Stock Code:3008

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Parent Company Only Financial Statements

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

Address: No.11, Jingke Rd., Nantun Dist., Taichung City 40852, Taiwan (R.O.C.) Telephone: 886-4-3600-2345

The independent auditors’ report and the accompanying parent company only 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 parent company only financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information
9. List of major account titles Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. List of major account titles	Page
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Independent Auditors’ Report

To the Board of Directors of Largan Precision Co., Ltd.:

Opinion

We have audited the financial statements of Largan Precision Co., Ltd. (the ”Company”) which comprise the balance sheets as of December 31, 2021 and 2020, the statement of comprehensive income, changes in equity and cash flows for the years ended December 31, 2021 and 2020, and notes to the parent company only financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Inventory valuation

Please refer to Note 4(g), Note 5, and Note 6(f) for accounting policies, uncertainty of accounting estimates and assumptions, and related disclosures for inventory valuation.

Description of key audit matter:

Inventories are stated at the lower of cost or net realizable value. With the rapid development of technology, and significant changes in market demand, the severe volatility to sales may lead to risks, wherein the costs of inventories may exceed its net realizable values. Therefore, the valuation of inventories has been identified as one of the key audit matters.

3-1

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures include obtaining an inventory aging report, analyzing the movement of inventory aging and evaluating the reasonableness of the Company’ s accounting policies, such as allowance for inventory valuation and obsolescence; performing a retrospective test of the Company’s historical accuracy of judgments with reference to inventory valuation and comparing with the current period to evaluate the appropriateness of the estimation and assumptions used; examining whether the valuation of inventories is in compliance with the accounting policies of the Company; understanding the basis of the selling price the management used to ensure the reasonableness of net realizable value of inventories; reviewing sales in the subsequent period, as well as assessing the basis of the net realizable value the Company used to determine the sufficiency of allowance of inventories and whether the related disclosures are appropriate.

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

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

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

Those charged with governance (including the supervisors) are responsible for overseeing the Company’ s financial reporting process.

3-2

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information on the investment in other entities accounted for using the equity method in order to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

3-3

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

The engagement partners on the audit resulting in this independent auditors’ report are Shyh-Huar, Kuo and Chun-Yuan, Wu.

KPMG

Taipei, Taiwan (Republic of China) February 21, 2022

Notes to Readers

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

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a) and (v)) $ 77,792,072 45 1110 Current financial assets at fair value through profit or loss (Note 6(b) and (v)) 14,329,966 8 1120 Current financial assets at fair value through other comprehensive income (Note 6(c) and (v)) 2,354,263 1 1150 Notes receivable, net (Note 6(d) and (v)) - - 1170 Accounts receivable, net (Note 6(d) and (v)) 5,126,249 3 1180 Accounts receivable from related parties, net (Note 6(d), (v) and 7) 4,025,551 2 1200 Other receivables (Note 6(e) and (v)) 286,304 - 1210 Other receivables from related parties (Note 6(e), (v) and 7) 110,996 - 1310 Inventories (Note 6(f)) 4,641,165 3 1470 Other current assets (Note6(k)) 222,479 - 1476 Other current financial assets (Note 6(k), (v) and 8) 2,257,576 1 111,146,621 63 Non-current assets: 1520 Non-current financial assets at fair value through other comprehensive income (Note 6(c) and (v)) 932,000 1 1550 Investments accounted for using equity method (Note 6(g)) 14,453,422 8 1600 Property, plant and equipment (Note 6(h) and 7) 34,650,808 20 1755 Right-of-use assets (Note 6(i)) 155,128 - 1780 Intangible assets (Note 6(j)) 69,799 - 1840 Deferred tax assets (Note 6(o)) 762,515 - 1900 Other non-current assets (Note 6(k), (v) and 8) 1,892,029 1 1980 Other non-current financial assets (Note 6(k), (v) and 8) 11,180,527 7 64,096,228 37 Total assets $ 175,242,849 100	December 31, 2020 Amount % 78,789,365 46 13,207,411 8 41,470 - 590 - 3,180,333 2 6,203,908 4 263,429 - 59,578 - 3,694,824 2 1,012,857 - 9,000 - 106,462,765 62 - - 13,802,157 8 33,542,417 20 167,766 - 112,794 - 509,269 - 1,840,940 1 15,170,562 9 65,145,905 38 171,608,670 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(l) and (v)) 2150 Notes payable (Note 6(v)) 2170 Accounts payable (Note 6(v)) 2180 Accounts payable to related parties (Note 6(v) and 7) 2200 Other payables (Note 6(p) and (v)) 2216 Dividends payable (Note 6(q) and (v)) 2220 Other payables to related parties (Note 6(v) and 7) 2230 Current tax liabilities 2280 Current lease liabilities (Note 6(m) and (v)) 2300 Other current liabilities Non-Current liabilities: 2570 Deferred tax liabilities (Note 6(o)) 2580 Non-current lease liabilities (Note 6(m) and (v)) 2600 Other non-current liabilities (Note 6(v)) 2640 Net defined benefit liabilities (Note 6(n)) Total liabilities Equity attributable to owners of parent: (Note 6(q)) 3110 Share capital 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares Total equity attributable to owners of parent Total liabilities and equity	December 31, 2021	December 31, 2021		December 31, 2020 Amount % 249,535 - 873 - 1,454,301 1 715,194 - 21,811,109 13 - - 10,147 - 6,133,020 4 43,401 - 144,041 - 30,561,621 18 8,692 - 123,164 - 3,766 - 109,269 - 244,891 - 30,806,512 18 1,341,402 1 1,560,586 1 139,645,983 81 (1,745,813) (1) - - 140,802,158 82 171,608,670 100
		Amount	%

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

4000 Operating revenues (Note 6(s) and 7) 5000 Operating costs (Note 6(f), (n), (t) and 7) 5910 Realized (unrealized) profit from sales 5900 Gross profit from operations 6000 Operating expenses (Note 6(n), (t) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Total operating expenses 6900 Operating income 7000 Non-operating income and expenses: 7100 Interest income (Note 6(u)) 7010 Other income (Note 6(u) and 7) 7020 Other gains and losses (Note 6(u) and 7) 7050 Finance costs (Note 6(m) and (u)) 7060 Share of profit (losses) of associates accounted for using equity method 7900 Profit before income tax 7950 Less: Income tax expenses (Note 6(o)) Profit for the period 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurements of defined benefit obligation 8316 Unrealized losses on investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Other comprehensive income (loss) for the period, net of tax 8500 Total comprehensive income for the period Earnings per share (NT Dollars) (Note 6(r)) 9750 Basic earnings per share 9850 Diluted earnings per share	2021 Amount % $ 47,033,940 100 19,502,569 41 27,531,371 59 (465,441) (1) 27,065,930 58 306,624 1 1,008,281 2 3,598,488 8 4,913,393 11 22,152,537 47 827,408 2 50,975 - (1,267,144) (2) (1,909) - 1,079,876 2 689,206 2 22,841,743 49 4,170,513 9 18,671,230 40 (7,378) - 344,093 1 - - 336,715 1 (239,550) (1) - - (239,550) (1) 97,165 - $ 18,768,395 40 $ 139.28 $ 137.49	2020 Amount % 53,979,503 100 18,370,185 34 35,609,318 66 251,075 - 35,860,393 66 336,833 - 1,228,094 2 3,791,346 7 5,356,273 9 30,504,120 57 1,035,231 1 47,331 - (1,708,009) (3) (2,323) - 1,600,362 3 972,592 1 31,476,712 58 6,942,581 13 24,534,131 45 (6,134) - 160,404 - - - 154,270 - 314,394 1 - - 314,394 1 468,664 1 25,002,795 46 182.90 180.94

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD. Statements of Changes in Equity For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Share Capital	Capital surplus		Retained earnings	Retained earnings	Retained earnings		Other equity interest	Other equity interest	Other equity interest	Other equity interest	Other equity interest	Treasury shares	Total equity
							Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income		Total
		Legal reserve	Special reserve	Unappropriated retained earnings		Total
$ 1,341,402 - - - - - - - - - $ 1,341,402 $ 1,341,402 - - - - - - - - - $ 1,341,402	1,558,058	16,019,773	1,802,464		107,813,790	125,636,027		(2,061,631) - - - - - - 314,394 314,394 - (1,747,237) (1,747,237) - - - - - - (239,550) (239,550) - (1,986,787)		(79,945) - - - - - - 160,404 160,404 (79,035) 1,424 1,424 - - - - - - 344,093 344,093 - 345,517	(2,141,576) - - - - - - 474,798 474,798 (79,035) (1,745,813) (1,745,813) - - - - - - 104,543 104,543 - (1,641,270)	- - - - - - - - - - - - - - - - - - - - (1,400,985) (1,400,985)	126,393,911 - - (10,597,076) (10,597,076) 2,528 24,534,131 468,664 25,002,795 - 140,802,158 140,802,158 - - (16,432,174) (16,432,174) 2,328 18,671,230 97,165 18,768,395 (1,400,985) 141,739,722
	- - -	2,826,308 - -	- 339,112 -
	-	2,826,308	339,112
	2,528	-	-
	- -	- -	- -
	-	-	-
	-	-	-
	1,560,586	18,846,081	2,141,576
	1,560,586	18,846,081	2,141,576
	- - -	3,288,222 - -
	-	3,288,222
	2,328	-
	- -	- -
	-	-
	-	-
	1,562,914	22,134,303

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Interest expense Interest income Share of profit of subsidiaries accounted for using equity method (Profit) losses on disposal of property, plant and equipment Unrealized (realized) profit from sales Unrealized foreign exchange loss Other Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets mandatorily measured at fair value through profit or loss Decrease in notes receivable Decrease in accounts receivable (including from related parties) Increase in inventories Decrease (increase) in other current assets Total changes in operating assets Changes in operating liabilities: Increase in notes payable Increase (decrease) in accounts payable (including to related parties) Increase in other current liabilities Decrease in net defined benefit liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits (Increase) decrease in other non-current assets Acquisition of intangible assets Acquisition of right-of-use assets Decrease (increase) in other financial assets Dividends received Net cash flows used in investing activities Cash flows from financing activities: (Decrease) increase in short-term borrowings Decrease in guarantee deposits received Payment of lease liabilities Cash dividend paid Payments to acquire treasury shares Overdue dividend transferred to capital surplus Net cash flows used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 22,841,743 4,600,159 95,046 1,909 (827,408) (1,079,876) (3,992) 465,441 3,504 (900) 3,253,883 (1,122,555) 590 232,441 (946,341) 706,898 (1,128,967) 684 384,260 315,718 (16,654) 684,008 (444,959) 25,650,667 837,976 (1,909) (6,181,930) 20,304,804 (2,916,273) (274,600) (5,844,120) 59,015 617,474 (668,563) (47,030) (410) 1,741,459 - (7,333,048) (252,007) (136) (44,421) (12,273,828) (1,400,985) 2,328 (13,969,049) (997,293) 78,789,365 $ 77,792,072	2020 31,476,712 4,205,548 85,266 2,323 (1,035,231) (1,600,362) 6,731 (251,075) 10,099 (1,460) 1,421,839 (6,139,558) 2,520 5,171,372 (494,076) (42,553) (1,502,295) 171 (109,385) 1,505,945 (2,714) 1,394,017 (108,278) 32,790,273 1,001,121 (2,323) (5,155,726) 28,633,345 - - (5,773,541) 1,551 (1,841) 326,030 (91,871) - (8,747,667) 12,117,060 (2,170,279) 23,619 (730) (40,734) (10,597,076) - 2,528 (10,612,393) 15,850,673 62,938,692 78,789,365

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2021 and 2020

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

(1) Company history

Largan Precision Co., Ltd. (the “Company”) was incorporated in April 1987 as a company limited by shares under the Company Act of the Republic of china (R.O.C). The registered address is No.11, Jingke Rd., Nantun Dist., Taichung City 40852, Taiwan (R.O.C.). The major business activities of the Company are the design, manufacture and sale of lens for perspective mirror, camera, single and double binoculars, fax machine, microscope and scanner etc. Please refer to Note 14.

