is consistent with that used to calculate the net defined benefit liabilities of the balance sheet.

The methods and assumptions used for sensitivity analysis in current period are the same as those used in previous periods.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Company's defined contribution plan is allocated to the individual labor pension account at the Bureau of Labor Insurance, Ministry of Labor (the Bureau of Labor Insurance) at a contribution rate of 6% of the worker's monthly wages. There is no statutory or constructive obligation on the Company to pay any additional amount after the Company has made a fixed contribution to the Bureau of Labor Insurance under the such plan.

The pension expenses allocated by the Company under its defined pension contribution plan in 2021 and 2020 were NT$16,161 thousand and NT$16,386 thousand respectively (after deducting the ending payable expenses of NT$2,653 thousand and NT$2,685 thousand), which has been allocated to the Bureau of Labor Insurance.

n. Income tax

1) Income tax expenses

The income tax expenses in 2021 and 2020 are as follows:

Current income tax expenses Current period Prior period adjustments Deferred income tax expenses Occurrence and reversal of temporary differences Income tax expenses of continuing operations	2021 $ 6,626 465	2020 4,733 (485) 4,248 (1,738) 2,510
	7,091
	1,357
	$ 8,448

There is no income tax directly recognized as equity for 2021 and 2020 of the Company.

The income tax profits recognized under other comprehensive income of the Company for 2021 and 2020 are as follows:

Actuarial gains (loss) from defined benefit plans	2021 $ 537	2020 1,340

The reconciliation of income tax benefit and profit (loss) before tax for the 2021 and 2020 are as follows:

2020 are as follows:
Net profit (loss) before tax Income tax calculated according to the domestic tax rate at the place where the Group is located Permanent differences Changes in temporary difference unrecognized Overestimate/underestimate for previous period Basic income tax Overestimate/underestimate of temporary differences Total	2021 $ 154,476	2020 (62,909) (12,582) 16,699 (1,293) (485) - 171 2,510
	30,895 (20,102) (4,452) 465 1,642 -
	$ 8,448

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Deferred tax assets and liabilities
a) Unrecognized deferred tax assets

Items not recognized as deferred tax assets by the Company are as follows:

Deductible temporary differences Tax incentives	2021.12.31 $ 40,121 18,243	2020.12.31 44,910 31,358 76,268
	$ 58,364

As of December 31, 2021 and 2020, the Company estimated that some of the temporary differences were unlikely to be realized in the foreseeable future. Therefore, the Company did not recognize any deferred tax assets.

b) Recognized deferred tax assets and liabilities

Changes in deferred tax assets and liabilities for 2021 and 2020 are as follows:

Defined benefit

	Defined benefit
Deferred tax liabilities: Balance as of January 1, 2021 Debit (credit) profit and loss Balance as of December 31, 2021 Balance as of January 1, 2020 Debit (credit) profit and loss Balance as of December 31, 2020 Deferred tax assets: Balance as of January 1, 2021 (Debit) credit profit and loss (Debit) credit other comprehensive income Balance as of December 31, 2021 Balance as of January 1, 2020 (Debit) credit profit and loss (Debit) credit other comprehensive income Balance as of December 31, 2020	plans	Others 16 244	Total 16 244 260 582 (566) 16 37,047 (1,113) 537 36,471 34,535 1,172 1,340 37,047
	$ - -
	$ -	260
	$ - -	582 (566)
	$ -	16
	$ 4,705 - 537	32,342 (1,113) -
	$ 5,242	31,229
	$ 3,365 - 1,340	31,170 1,172 -
	$ 4,705	32,342

3) Assessment of income tax

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

The Company’s tax returns till 2019 were examined and approved by the Taiwan National Tax Administration.

o. Capital and other equity

Both the total authorized ordinary share capital of the Company as of December 31, 2021 and 2020 is NT$3,120,000 thousand for 312,000 thousand shares with a par value per share of NT$10. The number of ordinary shares outstanding was 273,552 thousand, and share capital of shares outstanding has been collected.

Below is the reconciliation statement for the number of outstanding shares of the Company for 2021 and 2020:

Beginning balance as of January 1 Repurchase the shares of the Company New restricted employee shares Ending balance as of December 31	(presented in thousands of shares) Ordinary shares 2021 2020 273,552 276,076 - (2,736) - 212 273,552 273,552

1) Issuance of ordinary shares

In accordance with the new restricted employee share plan adopted by the shareholders' meeting on June 10, 2013, June 13, 2014, June 8, 2016 and June 13, 2017, the Company issued 913 thousand, 987 thousand, 1,019 thousand and 301 thousand ordinary shares at face values for aggregate amounts of NT$9,129 thousand, NT$9,874 thousand, NT$10,189 thousand and NT$3,010 thousand, respectively, by resolution of the board of directors on March 16, 2015, March 15, 2016, March 13, 2017 and March 12, 2018. Among them, 17 thousand, 21 thousand, 283 thousand, 47 thousand, 64 thousand, 311 thousand, 133 thousand, 301 thousand, 35 thousand, 301 thousand, 23 thousand and 3 thousand shares, due to employee turnover and performance ratings not up to standard, were canceled on August 10, 2015, November 10, 2015, March 17, 2016, August 10, 2016, November 8, 2016, March 17, 2017, August 10, 2017, March 17, 2018, August 10, 2018, March 17, 2019, December 31, 2019 and May 9, 2020, respectively, and their registration of change were completed on September 2, 2015, November 27, 2015, April 6, 2016, August 23, 2016, November 22, 2016, April 6, 2017, August 28, 2017, April 3, 2018, August 28, 2018, April 1, 2019, January 15, 2020 and May 26, 2020. Please refer to Note 6 (16) for details.

2) Capital surplus

Balance of the Company's capital surplus is as follows:

Share premium Income from endowments received by the Company Total	2021.12.31 $ 88,085 719	2020.12.31 88,085 717 88,802
	$ 88,804

In accordance with the provisions of the Company Act, only after covering losses by capital surplus, the Company may distribute new shares or cash from realized capital

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

surplus according to the proportion of the shareholders' original shares. The term "realized capital surplus" referred to in the preceding paragraph includes the income derived from the issuance of new shares at a premium and income from endowments received by the Company. In accordance with the Regulations Governing the Offering and Issuance of Securities by Issuers, when capital surplus is capitalized, the combined amount capitalized in any 1 year may not exceed 10 percent of paid-in capital.

3) Retained earnings

In accordance with the Articles of Incorporation of the Company, any earnings after the Company's annual closing of the books, it shall be first used to pay all taxes and dues and cover accumulated losses, then 10 percent of the earnings shall be reserved as the legal reserve; provided that this restriction shall not apply to the circumstances that the legal reserve has reached the paid-in capital of the Company. Provision (reversal) for special reserve shall be made from the remaining earnings as required by the Company's operation or by law. If there is still a balance, the board of directors shall draw up an earnings distribution plan for the balance and the unappropriated earnings at the beginning of period, and submit it to the board of shareholders for a resolution on distribution.

