LPI - Annual Report 2021 | FinancialReports.eu

Stock Code: 2369

Lingsen Precision Industries, Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditor’s Report

For the Years Ended December 31, 2021 and 2020

Address: No. 5-1, Nan’er Rd., Tanzi Dist., Taichung City 427058, Taiwan (R.O.C.) TEL: (04)25335120

Representation Letter

The entities that are required to be included in the combined financial statements of Lingsen Precision Industries, Ltd. as of and for the year ended December 31, 2021, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Lingsen Precision Industries, Ltd. and its subsidiaries do not prepare a separate set of combined financial statements. Declared by

Company Name: Lingsen Precision Industries, Ltd.

Owner: Shu-Chyuan Yeh

March 17, 2022

Independent Auditors’ Report

To the Board of Directors and Shareholders of Lingsen Precision Industries, Ltd.

Audit opinions

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

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

Basis for Opinion

We conducted our audits in accordance with the Regulation Governing Auditing and Certification of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the R.O.C.. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. The auditors of the firm, subject to the independence regulations, have maintained independence from the Group in accordance with the Code of Ethics and perform other obligations of such Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

The key audit matters for the Group's consolidated financial statements for the year 2021 are

stated as follows:

Authenticity of service revenue recognition

The main source of revenue of the Group relies on the service revenue from the various wafer and integrated circuit packaging and testing services; therefore, the service revenue is determined to be the main indicator for the management to evaluate the business performance, and its recognition authenticity has a material impact on the overall financial statements. Accordingly, the authenticity of the recognition of specific customer service revenue is listed as the key audit matter. For revenue recognition related accounting policy, please refer to Notes 4 and 21 of the consolidated financial statements.

We summarize the main audit procedures executed for the aforementioned matters of the current year as follows:

Understand and assess the internal control design related to the audit and risk in the product sales and payment collection cycle and conduct a test on its effectiveness.
Inspect and obtain samples from the account sales of specific customers, and inspect relevant documents of delivery orders and sales invoices, and also verify whether the payment collection subjects are consistent with the delivery subjects, and also perform letter issuance for customers of service revenue, in order to verify the authenticity of the service revenue.

Other Matters

Lingsen Precision Industries, Ltd. has prepared the parent company only financial statements for 2021 and 2020, to which we have also issued an independent auditor's report with unqualified opinion along with the section on other matters and provided for reference.

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

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

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

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial

statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. The term of “reasonable assurance” refers to high level of assurance. Nevertheless, the audit performed according to the Generally Accepted Auditing Standards cannot guarantee the discovery of material misstatement in the financial statements. Misstatements can arise from fraud or error. Misstatements 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 the consolidated financial statements.

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

Identify and assess the risk of material misstatement of the consolidated financial statements due to fraud or error, design and adopt appropriate countermeasures for the risks assessed, and obtain sufficient and appropriate audit evidence in order to be used as the basis for the 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 a necessary understanding of internal control concerning the inspection in order to design appropriate inspection procedures that are appropriate for the time being. The purpose, however, is not to effectively express opinions on the internal control of the Group.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management level.
According to the audit evidence obtained, evaluate the appropriateness of the continuous operation accounting basis and whether events or circumstances possibly generating material concerns on the continuous operation ability of the Group have significant uncertainty, and provide conclusion thereto. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated 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 auditor’s report. Nevertheless, future events or circumstances may cause the Group to have no ability for continuous operation.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including relevant notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence for the financial information of individual entities of the Group and provide opinion on the consolidated financial statements. We handle the guidance, supervision and execution of the audit on the Group and are responsible for preparing the opinion for the Group.

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 the governance units with statements that we have complied with relevant matters that may reasonably be thought to bear on our independence, and we have also communicated with the governance units on all relationships and other matters (including relevant protective measures) that may be considered to affect the independence of auditors.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Group’s 2021 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte Taiwan

CPA Shu-Ching Chiang

CPA Ting-Chien Su

Financial Supervisory Commission Approval Document No. Jin-Guan-Zheng-Shen-Zi No. 1000028068

Financial Supervisory Commission Approval Document No. Jin-Guan-Zheng-Shen-Zi No. 1070323246

March 17, 2022

Lingsen Precision Industries, Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