The Company's common shares were listed on the Taiwan Stock Exchange (TWSE) in March 2002.

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

The accompanying parent company only financial statements were authorized for issue by the Board of Directors on February 21, 2022.

(3) New standards, amendments and interpretations adopted:

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

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

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

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

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”
Amendments to IAS 12
“Deferred Tax related to
Assets and Liabilities arising
from a Single Transaction”

Content of amendment
Effective date per
IASB
The
amendments
aim
to
promote
consistency in applying the requirements
by helping companies determine whether,
in the statement of balance sheet, debt and
other
liabilities
with
an
uncertain
settlement date should be classified as
current (due or potentially due to be settled
within one year) or non-current. The
amendments
include
clarifying
the
classification requirements for debt a
company might settle by converting it into
equity.
January 1, 2023
The amendments narrowed the scope of the
recognition exemption so that it no longer
applies to transactions that, on initial
recognition, give rise to equal taxable and
deductible temporary differences.
January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

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

(4) Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the parent company only financial statements.

(a) Statement of compliance

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

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts, the parent company only financial statements have been prepared on the historical cost basis:

1) Financial instruments measured at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value.
(ii) Functional and presentation currency

The functional currency is determined based on the primary economic environment in which the entity operates. The Company’s financial statements are presented in New Taiwan Dollar, which is the Company’ s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(c) Foreign currency

(i) Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company's disposes any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

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

(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 noncurrent.

(i) It expected to be realized, or intended to be sold or consumed, in its normal operating cycle;
(ii) It holds primarily for the purpose of trading;
(iii) It expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve 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.

(i) It is expected to settle the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes 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.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(f) Financial instruments

Accounts receivable are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at amortized cost; fair value through other comprehensive income (FVOCI); or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

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

it is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and
it is contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL ：

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

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

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes ：

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’ s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

how managers of the business are compensated ─ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers ：

contingent events that would change the amount or timing of cash flows ；
terms that may adjust the contractual coupon rate, including variable rate features ；
prepayment and extension features ； and
terms that limit the Company’s claim to cash flows from specified assets （ e.g. nonrecourse features ）
6)
Impairment of financial assets

The Company recognizes its loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets) and debt investments measured at FVOCI.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The Company measures its loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL ：

debt securities that are determined to have low credit risk at the reporting date ； and
other debt securities and bank balances for which the credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment, as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 180 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 360 days past due or the debtor is unlikely to fully pay its credit obligations to the Company.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be twA or higher per Taiwan Ratings’.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs resulting from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data ：

significant financial difficulty of the borrower or issuer ；
a breach of contract such as a default or being more than 360 days past due ；
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider ；
it is probable that the borrower will enter bankruptcy or other financial reorganization ； or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

7) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Financial liabilities and equity instrument
1) Classification of debt or equity

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

2) Equity instrument

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

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares 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).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

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

5) Derecognition of financial liabilities

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

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the non-consolidated financial statements. Under equity method, the net income, other comprehensive income and equity in the non-consolidated financial statement are the same as those attributable to the owners of the parent in the consolidated financial statements.

The changes in ownership of the subsidiaries are recognized as equity transaction.

(i) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1)	Buildings	35 ~55years
2)	Machinery and equipment	2 ~ 10 years

Plant constitutes mainly building, electromechanical power engineering and cleanroom air conditioning project. Each such part is depreciated based on its useful life of 35~55 years, 8~ 10 years and 8~10 years, respectively.

Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.

(j) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

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

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

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be paid under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

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

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Company’ s estimate of the amount expected to be paid under a residual value guarantee; or
there is a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an extension or termination option; or
there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets, photocopying equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

the rent concessions occurring as a direct consequence of the COVID-19 pandemic;
the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2022; and
there is no substantive change in other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(k) Intangible assets

(i) Recognition and measurement

Other intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

Computer software cost 1~3 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(l) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets and employee benefits) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(m) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(n) Revenue

(i) Revenue from contracts with customers

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

1) Sale of goods

The Company manufactures and sells various multiples lens to mobile phone manufacturers. The Company recognizes revenue when control of the products has been transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

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

2) Financing components

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

(ii) Contract costs

1) Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

2) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;
the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
the costs are expected to be recovered.

For general and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(o) Employee benefits

(i) Defined contribution plans

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

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(p) Income taxes

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

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year, and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables is the best estimate of the tax amount expected to be paid or received that it is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

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

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

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

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(q) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee bonus.

(r) Operating segments

The Company has disclosed the information on operating segments in its consolidated financial statements. Hence, no further information is disclosed in the parent company only financial statements.

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

The preparation of the parent company only financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to note 6(f) for further description of the valuation of inventories.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

h and cash equivalents
December 31, 2021 Petty cash and cash on hand $ 514 Demand deposits 3,591,055 Time deposits 74,200,503 Cash and cash equivalents in the parent company only statement of cash flows $ 77,792,072	December 31, 2020
	410 3,896,542 74,892,413
	78,789,365

Please refer to note 6(v) for the exchange rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

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

December 31, 2021 Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Stocks unlisted in domestic markets $ - Beneficiary Certificate-open-end funds 14,329,966 Total $ 14,329,966 For market risk, please refer to note 6(v). (c) Financial assets at fair value through other comprehensive income December 31, 2021 Debt investments at fair value through other comprehensive income Current Corporate bonds $ 772,541 Equity investments at fair value through other comprehensive income Current Domestic Company`－`AVISION INC $ 67,202 Domestic Company`－`Fubon Financial Holding Co., Ltd. Preferred Shares C 1,514,520 $ 1,581,722	December 31, 2020
	- 13,207,411
	13,207,411
	December 31, 2020
	-
	41,470 -
	41,470

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

	Non-Current Domestic Company Private Equity`－`ABILITY OPTO-ELECTRONICS TECHNOLOGY CO., LTD	December 31, 2021 $ 932,000	December 31, 2020
			-

(i) Debt investments at fair value through other comprehensive income

The Company has assessed that the following securities were held within a business model whose objective was achieved by both collecting the contractual cash flows and by selling securities. Therefore, they have been classified as debt investments at fair value through other comprehensive income.

(ii) Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term for strategic purposes.

On March 9, 2021, the Company subscribed for 20,000 thousand private ordinary shares of ABILITY OPTO-ELECTRONICS TECHNOLOGY CO., LTD. with a resolution of the Board of Directors, and the transaction amount was $598,400 thousand.

On October 22, 2021, the Company obtained 25,200 thousand preferred shares issued by Fubon Financial Holding Co., Ltd., and the amount of transaction was $1,512,000 thousand.

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2021 and 2020.

(iii) For market risk, please refer to note 6(v).

(iv) As of December 31, 2021 and 2020, the financial assets at fair value through other comprehensive income of the Company had not been pledged as collateral for long-term borrowing.

(d) Notes and accounts receivable

Notes receivable from non-operating activities Accounts receivable-measured as amortized cost Accounts receivable from related parties-measured as amortized cost Less: loss allowance	December 31, 2021 $ - 5,128,499 4,025,551 (2,250) $ 9,151,800	December 31, 2020 590 3,182,583 6,203,908 (2,250) 9,384,831

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowances provision were determined as follows:

	December 31, 2021	Loss allowance
Gross carrying amount $ 8,715,628 438,422 $ 9,154,050	Weighted-average loss rate
	- % 0.5132 December 31, 2020	- 2,250 2,250 Loss allowance

	Weighted-average loss rate
	- % 4.1168	- 2,250 2,250

The movements in the allowance for notes and accounts receivable were as follows:

Balance at December 31 (Balance at January 1)	For the years ended December 31,	For the years ended December 31,
	2021 $ 2,250	2020
		2,250

The notes and accounts receivable of the Company had not been pledged as collateral as of December 31, 2021 and 2020.

For further credit risk information, please refer to note 6(v).

(e) Other receivables

er receivables
Other receivables-Tax receivables Other receivables-Interest receivables Other receivables-Others Other receivables-Related parties	December 31, 2021 $ 128,416 127,213 30,675 110,996 $ 397,300	December 31, 2020
		106,662 136,708 20,059 59,578
		323,007

For further credit risk information, please refer to note 6(v).

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(f) Inventories

Finished goods Work in progress Raw materials Supplies	December 31, 2021 $ 2,861,299 501,862 1,176,012 101,992 $ 4,641,165	December 31, 2020
		2,047,495 480,201 1,073,857 93,271
		3,694,824

For the years ended December 31, 2021 and 2020, the amounts of inventories that were charged to cost of sales, and the net of provisions that were charged to cost of sales in the parent company only statement of comprehensive income for inventories written down to net realizable value, were $264,544 thousand and $291,659 thousand, respectively.

As of December 31, 2021 and 2020, the Company did not provide any inventories as collateral for its loans.

(g) Investments accounted for using equity method

A summary of the Company’s financial information about investments accounted for using equity method at the reporting date is as follows:

Subsidiary-Largan (Hong Kong) Limited. Subsidiary-Astro International Ltd. Subsidiary-Largan Industrial Optics Co., Ltd. (Note) Subsidiary-Largan Digital Co., Ltd. Subsidiary-Largan Health AI-Tech Co., Ltd.	December 31, 2021 $ 319,701 13,437,799 283,560 397,619 14,743 $ 14,453,422	December 31, 2020
		328,263 13,195,093 33,878 240,330 4,593
		13,802,157

(i) Subsidiaries

Please refer to the consolidated financial statements of the year 2021.

(ii) Collateral

As of December 31, 2021 and 2020, the Company did not provide any investment accounted for using equity method as collaterals for its loans.