The Company will, considering the Company's environment and growth stage, taking into account its future capital needs and long-term financial planning, satisfying the needs of shareholders for cash inflows, distribute shareholders' dividends in the form of both stock dividends and cash dividends, in which the proportion of cash dividends shall not be less than 10 percent of the total dividend of shareholders.

a) Legal reserve

If there is no loss, the Company may, by resolution of the shareholders' meeting, distribute new shares or cash from legal reserves, but only the portion of the reserve exceeding 25 percent of the paid-in capital shall be distributed.

b) Special reserve

Pursuant to Financial-Supervisory-Securities-Corporate-1010012865 issued on April 6, 2012, The Company shall allocate a special reserve of the same amount from the after-tax earnings for the current year and the unappropriated earnings in the previous period for the net deduction of shareholders' equity incurred for the current year. For the deduction of accumulated shareholders' equity for the preceding period, the special reserve of the same amount that should be allocated from the unappropriated earnings in the previous period shall not be distributed. In the event of a subsequent reversal of the amount of the reduction in shareholders' equity, the earnings may be distributed from such reversal. As of December 31, 2021 and 2020, the balance of the special reserve is NT$0.

c) Earning distribution

The Company's deficit appropriation and earnings distribution plans for 2020 were resolved at the regular shareholders' meeting on July 19, 2021 and the earnings distribution plans for 2019 were resolved at the regular shareholders' meeting on June 10, 2020 respectively. The payout ratio and amount of dividends distributed to owners are as follows:

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Dividends distributed to owners of ordinary shares: Cash	2020 Payout ratio (NT$) Amount $ 0.30 82,065	2020 Payout ratio (NT$) Amount $ 0.30 82,065	2019 Payout ratio (NT$) Amount 0.60 165,773	2019 Payout ratio (NT$) Amount 0.60 165,773
	Payout ratio (NT$)		Payout ratio (NT$)
	$ 0.30		0.60

The earnings distribution plan for 2020 was distributed after offsetting a loss of 38,069 thousand from legal reserve.

The Company's earnings distribution plan for 2021 was resolved by the board of directors on March 10, 2022. The payout ratio and amount of dividends distributed to owners are as follows:

to owners are as follows:
Dividends distributed to owners of ordinary shares: Cash	2021 Payout ratio (NT$) Amount $ 0.40 109,421
	Payout ratio (NT$)
	$ 0.40

4) Treasury shares

In 2020, the Company repurchased a total of 2,736 thousand treasury shares as necessary to protect the Company's credit and shareholders' equity in accordance with Article 28-2 of the Securities and Exchange Act. All the said treasury shares repurchased have been canceled in 2020.

The treasury shares held by the Company shall not be pledged in accordance with the Securities and Exchange Act, and no shareholders' right shall be enjoyed until they are transferred.

5) Other equity (net after tax)

Exchange differences on translation of foreign financial statements	Unpaid employee remuneration	Total 5,348 (1,146)
$ 5,348 (1,146)	- -
$ 4,202	-	4,202
$ 7,586 (2,238) -	(597) - 597	6,989 (2,238) 597
$ 5,348	-	5,348

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

p. Share-based payment

On June 11, 2018, the Company issued 800 thousand new restricted employee shares by the resolution of shareholders' meeting, which were granted to only full-time employees of the Company who meet certain conditions and have been filed for effective registration with the Securities and Futures Bureau, Financial Supervisory Commission, R.O.C.

On June 13, 2017, June 8, 2016, June 13, 2014, and June 10, 2013, respectively, the Company issued 1,300 thousand, 1,500 thousand, 1,000 thousand and 2,500 thousand new restricted employee shares by the resolution of shareholders' meeting, which were granted to only full-time employees of the Company who meet certain conditions and have been filed for effective registration with the Securities and Futures Bureau, Financial Supervisory Commission, R.O.C. And on March 12, 2018, March 13, 2017, March 15, 2016 and March 16, 2015, respectively, the Company issued 301 thousand, 1,019 thousand, 987 thousand and 913 thousand shares by resolutions of the board of directors.

Employees who are allotted the aforesaid new restricted employee shares may obtain 30%, 30% and 40% of the allotted shares under vesting conditions respectively if they have been in service for the first, second and third years after the date of allotment of shares and have met the performance criteria required by the Company.

After subscribing for the new shares, employees shall not sell, pledge, transfer, grant, or otherwise dispose of the new shares, nor shall they enjoy the allotment rights on dividends and reserves, nor the stock options to increase cash capital until the vesting conditions are met. From 15 business days prior to the book closure date of bonus shares and the book closure date of cash dividends to the base date of right distribution, the employees who have reached the vesting conditions during this period still do not be entitled to the right of earnings distribution on their shares which have been removed from the restriction.

Upon allotment of the new shares, employees shall, until the vesting conditions are met, deliver the shares in full to the trust institution designated by the Company for custody. During the trust custody period, the voting rights of the shareholders' meeting of the shares shall be exercised by the trust custody institution in accordance with the relevant laws and regulations. If any employee fails to meet the vesting conditions after being allotted the new shares, the Company will recover the shares without compensation and perform the cancellation of the shares according to law.

Relevant information on new restricted employee shares of the Company is as follows:

Number of shares outstanding as of January 1 (thousand shares) Current vesting amount (thousand shares) Current lost amount (thousand shares) Number of shares outstanding as of December 31 (thousand shares)		2020 215 (212) (3) -

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

1) Measurement parameters of fair value on the grant date

The Company adopts the Black-Scholes option pricing model to estimate the fair value of share-based payment at the grant date. The input value of this model is as follows:

Grant date Fair value on the grant date Share price on the grant date Strike price Expected volatility (%) Duration (years) Expected rate of dividend (%) Risk-free interest rate (%)			New restricted employee shares

The Company's expected volatility is based on historical volatility. The duration is governed by the Company's issuance rules. The expected dividends are calculated based on cash dividends distributed by the Company in 2017, 2016, 2015 and 2014, respectively. The risk-free interest rate refers to the interest rate for one to three-year fixed deposits of the Bank of Taiwan. The determination of fair value does not take into account the services and non-market performance conditions included in the transaction.

2) Employee expenses and liabilities

The expenses and liabilities incurred from share-based payments by the Company for 2020 are as follows:

Expenses incurred by new restricted employee shares	2020 $ 544

q. Earnings per share
1) Basic earnings per share

The basic earnings per share of the Company for 2021 and 2020 is calculated on the basis of the net profit attributable to the ordinary equity holders of the Group and the weighted average number of ordinary shares outstanding as follows:

a) Net profit (loss) attributable to the ordinary equity holders of the Company

2021 Net profit (loss) attributable to the ordinary equity holders of the Company $ 146,028 Weighted average number of ordinary shares outstanding 2021 Balance as of January 1 273,552 Impact of new restricted employee shares - Impact of treasury shares - Balance as of December 31 273,552	2021 $ 146,028	2020 (65,419)
		2020
		276,076 169 (1,696)
	273,552	274,549

b) Weighted average number of ordinary shares outstanding

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Diluted earnings per share

The basic earnings per share of the Company for 2021 is calculated on the basis of the net profit attributable to the ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding after adjusting for the dilution effect of all potential ordinary shares as follows:

a) Net profit attributable to the ordinary equity holders of the Company (diluted)

			2021
	Net profit attributable to the ordinary equity holders of the
	Company (diluted)	$	146,028
b)	Weighted average number of ordinary shares outstanding (diluted)
			2021
	Weighted average number of ordinary shares outstanding (basic)		274,549
	Impact of employee stock remuneration		1,842
	Balance as of December 31 - weighted average number of
	ordinary shares outstanding (diluted)		276,391

Since it is a net loss for 2020 for the Company, there is no dilution effect. Therefore, the disclosure of diluted earnings per share (loss) is not required.

r. Revenue from contracts with customers

1) Disaggregation of income

Primary geographical markets: USA Europe Taiwan China Japan Germany Other countries Major products: Computer peripherals Rendering of services	2021	2020 79,372 151,473 61,541 109,760 316,569 117,567 130,101 966,383 958,932 7,451 966,383
	$ 89,906 170,358 38,511 113,479 427,790 48,314 155,124
	$ 1,043,482
	$ 1,036,564 6,918
	$ 1,043,482

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Contract balance

Trade receivables Less: allowance for losses Total Contract liabilities	2021.12.31 $ 247,444 (450)	2020.12.31 216,261 (3,820)	2020.1.1 347,695 (2,020) 345,675 31,576
	$ 246,994	212,441
	$ 34,736	32,101

Please refer to Note 6 (3) for details of disclosure of trade receivables and their impairment.