				December	31,	2021					December	31,	2020
Code	ASSETS			Amount			%				Amount			%
	Current Assets
1100	Cash and cash equivalents (Notes 4 and 6)		$	1,646,990			17			$	1,373,024			18
1140	Contract assets - current (Notes 4 and 21)			150,260			2				126,485			2
1150	Notes receivable (Notes 4 and 21)			5,593			-				9,386			-
1170	Accounts receivable (Notes 4, 8 and 21)			1,744,380			18				1,311,023			17
1200	Other receivables (Notes 4 and 9)			243,361			3				304,193			4
1220	Current tax assets (Notes 4 and 23)			210			-				3,081			-
1310	Inventories (Notes 4 and 10)			689,909			7				336,114			4
1470	Other current assets (Notes 4, 15 and 28)			352,747			4				224,834			3
11XX	Total current assets			4,833,450			51				3,688,140			48
	Non-current assets
1517	Financial assets at fair value through other comprehensive income-
	non-current (Note 4 and 7)			34,709			1				38,981			1
1550	Investment accounted for using the equity method (Notes 4 and 12)			-			-				-			-
1600	Property, plant and equipment (Notes 4, 13 and 28)			3,984,904			42				3,491,550			46
1755	Right-of-use assets (Notes 4 and 14)			154,244			2				164,801			2
1840	Deferred tax assets (Notes 4, 5 and 23)			28,600			-				91,305			1
1915	Prepayments for facilities			356,707			4				157,529			2
1920	Refundable deposits (Note 4)			1,018			-				935			-
1975	Net defined benefit assets - non-current (Notes 4 and 19)			12,009			-				-			-
1990	Other non-current assets			19,139			-				12,019			-
15XX	Total non-current assets			4,591,330			49				3,957,120			52
1XXX	Total assets		$	9,424,780			100			$	7,645,260			100
Code	Liabilities and Equity
	Current Liabilities
2100	Short-term bank borrowings (Notes 4 and 16)		$	304,838			3			$	248,679			3
2150	Notes payable			23,699			-				-			-
2170	Accounts payable			491,184			5				332,380			4
2200	Other payables (Note 17)			886,595			9				582,873			8
2230	Deferred tax liabilities (Notes 4 and 23)			51,330			1				807			-
2250	Liability reserve - current (Notes 4 and 18)			3,980			-				19,450			-
2280	Lease liabilities - current (Notes 4 and 14)			5,027			-				5,494			-
2320	Long-term borrowings due in one year (Notes 4, 16 and 28)			360,830			4				486,287			7
2399	Other current liabilities			68,372			1				48,716			1
21XX	Total current liabilities			2,195,855			23				1,724,686			23
	Non-current liabilities
2540	Long-term banks borrowings (Notes 4, 16 and 28)			931,461			10				577,589			7
2570	Deferred tax liabilities (Notes 4 and 23)			804			-				1,156			-
2580	Lease liabilities - non-current (Notes 4 and 14)			147,411			2				152,251			2
2640	Net defined benefit liabilities - non-current (Notes 4 and 19)			-			-				54,241			1
2645	Deposits received			51,822			-				1,822			-
25XX	Total non-current liabilities			1,131,498			12				787,059			10
2XXX	Total Liabilities			3,327,353			35				2,511,745			33
	Equity attributable to owners of the company
3110	Ordinary shares			3,801,023			40				3,801,023			50
3200	Capital surplus			1,250,011			13				1,384,604			18
	Retained earnings
3320	Special reserve			160,419			2				192,020			2
3350	Unappropriated earnings (accumulated deficit)			912,825			10		(		166,267	)	(	2	)
3400	Other equities	(		71,372	)	(	1	)	(		64,644	)	(	1	)
3500	Treasury shares	(		199,828	)	(	2	)	(		199,828	)	(	2	)
31XX	Total equity attributable to owners of the Company			5,853,078			62				4,946,908			65
36XX	Non-controlling interests			244,349			3				186,607			2
3XXX	Total equity			6,097,427			65				5,133,515			67
	Total liabilities and equities		$	9,424,780			100			$	7,645,260			100

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

Lingsen Precision Industries, Ltd. and Subsidiaries Statement of Comprehensive Income For the Years from January 1 to December 31, 2021 and 2020

Unit: Expressed in NT$ thousand; except (loss) earnings per share expressed in NT$

Code 4000 Operating revenue (Notes 4 and 21) 5000 Operating costs (Notes 10 and 22) 5900 Gross profit Operating expenses (Note 22) 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment losses (Notes 4 and 8) 6000 Total operating expenses 6900 Net operating profit (loss) Non-operating income and expenses (Note 4) 7100 Interest income 7110 Rental income (Note 14) 7130 Dividend income 7190 Other income 7210 Gains from disposal of property, plant, and equipment 7230 Net gain on foreign exchange 7273 Property, plant and equipment gain on reversal of impairment 7510 Interest expenses 7590 Miscellaneous expenses 7670 Impairment loss 7000 Total non-operating incomes and expenses 7900 Net profit (loss) before income tax 7950 Income tax expenses (Notes 4 and 23) 8200 Net profit (loss) for the year (Continued on next page)		2021		% 100 81 19 1 5 2 - 8 11 - - - - 1 - 1 - - - 2 13 1 ) 12		2020
		Amount $ 7,733,302 6,258,406 1,474,896 70,345 338,281 176,579 388 585,593 889,303 3,978 20,882 7,198 32,024 54,462 13,927 42,417 15,743 ) 657 ) 12,000 ) 146,488 1,035,791 104,200 ) 931,591				Amount $ 5,457,586 5,158,502 299,084 54,894 240,974 166,697 49 462,614 163,530 ) 6,821 18,906 1,165 52,855 484 3,361 - 18,563 ) 459 ) 47,456 ) 17,114 146,416 ) 16,724 ) 163,140 )		%
	( ( ( (		(		( ( ( ( ( ( (		( ( ( (	100 95 5 1 4 3 - 8 3 ) - - - 1 - - - - - 1 ) - 3 ) - 3 )