Note: The subsidiary was originally named Ba Fang Co., Ltd., and changed its name to Largan Industrial Optics Co., Ltd. on June 23, 2021.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company in 2021 and 2020, were as follows:

Cost or deemed cost: Balance on January 1, 2021 Additions Disposal Reclassification Balance on December 31, 2021 Balance on January 1,2020 Additions Disposal Reclassification Balance on December 31, 2020 Depreciation and impairment loss: Balance on January 1,2021 Depreciation for the year Disposal Reclassification Balance on December 31, 2021 Balance on January 1, 2020 Depreciation for the year Disposal Reclassification Balance on December 31, 2020 Carrying amounts: Balance on December 31, 2021 Balance on January 1, 2020 Balance on December 31,2020	Land Building and Construction Machinery and equipment $ 8,220,803 6,285,965 25,700,460 - 8,573 3,004,612 - (721) (161,182) - 35,909 164,624 $ 8,220,803 6,329,726 28,708,514 $ 8,170,433 6,138,987 23,485,935 50,370 27,513 3,735,154 - (487) (1,834,812) - 119,952 314,183 $ 8,220,803 6,285,965 25,700,460 $ - 778,322 13,122,461 - 190,842 2,921,804 - (722) (109,930) - - - $ - 968,442 15,934,335 $ - 595,928 12,352,163 - 186,465 2,596,863 - (487) (1,826,565) - (3,584) - $ - 778,322 13,122,461 $ 8,220,803 5,361,284 12,774,179 $ 8,170,433 5,543,059 11,133,772 $ 8,220,803 5,507,643 12,577,999		Transportation equipment 19,780 5,794 (3,377) 1,136 23,333 20,552 3,575 (4,347) - 19,780 15,132 2,070 (3,377) - 13,825 17,256 2,223 (4,347) - 15,132 9,508 3,296 4,648	Office equipment and other facilities		Rental assets		Construction in progress and testing equip 1,416,240 1,542,000 - (616,011) 2,342,229 1,218,340 783,942 - (586,042) 1,416,240 - - - - - - - - - - 2,342,229 1,218,340 1,416,240	Total 54,606,092 5,722,519 (178,289) (5,021)
						54,898 - - -
						54,898			60,145,301
						54,898 - - -			51,157,716 5,431,393 (1,974,974) (8,043)
						54,898			54,606,092
						21,649 406 - -			21,063,675 4,554,084 (123,266) -
						22,055			25,494,493
						21,243 406 - -			18,871,477 4,162,485 (1,966,692) (3,595)
						21,649			21,063,675
						32,843			34,650,808
						33,655			32,286,239
						33,249			33,542,417

In 2013, the Company acquired a piece of land, for the expansion of its factory, amounting to $120,086 thousand, which was recognized under property, plant and equipment. The title of the said land cannot be transferred to the Company due to its classification. Therefore, it was registered under the name of a different person. To ensure the right of both parties (including that of the Company’s shareholders), the two parties entered into an agreement, with the notarization of the court. In the future, the Company will file an application to the relevant authorities, and go through proper procedures, for the land to be reclassified in order to make it possible for the deed to be transferred to the Company.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(i) Right-of-use assets

The Company leases buildings and constructions. Information about leases for which the Company has been a lessee is presented below:

Cost: Balance at January 1, 2021 Additions Disposal Balance at December 31,2021 Balance at January 1, 2020 Additions Disposal Balance at December 31,2020 Accumulated depreciation: Balance at January 1, 2021 Depreciation for the year Disposal Balance at December 31,2021 Balance at January 1, 2020 Depreciation for the year Balance at December 31,2020 Carrying amounts: Balance at December 31, 2021 Balance at January 1, 2020 Balance at December 31, 2020	Building and construction
	$ 251,630 50,739 (34,947) $ 267,422 $ 245,878 19,328 (13,576) $ 251,630 $ 83,864 46,075 (17,645) $ 112,294 $ 40,801 43,063 $ 83,864 $ 155,128 $ 205,077 $ 167,766

Cost:
Balance at January 1, 2021
Additions
Disposal
Balance at December 31,2021
Balance at January 1, 2020
Additions
Disposal
Balance at December 31,2020
Accumulated depreciation:
Balance at January 1, 2021
Depreciation for the year
Disposal
Balance at December 31,2021
Balance at January 1, 2020
Depreciation for the year
Balance at December 31,2020
Carrying amounts:
Balance at December 31, 2021
Balance at January 1, 2020
Balance at December 31, 2020

Building and
construction

$ 251,630
50,739
(34,947)
$
267,422
$ 245,878
19,328
(13,576)
$
251,630
$ 83,864
46,075
(17,645)
$
112,294
$ 40,801
43,063
$
83,864
$
155,128
$
205,077
$
167,766

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(j) Intangible assets

The costs and amortization of the intangible assets of Company in 2021 and 2020, were as follows:

Costs:
Balance at January 1, 2021
Additions
Disposal
Reclassification
Balance at December 31,2021
Balance at January 1, 2020
Additions
Disposal
Reclassification
Balance at December 31,2020
Amortization:
Balance at January 1, 2021
Amortization for the year
Disposal
Balance at December 31, 2021
Balance at January 1, 2020
Amortization for the year
Disposal
Balance at December 31, 2020
Carrying value:
Balance at December 31,2021
Balance at January 1, 2020
Balance at December 31, 2020 Computer
Software
$ 400,164
47,030
(13,889)
5,021
$
438,326
$ 342,909
91,871
(39,064)
4,448
$
400,164
$ 287,370
95,046
(13,889)
$
368,527
$ 241,168
85,266
(39,064)
$
287,370
$
69,799
$
101,741
$
112,794

The following amortizations of intangible assets are included in the statement of comprehensive income:

Operating cost Operating expense	2021 $ 4,504 90,542 $ 95,046	2020
		17,924 67,342
		85,266

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(k) Other current assets, other current financial assets, other non-current financial assets and other non-current assets

The other current assets, other current financial assets, other non-current financial assets and other non-current assets of the Company were as follows:

Other current financial assets Other current assets Other non-current financial assets Refundable deposits Prepayment for equipment	December 31, 2021 $ 2,257,576 222,479 11,180,527 22,376 1,869,653 $ 15,552,611	December 31, 2020
		9,000 1,012,857 15,170,562 639,850 1,201,090
		18,033,359

(i) Other current (non-current) financial assets were restricted deposits and bank account for repatriation of offshore fund, which were pledged as collateral; please refer to note 8.
(ii) Other current assets were prepayment for purchases.

(iii) Refundable deposits had been pledged as collateral; please refer to note 8.

(iv) For further credit risk information, please refer to note6 (v).

(l) Short-term borrowings

The short-term borrowings were summarized as follows:

hort-term borrowings were summarized as follows:
Letters of credit Unused credit Lines Range of interest rates	December 31, 2021 $ - $ 2,600,000 0.45%~1.10%	December 31, 2020
		249,535
		2,350,465
		0.95%~1.10%

(m) Lease liabilities

The carrying amounts of the Company's lease liabilities were as follows:

Current Non-current	December 31, 2021 $ 46,555 $ 108,024	December 31, 2020
		43,401
		123,164

For the maturity analysis, please refer to note 6(v).

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The amounts recognized in profit or loss were as follows:

	For the year ended	For the year ended	For the year ended
	December 31, 2021		December 31, 2020
Interest on lease liabilities	$	1,909	2,323
Variable lease payments not included in the
measurement of lease liabilities	$	61	91
Expenses relating to leases of low-value assets
	$	220	219
COVID-19-related rent concessions (recognized as
other income)	$	735	1,460

The amounts recognized in the statement of cash flows by the Company were as follows:

Total cash outflow for leases	For the year ended December 31, 2021 For the year ended December 31, 2020 $ 46,611 43,367	For the year ended December 31, 2021 For the year ended December 31, 2020 $ 46,611 43,367
		43,367

(i) Real estate leases

The Company leases buildings for its factory space. The leases of factory space typically run for 3 to 5 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

(ii) Other leases

The Company leases photocopying equipment, these leases are leases of low-value items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases.

(n) Employee benefits

(i) Defined benefit plans

Reconciliation of the defined benefit obligations at present value and plan asset at fair value is as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liability	December 31, 2021 $ 175,751 (75,758) $ 99,993	December 31, 2020 167,568 (58,299) 109,269

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

1) Composition of plan assets

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

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to $75,758 thousand at the end of the reporting period. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations of the Company were as follows:

Defined benefit obligations at January 1 Benefit paid by the plan Current service costs and interest cost (income) Remeasurements loss (gain): -Financial assumptions Defined benefit obligations at December 31	2021 $ 167,568 (1,738) 1,797 8,124 $ 175,751	2020 164,467 (7,311) 2,416 7,996 167,568

3) Movements of the fair value of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets of the Company were as follows:

Fair value of plan assets at January 1 Contributions paid by the employer Benefits paid from plan assets Interest income Remeasurements loss (gain): `－`Return on plan assets excluding interest income Fair value of plan assets at December 31	2021 $ 58,299 18,096 (1,738) 355 746 $ 75,758	2020 58,618 4,595 (7,311) 535 1,862 58,299

4) Expenses recognized in profit or loss

The expenses recognized in profits or losses for the years ended December 31, 2021 and 2020 were as follows:

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Current service costs Net interest of net liabilities for the defined benefit obligations Plan assets interest income Operating Costs Selling expenses Administrative expenses Research and development expenses Return on plan assets	2021 $ 634 1,163 (355) $ 1,442 $ 1,076 12 60 294 $ 1,442 $ 1,102	2020 708 1,708 (535)
		1,881
		1,432 14 81 354
		1,881
		2,397

5) Remeasurement in net defined benefit liability recognized in other comprehensive income

The Company’s remeasurement in the net defined benefit liability recognized in other comprehensive income for the years ended December 31, 2021 and 2020 were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2021 $ 77,718 7,378 $ 85,096	2020
		71,584 6,134
		77,718

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Increase in future salary rate	December 31, 2021 December 31, 2020 % 0.750 % 0.750 % 2 % 2

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

The expected allocation payment to be made by the Company to the defined benefit plans for the one year - period after the reporting date is $3,169 thousand.

The weighted average lifetime of the defined benefit plans is 16.89 years.

7)

Sensitivity analysis

On December 31, 2021 and 2020, if the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increases rate December 31, 2020 Discount rate Future salary increases rate	Influences of defined benefit obligations Increase0.25% Decrease0.25% $ (4,490) 4,674 4,420 (4,265) (4,470) 4,659 4,434 (4,275)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There were no changes in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

(ii) Defined contribution plans

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

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $206,427 thousand and $190,203 thousand for the years ended December 31, 2021 and 2020, respectively.

(iii) Short-term employee benefit

The Company’s employee benefit liabilities were as follows:

December 31, 2021 Compensated absences liability $ 117,809	December 31, 2020
	110,695

(Continued)

LARGAN PRECISION CO., LTD.