The beginning balance of contract liabilities as of January 1, 2021 and 2020 was recognized as income of NT$8,934 thousand and NT$9,853 thousand in 2021 and 2020, respectively.

s. Remuneration to employees and directors

In accordance with the Articles of Incorporation of the Company, if the Company has gained profits within a fiscal year, at least 1 percent of the profits shall be allocated as the employees' compensation, and less than 0.5 percent as the director's remuneration. However, in case of the accumulated losses, certain profits shall first be reserved to cover them. Profits refer to pre-tax benefits before deducting remuneration to employees and directors. The remuneration to employees referred to in the preceding paragraph may be distributed by shares or cash to employees of subsidiaries.

The Company's remuneration for employees in 2021 is accrued at NT$35,000 thousand, and the compensation for directors is accrued at NT$940 thousand, which are based on the amount of the Company's net pre-tax income before deducting the remuneration to employees and directors for the period multiplied by the distribution percentage of remuneration to employees and directors as stipulated in the Articles of Incorporation, and presented as operating costs or operating expenses for the period. If the actual distribution amount differs from the estimated amount in the following year, the discrepancies are treated as a change in accounting estimate and recognized as profit or loss in the following year.

It is a pre-tax loss for 2020 thus no provision has been made for the expenses related to the remuneration to employees and directors.

t. Non-operating income and expenses
1) Interest income

The interest income of the Company in 2021 and 2020 are as follows:

Interest income Financial assets measured at fair value through profit or loss Interest on bank deposits Others	2021 $ 31,571 1,319 8	2020 42,926 560 10 43,496
	$ 32,898

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Other income

Other income of the Company in 2021 and 2020 is as follows:

Other income Other income of the Company in 2021 and 2020 is	as follows:
Rental income Dividend income	2021 $ 17,409 99,391	2020 16,565 64,030 80,595
	$ 116,800

3) Other gains and losses

Other gains and losses
Other gains and losses of the Company in 2021 and	2020	are as follows:
		2021	2020
Net loss of foreign exchange		(9,628)	(24,090)
Net loss of financial assets (liabilities) measured at
fair value through profit or loss		(4,462)	(134,054)
Gain on disposal of property, plant and equipment		64	-
Others		9,523	4,513
	$	(4,503)	(153,631)

4) Financial costs

The financial costs of the Company in 2021 and 2020 are as follows: 2021 Interest expenses $ 10,174	2020 7,627

u. Financial instruments
1) Credit risk
- a) Exposure to credit risk

The carrying amount of financial assets and contract assets represents the maximum credit risk exposure amount.

b) Concentration of credit risk

The Company's credit risk exposure is mainly affected by the individual circumstance of each customer. However, management also takes into account the statistics of the Company's customer base, including the default risk of the customer's industry and country, as these factors may affect credit risk. As of December 31, 2021 and 2020, 54.14% and 49.01% of the net trade receivables of the Company are trade receivables from related parties, as a result, there is a significant concentration of credit risk in the Company. In order to reduce the credit risk of trade receivables, the Company continuously assesses the financial position of its customers and periodically evaluates the possibility of collection of trade receivables. To date, the Company is in good condition for cash receipt and does not expect to incur any loss on bad debts.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

c) Credit risks in receivables and debt securities

Please refer to Note 6 (3) for information on the credit risk exposure of trade receivables. Other financial assets measured at amortized cost include other receivables and certificates of deposit. Please refer to Note 6 (4) for relevant information and provision for impairment allowance.

The foregoing items are financial assets with low credit risk, so the allowance for losses for the period are measured by the amount of the expected 12-month credit losses (Please refer to Note 4 (6) for instructions on how the Company determines the low credit risk). Time deposits held by the Company are traded with and performed by financial institutions of investment grade or above, and therefore are deemed to have low credit risk.

2) Liquidity risk

The table below shows the expiration dates of contract on financial liabilities, including the estimated interest but excluding the impact of netting agreement:

Carrying amount	Contract cash flow	Within 6 months	6-12 months	1-2years	2-5 years	More than 5 years
$ 683,750 516,250 72,927 152,062 17,818 - 247	684,565 516,700 72,927 152,062 18,124 (138,419) 138,666	684,565 516,700 72,927 152,062 3,262 (138,419) 138,666	- - - - 3,262 - -	- - - - 6,160 - -	- - - - 5,440 - -	- - - - - - -
$ 1,443,054	1,444,625	1,429,763	3,262	6,160	5,440	-
$ 492,500 357,500 48,359 130,017 13,007	493,781 357,996 48,359 130,017 13,222	493,781 357,996 48,359 130,017 3,222	- - - - 2,993	- - - - 3,686	- - - - 3,321	- - - - -
$ 1,041,383	1,043,375	1,033,375	2,993	3,686	3,321	-

The Company does not expect that the cash flow for the due date analysis will occur significantly earlier or that the actual amount may vary significantly.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

3) Exchange rate risk
a) Exposure to exchange rate risk

The Company's financial assets and liabilities that are exposed to material foreign exchange risk are as follows:

Foreign currency (thousand dollars) Financial assets Monetary items USD $ 45,205.47 RMB 191,193.77 ZAR 83,048.85 HKD 11,770.70 Non-monetary items USD 1,858.56 Financial liabilities Monetary items USD 302.67 Non-monetary items RMB 673.26 Foreign currency (thousand dollars) Financial assets Monetary items USD $ 37,946.68 RMB 101,299.54 ZAR 34,354.50 INR 111,197.58 Non-monetary items USD 1,208.57 Financial liabilities Monetary items USD 106.33 Non-monetary items RMB 2,143.06		2021.12.31	NTD 1,250,609 830,928 143,675 41,786 51,417 8,373 2,926 NTD 1,066,681 437,614 65,961 42,778 33,972 2,989 9,258
		Exchange rate USD:NTD 27.6650 RMB:NTD 4.3460 ZAR:NTD 1.7300 HKD:NTD 3.5500 USD:NTD 27.6650 USD:NTD 27.6650 RMB:NTD 4.3460 2020.12.31
		Exchange rate USD:NTD 28.1100 RMB:NTD 4.3200 ZAR:NTD 1.9200 INR:NTD 0.3847 USD:NTD 28.1100 USD:NTD 28.1100 RMB:NTD 4.3200

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

b) Sensitivity analysis

The exchange rate risk of the Company's monetary items mainly derives from the foreign currency exchange gains and losses generated at the time of translation of foreign-currency-denominated cash and cash equivalents, trade receivables and other receivables, financial assets and liabilities at fair value through profit or loss, trade payables and other payables etc. As of December 31, 2021 and 2020, when the functional currency depreciates or appreciates by 0.5% relative to the non-functional currency, with all other factors remain unchanged, the net profit after tax as of December 31, 2021 and 2020 will increase by NT$9,035 thousand and NT$6,443 thousand respectively.

Due to the wide variety of functional currencies adopted, the Company discloses the exchange gains and losses of monetary items in a consolidated manner. The gains and losses (realized and unrealized) on foreign currency exchange in 2021 and 2020 were a loss of NT$9,628 thousand and a loss of NT$24,090 thousand.

4) Interest rate analysis

The interest rate exposure of the Company's financial assets and financial liabilities is described in the liquidity risk management section of this Note.

The following sensitivity analysis is based on the interest rate exposure of both derivative and non-derivative instruments as at the reporting date. For floating rate liabilities, the analysis assumes that the amount of liabilities outstanding on the reporting date is outstanding for the entire year. The rate of change used internally to report interest rates to key management is a 1% increase or decrease in interest rates, which also represents the management's assessment of the reasonable range of possible changes in interest rates.

If the interest rate increases or decreases by 1%, with all other variables remain unchanged, the net profit of the Company in 2021 and 2020 will decrease or increase by $9,600 thousand and $6,800 thousand, mainly resulting from the Company's borrowings at variable interest rates.