(Continued from previous page)

Code Other comprehensive income (loss) (Note 4) 8310 Items not reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit plans(Note 19) 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income 8349 Income tax related to items that will not be reclassified subsequently (Note 23) 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of the financial statements of foreign operations 8300 Other comprehensive income of the year (Net income after tax) 8500 Total comprehensive income (loss) for the year Net profit (loss) attributable to: 8610 Owners of the company 8620 Non-controlling interests 8600 Total comprehensive income attributable to: 8710 Owners of the company 8720 Non-controlling interests 8700 Earnings (losses) per share (Note 24) 9750 Basic 9850 Diluted		2021		% - - - - - - 12 11 1 12 11 1 12		2020
		Amount $ 48,720 4,272 ) 9,744 ) 34,704 2,456 ) 32,248 $ 963,839 $ 873,849 57,742 $ 931,591 $ 906,097 57,742 $ 963,839 $ 2.35 $ 2.32				Amount $ 1,828 7,454 366 ) 8,916 139 ) 8,777 $ 154,363 ) $ 164,343 ) 1,203 $ 163,140 ) $ 155,566 ) 1,203 $ 154,363 ) $ 0.44 ) $ 0.44 )		%
	( ( (				( ( ( ( ( ( ( ( (		( ( ( ( (	- - - - - - 3 ) 3 ) - 3 ) 3 ) - 3 )

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

Lingsen Precision Industries, Ltd. and Subsidiaries

Unit: In Thousands of New Taiwan Dollars

Consolidated Statement of Changes in Equity

For the Years from January 1 to December 31, 2021 and 2020

Equity attributable to owners of the company

Capital surplus (Note 20) $ 1,451,696 - - 64 ( 67,156 ) - - - - - - 1,384,604 - 73 ( 134,666 ) - - - $ 1,250,011		Retained earnings(Note 20) Undistributed earnings (losses to be covered) (Notes 4 and 7) Legal reserve Special reserve $ 359,085 $ 226,856 ($ 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) - 192,020 ( 166,267 ) - ( 31,601 ) 31,601 - - - - - 134,666 - - 873,849 - - 38,976 - - 912,825 $ - $ 160,419 $ 912,825	Retained earnings(Note 20) Undistributed earnings (losses to be covered) (Notes 4 and 7) Legal reserve Special reserve $ 359,085 $ 226,856 ($ 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) - 192,020 ( 166,267 ) - ( 31,601 ) 31,601 - - - - - 134,666 - - 873,849 - - 38,976 - - 912,825 $ - $ 160,419 $ 912,825	Retained earnings(Note 20) Undistributed earnings (losses to be covered) (Notes 4 and 7) Legal reserve Special reserve $ 359,085 $ 226,856 ($ 461,077 ) 359,085 ) - 359,085 - ( 34,836 ) 34,836 - - - - - 67,156 - - ( 164,343 ) - - 1,462 - - ( 162,881 ) - - - - - ( 887 ) - - ( 2,499 ) - 192,020 ( 166,267 ) - ( 31,601 ) 31,601 - - - - - 134,666 - - 873,849 - - 38,976 - - 912,825 $ - $ 160,419 $ 912,825	Other equityitems(Note 4) Exchange differences on translation of the financial statements of foreign operations Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other comprehensive income ($ 22,033 ) ($ 52,425 ) - - - - - - - - - - ( 139 ) 7,454 ( 139 ) 7,454 - - - - - 2,499 ( 22,172 ) ( 42,472 ) - - - - - - - - ( 2,456 ) ( 4,272 ) ( 2,456 ) ( 4,272 ) ($ 24,628 ) ($ 46,744 )	Other equityitems(Note 4) Exchange differences on translation of the financial statements of foreign operations Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other comprehensive income ($ 22,033 ) ($ 52,425 ) - - - - - - - - - - ( 139 ) 7,454 ( 139 ) 7,454 - - - - - 2,499 ( 22,172 ) ( 42,472 ) - - - - - - - - ( 2,456 ) ( 4,272 ) ( 2,456 ) ( 4,272 ) ($ 24,628 ) ($ 46,744 )	Treasury shares (Note 20) ($ 176,415 ) - - - - - - - ( 23,413 ) - - ( 199,828 ) - - - - - - ($ 199,828 )			Total equity
					Exchange differences on translation of the financial statements of foreign operations ($ 22,033 ) - - - - - ( 139 ) ( 139 ) - - - ( 22,172 ) - - - - ( 2,456 ) ( 2,456 ) ($ 24,628 )
		Legal reserve $ 359,085 359,085 ) - - - - - - - - - - - - - - - - $ -	Special reserve $ 226,856 - ( 34,836 ) - - - - - - - - 192,020 ( 31,601 ) - - - - - $ 160,419
( (	(		( (	( ( ( ( ( (	( ( ( ( ( ( (	( ( ( ( (	( ( ( (	( ( ( (	( ( (	$ 5,311,227 - - 64 - 163,140 ) 8,777 154,363 ) 23,413 ) - - 5,133,515 - 73 - 931,591 32,248 963,839 $ 6,097,427