Notes to the Parent Company Only Financial Statements

(o) Income taxes

(i) Income tax expense

The components of income tax for 2021 and 2020 were as follows:

Current tax expense: Current period Adjustment for prior periods Deferred tax expense`：` Origination and reversal of temporary differences	2021 $ 4,512,473 (95,153) (246,807) $ 4,170,513	2020 6,968,267 (956) (24,730) 6,942,581

Reconciliation of income tax and profit before tax for 2021 and 2020 is as follows:

Profit before income tax Income tax using the Company's domestic tax rate Investment tax credits Changes in unrecognized temporary differences Gains on disposal of investment Other income tax adjustments Changes in provision in prior periods Income tax for repatriation of overseas earnings Surtax on unappropriated earnings Total	2021 $ 22,841,743 4,568,348 (438,589) (215,975) (3,720) 44 (95,153) - 355,558 $ 4,170,513	2020 31,476,712 6,295,342 (371,218) (320,072) (2,396) 138,275 (956) 648,710 554,896 6,942,581

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities

The entity is able to control the timing of the reversal of the temporary differences associated with the investments in subsidiaries as of December 31, 2021 and 2020. Also, the management considers it probable that the temporary differences will not reverse in the foreseeable future. Hence, such temporary differences are not recognized under deferred tax liabilities. Details are as follows:

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Aggregated amount of temporary differences related to investments in subsidiaries	December 31, 2021 $ 14,438,449	December 31, 2020
		13,614,355

2) Recognized deferred tax assets and liabilities

Changes in the amounts of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Deferred Tax Assets:

Unrealized profit from associates Balance at January 1, 2021 $ 164,011 Recognized profit 92,738 Balance at December 31, 2021 $ 256,749 Balance at January 1, 2020 $ 214,692 Recognized profit or loss (50,681) Balance at December 31, 2020 $ 164,011	Others 345,258 160,508 505,766 263,781 81,477 345,258	Total
		509,269 253,246
		762,515
		478,473 30,796
		509,269

Deferred Tax Liabilities:

		Others
Balance at January 1, 2021	$	8,692
Recognized loss		6,439
Balance at December 31, 2021	$	15,131
Balance at January 1, 2020	$	2,626
Recognized loss		6,066
Balance at December 31, 2020	$	8,692

3) Assessment of tax

The Company’ s tax returns for the years through 2019 were assessed by the Taipei National Tax Administration.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(p) Other payables

The other payables were summarized as follows:

Payables on remuneration to employees, directors and supervisors Payables for plant and equipment Others	December 31, 2021 $ 18,667,760 1,565,506 1,800,353 $ 22,033,619	December 31, 2020
		18,526,199 1,696,862 1,588,048
		21,811,109

(q) Capital and other equity

(i) Ordinary Shares

As of December 31, 2021 and 2020, the Company's authorized ordinary shares each amounted to $2,000,000 thousand (including the amount of $100,000 thousand allocated for the exercise of employee stock options), and the outstanding ordinary shares each amounted to $1,341,402 thousand, with a par value of $10 per share.

Reconciliation of shares outstanding during 2021 and 2020 was as follows:

(in thousands of shares) Balance on January 1 Purchase of treasury shares Balance on December 31		Ordinary	Shares
		2021 134,140 (672) 133,468	2020 134,140 -

			134,140

(ii) Capital Surplus

The balance of capital surplus as of December 31, 2021 and 2020 were as follows:

Additional paid-in capital Capital surplus-premium from merger Dividend timeout not received by shareholder	December 31, 2021 $ 817,574 738,155 7,185 $ 1,562,914	December 31, 2020 817,574 738,155 4,857
		1,560,586

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Retained earnings

The Company's general meeting of shareholders held on August 25, 2021, and passed a resolution to amend the Company's Article of Incorporation, stipulating expressly that the Company's earnings distribution or loss appropriation may be made on a semiannually basis after the close of each semiannual.

The Company's Articles of Incorporation stipulate that Company's net earnings semiannually should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, until the accumulated legal reserve equals the Company's paid-in capital. In addition, a special reserve in accordance with applicable laws and regulations shall also be set aside.

Then, any remaining profit, together with any undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors.

When it is distributed by issuing new shares, it should be submitted to the shareholders' meeting for approval. When it is distributed in cash, it should be authorized by the Board of Directors and reported to the shareholders meeting only.

Before the distribution of dividends, the Company shall first take into consideration its operating environment, industry developments, and the long-term interests of its stockholders, as well as its programs to maintain its operating efficiency and meet its capital expenditure budget and financial goals in determining the stock or cash dividends to be paid. After the above appropriations, dividend to be distributed shall be no less than 10% of the current-year retained earnings available for distribution. The cash dividends shall not be less than 30% of the total dividends.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

In accordance with the regulation set by the Financial Supervisory Commission, a portion of current period earnings and undistributed prior period earnings shall be reclassified as a special earnings reserve during earnings distribution. When the undistributed retained earnings of 2019 are distributed in 2020, the special earnings reserve will be recognized from the profit and loss of the current period and the undistributed retained earnings of the previous period. When the undistributed retained earnings of 2020 are distributed in 2021, the special earnings reserve will be recognized from the profit after income tax of the current period plus other current earnings and the undistributed retained earnings of the previous period. The net reduction of other shareholders’ equity accumulated in the previous period shall be recognized from the undistributed retained earnings and shall not be distributed. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. The special reserve for the years ended December 31, 2021 and 2020, was $1,521,382 thousand and $2,141,576 thousand, respectively.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

3) Earnings distribution

The amounts of cash dividends on the appropriations of earnings for 2020 and 2019 had been approved during the board meeting held on February 22, 2021 and April 22, 2020, respectively.

The relevant dividend distributions to shareholders were as follows:

Dividends distributed to common shareholders: Cash	2020 Amount per share Total amount $ 91.5 12,273,828	2019	2019
	Amount per share $ 91.5	Amount per share 79	Total amount
			10,597,076

The amounts of cash dividends on the appropriations of earnings for the first half of 2021 and the second half of 2021 had been approved during the Board meeting on February 21, 2022 and October 25, 2021, respectively.

The relevant dividend distributions to shareholders were as follows:

Dividends distributed to common shareholders: Cash	The second half of 2021 Amount per share Total amount $ 39 5,205,260	The first half of 2021	The first half of 2021
	Amount per share $ 39	Amount per share 31	Total amount
			4,158,346

4) Treasury shares

In accordance with the requirements under section 28(2) of the Securities and Exchange Act, the Company expected to repurchase 1,342 thousand shares as treasury shares in order to protect the Company’s integrity and shareholders’ equity during October 26, 2021 to December 24, 2021, and the range of the repurchase price is $2,025 to $3,300 a share. As of December 31, 2021, a total of 672 thousand shares have been repurchased, and the repurchase cost is $1,400,985 thousand, all of which were not yet cancelled .

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

5) Other equity interests (net-of-taxes)

Balance at January 1, 2021 Exchange differences on foreign operations: The Company Subsidiaries Unrealized gains(losses) from financial assets measured at fair value through other comprehensive income: The Company Subsidiaries Balance at December 31, 2021 Balance at January 1, 2020 Exchange differences on foreign operations: The Company Subsidiaries Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income: The Company Subsidiaries Disposal of investments in equity instruments designated at fair value through other comprehensive income: Subsidiaries Balance at December 31, 2020	Exchange differences on translation of foreign financial statements $ (1,747,237) (239,072) (478) - - $ (1,986,787) $ (2,061,631) 315,510 (1,116) - - - $ (1,747,237)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income 1,424 - - 344,061 32 345,517 (79,945) - - 23,861 136,543 (79,035) 1,424

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(r) Earnings per share

The calculation of basic earnings per share and diluted earnings per share for 2021 and 2020 were as follows:

Basic earnings per share Profit of the Company for the year Weighted-average number of outstanding ordinary shares (in thousands) Issued ordinary shares at January 1 Effect of treasury shares held Weighted average number of ordinary shares at December 31 Diluted earnings per share Profit of the Company for the year Weighted-average number of outstanding ordinary shares (in thousands) Effect of dilutive potential common shares (thousand shares) Effect of employee share bonus Weighted-average number of ordinary shares (in thousands) (after adjustment of potential diluted ordinary shares) (s) Revenue from contracts with customers Disaggregation of revenue Sale of goods Other	2021 $ 18,671,230 134,140 (84) 134,056 $ 139.28 $ 18,671,230 134,056 1,742 135,798 $ 137.49 2021 $ 45,891,768 1,142,172 $ 47,033,940		2020 24,534,131 134,140 - 134,140 182.90 24,534,131 134,140 1,456 135,596 180.94 2020









			53,804,875 174,628
			53,979,503

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(t) Employee compensation and directors’ and supervisors’ remuneration

According to the Company’ s Articles of Incorporation, the Company should distribute its remuneration of not less than 1%~30% and not more than 5% of annual profits to its employees and directors respectively, after offsetting accumulated deficits, if any. Employees, including employees of affiliate companies that meet certain conditions, are subject to the abovementioned remuneration, which is to be distributed in stock or cash.

For the year ended December 31, 2021 and 2020, the Company estimated its employee remuneration at $3,363,086 thousand and $4,416,600 thousand, and directors' and supervisors' remuneration at $252,052 thousand and $331,245 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees, directors and supervisors of each period, multiplied by the percentage of remuneration of employees, directors and supervisors as specified in the Company's Articles. These remunerations were expensed under operating costs or operating expenses during 2021 and 2020. The amounts, as stated in the parent company only financial statements, are identical to those of the actual distributions for 2021 and 2020.

(u) Non-operating income and expenses

(i) Interest income

The details of interest income for 2021 and 2020 were as follows:

Interest income from bank deposits Interest income from financial assets measured at fair value through other comprehensive income	2021 $ 824,631 2,777 $ 827,408	2020
		1,035,231 -
		1,035,231

(ii) Other income

The details of other income for 2021 and 2020 were as follows:

Rent income Gains on technical services	2021 $ 15,546 35,429 $ 50,975	2020
		11,633 35,698
		47,331

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Other gains and losses

The details of other gains and losses for 2021 and 2020 were as follows:

Foreign exchange losses Gains (losses) on disposals of property, plant and equipment Gains on financial assets at fair value through profit or loss Others	2021 $ (1,487,370) 3,992 34,142 182,092 $ (1,267,144)	2020 (1,814,805) (6,731) 39,591 73,936 (1,708,009)

(iv) Finance costs

The details of finance costs for 2021 and 2020 were as follows:

Interest expenses	2021 $ 1,909	2020
		2,323

(v) Financial Instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

To minimize credit risk, the Company periodically evaluates the Company’s financial positions and the possibility of collecting accounts receivable. Besides, the Company monitors and reviews the recoverable amount of its trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. As of December 31, 2021 and 2020, 84% and 90%, respectively, of accounts receivable were derived from several major customers. Thus, the credit risk is significantly centralized.

3) Receivables and debt securities

For credit risk exposure of notes and accounts receivable, please refer to note 6 (d). Other financial assets at amortized cost includes other receivables, refundable deposits and other financial assets. Debt investments at fair value through other comprehensive income include corporate bonds. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note 4 (f). Other financial assets at amortized cost and debt investments at fair value through other comprehensive income did not have impairment provision for the years ended December 31, 2021 and 2020.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, without the impact of netting agreements.