5) Other price risks

If the price of equity securities had changed at the reporting date (the same basis was used for both periods of analysis and other changes were assumed to be constant), the effect on the items in the comprehensive income would have been as follows:

Price on the reporting date	2021 Other comprehensive income after tax Profit or loss after tax $ - 26,539	2021 Other comprehensive income after tax Profit or loss after tax $ - 26,539	2020 Other comprehensive income after tax Profit or loss after tax - 20,846	2020 Other comprehensive income after tax Profit or loss after tax - 20,846
	Other comprehensive income after tax $ -		Other comprehensive income after tax -
Stocks - up by 1% Stocks - down by 1% Beneficiary certificate - up by 1% Beneficiary certificate - down by 1% ETF - up by 1% ETF - down by 1%
	$ -	(26,539)	-	(20,846)
	$ -	3,814	-	7,499
	$ -	(3,814)	-	(7,499)
	$ -	275	-	275
	$ -	(275)	-	(275)

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

6) Fair value information
a) Type of financial instruments and fair value

The financial assets and liabilities measured at fair value through profit or loss of the Company are measured at fair value on a repeatability basis. Except as described below, the carrying amount of all financial instruments of the Company is a reasonable approximation of the fair value and the disclosures of fair value are not required.

		2021.12.31	2021.12.31
Carrying amount $ 27,534 3,761,155 3,788,689 297,752 269,518 125,237 692,507 $ 4,481,196 $ 247 $ 1,200,000 72,927 152,062 17,818 $ 1,443,054		Fair value		Total 27,534 3,761,155
	Level 1 27,534 3,761,155 3,788,689 - - - - 3,788,689 - - - - - -	Level 2 - - - - - - - - 247 - - - - 247	Level 3 - - - - - - - - - - - - - -

				3,788,689
				- - -
				-
				3,788,689
				247
				- - - -
				247

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

		2020.12.31	2020.12.31
Carrying amount $ 27,547 3,494,414 3,521,961 207,967 313,941 3,596 525,504 $ 4,047,465 $ 850,000 48,359 130,017 13,007 $ 1,041,383		Fair value		Total 27,547 3,494,414
	Level 1 27,547 3,494,414 3,521,961 - - - - 3,521,961 - - - - -	Level 2 - - - - - - - - - - - - -	Level 3 - - - - - - - - - - - - -

				3,521,961
				- - -
				-
				3,521,961
				- - - -
				-

b) Each fair value hierarchy is defined as follows:
i. Level 1: The publicly quoted prices (unadjusted) in active markets for identical assets or liabilities.
ii. Level 2: The input parameters other than publicly quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. price) or indirectly (and derived from price).
iii. Level 3: The inputs for assets or liabilities that are not based on observable market prices and counterparty quoted prices (non-observable parameters).
c) Valuation technique of fair value of financial instruments measured at fair value

The Company presents the fair value of financial assets and financial liabilities by class and attribute as follows:

i. Redeemable corporate bonds and open-end funds listed (OTC) are financial assets that are subject to standard terms and conditions and are traded in an active market, and their fair value is based on the publicly quoted prices in active markets.
ii. Forward contracts and exchange rates for derivative financial instruments are usually valued according to valuation models accepted widely by market users at current forward exchange rates. The fair value for structured derivative instruments is calculated by the cash flow discount analysis using the yield curve applied to the duration of derivative commodities.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

d) Transfer between Level 1 and Level 2

There is no transfer in 2021 and 2020.

v. Financial risk management

1) Summary

The Company is exposed to the following risks as a result of the use of financial instruments:

a) Credit risk
b) Liquidity risk
c) Market risk

This Note presents the information on the Company's exposure to the above risks and the Company's objectives, policies and procedures for measuring and managing risk. Please refer to relevant notes to the Parent Company Only Financial Statements for details of further quantitative disclosure.

2) Risk management framework

The board of directors shall fully take the responsibilities for establishment and supervision of the risk management framework of the Company.

The risk management policy of the Company is established to identify and analyze risks encountered by the Company, set appropriate risk limits and controls, and supervise the compliance of risks and risk limits. Risk management policies and systems are periodically reviewed to reflect changes in market conditions and the Company's operations. The Company develops a disciplined and constructive control environment through training, management guidelines and procedures to enable all employees to understand their roles and obligations.

The audit committee of the Company supervises the compliance of the Company's risk management policies and procedures, and review the appropriateness of the Company's relevant management framework for the risks encountered. The internal auditors assist the audit committee of the Company in its supervisory role by conducting periodic and exceptional reviews on risk management controls and procedures and reporting the review results to the audit committee.

3) Credit risk

Credit risk refers to the risk of the Company's financial loss arising from the failure of a customer or a counterparty to a financial instrument to fulfill its contractual obligations, which is mainly derived from the Company's trade receivables from customers, bank deposits and securities investments.

a) Trade receivables and other receivables

The Company has developed a credit policy for a wide range of customers, under which the Company shall analyze the credit rating of each new customer on an individual basis. To reduce credit risk, the Company regularly and continuously evaluates the financial position of its customers, but does not normally require customers to provide collateral.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

b) Investments

The credit risk of bank deposits, fixed income investments and other financial instruments is measured and monitored by our management and finance department. Since the parties which the Company trades with and the investments performed by are all banks of good credit and financial institutions and corporate organizations with investment grade or above, there is no significant doubts on performance, thus there is no material credit risk.

4) Liquidity risk

Liquidity risk refers to the risk that the Company is unable to deliver cash or other financial assets to pay off its financial liabilities and fail to meet its obligations. The Company manages its liquidity in such a way as to ensure, to the extent possible, that the Company has adequate liquidity under normal and stressful circumstances to meet its liabilities when they come due without the risk of unacceptable loss or damage to the Company's reputation.

5) Market risk

Market risk refers to the risk that the Company's earnings or the value of financial instruments held by the Company may be affected by changes in market prices, such as changes in exchange rates, interest rates, or prices of equity instruments. Market risk management aims to control the exposure of market risk to a tolerable extent and to maximize the return on investment.

The Company engages in derivatives transaction to manage market risk. All transactions are conducted in accordance with the Company's Derivative Commodity Handling Procedures.

a) Exchange rate risk

The Company is exposed to exchange rate risks arising from sales, procurements and borrowing transactions that are not denominated in the functional currencies of each of the Group's enterprises. The functional currencies of the Group's enterprises are mainly New Taiwan dollar, as well as US dollar, RMB and Japanese yen, while the main currencies used for transactions are New Taiwan dollar, Euro, US dollar, British pound and Japanese yen.

In addition to the natural hedging by trade receivables and trade payables, the Company also adopts one-year forward foreign exchange contracts or other financial instruments to hedge foreign exchange risks.

b) Interest rate risk

The Company's investments in financial bonds and loans may affect interest income, expenses or fair value as market interest rates change, but slightly affect the working capital of the Company.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

c) Other market price risks

The Company is exposed to equity prices risk derived from listed (OTC) equity securities investments. The equity investments are not held for trading but are for strategic investments. The Company does not actively trade such investments, and the Company's management personnel manage risk by holding different risk investment portfolios. The Company's equity price risk is mainly concentrated in equity instruments issued by financial enterprises on the Taiwan Stock Exchange. In addition, the Company assigns a specific team to monitor price risk and to assess when to increase the hedging position of the risk to be avoided.

w. Capital management

The capital management the Company aims to ensure the ability as a going concern, so as to provide shareholder returns and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the dividends paid to shareholders, reduce capital to refund shareholders, issue new shares or sell assets to pay off liabilities.

In line with its peers, the Company manages capital on the basis of its debt-to-capital ratio, which is calculated by dividing net liabilities by total capital. Net liabilities are the total liabilities presented in the balance sheet minus cash and cash equivalents. Total capital is the total component of equity (i.e., share capital, capital surplus, retained earnings, treasury shares and other equity).

shares and other equity).
Total liabilities Less: Cash and cash equivalents Net liabilities Total equity Debt-to-capital ratio	2021.12.31 $ 1,515,448 (297,752)		2020.12.31 1,117,286 (207,967)
	$ 1,217,696		909,319
	$ 4,025,018		3,964,347
		30.25%	22.94%

As of December 31, 2021, the Company's approach The Company capital management remained unchanged.

x. Investment and financing activities involved in non-cash transactions

The Company's investment activities in 2021 and 2020 are not involved in non-cash transactions. Financing activities involved in non-cash transactions refer to acquisition of right-of-use assets by lease. Please refer to Note 6 (8) for details.