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

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Lingsen Precision Industries, Ltd. and Subsidiaries

Statement of Cash Flows

For the Years from January 1 to December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

Code Cash flows from operating activities A10000 Net profit (loss) before tax for the year Income/expenses items A20100 Depreciation expense A20300 Expected credit impairment losses A20900 Interest expenses A21200 Interest income A21300 Dividend income A22500 Gains on disposal of property, plant and equipment A23800 Loss for market price decline and obsolete and slow-moving inventories (gain from price recovery) A23800 Impairment loss (reversal gain) on disposal and discard of property, plant and equipment A24100 Unrealized foreign currency exchange net profit A29900 Amortization of prepayments A29900 Other losses A30000 Net changes in operating assets and liabilities A31125 Contract assets A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31240 Other current assets A32130 Notes payable A32150 Accounts payable A32180 Other payables A32200 Provision (reversal) for liabilities A32230 Other current liabilities A32240 Net defined benefit liability A33000 Cash provided by operating activities A33100 Interest received A33300 Interest paid A33500 Income tax returned AAAA Net cash inflow from operating activities	2021 $1,035,791 762,262 388 15,743 ( 3,978 ) ( 7,198 ) ( 54,462 ) ( 39,380 ) ( 42,417 ) ( 4,939 ) 7,398 12,000 ( 23,839 ) 3,781 ( 435,223 ) 59,541 ( 314,539 ) ( 139,950 ) 23,699 161,093 271,221 ( 15,470 ) 19,658 ( 17,530 ) 1,273,650 3,884 ( 14,403 ) 1,801 1,264,932	2020
		( $ 146,416 ) 824,680 49 18,563 ( 6,821 ) ( 1,165 ) ( 484 ) 44,673 47,456 ( 7,850 ) 4,941 - ( 35,593 ) ( 2,377 ) ( 229,426 ) 64,099 ( 35,065 ) ( 40,177 ) - 53,064 55,985 7,072 ( 56,518 ) ( 21,287 ) 537,403 7,388 ( 17,919 ) 15,394 542,266

(Continued on next page)

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(Continued from previous page)

Code Cash flows from investing activities B02700 Purchase of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Increase in refundable deposits B06700 Increase in other non-current assets B07100 Increase in prepaid equipment amount B07600 Dividends received BBBB Net cash outflow from investment activities Cash flows from financing activities C00100 Increase in short-term bank borrowings C00200 Decrease in short-term bank borrowings C01600 Proceeds from long-term bank borrowings C01700 Repayments of long-term bank borrowings C03000 Increase in guarantee deposits C04020 Repaid principal of lease liabilities C04900 Buy-back of treasury shares C09900 Uncollected overdue dividends CCCC Net cash inflow (outflow) from financing activities DDDD Effect of exchange rate changes on cash and cash equivalents EEEE Increase (decrease) of cash and cash equivalents for the year E00100 Beginning cash and cash equivalents of the year E00200 End cash and cash equivalents of the year	2021 ( $1,057,572 ) 98,439 ( 85 ) ( 14,523 ) ( 355,079 ) 7,198 (1,321,622 ) 1,230,613 ( 1,171,050 ) 772,700 ( 544,286 ) 50,000 ( 6,824 ) - 73 331,226 ( 570 ) 273,966 1,373,024 $1,646,990	2020
		( $ 307,696 ) 5,901 ( 7 ) ( 9,835 ) ( 123,707 ) 1,165 ( 434,179 ) 1,561,937 ( 1,734,745 ) 169,500 ( 407,934 ) 909 ( 6,831 ) ( 23,413 ) 64 ( 440,513 ) 660 ( 331,766 ) 1,704,790 $1,373,024

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

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Lingsen Precision Industries, Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2021 and 2020

(Amounts are expressed In thousands of New Taiwan Dollars or foreign currency, unless stated

otherwise)

1. Company History

Lingsen Precision Industries, Ltd. (referred to as the “Company”) was established in Taichung Export Processing Zone in April 1973 and began its operation in July 1973. The main business is IC packaging and testing as well as optoelectronic devices.

In April 1998, the company's shares were listed on the Taiwan Stock Exchange (TWSE).

The consolidated financial statements were expressed in New Taiwan Dollars, which is the Company's functional currency.

2. Approval Date and Procedures of the Consolidated Financial Statements

These consolidated financial statements were approved by the Board of Directors on March 17, 2022.

3. Application Of New, Amended And Revised Standards And Interpretations

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

Application of aforementioned amendments will not have a significant effect on the Company and controlled entities (referred to as the “Group”)'s accounting policies.