December 31, 2021 Non-derivative financial liabilities Accounts and notes payable (including related parties) Other payables (including related parties) Lease liabilities - current and non- current Guarantee deposits received December 31, 2020 Non-derivative financial liabilities Short-term borrowings Accounts and notes payable (including related parties) Other payables (including related parties) Lease liabilities-current and non- current Guarantee deposits received	Carrying amount $ 2,555,312 26,199,526 154,579 3,630 $ 28,913,047 $ 249,535 2,170,368 21,821,256 166,565 3,766 $ 24,411,490	Contractual cash flows 2,555,312 26,199,526 157,761 3,630 28,916,229 249,535 2,170,368 21,821,256 170,450 3,766 24,415,375	Within a year 2,555,312 26,199,526 48,041 - 28,802,879 249,535 2,170,368 21,821,256 45,148 - 24,286,307	Over 1 year
				- - 109,720 3,630
				113,350
				- - - 125,302 3,766
				129,068

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

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

F inancial Assets Monetary items USD JPY CNY F inancial Liabilities M onetary items USD JPY	December 31, 2021 Foreign Currency Exchange Rates New Taiwan Dollars $ 1,877,347 27.6800 51,964,958 2,123,717 0.2405 510,754 4,024,218 4.3440 17,481,202 74,521 27.6800 2,062,749 1,836,100 0.2405 441,582	December 31, 2021 Foreign Currency Exchange Rates New Taiwan Dollars $ 1,877,347 27.6800 51,964,958 2,123,717 0.2405 510,754 4,024,218 4.3440 17,481,202 74,521 27.6800 2,062,749 1,836,100 0.2405 441,582	December 31, 2020	December 31, 2020
	Foreign Currency $ 1,877,347 2,123,717 4,024,218 74,521 1,836,100	Exchange Rates 27.6800 0.2405 4.3440 27.6800 0.2405	Foreign Currency 1,541,813 2,188,182 6,207,389 63,341 3,055,631	Exchange Rates New Taiwan Dollars 28.4800 43,910,835 0.2763 604,595 4.3770 27,169,743 28.4800 1,803,964 0.2763 844,271

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, financial assets at fair value through other comprehensive income, accounts and other receivables, and accounts and other payables that are denominated in foreign currency. A strengthening (weakening) 1% of the TWD against the USD, JPY, and CNY as of December 31, 2021 and 2020 would have increased (decreased) the net profit after tax by $539,621 thousand and $552,296 thousand, respectively. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the years 2021 and 2020, the foreign exchange gain (loss) (including realized and unrealized portions) amounted to $(1,487,370) thousand and $(1,814,805) thousand, respectively.

(iv) Interest rate analysis

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

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

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

If the interest rate increases/decreases by 1%, with all other variable factors that remaining constant, the Company’ s net income would have decreased/increased by $0 and $1,996 thousand for the years ended December 31, 2021 and 2020, respectively. This is mainly due to the Company’s borrowings in variable rates.

(v) Other market price risk

For the years ended December 31, 2021 and 2020, the sensitivity analysis for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss with all other variable factors remaining constant as illustrated below:

Prices of securities at the reporting date 1% increase 1% decrease	For theyears ended December 31, 2021 2020 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 25,137 143,300 415 132,074 $ (25,137) (143,300) (415) (132,074)

(vi) Fair value of financial instruments
1) Categories and fair value of financial instruments

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

The Company uses observable market data to evaluate its assets and liabilities when it is possible. The different levels have been defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

	December 31, 2021	December 31, 2021	December 31, 2021
BookValue		Fair Value
	Level 1 14,329,966 1,581,722 - 772,541 2,354,263 - - - - - 16,684,229 - - - - -	Level 2 - - 932,000 - 932,000 - - - - - 932,000 - - - - -	Level 3 - - - - - - - - - - - - - - - -	Total
				14,329,966
				1,581,722 932,000 772,541
				3,286,263
				- - - -
				-
				17,616,229
				- - - -
				-

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
BookValue		Fair Value
	Level 1 13,207,411 41,470 - - - - - 13,248,881 - - - - - -	Level 2 - - - - - - - - - - - - - -	Level 3 - - - - - - - - - - - - - -	Total
				13,207,411
				41,470
				- - - -
				-
				13,248,881
				- - - - -
				-

2) Valuation techniques of financial instruments not measured at fair value

The Company estimates its financial instruments, that are not measured at fair value, by methods and assumption as follows:

If there is quoted price generated by transactions for financial liabilities at amortized cost, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values. In addition, if the expiration date is approaching, or the future payable or receivable price is similar to the carrying amount, the fair value shall be assumed in the carrying amount in the balance sheets.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

3) Valuation techniques for financial instruments measured at fair value.

Non-derivative financial instruments

Financial instruments traded in active markets are based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a basis to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities, and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The fair value of the listed common shares, funds and bonds held by the Company are determined by reference to the market quotation.

Except for the above-mentioned financial instruments with active market, measurements of fair value of financial instruments without an active market are based on a valuation technique. Privately equity of domestic companies that the Company hold was measured by the Black-Scholes put evaluation model to calculate its liquidity discount and fair value.

4) Transfer between Level 1 and Level 2

There were no transfers from one level to another level in 2021 and 2020.

(w) Financial risk management

(i) Overview

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

1) Credit risk
2) Liquidity risk
3) Market risk

In this note expressed the information on risk exposure and objectives, policies and procedures of risk measurement and management. For detailed information, please refer to the related notes of each risk.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Structure of risk management

The Company’ s finance management department provides business services for the overall internal department. It sets the objectives, policies and processes for managing the risk and the methods used to measure the risk arising from both the domestic and international financial market operations. The Company minimizes the risk exposure through derivative financial instruments. The Board of Directors regulates the use of derivative financial instruments in accordance with the Company’ s policy on risks arising from financial instruments such as currency risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments, and the investments of excess liquidity. The internal auditors of the Company continue to review the amount of the risk exposure in accordance with the Company’s policies and the risk management's policies and procedures. The Company has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(iii) Credit risk

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

1) Accounts receivable and other receivables

The Company's customers is significantly concentrated in a few customers. In order to reduce credit risk, the Company continuously evaluates the financial status of its major customers and their condition, and also regularly assesses the possibility of receivables recovery.

The Company did not have any collateral or other credit enhancement to avoid credit risk of the financial assets.

The Company has losses allowance for bad debts to reflect the estimated losses of its accounts receivable, other receivables and investments. The main components of the allowance account contain specific losses associated with individual major risks. The component, and the component of the combined loss established for the loss of a similar group of assets, has occurred but not yet identified. The loss allowance account is based on the occurring risk of a default and the rate of expected credit loss.

2)

Investments

The exposure to credit risk for bank deposits, fixed income investments, and other financial instruments, is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any of the counterparties above to fail in meeting their obligations; hence, there is no significant credit risk arising from these counterparties.

3) Guarantees

At December 31, 2021 and 2020, no other guarantees were outstanding.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(iv) Liquidity risk

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

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the New Taiwan Dollars (NTD). The currencies used in these transactions are the NTD, USD, CNY and JPY.

2) Interest rate risk

Please refer to note on the liquidity risk for interest rate risk of financial assets and financial liabilities.

3) Other market price risk

Please refer to note 6(v) for the sensitivity analysis of equity price risk.

(x) Capital management

The Company must maintain sufficient capital to establish and expand production capacity and equipment. Because the optical lens industry is highly subject to fluctuations in the booming cycle; the capital management of the Company is to ensure that it has sufficient and necessary financial resources to support its working capital requirements, capital expenditures, research and development activities, dividends and other business needs in the next 12 months.

(y) Investing and financing activities not affecting current cash flow

The Company’ s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2021 and 2020 were as follows:

Acquisition of right-of-use assets through lease, please refer to note 6(m).

(Continued)

LARGAN PRECISION CO., LTD.

Notes to the Parent Company Only Financial Statements

Reconciliation of liabilities arising from financing activities was as follows:

Non-cash changes Foreign exchange movement Acquisition Changes in lease payments 2,472 - - - 33,335 (900) - - - 2,472 33,335 (900) Non-cash changes	Non-cash changes Foreign exchange movement Acquisition Changes in lease payments 2,472 - - - 33,335 (900) - - - 2,472 33,335 (900) Non-cash changes	Non-cash changes Foreign exchange movement Acquisition Changes in lease payments 2,472 - - - 33,335 (900) - - - 2,472 33,335 (900) Non-cash changes	December 31, 2021
			- 154,579 3,630 158,209 December 31, 2020
Foreign exchange movement	Acquisition - 4,399 - 4,399	Changes in lease payments - (1,460) - (1,460)
7,048 - - 7,048			249,535 166,565 3,766 419,866

(7) Related-party transactions

(a) For details of subsidiaries of the Company, please refer to note 4 (c) of the year 2021 consolidated financial report.

(b) Names and relationship with the Company

The followings are related parties that have had transactions with the Company during the periods covered in the parent company only financial statements.

Name of related party	Relationship with the Company
Amtai International Ltd. (Amtai)	Subsidiaries
Largan Digital Co., Ltd. (Largan Digital)	Subsidiaries
Largan Medical Co., Ltd. (Largan Medical)	Subsidiaries
Largan (Dongguan) Optronic Ltd.	Subsidiaries
(Largan Dongguan)
Largan Health AI-Tech Co., Ltd.	Subsidiaries
(Largan Health AI-Tech)
Largan Industrial Optics Co., Ltd.	Subsidiaries
(Largan Industrial Optics)
Fang Yuan Co., Ltd. (Fang Yuan)	Subsidiaries

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(c) Significant related-party transactions

(i) Sale of goods to related parties

The amounts of significant sales and receivables by the Company to its related parties were as follows:

Sale 2021 2020 $ 12,340,237 12,828,653 11,971,036 22,503,930 250,730 58,039 $ 24,562,003 35,390,622	Receivables from related parties	Receivables from related parties
2021 $ 12,340,237 11,971,036 250,730 $ 24,562,003	December 31, 2021 3,046,613 911,070 67,868 4,025,551	December 31, 2020
		3,337,315 2,859,633 6,960
		6,203,908

The sales price of the Company to its related parties is not comparable to other sales due to the differences in the sales of the goods. During 2021 and 2020, the collection terms for sales to related parties were month-end 30 to 120 days, which were not materially different from those of the third parties.

(ii) Purchases from related parties

1) The amounts of significant purchases and payables by the Company from its related parties were as follows:

Purchases 2021 2020 $ 2,525,823 1,727,506 1,082,072 188,797 $ 3,607,895 1,916,303	Payables to related parties	Payables to related parties
2021 $ 2,525,823 1,082,072 $ 3,607,895	December 31, 2021 December 31, 2020 1,059,145 683,081 202,776 32,113 1,261,921 715,194
		683,081 32,113
		715,194

The purchases price of the Company to its related parties is not comparable to other purchases due to the differences in the purchases of the goods. During 2021 and 2020, the payment terms for purchases to related parties were month-end 30 to 120 days, which were not materially different from those of the third parties.