The Company’s financing activities that did not affect the current cash flow for the years ended December 31, 2020 and 2019 were as follows:

Lease liabilities Total liabilities generated from the financing activities	2021.1.1 Cash flow Non-cash changes 2021.12.31 $ 13,007 (6,313) 11,124 17,818
	$ 13,007 (6,313) 11,124 17,818

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Lease liabilities Total liabilities generated from the financing activities	2020.1.1 Cash flow Non-cash changes 2020.12.31 $ 19,238 (6,231) - 13,007
	$ 19,238 (6,231) - 13,007

7. Related-Party Transactions

a. Name and relationship of related parties

Subsidiaries of the Company and other related parties involved in transactions with the Company during the period covered by the Parent Company Only Financial Statements are as follows:

Name of related parties Infortrend Corporation Infortrend Europe Limited Infortrend Japan Inc. Prophet Technology Inc. Infortrend Limited Surveon Technology Inc. Infortrend Shanghai Limited	Relationship with the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Sub-subsidiary of the Company Sub-subsidiary of the Company

b. Significant transactions with related parties
1) Operating income

The amount of significant sales transactions between the Company and related parties were as follows:

Subsidiary Infortrend Shanghai Limited Other subsidiaries	2021 $ 99,842 250,584	2020 109,149 176,732
	$ 350,426	285,881

The price at which the Company sells to its related parties is about 10 ~ 20 % lower than the usual price, and the payment shall be made in three months. The unrealized gross margin on sales to related parties in 2021 and 2020 is NT$8,848 thousand and NT$13,893 thousand, respectively.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

2) Receivables from related parties

The details of the Company's trade receivables from related parties are as follows:

Accounting items Types of related parties	2021.12.31 2020.12.31 $ 5,562 4,334 69,274 73,147 45,416 9,668 13,479 16,959 6,204 6,304 $ 139,935 110,412
Trade receivables Subsidiary Infortrend Corporation Infortrend Shanghai Limited Infortrend Japan Inc. Other subsidiaries Other receivables Subsidiary

3) Trade payables to related parties

The details of the Company's trade payables to related parties are as follows:

Accounting

	Accounting
4) 5) 6)	items Types of related parties	2021.12.31 $ 335	2020.12.31 339 2020.12.31 6,212 11,034 7,127 1,212 25,585 2020 15,703 2020 2,404 222 93 2,719
	Other payables Subsidiary Contract liabilities Types of related parties Subsidiary Infortrend Corporation Infortrend Europe Limited InfortrendJapan Inc. Other subsidiaries Rental income Types of related parties Subsidiary Infortrend Corporation Other income Types of related parties Subsidiary Infortrend Corporation Infortrend Europe Limited Other subsidiaries
		2021.12.31 $ 6,507 11,396 7,279 1,003
		$ 26,185
		2021 $ 16,597
		2021 $ 3,857 3,058 46
		$ 6,961

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

7) Service fees

Types of related parties Subsidiary InfortrendEurope Limited c. Transactions of key management personnel Remuneration of key management personnel includes: Short-term employee benefits Post-employment benefits Pledged Assets The carrying value of the assets pledged is as follows: Pledged assets Object	Types of related parties Subsidiary InfortrendEurope Limited c. Transactions of key management personnel Remuneration of key management personnel includes: Short-term employee benefits Post-employment benefits Pledged Assets The carrying value of the assets pledged is as follows: Pledged assets Object	2021 $ 1,287
		2021 $ 12,656 281
		$ 12,937
		2021.12.31 $ 1,491,408 121,691 2,500 1,046
Financial assets measured at fair value through profit or loss - current Other financial assets - current Other financial assets - non-current Other financial assets - non-current	Short-term loans and financing amount Short-term loans and financing amount Guarantee for customs duties Guarantee for national defense service and deposit for housing and parking space
		$ 1,616,645

8. Pledged Assets

9. Significant Contingent Liabilities and Unrecognized Contractual Commitments

a. Significant unrecognized contractual commitments:

1)	The refundable deposit notes	issued by the Company	for the loan limit	are as follows:
			2021.12.31	2020.12.31
	NTD	$	800,000	800,000

10. Losses due to Major Disasters: None.

11. Significant Events : None.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

12. Others

a. The summary of employee benefits, depreciation, depletion and amortization expenses by function is as follows:

Function Nature	2021	2021	2021	2020	2020	2020
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Personal expenses Salary Labor and health insurance expenses Pension Director's remuneration Other employee benefits expenses Depreciation Amortization	105,233 10,529 4,932 - 5,346 9,993 -	274,092 19,861 11,568 2,228 7,611 14,459 423	379,325 30,390 16,500 2,228 12,957 24,452 423	102,389 9,858 4,903 - 5,376 9,995 -	278,417 19,139 12,028 1,122 7,804 15,673 787	380,806 28,997 16,931 1,122 13,180 25,668 787

Additional information on the number of employees and employee benefits expenses of the Company in 2021 and 2020 is as follows:

Company in 2021 and 2020 is as follows:
Numbers of employees The number of directors who do not serve concurrently as employees Average employee benefits expenses Average employee salary expenses Adjustment on the average employee salary expenses (Note 1) Supervisor's remuneration (Note 2)	2021 432	2020 443
	4	3
	$ 1,026	1,000
	$ 886	865
	2.43% $ -	(4.21)%
		-

Note 1. The Company adjusts employees’ salaries based on their performance every year in January, and the discrepancies of the average employee salary expense adjustment in the two periods are caused by multi factors such as employee structure, individual performance appraisal and company operating status.

Note 2. The Company has established an Audit Committee to replace the Supervisor.

The Company's remuneration policy (including remuneration to directors, managers and employees) is as follows:

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

1) Employee

The employee's monthly salary is determined according to his/her job category, education and experience, professional years of experience, professional knowledge and technology, and additional bonus and remuneration will be given according to the Company's annual operating status and personal performance, and the annual salary adjustment range will be determined on such basis.

2) Manager

The remuneration is paid in accordance with the Company's "Management Measures on Manager Remuneration and Performance Appraisal," the salary level of the position in the industry market and the contribution of the position to the Company's operational objectives. The reasonableness of relevant performance appraisal and remuneration has been reviewed by the Remuneration Committee and submitted to the board of directors for approval, and the remuneration system will be timely reviewed in light of the actual operating conditions and relevant laws and regulations.

3) Director

In accordance with Article 21 of the Articles of Incorporation of the Company, the remuneration to directors for the current year shall not more than 0.5% of the annual profit, and shall be reasonably distributed taking into account the number of board meetings attended and their contribution to the Company's performance. The remuneration to independent directors shall be determined by reference to the market situation of the same industry and their contribution to the Company's operation, which shall be reviewed by the Remuneration Committee and submitted to the board of directors for approval in advance.

b. Influences of COVID-19:

The COVID-19 outbreak in early 2020 has affected the sales of the Company's subsidiary in Mainland China, Infortrend Shanghai Limited and its subsidiary in the USA, Infortrend Corporation, including order reduction and delayed delivery, but their revenue have gradually recovered. The Company will continue to closely monitor the development of events for immediate assessment, and take relevant measures to prevent the pandemic.