(2) IFRSs endorsed by FSC applicable in 2022

IFRSs endorsed by FSC applicable in 2022
New, Revised or Amended Standards and Interpretations “Annual Improvements to IFRSs 2018-2020” Amendments to IFRS 3 “References to Conceptual Framework” Amendments to IAS 16 “Property, plant and equipment: Proceeds before intended use” Amendments to IAS 37 “Onerous contract - costs incurred in fulfilling contracts”	Effective Date Announced byIASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

Note 1: Amendments to IFRS 9 are applicable to exchange of financial liabilities or clause amendment occurred during the annual reporting period beginning on

13 -

or after January 1, 2022; Amendments to IAS 41"Agriculture" are applicable to the fair value measurement during the annual reporting period beginning on or after January 1, 2022; Amendments to IFRS 1"First Adoption of IFRSs" are retrospectively applicable to the annual reporting period beginning on or after January 1, 2022.

Note 2: Amendments are applicable to the merge and acquisition at the annual reporting period beginning on or after January 1, 2022.
Note 3: Amendments are applicable to plant, property and equipment in and under necessary places and conditions which meet the operation way expected from the management at the periods beginning on or after January 1, 2021.
Note 4: The Amendments are applicable to all contracts which have not fulfilled obligations on January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group has assessed the possible impact that the application of other standards and interpretations would have on the Group’s financial position and financial performance, and has determined that there would be no such material impact.

IFRSs already announced by IASB but not yet endorsed and issued into effect by the FSC

FSC

New, Revised or Amended Standards and
Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or
Contribution of Assets between an Investor and its
Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 "First time of application of
IFRS 17 and IFRS 9－comparison information"
Amendments to IAS 1 “Classification of Liabilities
as Current or Non-current”
Amendments to IAS 1 “Disclosure of Accounting
Policy”
Amendments to IAS 8 “Definition of Accounting
Estimation”
Amendments to IAS 12 "Deferred income tax:
related to assets and liabilities incurred due to
single transaction" Effective Date Announced
byIASB(Note 1)

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 2)
Sunday, January 1, 2023
(Note 3)
January 1, 2023 (Note 4)

FSC
New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 "First time of application of IFRS 17 and IFRS 9`－`comparison information" Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policy” Amendments to IAS 8 “Definition of Accounting Estimation” Amendments to IAS 12 "Deferred income tax: related to assets and liabilities incurred due to single transaction"	Effective Date Announced byIASB(Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) Sunday, January 1, 2023 (Note 3) January 1, 2023 (Note 4)

Note 1: Unless stated otherwise, the above New, Revised or Amended Standards and Interpretations are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: Amendments are applicable to the reporting period beginning on or after Sunday, January 1, 2023.
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Note 3: Amendments are applicable to the changes on accounting estimates and accounting policies for annual reporting periods beginning on or after January 1, 2023.
Note 4: Except for the temporary difference of lease and decommissioning obligations recognized as deferred income tax on January 1, 2022, the amendments are applicable to transactions occurred after January 1, 2022.

Addition to the aforementioned influences, up to the reporting date, the Group will continue evaluating other influences on financial status and performance resulting from amendments to rules or explanations. The related influences are to be disclosed once the evaluation is accomplished.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The preparation of the consolidated financial statements is based on the “Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IFRSs accepted and effectively published by FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments and the present value of the defined benefit obligation deducting the net defined benefit liabilities (assets) of the fair value of any plan assets which are measured at fair value.

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

Level 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 inputs are unobservable inputs for the asset or liability.
(3) Classification of Current and Non-current Assets and Liabilities

Current assets include:

Assets held primarily for the purpose of trading;
Assets that are expected to be realized within twelve months from the balance sheet date; and
Cash and cash equivalent (unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the date of statement of financial position).
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Current liabilities include:

Liabilities held primarily for the purpose of trading;
Liabilities expected to be settled within twelve months after the maturity of the debt (even if the liability at the date of statement of financial position to complete the long-term refinancing prior to the financial statements or reschedule payment agreement), and
Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.

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

(4) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e. its subsidiaries). Adjustments have been made to the financial statements of subsidiaries to allow their accounting policies to be consistent with those used by the Group. During the preparation of the consolidated financial statements, the transaction, account balance, revenue and expense among entities have been eliminated completely. The total comprehensive income/loss of the subsidiaries are attributed to the owner’s and non-controlling interests of the Company, and the same is true when the non-controlling interests consequently become loss balance.

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

Please see Note 11 and Tables 4 and 5 for details of subsidiaries, percentage of ownership and business.

(5) Foreign Currency

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

Foreign currency monetary amount is translated at the closing rate at each date of the balance sheet. Exchange differences arising from settlement or translation are recognized as profit or loss at the period.

Non-monetary foreign currencies held at fair value at the exchange rates prevailing at the date of transaction; however, non-monetary foreign currencies held at fair value through other comprehensive income are recognized in other comprehensive income.

Non-monetary items carried at historical cost is reported using the exchange rate at the date of the transaction and will not calculated again.