2) The disposed amount of both the purchased finished goods from related parties, and the purchased part of raw materials components from the Company, were included in financial statements as follows:

Subsidiaries-Amtai

2021	2020
$ 1,050,385	815,847

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Provides and purchase technical services to related parties

During 2021 and 2020, the Company's income from providing technical services to its related parties were as follows (classified under the other gains):

Subsidiaries`-`Amtai Subsidiaries`-`Largan Medical	2021	2020
	$ 19,734 15,695 $ 35,429	19,937 15,761 35,698

During 2021 and 2020, the Company's expense from technical services from its related parties were as follows (classified under the other expense):

Subsidiaries`-`Largan Digital	2021	2020
	$ 3,501	2,527

(iv) Purchases and disposals of property, plant and equipment
1) During 2021 and 2020, the Company's disposals of its equipment to its related parties are summarized as follows:

	2021	2021			Carrying amount	2020 Disposal price Gain from disposal 1,007 11 41 3 - - - - 1,048 14
Carrying amount	Disposal price		Gain from disposal
$ 1,712 58 1,594 47,956 $ 51,320		1,818 73 1,779 54,161		106 15 185 6,205	996 38 - -	11 3 - -
		57,831		6,511	1,034	14

2) During 2021 and 2020, the Company's purchase of its equipment from its related parties are summarized as follows:

are summarized as follows:
Subsidiaries	2021	2020
	$ 48,836	100,164

3) During 2021 and 2020, the Company assisted its related parties to purchase other facilities as follows:

Subsidiaries`-`Amtai Subsidiaries`-`Largan Digital Subsidiaries`-`Largan Medical Subsidiaries`-`LarganDongguan Subsidiaries`-`LarganIndustrial Optics	2021	2020
	$ 2,788 99,653 11,667 1,105 271 $ 115,484	1,165 13,794 3,539 - - 18,498

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(v) Rental income

During 2021 and 2020, the Company's rental income on offices to the subsidiaries are summarized as follows:

Subsidiaries`-`Largan Digital Subsidiaries`-`Largan Medical	2021	2020
	$ 7,646 4,797 $ 12,443	3,473 4,617 8,090

(vi) Other

For the years ended December 31, 2021 and 2020, the amounts of receivables and payables 、 from property transactions rental income, technical service and other transactions, which were classified under other receivables from related parties, and other payables to related parties, are summarized as follows:

Subsidiaries`-`Amtai Subsidiaries`-`Largan Digital Subsidiaries`-`LarganIndustrial Optics Subsidiaries`-`Other	December 31, 2021 December 31, 2020 other receivables from related parties other payables to related parties other receivables from related parties other payables to related parties	December 31, 2021 December 31, 2020 other receivables from related parties other payables to related parties other receivables from related parties other payables to related parties	December 31, 2021 December 31, 2020 other receivables from related parties other payables to related parties other receivables from related parties other payables to related parties	December 31, 2021 December 31, 2020 other receivables from related parties other payables to related parties other receivables from related parties other payables to related parties
	$ 37,797 7,165 57,181 8,853 $ 110,996	- 6,891 - 670 7,561	33,501 17,606 - 8,471 59,578	259 9,161 - 727
				10,147

(d) Key management personnel compensation

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payments	2021 $ 225,549 278 - - - $ 225,827	2020
		206,995 275 - - -
		207,270

(Continued)

LARGAN PRECISION CO., LTD.

Notes to the Parent Company Only Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follow:

Pledged assets Time deposit (classified under other current financial assets) Time deposit (classified under other non-current assets) Time deposit (classified under other non-current financial assets)	Pledged to secure Customs office deposit Litigation deposit Completion deposit	December 31, 2021 $ 9,000 4,733 310,001 $ 323,734	December 31, 2020
			9,000 625,733 320,145
			954,878

(9) Commitments and contingencies

As of December 31, 2021 and 2020, the Company’ s outstanding purchase commitments for construction in progress, property and plant were $23,708,638 thousand and $12,204,700 thousand, respectively ； The amount of construction that has not yet occurred were $20,240,049 thousand and $9,908,276 thousand, respectively.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(12) Other:

The followings are the summary statement of employee benefits, depreciation, depletion, and amortization expenses by function in the current period:

By function By item	2021	2021	2021	2020	2020	2020
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits
Salary	4,867,143	2,929,189	7,796,332	5,293,591	3,408,571	8,702,162
Labor and health insurance	412,186	147,043	559,229	378,050	124,945	502,995
Pension	147,546	60,323	207,869	138,091	53,993	192,084
Remuneration directors	-	180,723	180,723	-	237,289	237,289
Others	150,519	38,257	188,776	155,950	36,095	192,045
Depreciation	4,235,928	364,231	4,600,159	3,881,533	324,015	4,205,548
Amortization	4,504	90,542	95,046	17,924	67,342	85,266

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Additional information on the numbers of employees and the employee benefits of the Company in 2021 and 2020:

The numbers of employees The numbers of directors excluding the employees The average of employees' benefits The average of salary The average of salary adjustment Supervisor's remuneration

The Company's salary and remuneration policy (including directors, supervisors, managers and employees) are as follows:

The remunerations to directors, supervisors, general managers and deputy general managers are in accordance with the Company's Articles of Incorporation and the managerial salary standards, which are reviewed by the Compensation Committee and approved by the board of directors.

Furthermore, the remuneration of the Company’ s directors and supervisors is determined by reference to the Company’s overall operating performance, future risks and development trends of the industry, as well as the individual’ s performance achievement rate and contribution to the Company; reasonable remuneration is also taken into consideration. Relevant performance appraisal and remuneration reasonableness are reviewed by the Salary and Compensation Committee and the Board of Directors, and the remuneration system is reviewed at any time in accordance with the actual operating conditions and relevant laws and regulations.

Also, the remuneration of the general manager and deputy general managers includes salary and employee remuneration. According to the position held, the responsibilities assumed and the salary standard of the Company’s managers, the payment shall be reviewed by the Salary and Compensation Committee and approved by the board of directors.

In addition, the wages of the employees of the Company are paid based on the grade table set according to the complexity of their work, the degree of responsibilities, and the professional skills required.

The remuneration of employee includes salary and employee remuneration, and the distribution of employee remuneration is determined by the board of directors to whether distribute in stock or cash. The recipients may include employees of affiliated companies who meet certain conditions such as rank and performance. The above conditions will have to be approved by the board of directors.

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on the Company's significant transactions, required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers”:

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties: None
(iii) Securities held as of December 31, 2021 (excluding those investments in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock -Micro Win Tech Inc.	-	Financial assets designated as at fair value through profit or loss	1.25	-	% 20.66	-
The Company	Stock -Kintech Technology Co., Ltd.	-	Financial assets designated as at fair value through profit or loss	570	-	% 0.33	-
The Company	Stock-AETAS TECHNOLOGY INCORPORATED	-	Financial assets designated as at fair value through profit or loss	125	-	% 0.25	-
The Company	Open-end fund- Franklin Templeton Sinoam Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	124,342	1,299,829	-	1,299,829
The Company	Open-end fund-Capital Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	50,858	828,845	-	828,845
The Company.	Open-end fund- Jih Sun Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	145,835	2,185,644	-	2,185,644
The Company	Open-end fund- CTBC Hwa-win Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	16,092	179,061	-	179,061
The Company	Open-end fund- FSITC Taiwan Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	74,470	1,152,153	-	1,152,153
The Company	Open-end fund-FSITC Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	2,812	506,856	-	506,856
The Company	Open-end fund- Eastspring Investments Well Pool Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	31,830	437,343	-	437,343
The Company	Open-end fund- Prudential Financial MoneyMarket Fund	-	Financial assets mandatorily measured fair value through profit or loss	33,226	531,329	-	531,329
The Company	Open-end fund-Union Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	48,118	641,712	-	641,712
The Company	Open-end fund- Taishin 1699 Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	192,838	2,637,750	-	2,637,750
The Company	Open-end fund-Hua Nan Phoenix Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	31,601	518,882	-	518,882
The Company	Open-end fund-Mega Diamond Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	168,362	2,134,430	-	2,134,430
The Company	Open-end fund- UPAMC James Bond MoneyMarket Fund	-	Financial assets mandatorily measured fair value through profit or loss	11,858	200,072	-	200,072
The Company	Open-end fund-Taishin Ta-Chong Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	38,227	548,568	-	548,568
The Company	Open-end fund-Cathay Taiwan Money Market Fund	-	Financial assets mandatorily measured fair value through profit or loss	42,002	527,492	-	527,492
The Company	Stock`－`AVISION INC.	-	Financial assets at fair value through other comprehensive income	4,253	67,202	% 2.25	67,202
The Company	Stock`－`Fubon Financial Holding Co., Ltd. Preferred Shares C	-	Financial assets at fair value through other comprehensive income	25,200	1,514,520	% 7.56	1,514,520	Note 1
The Company	Private equity`－` ABILITY OPTO- ELECTRONICS TECHNOLOGY CO., LTD.	-	Financial assets at fair value through other comprehensive income	20,000	932,000	% 15.2	932,000
The Company	Bond`－`BANK OF AMERICA CORP	-	Financial assets at fair value through other comprehensive income	-	109,993	-	109,993

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Bond`－`JPMORGAN CHASE & CO	-	Financial assets at fair value through other comprehensive income	-	109,574	-	109,574
The Company	Bond`－`IBM CORP	-	Financial assets at fair value through other comprehensive income	-	118,591	-	118,591
The Company	Bond`－`JOHNSON & JOHNSON	-	Financial assets at fair value through other comprehensive income	-	108,524	-	108,524
The Company	Bond`－`MIZUHO FINANCIAL GROUP	-	Financial assets at fair value through other comprehensive income	-	108,902	-	108,902
The Company	Bond`－`TSMC GLOBAL LTD	-	Financial assets at fair value through other comprehensive income	-	108,669	-	108,669
The Company	Bond`－`APPLE INC	-	Financial assets at fair value through other comprehensive income	-	108,288	-	108,288

Note 1 ： Shareholding ratio of Fubon Financial Holding Co., Ltd. Preferred Shares C.