13. Supplementary Disclosures

a. Information on significant transactions

In accordance with the "Regulations Governing the Preparation of Financial Statements by Securities Issuers," the Company discloses the information concerning significant transactions in 2021 as follows:

1) Financings provided: None.
2) Guarantee and endorsement provided: None.
3) Marketable securities held at the end of the period (excluding investments in subsidiaries, associates, and joint ventures):

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Unit: NT$ Thousands

Holding company	Type and name of securities	Relationship with the issuer of securities	Accounting subject		End of the	period		Remarks
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Infortrend Technology Inc. `〞` `〞` `〞` `〞` `〞` Infortrend Technology Inc. `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞`	SoftBank Perpetual Bonds UPAMC James Bond Money Market Fund Nomura Global Financial Bond Fund Dis - USD Nomura Fallen Angel High Yield Bond Fund-USD Nomura Fallen Angel High Yield Bond Fund-RMB Cathay Senior Secured High Yield Bond Fund - USD Cathay Asian High Yield Bond Fund - USD Cathay High Income Fund of Funds - USD Taishin Strategy Senior Total Return High Yield Bond Fund-USD PGIM Broad Market U.S. High Yield Bond Fund-USD Swiss Bank USD Bonds Barclays Bank USD Bonds Fortis Insurance USD Bonds Westpac Bank RMB Bonds CDB Leasing USD Bonds Standard Charter Group USD Bonds Agricultural Development Bank of China RMB Bonds The Hong Kong Mortgage Corporation Limited RMB Bonds Far East Horizon Ltd. RMB Bonds KEXIM RMB Bonds KEXIM Bank INR Bonds International Bank for Reconstruction and Development ZAR Bonds China Construction Bank RMB Bonds Asian Infrastructure Investment Bank ZAR Bonds Evergrande Group USD Bonds	- - - - - - - - - - - - - - - - - - - - - - - - -	Derivatives measured at fair value through profit or loss - non-current Debt instruments measured at fair value through profit or loss - current `〞` `〞` `〞` `〞` Debt instruments measured at fair value through profit or loss - current `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞`	- 249,822.94 84,161.62 118,389.31 1,401,951.33 13,106,492.50 99,975.88 1,129,567.60 590,056.98 19,598.92 - - - - - - - - - - - - - - -	27,534 4,215 27,162 33,196 62,539 135,319 21,842 14,284 26,895 55,932 88,972 59,100 42,531 40,369 41,669 41,627 4,369 85,928 21,583 34,658 15,162 35,540 73,895 19,614 2,183	- % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - %	27,534 4,215 27,162 33,196 62,539 135,319 21,842 14,284 26,895 55,932 88,972 59,100 42,531 40,369 41,669 41,627 4,369 85,928 21,583 34,658 15,162 35,540 73,895 19,614 2,183

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc.

(Continued)

Holding company	Type and name of securities	Relationship with the issuer of securities	Accounting subject		End of the	period		Remarks
				Number of shares	Carrying amount	Shareholding ratio	Fair value
`〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Infortrend Technology Inc. `〞` `〞` `〞` `〞` `〞` `〞`	Industrial and Commercial Bank of China Macau Branch RMB Deposits European Bank for Reconstruction and Development INR Bonds International Finance Corporation INR Bonds Bank of China, Macau Branch RMB Bonds Inter-American Development Bank INR Bonds Class A Preferred Shares issued by Fubon Financial Holding Class B Preferred Shares issued by Fubon Financial Holding Class A Preferred Shares issued by Cathay Financial Holdings Class E Registered Preferred Shares issued by Taishin Holdings Class A Preferred Shares issued by Union Bank Class A Preferred Shares issued by WPG Holdings Class A Preferred Shares issued by Shin Kong Financial Holding Class B Preferred Shares issued by Shin Kong Financial Holding Non-cumulative Convertible Class A Preferred Shares issued by O-Bank Ordinary shares of Cathay Financial Holdings Co., Ltd. Ordinary shares of Fubon Financial Holding Co., Ltd.	- - - - - - - - - - - - - - - -	`〞` `〞` `〞` `〞` `〞` Equity instruments measured at fair value through profit or loss - current `〞` `〞` `〞` Equity instruments measured at fair value through profit or loss - current `〞` `〞` `〞` `〞` `〞` `〞`	- - - - - 7,339,000.00 2,898,000.00 4,059,000.00 8,383,000.00 10,251,000.00 5,901,000.00 5,821,000.00 4,285,000.00 3,907,000.00 465.00 243.00	21,748 22,335 22,892 21,671 29,995 463,825 182,864 255,311 445,137 543,303 292,394 247,975 183,612 39,461 29 19	- % - % - % - % - % - % - % - % - % - % - % - % - % - % - % - %	21,748 22,335 22,892 21,671 29,995 463,825 182,864 255,311 445,137 543,303 292,394 247,975 183,612 39,461 29 19	Note Note Note Note Note

Note: Please refer to Notes 6 (2) and 8 for details about stock pledge.

4) Aggregate purchases or sales of the same securities reaching NT$300 million or 20 percent of paid-in capital or more: None.
5) Acquisition of real estate reaching NT$300 million or 20 percent of paid-in capital or more: None.
6) Disposal of real estate reaching NT$300 million or 20 percent of paid-in capital or more: None.
7) Purchases or sales of goods from or to related parties reaching NT$100 million or 20 percent of paid-in capital or more: None.
8) Trade receivable from related parties reaching NT$100 million or 20 percent of paid-in

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

capital or more: None.

9) Trading in derivative instruments: Notes 6 (2) and 6 (21).
b. Information on investments in other companies:

The information on the Company's investments in other companies in 2021 is as follows (excluding the investee companies in the Mainland China):

Unit: NT$ Thousands

Name of investment company	Name of investee	Region	Principal business	Original investment amount (Note 1)	Original investment amount (Note 1)	Shareholding at the end of the period	Shareholding at the end of the period	Shareholding at the end of the period	Current profit or loss of investee	Investment profit or loss recognized in the current period	Remarks
				End of current period	End of last year	Number of shares	Ratio	Carrying amount
Infortrend Technology Inc. Infortrend Technology Inc. Infortrend Technology Inc. Infortrend Technology Inc. Infortrend Technology Inc. Infortrend Europe Limited Prophet Technology Inc.	Infortrend Corporation Infortrend Europe Limited Infortrend Japan Inc. Prophet Technology Inc. Infortrend Limited Infortrend Deutschland GmbH Surveon Technology Inc.	USA United Kingdom Japan Taiwan Mauritius Germany Taiwan	Transaction of computer peripherals Transaction of computer peripherals Transaction of computer peripherals Transaction of computer peripherals Investment Transaction of computer peripherals Transaction of computer peripherals	65,628 89,174 930 15,000 120,270 1,015 10,000	65,628 89,174 930 15,000 120,270 1,015 10,000	153,824 2,200,000 60 1,500,000 - - 1,000,000	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	33,037 18,380 147 15,188 (2,926) 3,863 10,200	17,506 2,966 785 (403) 1,378 17 (404)	15,474 2,966 785 (403) 1,378 17 (404)	Subsidiary `〞` `〞` `〞` `〞` Sub-subsidiary `〞`

Note 1. The exchange rate is the historical exchange rate at the time of each investment.

c. Information on investments in mainland China:

1) Information on investments in Mainland China:

Unit: NT$ Thousands

Name of investee in Mainland China	Principal business	Paid-in capital (Note 3)	Method of investment i	Accumulated outward remittance of nvestment from Taiwan at the beginning of the current period (Note 3)	Outward remittance or recovery of investment in the current period (Note 3)	Outward remittance or recovery of investment in the current period (Note 3)	Accumulated outward remittance of investment from Taiwan at the end of the current period (Note 3)	Current profit or loss of investee	Shareholding ratio of the Company's direct or indirect investments	Investment profit or loss recognized in the current period	Ending book value of investment	Repatriated investment income as of the end of current period
					Remittance	Recovery
Infortrend Shanghai Limited T c p	ransaction of omputer eripherals	68,121	(2)	68,121	-	-	68,121	1,376	100.00%	1,376	(9,229)	-

2) Limit on the amount of investments in Mainland China:

Accumulated outward remittance of investment to Mainland China from Taiwan at the end of the current period (Note 3)	Investment amount approved by the Investment Commission, MOEA (MOEAIC) (Note 3)	Limit on the amount of investments in Mainland China authorized by MOEAIC (Note 4)
68,121	68,121	2,415,011

Note 1. Invest in mainland companies through remittance from the third region.