In preparing the consolidated financial statements, assets and liabilities from foreign

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operations, including subsidiaries whose location or currency are different from the Company, are translated into the presentation currency, the New Taiwan dollar, at the exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates at the period. The resulting currency translation differences are recognized in other comprehensive income and attributed to the owner and non-controlling interests, respectively.

(6) Inventories

Inventories include raw materials, work in process, finished goods and products. Inventories are stated at the lower of cost or net realizable value. The lower of cost and net realizable value is based on the individual inventory items. Net realized value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. The inventory cost is measured by using First In, First Out.

(7) Investment in Associates

The associates are entities which are material to the Group, but not subsidiaries or joint venture companies.

Investments in the associates are accounted for using the equity method.

Under the equity method, an investment is initially recognized in the statements of financial positional cost and adjusted thereafter to recognize the Group's share of profit or loss and other comprehensive income of the associates as well as the distribution received. The Company also recognizes its share in the changes in equities of associates.

The Group discontinues recognizing its share of further losses if its share of losses of the associate equals or exceeds its interest in the associate. The Group recognizes the additional losses and liabilities which occur in the scope of legal obligation, constructive obligation or payment on behalf of the associates only.

During the evaluation of the impairment of the Group, the entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss is not amortized to any assets as part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

(8) Property, plant and equipment

Property, plant and equipment are recognized at costs and subsequently measured at costs of the amount less accumulated depreciation and accumulated impairment losses.

Property, plant and equipment in the course of construction for production are recognized as the cost, and such cost includes professional service fees and borrowing costs eligible for capitalization. Upon completion and ready for intended use, such assets are classified to the appropriate categories of property, plant and equipment, and depreciation of these assets commences.

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Depreciation is recognized using the straight-line method, and each significant part is depreciated separately. The Group reviews the estimated useful lives, residual values and depreciation method at least at the end of each reporting period, and with the effect of any changes in estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

(9) Impairments of related assets including property, plant and equipment, right-of-use assets and contract cost

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

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

Inventories recognized in customers' contracts are recognized as impairment loss in accordance with Inventory write off policy and the aforementioned regulations. Subsequently, the excess of carrying amount of assets associated with contract cost over the price received from providing relevant products or service, less direct relevant costs, is recognized as impairment loss. Then the carrying amount of assets associated with contract cost is computed to its cash-generating unit to evaluate the impairment losses on cash-generating unit.

When impairment loss subsequently reverses, the carrying amounts of the asset, cash-generating units or contract cost and related assets are increased to the revised recoverable amounts. However, the increased carrying amounts shall not exceed the carrying amounts of the asset, cash-generating units or contract cost and related assets which were not recognized as impairment loss at the past period (less amortization or depreciation). The reversal of impairment loss is recognized as profit or loss.

(10) Financial instruments

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

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

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Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

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

1) Classification of measurement
Financial assets held by the Group are classified to financial assets measured at amortized cost and investments in equity instruments measured through other comprehensive income at fair value.
i) Financial assets measured at amortized cost

When the financial assets invested by the Group satisfies the following two criteria at the same time, it is classified as the amortized cost financial assets:

a. Where the financial assets are held under certain business model, and the purpose of such model is to hold the financial assets in order to collect contract cash flows; and
b. Where contract terms generated cash flow of specific date, and such cash flow is completely for the payment of the interest of principle and external circulating principle amount.

Financial assets measured at amortized cost include cash and cash equivalent, contract assets, note receivables, account receivables, other receivables, other current assets and refundable deposits. When the recognition commences, effective interest method is used to determine the carrying amount less any amortized cost of depreciation. Any exchange gains and losses are recognized as gains and losses.

Credit losses on financial assets are significant financial difficulty of the issuer or borrower, a breach of contract, it becoming probable that the borrower will enter bankruptcy or other financial reorganization, or the disappearance of an active market for the financial asset because of financial difficulties.

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and acquired within three months. ii) Investments in equity instruments measured at fair value through other comprehensive income

On initial recognition, the Group may irrevocably designate investments in equity instruments that is not held for trading and not recognized as contingent consideration as at FVTOCI.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value. Subsequently the

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changes in fair value are reported in other comprehensive income and accumulated in other equity. On disposal of investments, the accumulated profit or loss is directly transferred to retained earnings and it is not reclassified to profit or loss.

The dividend from investments in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss upon the Group's right to receive payment is established, except for apparently the dividend representing the recovery of the partial investment cost.

2) Impairments of financial assets and contract assets

At the date of each balance sheet, the Group reviews expected credit losses to estimate the impairment loss of financial assets, including notes receivable, and contract assets measured at amortized cost.

The loss allowance for accounts receivable is measured at an amount equal to useful lives expected credit losses. Other financial assets are assessed to determine whether the credit risk has significantly increased since the original recognition. If there is no significant increase, then the allowance loss is recognized according to the 12-month expected credit loss. If it has increased significantly, then allowance loss is recognized according to the lifetime expected credit loss.