(iv) Individual securities acquired, or disposed, with an accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Category and name of security	Account name	Name of counter- party	Relationship with the company	Beginningbalance	Beginningbalance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
The Company	Open-end fund- Franklin Templeton Sinoam Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	96,281	1,004,061	28,061	293,000	-	-	-	-	124,342	1,299,829
The Company	Open-end fund- Capital Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	113,926	1,853,047	31,753	517,000	94,821	1,544,367	1,540,000	4,367	50,858	828,845
The Company	Open-end fund- Yuanta De-Li Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	3,049	50,118	35,609	586,000	38,658	636,344	636,000	344	-	-
The Company	Open-end fund- CTBC Hwa-win Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	86,634	962,287	126,254	1,404,000	196,796	2,188,751	2,186,947	1,804	16,092	179,061
The Company	Open-end fund- FSITC Taiwan Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	55,972	863,851	18,498	286,000	-	-	-	-	74,470	1,152,153
The Company	Open-end fund- FSITC Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	3,100	557,590	1,606	289,000	1,894	341,049	340,000	1,049	2,812	506,856
The Company	Open-end fund- Eastspring Investments Well Pool Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	52,271	716,778	-	-	20,441	280,687	280,000	687	31,830	437,343
The Company	Open-end fund- TCB Taiwan Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	88,914	910,268	55,824	572,000	144,738	1,483,489	1,482,000	1,489	-	-
The Company	Open-end fund- UPAMC James Bond Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	-	-	60,194	1,015,000	48,336	815,245	815,000	245	11,858	200,072

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Name of company	Category and name of security	Account name	Name of counter- party	Relationship with the company	Beginningbalance	Beginningbalance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
The Company	Open-end fund- Taishin 1699 Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	153,386	2,093,093	39,452	539,000	-	-	-	-	192,838	2,637,750
The Company	Open-end fund- Shin Kong Chi- Shin Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	46,243	721,705	28,616	447,000	74,859	1,169,912	1,168,000	1,912	-	-
The Company	Open-end fund- Jin Sun Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	96,682	1,445,395	49,153	736,000	-	-	-	-	145,835	2,185,644
The Company	Open-end fund- Fubon Chi-Hsiang Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	18,733	296,052	42,242	668,000	60,975	964,718	964,000	718	-	-
The Company	Open-end fund- Mega Diamond Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	12,649	160,011	155,713	1,972,000	-	-	-	-	168,362	2,134,430
The Company	Open-end fund- Hua Nan Phoenix Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	3,784	62,000	40,022	656,000	12,205	200,273	200,044	229	31,601	518,882
The Company	Open-end fund- Taishin Ta-Chong Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	-	-	53,580	768,000	15,353	220,175	220,000	175	38,227	548,568
The Company	Open-end fund- Cathay Taiwan Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	-	-	120,506	1,512,000	78,504	985,348	985,000	348	42,002	527,492
The Company	Open-end fund- Union Money Market Fund	Financial assets mandatorily measured fair value through profit or loss	-	-	56,586	753,138	76,589	1,021,000	85,057	1,133,776	1,130,000	3,776	48,118	641,712
The Company	Private equity - ABILITY OPTO- ELECTRONICS TECHNOLOGY CO., LTD.	Financial assets at fair value through other comprehensive income	-	-	-	-	20,000	598,400	-	-	-	-	20,000	932,000
The Company	Stock - Fubon Financial Holding Co., Ltd. Preferred Shares C	Financial assets at fair value through other comprehensive income	-	-	-	-	25,200	1,512,000	-	-	-	-	25,200	1,514,520

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Buildings Expansion	2021.10	2,782,500	Not paid as of December 31, 2021	YANKEY ENGINEERING CO., LTD.	None				-	Public Bidding	Extend the buildings	None
The Company	Buildings Expansion	2021.10	4,567,500	Not paid as of December 31, 2021	CHUNG YUANG ELECTRICAL CONSULTING CO., LTD.	None				-	Public Bidding	Extend the buildings	None

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	If the counterparty is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Buildings Expansion	2021.10	1,228,500	Not paid as of December 31, 2021	YANKEY ENGINEERING CO., LTD.	None				-	Public Bidding	Extend the buildings	None
The Company	Buildings Expansion	2021.10	2,940,000	Not paid as of December 31, 2021	ACTER GROUP CORPORATION LIMITED	None				-	Public Bidding	Extend the buildings	None

(vi) Disposal of individual real estate with an amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company	Amtai International Ltd.	The Company's subsidiary	Purchases	2,525,823	% 27	120Days	-	-	(1,059,145)	(41)%
The Company	Amtai International Ltd.	The Company's subsidiary	Sales	(12,340,237)	% (26)	60Days	-	-	3,046,613	33%
The Company	Largan Medical Co. Ltd.	The Company's subsidiary	Purchases	205,930	% 2	30Days	-	-	(4,472)	-%
The Company	Largan (Dongguan) Optronic Ltd.	The Company's subsidiary	Sales	(11,971,036)	% (25)	120Days	-	-	911,070	10%
The Company	Largan Digital Co., Ltd.	The Company's subsidiary	Purchases	873,710	% 9	30Days	-	-	(198,288)	(8)%
The Company	Largan Digital Co., Ltd.	The Company's subsidiary	Sales	(180,459)	% -	30Days	-	-	58,625	1%

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

Name of company	Related-party	Nature of relationship	Ending balance (Note2)	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Loss allowance
					Amount	Action taken
The Company	Amtai International Ltd.	The Company's subsidiary	3,084,411	3.87	-	None	1,602,965 (Note1)	-
The Company	Largan (Dongguan) Optronic Ltd.	The Company's subsidiary	911,070	6.35	-	None	837,847 (Note1)	-

Note1: Until February 7, 2022.

Note2: Including other receivables.

(ix) Trading in derivative instruments: None
(b) Information on investees:

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

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2021	Balance as of December 31, 2021	Balance as of December 31, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company	Largan Digital Co., Ltd.	Taichung, Taiwan	Manufacturing of image capture device`、`image reader`、`camera and player etc.	411,359	411,359	26,636	% 49.37	397,619	204,792	156,719	The Company's subsidiary
The Company	Largan (Hong Kong) Ltd.	Hong Kong	Investment	658,555	658,555	31,100	% 100	319,701	665	665	The Company's subsidiary
The Company	Astro International Ltd.	Samoa	Investment	247,104	247,104	7,600	% 100	13,437,799	1,062,501	937,260	The Company's subsidiary
The Company	Largan Industrial Optics Co., Ltd.	Taichung, Taiwan	Manufacturing of Optical Instruments	300,000	43,000	30,000	% 100	283,560	(7,318)	(7,318)	The Company's subsidiary
The Company	Largan Health AI-Tech Co., Ltd.	Taipei, Taiwan	Sales of medical equipment	26,400	8,800	2,640	% 88	14,743	(8,466)	(7,450)	The Company's subsidiary
Largan Digital Co., Ltd.	Largan Medical Co. Ltd.	Taichung, Taiwan	Manufacturing of Optical Instruments`、`Medical and Photo instruments sale etc.	428,252	428,252	40,497	% 40.5	436,019	199,144	80,653	The Company's subsidiary
Largan Digital Co., Ltd.	Alpha Holding Inc.	Samoa	Investment	118,415	118,415	3,700	% 100	29,466	(87)	(87)	The Company's subsidiary
Astro International Ltd.	Net International Trading Ltd.	British Virgin Islands	Investment	756,599	756,599	24,300	% 100	8,165,086	592,534	592,534	The Company's subsidiary
Astro International Ltd.	Amtai International Ltd.	Samoa	Sales of Optical part etc.	50,600	50,600	1,500	% 100	5,989,553	463,934	470,917	The Company's subsidiary

(Continued)

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2021	Balance as of December 31, 2021	Balance as of December 31, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
Astro International Ltd.	Largan Health Technology Inc.	Samoa	Investment	110,898	110,898	1,476	% 12	26,850	(500)	(60)	The Company's subsidiary
Largan Industrial Optics Co., Ltd.	Fang Yuan Co., Ltd.	Taichung, Taiwan	Investment	29,800	29,800	2,980	% 100	18,174	(2,619)	(2,619)	The Company's subsidiary
Largan Medical Co. Ltd.	Beta International Ltd.	Samoa	investment	120,334	120,334	3,700	% 100	64,916	(187)	(187)	The Company's subsidiary
Alpha Holding Inc.	Largan Health Technology Inc.	Samoa	investment	110,898	110,898	1,476	% 12	26,850	(500)	(60)	The Company's subsidiary
Beta International Ltd.	Largan Health Technology Inc.	Samoa	investment	110,898	110,898	3,936	% 32	62,300	(500)	(160)	The Company's subsidiary
Largan Health Technology Inc.	Dynadx Corporation	U.S.A	Development of the software	12,150	12,010	11,081	% 100	4,205	(349)	(349)	The Company's subsidiary
Largan Health Technology Inc.	Largan Health Technology Co., Ltd.	Taichung, Taiwan	Sales of medical equipment	45,797	45,797	801	% 100	2,218	(591)	(591)	The Company's subsidiary
Largan Health AI-Tech Co., Ltd.	Charis Health Co., Ltd.	New Taipei City, Taiwan	Sales of medical equipment	4,900	-	490	% 98	4,146	(770)	(754)	The Company's subsidiary

(c) Information on investment in mainland China:
(i) The names of investees in Mainland China, their main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of capital surplus	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in currentperiod
					Outflow	Inflow
Largan (Dongguan) Optronic Ltd.	Production and sales of camera lenses, scanner lens optoelectronic devices, viewing windows, digital electronic cameras	HK$ 178,076	Note1(a)	HK$ 85,986 US$ 7,474	-	-	HK$ 85,986 US$ 7,474	RMB$ 115,406	100%	NT$ 500,658	NT$ 4,655,536	-
NEO (Shanghai) Medical Technology Co., Ltd.	Technical development and technical services in the field of medical device technology	RMB$ -	Note1(b)	-	-	-	-	RMB$ (782)	-%	NT$ (331)	NT$ -	-

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated Investment in Mainland China as of December 31, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
NT$650,445 (HK$85,986 and US$12,474)	NT$795,654 (HK$85,986 and US$17,720)	NT$85,043,833

Note 1(a): Indirectly investment in Mainland China through an existing company registered in the third region.

Note 1(b): Directly investment in Mainland China through investment company which uses the equity method.

Note 2: Since Suzhou Largan had been liquidated, the cumulative investment amount remitted from Taiwan, including the Company’s indirect investment in Suzhou Largan of US$5,000 thousand through Net International Trading Ltd., has yet to be repatriated before the year end of 2021.
Note 3: The liquidation process of NEO (Shanghai) Medical Technology Co., Ltd. had been completed on December 31, 2021.
(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China are disclosed in the “ Information on significant transactions”.

(d) Major shareholders:

Major shareholders:
Shareholder’s Name	Shares	Percentage
Mao Yu Commemorate Co., Ltd.	18,910,616	% 14.09
Shih-ching, Chen	6,756,831	% 5.03

(14) Segment information

Please refer to the 2021 consolidated financial statement.

(Continued)

LARGAN PRECISION CO., LTD.

Statement of cash on hand and demand deposits

December 31, 2021

(Expressed in Thousands of NTD; Expressed in Dollars of Foreign Currencies)

Items
Cash
Cash in banks
Total

Description
Amount
Cash
$ 85
Cash on foreign Currency
429
Subtotal
514
Demand deposits
2,383,126
Demand deposit on foreign Currency
(USD18,485,869.23×27.68
GBP4,173.59×37.30
JPY2,123,462,581.33×0.2405
EUR3,143,752.40×31.32
HKD6,657.20×3.5490
CNY19,999,932.89 ×4.3440
CHF850.90×30.175)
1,207,929
Time deposits
28,444,470
Time deposits on foreign currency
(USD1,060,443,974×27.68
CNY3,776,000,000×4.3440)
45,756,033
Subtotal
77,791,558
$ 77,792,072

LARGAN PRECISION CO., LTD.