Reinvest in the mainland companies by establishing a company through investment in the third region.
Reinvest in a mainland company by reinvesting in an existing company in the third region.
Invest directly in mainland companies.
Other methods.

Note 2. It is presented according to the financial statements of the investee company.

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Note 3. The exchange rate is the historical exchange rate at the time of each investment. Note 4. The limit for other enterprises is 60% of net worth.

3) Significant transactions:

Please refer to the section titled "Information on significant transactions" for details of significant transactions, direct or indirect, between the Company and its investee companies in Mainland China in 2021, which have been written off at the time of preparation of the consolidated reports.

d. Information on major shareholders:

preparation of the consolidated reports. formation on major shareholders:	preparation of the consolidated reports. formation on major shareholders:	preparation of the consolidated reports. formation on major shareholders:
Unit: Shares
Share Name of major shareholders	Number of shares held	Shareholding ratio
Shih-TungLo	38,948,816	14.23%
Special investment account of Beevest Securities Limited entrusted for custody by Chinatrust Commercial Bank	25,405,815	9.28%
TungYu Investment Co.,Ltd	21,075,300	7.70%

Note 1. The information of major shareholders in this table refers to the information calculated by Taiwan Depository & Clearing Corporation (TDCC) on the last business day at the end of each quarter on the total number of ordinary shares and preferred shares (including treasury shares) of the Company held by shareholders which have been delivered with book-entry registration at least 5 percent in total. The capital stock recorded in the financial statements of the Company and the number of shares actually delivered with book-entry registration may vary depending on the calculation basis of preparation.
Note 2. If the above information is about the circumstance that the shareholders have entrusted their shares to the trust institutions, it shall be disclosed by the trustor who opened the trust account with the trustee by the individual trust account. Shareholders shall register their shareholding as insider holding more than 10 percent of the shares in accordance with the Securities and Exchange Act, including the shares held by themselves plus the shares they have entrusted to the trust institutions and have the right to use the trust property. Please refer to the Market Observation Post System for information on insider equity registration.

14. Segment information

Please refer to the Consolidated Financial statements for 2021.

Infortrend Technology Inc.

Schedule of Cash and Cash Equivalents As of December 31, 2021 Unit: NT$ Thousands

Item	Abstract	Amount $ 26 67,499 8 204,388 25,831 $ 297,752
Cash Bank deposits Total	Demand deposits Check deposits Foreign currency deposit (USD 4,621 thousand, RMB 2,562 thousand, ZAR 12,148 thousand, and HKD 11,771 thousand ) Time deposits

Infortrend Technology Inc.

Schedule of Financial Assets (Liabilities) Measured at Fair Value through Profit or Loss As of December 31, 2021 Unit: NT$ Thousands

Number/Nu mber of shares Face value	Acquisition cost 4,203 27,810 33,288 61,220 136,322 28,414 14,609 26,070 55,804 450,232 182,752 252,071 438,146 533,822 297,932 262,235 178,959 39,772 16 14 93,639 59,887 45,030 40,245 46,585 48,900 4,365 50,967 34,371 21,792 34,558 15,132 41,549 30,169 43,583 22,624 12,406 21,343 10,774 11,417 22,963 21,958 29,704 -	Fai	r value Changes in fair value attributable to changes in credit risk Total amount 4,215 - 27,162 - 33,196 - 62,539 - 135,319 - 21,842 - 14,284 - 26,895 - 55,932 - 463,825 - 182,864 - 255,311 - 445,137 - 543,303 - 292,394 - 247,975 - 183,612 - 39,461 - 29 - 19 - 88,972 - 59,100 - 42,531 - 40,369 - 41,669 - 41,627 - 4,369 - 51,132 - 34,796 - 21,583 - 34,658 - 15,162 - 35,540 - 30,447 - 43,448 - 19,614 - 2,183 - 21,748 - 10,947 - 11,388 - 22,892 - 21,671 - 29,995 - (247) -	Remarks
		Unit price (NT$)
249,822.94 $ - 84,161.62 - 118,389.31 - 1,401,951.33 - 13,106,492.50 - 99,975.88 - 1,129,567.60 - 590,056.98 - 19,598.92 - 7,339,000.00 - 2,898,000.00 - 4,059,000.00 - 8,383,000.00 - 10,251,000.00 - 5,901,000.00 - 5,821,000.00 - 4,285,000.00 - 3,907,000.00 - 465.00 - 243.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -		16.8723 11.6659 10.1353 10.2642 0.3732 7.8973 0.4571 10.4878 103.1570 63.2000 63.1000 62.9000 53.1000 53.0000 49.5500 42.6000 42.8500 10.1000 62.5000 76.3000 - - - - - - - - - - - - - - - - - - - - - - - - -		Note Note Note Note Note
	3,787,652		3,760,908 -
	30,749		27,534 -
	3,818,401		3,788,442 -

Note: Please refer to Notes 6 (2) and 8 for details about stock pledge.

Infortrend Technology Inc.

Schedule of Trade receivables As of December 31, 2021 Unit: NT$ Thousands

Customer name	Abstract (USD thousand)	Amount $ 5,562 13,473 69,274 45,416 6	Remarks
Related parties: IFT-USA IFT-EU IFT-CHINA (Infortrend) IFT-JP IFT-S (Surveon) Non-related parties: CANON-M STARLINE Others Less: allowance for losses Net amount Total	USD 201 USD 487 USD 2,504 USD 1,642 USD - Subtotal USD 2,794 USD 227 Subtotal		The balance did not exceed 5%
		133,731
		77,283 6,266 30,164
		113,713 (450)
		113,263
		$ 246,994

Schedule of Other Receivables

Item	Abstract	Amount $ 15,540 780 6,204	Remarks
Other receivables Other receivables - related parties Total	Bond interest receivable Others
		$ 22,524

Infortrend Technology Inc.

Inventory Schedule As of December 31, 2021 Unit: NT$ Thousands

Item	Amount Cost Net realizable value $ 312,751 305,248 38,550 31,640 54,546 34,696	Amount Cost Net realizable value $ 312,751 305,248 38,550 31,640 54,546 34,696	Remarks
	Cost $ 312,751 38,550 54,546
Raw material Work in process Finished products Subtotal Allowance for inventory loss from market price decline and for loss on obsolete and slow-moving inventories Net amount			Net realizable value Net realizable value Net realizable value
	405,847 (54,576)	371,584

	$ 351,271

Schedule of Other Current Assets

Item	Abstract	Amount $ 8,991 48	Remarks
Other current assets Temporary payment	Tax refund receivable, etc. Temporary payment of patent fees, etc.
		$ 9,039

Infortrend Technology Inc.