Expected credit losses are weighted average credit losses with the probability of default events. The 12-month expected credit losses are expected credit losses that result from default events possible within 12 months after the reporting date. Lifetime expected credit losses result from all possible default events over the expected life of the financial instruments.

For the purpose of internal controls on credit risk, without considering the collaterals it holds, the Group determines the following events as a breach of contract:

i) There is internal or outside information prevails that it is not possible the borrower pays off the debt.
ii) The overdue exceeds the average credit period, unless reasonable and supportable information indicates that a delayed default basis is more appropriate.

All impairment losses on financial assets is decreased its carrying amount through contra accounts.

3) Derecognition of financial assets

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

On derecognition of financial assets at amortized cost in its entirety, the

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difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of Investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial liabilities

1) Follow-up measurement

Financial liabilities are measured at amortized cost using effective interest method.

2) Derecognition of financial liabilities

On the derecognition of financial liabilities, the difference between their carrying amount and the consideration paid and payable, including any transfer of non-cash assets or liabilities, is recognized as profit or loss.

(11) Provision for liabilities

The amount recognized as a provision for liabilities is, taking risk and uncertainty of obligation into consideration, the best estimate of the expenditure required to settle the obligation at the date of balance sheet.

(12) Revenue recognition

The Group allocates the transaction price to each performance obligation and recognizes the revenue when each of the obligation is satisfied after the customer has identified it.

1) Sales revenue

Sales revenue comes from the sale of semiconductor materials. Since the clients are eligible for pricing and using the products as well as responsible for reselling and taking the risk of depreciation upon the delivery of semiconductor materials, the Company shall recognize the revenue and accounts receivable upon the sale.

2) Service income

Service Income comes from packaging and final testing.

When the customer simultaneously receives and consumes the benefits provided by the Group's performance of packaging and final testing service, or the customer controls an asset which the Group's performance has created or enhanced, the related revenue is recognized. Packaging of products relies on the involvement of technicians. The Group measures the work in progress by the percentage of completion. The contract with customer states that the customer is billed after the packaging or the delivery has been completed. A contract asset is thus recognized when the Group renders the service and transfers to accounts receivable when the packaging or delivery is completed. Final testing counts on the involvement of technicians. The Group measures the work in progress by the percentage of completion. Contract customer is

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billed after the completion of service, and the Group then recognizes accounts receivable when rendering the service.

(13) Leases

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

1) The Group as the lessor

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

The sublease of right-of-use assets of the Group is classified by reference to right-of-use assets, instead of underlying assets. However, if the main lease is short-term lease applicable to recognition exemption of the Group, such sublease is classified as operating leases.

Under the operating lease, lease payments less lease incentives granted are recognized as revenue on a straight-line basis. The initial direct cost which occurs on granting operating leases is the carrying amount accumulated to the underlying assets and is recognized as expense on a straight of line basis.

2) The Group as the Lessee

Except for payments for low-value asset leases and short-term leases applicable to exemption of recognition are recognized as expenses on a straight-line basis, the Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

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

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

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and the default fine arises from lease termination. The lease payments are discounted using the interest rate in a lease if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Group remeasures the lease

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liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized as profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

(14) Borrowing costs

Borrowing costs that can be directly attributable to the acquisition, construction or production of a qualifying asset, that necessarily takes a substantial period of time to get ready for its intended use or sale, are included in the cost of the asset.

Where funds are borrowed specifically, costs eligible for capitalization are the actual costs incurred less any income earned on the temporary investment of such borrowings.

Other borrowing costs at the period are recognized as profit or loss.

(15) Government grants

A government grant is recognized only when there is reasonable assurance that the Group will comply with any conditions attached to the grant and the grant will be received.

The grant receivable as compensation for costs already incurred or for immediate financial support, with no future related costs, shall be recognized as profit or loss in the period in which it is receivable.

(16) Employee benefits

1) Short-term employee benefits

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

2) Pensions

For defined contribution plans, the amount of contribution payable in respect of service rendered by employees in that period should be recognized as expenses.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost and net interest on the net defined benefit liability are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur.

Net defined benefit liability represents the actual deficit in the Group’s defined benefit plan. Net defined benefit liability shall not exceed the present value of refunds from the plan or reductions in future contributions to the plan.

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(17) Income tax

The provision for income tax recognized in profit or loss comprises current and deferred tax.

1) Current tax

The Group has determined the current income (losses) and calculated taxes payable (receivable) in accordance with regulations established by the jurisdiction for tax return.

According to Income Tax Act in Republic of China, an additional income tax levied at unappropriated earnings are recognized in shareholders' annual meeting.

Income tax payable for prior period is adjusted to the current income tax.

2) Deferred tax

Deferred tax is accounted for temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit or loss.

Deferred tax liability is generally recognized for all taxable temporary differences. Deferred tax asset is recognized for deductible temporary differences or loss carryforwards to the extent that taxable profit is probably available.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group can control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits to realize the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the date of balance sheet and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets originally not recognized is also reviewed at the date of balance sheet and increased to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is recovered, based on tax rates and laws that have been enacted or substantively enacted by the date of balanced sheet. The measurement of deferred tax liabilities and assets reflects the tax consequences that arise from the manner in which the Group expects, at the date of balance sheet, to recover or settle the carrying amount of its assets and liabilities.