Statement of Current Financial Assets at Fair Value

through Profit or Loss

December 31, 2021

(Expressed in Thousands of NTD; Expressed in Dollars of Unit cost and price)

Names of financial investment	Description Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund Open-end fund	Unit in thousands 124,342 192,838 145,835 50,858 16,092 74,470 2,812 31,830 33,226 48,118 31,601 168,362 42,002 11,858 38,227	Acquisition $ 1,293,000 2,627,000 2,176,000 826,000 179,000 1,146,000 505,000 436,000 528,000 641,000 517,957 2,132,000 527,000 200,000 548,000 $ 14,281,957	Fair Value	Fair Value
				Unit price Total amount 10.45 1,299,829 13.68 2,637,750 14.99 2,185,644 16.30 828,845 11.13 179,061 15.47 1,152,153 180.22 506,856 13.74 437,343 15.99 531,329 13.34 641,712 16.42 518,882 12.68 2,134,430 12.56 527,492 16.87 200,072 14.35 548,568 14,329,966
Franklin Templeton Sinoam Money Market Fund Taishen 1699 Money Market Fund Jih Sun Money Market Fund Capital Money Market Fund CTBC Hwa-win Money Market Fund FSITC Taiwan Money Market Fund FSITC Money Market Fund Eastspring Investments Well Pool Money Market Found Prudential Financial Money Market Fund Union Money Market Fund Hua Nan Phoenix Money Market Fund Mega Diamond Money Market Fund Cathay Taiwan Money Market Fund UPAMC James Bond Money Market Fund Taishin Ta-Chong Money Market Fund					1,299,829 2,637,750 2,185,644 828,845 179,061 1,152,153 506,856 437,343 531,329 641,712 518,882 2,134,430 527,492 200,072 548,568 14,329,966

LARGAN PRECISION CO., LTD.

Statement of Current Financial Assets at Fair Value through Other Comprehensive Income December 31, 2021

(Expressed in Thousands of NTD; Expressed in Dollars of Unit cost and price)

Names of financial investment	Description Stock Preferred Shares C Bond Bond Bond Bond Bond Bond Bond	Unit in thousands 4,253 25,000 - - - - - - -	Acquisition $ 40,280 1,512,000 $ 1,552,280 $ 114,729 114,288 124,576 112,286 114,040 113,391 112,563 805,873 $ 2,358,153	Fair Value	Fair Value
				Unit price Total amount 15.8000 67,202 60.1000 1,514,520 1,581,722 99.34 109,993 98.97 109,574 107.11 118,591 98.02 108,524 98.36 108,902 98.15 108,669 97.80 108,288 772,541 2,354,263
Equity Securities AVISION INC Fubon Financial Holding Co., Ltd Subtotal Corporate Bond BANK OF AMERICA CORP JPMORGAN CHASE & CO IBM CORP JOHNSON & JOHNSON MIZUHO FINANCIAL GROUP TSMC GLOBAL LTD APPLE INC Subtotal Total					67,202 1,514,520 1,581,722 109,993 109,574 118,591 108,524 108,902 108,669 108,288 772,541 2,354,263

LARGAN PRECISION CO., LTD.

Statement of Notes and Accounts

Receivable

December 31, 2021

(Expressed in Thousands of NTD)

Client No. Accounts receivable-unrelated parties 653021 643006 643011 Other (Note) Total Impairment loss on allowance Net amount	Description Amount Operating $ 2,217,072 Operating 1,515,019 Operating 278,474 Operating 1,117,934 5,128,499 (2,250) $ 5,126,249

Note: The amount of each item in others does not exceed 5% of the account balance.

Statement of Other Receivables

Items Tax receivables Interest receivables Others (Note) Total	Description Amount Income tax refund of exercise tax $ 128,416 Income interest of cash in bank 127,213 30,675 $ 286,304

Note: The amount of each item in others does not exceed 5% of the account balance.

LARGAN PRECISION CO., LTD.

Statement of Inventories

December 31, 2021

(Expressed in Thousands of NTD)

Item Finish goods Work in progress Raw materials Loss on allowance for doubtful accounts Total	Amount Cost Market Value Note $ 3,656,758 6,308,341 Market value of net realizable value 501,862 974,114 Market value of net realizable value 1,326,115 1,278,004 Market value of net realizable value 5,484,735 8,560,459 (843,570) $ 4,641,165	Amount Cost Market Value Note $ 3,656,758 6,308,341 Market value of net realizable value 501,862 974,114 Market value of net realizable value 1,326,115 1,278,004 Market value of net realizable value 5,484,735 8,560,459 (843,570) $ 4,641,165
	Cost $ 3,656,758 501,862 1,326,115 5,484,735 (843,570) $ 4,641,165

Statement of Other Current Assets and Other Current Financial Assets

Items Other current assets Restricted cash in bank`－`current	Description Amount Prepayment for purchases $ 194,512 Temporary payment 13,352 Others (Note) 14,615 $ 222,479 Customs office deposit $ 9,000 Bank account for repatriation of offshore fund 2,248,576 $ 2,257,576

Note: The amount of each item in others does not exceed 5% of the account balance.

LARGAN PRECISION CO., LTD.

Statement of Non-Current Financial Assets at Fair Value through Other Comprehensive Income

December 31, 2021

(Expressed in Thousands of NTD, Expressed in Dollarsof Unit cost and price)

Names of financial Investment Equity Securities ABILITY OPTO- ELECTRONICS TECHNOLOGY CO., LTD.	Description	Unit in thousands	Acquisition	Fair Value	Fair Value
				Unit price 46.60	Total amount
	Stock	20,000	$ 598,400		932,000

LARGAN PRECISION CO., LTD.

Statement of Changes in Investments Accounted for Equity

Method

January 1, 2021 to December 31, 2021

(Expressed in Thousands of NTD)

Names of Investee	Beginning balan	ce	Add	ition	Dec	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Other (Note)		Ending balan
	Shares Percentage of ownership 31,100 100.00 26,636 49.37 7,600 100.00 4,300 100.00 880 88.00	Amount 328,263 240,330 13,195,093 33,878 4,593 13,802,157	Shares - - - 25,700 1,760	Amount	Shares - - - - -			Shares	Percentage of ownership
Largan (Hong Kong) Limited Largan Digital Co., Ltd. Astro International Ltd. Largan Industrial Optics Co., Ltd. Largan Health Al-Tech Co., Ltd. Total				- - - 257,000 17,600		- 32 - - - 32	- 1,016 (464,709) - - (463,693)	31,100 26,636 7,600 30,000 2,640	100.00 49.37 100.00 100.00 88.00
				274,600

Note: The unrealized gain (loss) is referred to the downstream transactions and upstream transactions.

LARGAN PRECISION CO., LTD.

Statement of changes in Property, Plant, and Equipment

January 1, 2021 to December 31, 2021

(Expressed in Thousands of NTD)

Please refer to note 6 (h).

Statement of Other Non-current Assets and Other Non-current Financial Assets

December 31, 2021

Items Refundable deposits Restricted cash in bank-non-current Restricted cash in bank-non-current Prepayment for equipment Total	Description Amount Litigation deposit $ 4,733 Others (Note) 17,643 22,376 Bank account for repatriation of offshore fund 10,870,526 Completion deposit 310,001 Prepaid machine equipment 1,869,653 $ 13,072,556

Note: The amount of each item in others does not exceed 5% of the account balance.

LARGAN PRECISION CO., LTD.

Statement of Notes and Accounts Payable

December 31, 2021

(Expressed in Thousands of NTD)

Vendor Name Notes payable-unrelated parties Accounts payable-unrelated parties 110181 110185 110059 100830 100896 110184 Others (Note) Total	Description Amount non-operating $ 1,557 operating $ 247,455 operating 236,889 operating 160,870 operating 145,823 operating 117,336 operating 83,277 operating 300,184 $ 1,291,834

Note: The amount of each item in others does not exceed 5% of the account balance.

Statement of Other Payables

Please refer to note 6 (p).

LARGAN PRECISION CO., LTD.

Statement of Other Current Liabilities and Other Non-current Liabilities

December 31, 2021

(Expressed in Thousands of NTD)

Items	Description		Amount
Other current liabilities	Receipts under custody	$	89,677
	Other (Note)		1,631
		$	91,308
Other non-current liabilities	Guarantee deposits received	$	3,630
Note: The amount of each item in others does not exceed 5% of the account balance.

Statement of Operating Income

For 2021

Items Lens Others (Note) Total	Quantity (unit in thousands) Amount 1,731,511 $ 44,795,540 2,238,400 $ 47,033,940

Note: The amount of each item in others does not exceed 10% of the account balance.

LARGAN PRECISION CO., LTD.

Statement of Operating Costs

For 2021

(Expressed in Thousands of NTD)

Items		Amount
Goods
Goods, beginning of year	$	-
Addition:Goods purchased		873,701
Goods surplus		4
Decrease:Goods, end of year		-
Others		10
Cost of goods		873,695
Raw materials and supplies
Raw materials and supplies, beginning of year		1,196,392
Addition:Raw materials and supplies purchased		6,432,254
Decrease:Raw materials and supplies, end of year		1,326,115
Sale of raw materials and supplies		9,412
Raw materials and supplies loss		7,262
Scrapped		2,937
Others		707,432
Raw materials and supplies used		5,575,488
Direct labor		1,999,143
Manufacturing expense		10,806,243
Manufacturing Cost		18,380,874
Addition:Work in progress, beginning of year		480,201
Decrease:Work in progress, end of year		501,862
Cost of finished goods		18,359,213
Addition:Finished goods, beginning of year		2,789,364
Finished goods purchased		1,170,184
Finished goods surplus		10,382
Decrease:Finished goods, end of year		3,656,758
Scrapped		304,501
Other		133,461
Production and marketing costs		18,234,423
Other		394,451
Operating costs	$	19,502,569

LARGAN PRECISION CO., LTD.

Statement of Operating Expenses

For 2021

(Expressed in Thousands of NTD)

Items Payroll Import and export expense Depreciation Amortization Consumable expense Others (note)	Selling expenses $ 159,435 73,598 180 - - 73,411 $ 306,624	Administrative Expenses Research and development expenses 410,675 2,359,079 - - 105,682 258,369 72,463 18,079 - 651,374 419,461 311,587 1,008,281 3,598,488	Administrative Expenses Research and development expenses 410,675 2,359,079 - - 105,682 258,369 72,463 18,079 - 651,374 419,461 311,587 1,008,281 3,598,488
			2,359,079 - 258,369 18,079 651,374 311,587 3,598,488

Note: The amount of each item in others does not exceed 5% of the account balance.

AI assistant

LARGAN — Audit Report / Information 2021

52244_rns_2021-10-28_0ed2c6fe-b662-4c24-8ae2-7a3965977ac5.pdf

Parent Company Only Financial Statements

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Inventory valuation

Description of key audit matter:

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

KPMG

Notes to Readers

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD. Statements of Changes in Equity For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LARGAN PRECISION CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2021 and 2020

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(b) Basis of preparation

(c) Foreign currency

(ii) Foreign operations

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

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

(e) Cash and cash equivalents

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(f) Financial instruments

(i) Financial assets

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

4) Business model assessment

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

2) Equity instrument

3) Treasury shares

4) Financial liabilities

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(g) Inventories

(h) Investment in subsidiaries

(i) Property, plant and equipment

(ii) Subsequent cost

(iii) Depreciation

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(j) Leases

(i) As a lessee

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) As a lessor

(k) Intangible assets

(ii) Subsequent expenditure

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(l) Impairment of non-financial assets

(m) Provisions

(n) Revenue

(i) Revenue from contracts with customers

1) Sale of goods

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Contract costs

LARGAN PRECISION CO., LTD. Notes to the Parent Company Only Financial Statements

(o) Employee benefits

(ii) Defined benefit plans

LARGAN Audit Report / Information 2021