Schedule of Changes in Investments Using Equity Method From January 1 to December 31, 2021 Unit: NT$ Thousands

Beginning balance Number of shares Amount 2,200,000 $ 15,479 60 (577) 153,824 18,493 1,500,000 16,103 $ 49,498 - $ 9,258 $ 9,258	Increase in the current period Number of shares Amount - 2,901 - 724 - 14,544 - - 18,169 - - -	Increase in the current period Number of shares Amount - 2,901 - 724 - 14,544 - - 18,169 - - -	Decrease in the current period Number of shares Amount - - - - - - - 915 915 - 6,332 6,332	Decrease in the current period Number of shares Amount - - - - - - - 915 915 - 6,332 6,332	Ending balance Number of shares Sharehold ing ratio Amount 2,200,000 100.00% 18,380 60 100.00% 147 153,824 100.00% 33,037 1,500,000 100.00% 15,188 66,752 - 100.00% 2,926 2,926	Ending balance Number of shares Sharehold ing ratio Amount 2,200,000 100.00% 18,380 60 100.00% 147 153,824 100.00% 33,037 1,500,000 100.00% 15,188 66,752 - 100.00% 2,926 2,926	Ending balance Number of shares Sharehold ing ratio Amount 2,200,000 100.00% 18,380 60 100.00% 147 153,824 100.00% 33,037 1,500,000 100.00% 15,188 66,752 - 100.00% 2,926 2,926	Market price or net equity value Unit price (NT$) Total price 9.07 19,961 23,283.88 1,397 244.25 37,572 10.13 15,188 74,118 - 1,759 1,759	Market price or net equity value Unit price (NT$) Total price 9.07 19,961 23,283.88 1,397 244.25 37,572 10.13 15,188 74,118 - 1,759 1,759	Remar ks
					Number of shares 2,200,000 60 153,824 1,500,000 -	Sharehold ing ratio 100.00% 100.00% 100.00% 100.00% 100.00%
	Number of shares		Number of shares					Unit price (NT$) 9.07 23,283.88 244.25 10.13 -
	- - - - -		- - - - -							(Note) `〞` `〞` `〞` (Note)
$ 49,498		18,169		915			66,752		74,118
$ 9,258		-		6,332			2,926		1,759
$ 9,258		-		6,332			2,926		1,759

Note: The market price of the unlisted (OTC) company is the net equity value, which is presented according to the financial statements of the investee company that have been audited and attested by a CPA.

Infortrend Technology Inc.

Schedule of Short-term loans As of December 31, 2021

Unit: NT$ Thousands

Type of loan Credit loans `〞` `〞` Guaranteed loans `〞` `〞`	Description Taiwan SMEs Bank E.SUN Bank Taishin International Bank Taishin International Bank Mega Bank E.SUN Bank	Ending balance $ 325,000 100,000 91,250 273,750 260,000 150,000 $ 1,200,000	Term of loan 2021.12.03~2022.01.24 2021.10.15~2022.04.15 2021.12.01~2022.01.28 2021.12.01~2022.01.28 2021.08.16~2022.02.12 2021.09.23~2021.06.13	Range of interest rate 1.05% 1.08% 1.00% 1.00% 1.05% 0.90%~1.05%	Financing amount 350,000 100,000 125,000 375,000 300,000 200,000	Mortgage or guarantee None `〞` `〞` Yes `〞` `〞`	Remarks

Infortrend Technology Inc.

Schedule of Contract Liabilities As of December 31, 2021

Unit: NT$ Thousands

Item	Abstract	Amount $ 2,621 240 5,930 25,945	Remarks
Advances on sales - non-related parties Advances on sales - related parties Long-term deferred income - non-related parties Long-term deferred income - related parties
		$ 34,736

Schedule of Trade payables

Customer name	Abstract	Amount $ 23,730 8,838 8,336 4,310 27,713	Remarks
Non-related parties: Trade payables	Toshiba Taiwan 3Y Power Technology Pentens Phoenics Electronics Corporation Others		The balance of single customer did not exceed 5%
		$ 72,927

Infortrend Technology Inc.

Schedule of Other Payables As of December 31, 2021 Unit: NT$ Thousands

Item	Abstract	Amount $ 76,829 45,746 18,209 11,278 $ 152,062
Wages payable Expense payables Other payables Other expense payables	Others

Schedule of Other Current Liabilities

Item	Abstract	Amount $ 927	Remarks
Collection for others	Labor and health insurance expenses

Infortrend Technology Inc.

Schedule of Provisions - Non-current As of December 31, 2021 Unit: NT$ Thousands

Item	Abstract	Amount $ 2,657	Remarks
Provision for after-sales service guarantee - three years

Schedule of Other Non-current Liabilities

Item	Abstract	Amount $ 7	Remarks
Guarantee deposits	Deposit for parking space

Infortrend Technology Inc.

Schedule of Operating Cost From January 1 to December 31, 2021 Unit: NT$ Thousands

Amount Subtotal Total $ 262,285 533,582 51 (312,751) (7,902) (6,426) (30,945) 437,894 31,324 116,168 147,492	Amount Subtotal Total $ 262,285 533,582 51 (312,751) (7,902) (6,426) (30,945) 437,894 31,324 116,168 147,492	Amount Subtotal Total $ 262,285 533,582 51 (312,751) (7,902) (6,426) (30,945) 437,894 31,324 116,168 147,492
Subtotal $ 262,285 533,582 51 (312,751) (7,902) (6,426) (30,945)
31,324 116,168
44,792 298 81 (38,550) (1,805) 1,205		585,386 6,021
50,022 20,096 (54,546) (557) (1,048)		591,407 13,967
7,821 9,279 1,956 (51) 4,620		605,374 23,625
	$ 628,999

Infortrend Technology Inc.

Schedule of Selling and Marketing Expenses From January 1 to December 31, 2021 Unit: NT$ Thousands

Item	Abstract	Amount $ 19,042 10,218 2,462 1,287 6,141	Remarks
Payroll expenses Transportation expenses Export expenses Service fees Others			The amount of a single item did not exceed 5%
		$ 39,150

Schedule of Administrative Expenses

Item	Abstract	Amount $ 45,262 6,885 5,937 5,063 19,937	Remarks
Payroll expenses Insurance premium Other expenses Depreciation Others			The amount of a single item did not exceed 5%
		$ 83,084

Infortrend Technology Inc.

Schedule of Research Expenses From January 1 to December 31, 2021 Unit: NT$ Thousands

Item	Abstract	Amount $ 213,802 83,873	Remarks
Payroll expenses Others			The amount of a single item did not exceed 5%
		$ 297,675

AI assistant

Infortrend — Audit Report / Information 2021

52125_rns_2021-11-05_baefd8c4-5b27-4e24-9387-e4812ad630af.pdf

Infortrend Technology Inc.

Parent Company Only Financial Statements and Independent Auditors' Report

Contents

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

CPA's responsibility for the audit on the Parent Company Only Financial Statements

KPMG

Infortrend Technology Inc.

Balance Sheet December 31, 2021 and 2020 Unit: NT$ Thousands

Infortrend Technology Inc.

Statement of Comprehensive Income From January 1 to December 31, 2021 and 2020 Unit: NT$ Thousands

Infortrend Technology Inc.

Statement of Changes in Equity From January 1 to December 31, 2021 and 2020 Unit: NT$ Thousands

Infortrend Technology Inc. Statement of Cash Flow From January 1 to December 31, 2021 and 2020

Unit: NT$ Thousands

(Please refer the accompanying notes to financial statements )

Infortrend Technology Inc.

Notes to Parent Company Only Financial Statements

2021 and 2020

(Unless otherwise indicated, all amounts are in NT$ Thousands)

1. Company Overview

2. Date and Procedures for the Adoption of the Financial Statements

3. Application of New and Revised Standards and Interpretations

4. Summary of Significant Accounting Policies

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

d) Derecognition of financial assets

j. Leases

(Continued)

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

a) Sales of goods - computer peripherals

b) Rendering of services

c) Financial component

2) Defined benefit plans

3) Short-term employee benefits

5. Major Sources of Uncertainty in Material Accounting Judgments, Estimates and Assumptions

6. Descriptions of Material Accounting Subjects

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

1) Preferred shares

2) Perpetual bonds

3) Swap contracts

c. Trade receivables

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

1) Subsidiary

g. Property, plant and equipment

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc.

(Continued)

h. Right-of-use assets

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

j. Short-term loans

k. Lease liabilities

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

1) Lease of buildings and structures

2) Other leases

l. Provisions

1) Defined benefit plans

a) Composition of plan assets

2) Defined contribution plans

n. Income tax

1) Income tax expenses

Defined benefit

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

3) Retained earnings

c) Earning distribution

4) Treasury shares

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

p. Share-based payment

1) Measurement parameters of fair value on the grant date

2) Employee expenses and liabilities

2) Diluted earnings per share

r. Revenue from contracts with customers

Notes to the Parent Company Only Financial Statements of Infortrend Technology Inc. (Continued)

s. Remuneration to employees and directors

Infortrend Audit Report / Information 2021