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3) Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except the current and deferred tax that relates to items recognized in other comprehensive income or directly in equity are recognized respectively in other comprehensive income or directly in equity.

Significant Accounting Assumptions and Judgment, And Major Sources of Estimation Uncertainty

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

The Group has taken COVID-19 into consideration on significant accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period when the estimates are revised if the revisions affect only that period. If revisions affect both current and future periods, the accounting estimates are recognized in the current and future periods.

Major source of estimates and assumption uncertainty

(1) Loss of property, plant, and equipment

Equipment relevant to semiconductor manufacturing is evaluated in accordance with the recoverable amount of such equipment (equal to the fair value of such asset less cost to sell and the higher amount of its use value). Market value or future changes in cash flow will affect the recoverable amount, resulting in the Group recognizing addition impairment losses or reversing impairment losses recognized. In addition, the subsequent development of COVID-19 pandemic in 2021 has caused the impacts of uncertainty on the interruption of the operation of the Group and the fluctuation of the financial market. Consequently, the estimated cash flow, growth rate and discount rate have greater uncertainty.

(2) Income tax

Upon the dates of December 31, 2021 and 2020, the balance of unused loss carryforwards is NT$1,424,940,000 and NT$1,985,835,000 respectively. The carrying amount of deferred tax assets related to temporary differences is NT$28,600,000 and NT$ 35,306,000 respectively. The realization of the deferred tax asset depends mainly on its future profitability or the taxable temporary difference. A significant reversal of deferred tax assets will be recognized as gain or loss if the real profits in the future are less than expected. Such reversal is recognized as gain or loss during the occurrence period.

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6. Cash and cash equivalents

and cash equivalents
Cash on hand and petty cash Check and demand deposit Cash equivalents Time deposits Short-term notes and bills Annual interest rate (%) Cash in banks Time deposits Short-term notes and bills	December 31,2021 $ 485 770,863 775,792 99,850 $ 1,646,990 0.001-0.05 0.13-0.41 0.23	December 31,2020
			$ 541 722,557 499,000 150,926 $ 1,373,024 0.001-0.05 0.34-2.1 0.23

7. Financial assets at fair value through other comprehensive income- non-current

Listed and OTC stocks ETREND Hightech Corp. Emerging stocks Enrich Tech Co., Ltd. Amtek Semiconductors Co., Ltd. Anwell Semiconductor Co., Ltd. Perfect Source Technology Corp. Xpert Semiconductor Inc.	December 31,2021 $ 8,630 18,974 7,105 - - - $ 34,709	December 31,2020	December 31,2020
			$ 6,795 25,994 6,192 - - - $ 38,981

The Group invests in the aforementioned common stocks in accordance with the long-term strategic objectives and expects to profit from the long-term investments. The management of the Group considers that if the short-term volatility at fair value of such investments recognized in profit or loss is not consistent with the aforementioned long-term investment plan, it will be determined that such investments are measured through other comprehensive income at fair value.

Anwell Semiconductor Co., Ltd. has registered its dissolution in December 2021, and it is currently under the liquidation procedure.

Perfect Source Technology Corp. has been liquidated and canceled the registration in May 2020. The Group has received liquidating distribution of NT$2,000 in October 2020 and will dispose financial assets measured at fair value through other comprehensive income. The realized loss of NT$2,499,000 will be transferred to the retained earnings.

8. Accounts receivable

nts receivable
Amortized cost Total carrying amount Less: Allowance for bad debts	December 31,2021 $ 1,747,567 ( 3,187 ) $ 1,744,380	December 31,2020
	(	(	$ 1,330,691 19,668 ) $ 1,311,023

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The average collection period for selling products and rendering service is 60 to 90 days, excluding accounts receivable. Credit of key customers is rated by using other public available financial information and historic transaction records. The Group continues supervising credit risk exposure and credit rating of the counterparty, as well as distributing the total transaction amount into different qualified customers. In addition, the management shall review and approve counterparty's line of credit for the purpose of managing credit risk exposure.

To mitigate credit risk, the management of the Group has designated functional working group responsible for decision on line of credit, credit approval and other supervision to ensure proper action has been taken to collect overdue accounts receivable. In addition, the collectible amount of accounts receivable shall be reviewed individually at the date of balance sheet to ensure the uncollectible accounts receivable has been listed to appropriate impairment loss. According these, the management considers the Group's credit risk has significantly decreased.

The loss allowance for accounts receivable is measured at an amount equal to useful lives expected credit losses. For the useful lives expected credit losses, customers' default on records and present financial position, economic trends, as well as GDP expectation and industry outlook are considered. The experience on the Group's credit losses presents that types of loss on different customer groups do not bring obvious differences. Thus the rate of expected credit losses is set based on accounts receivable aging, without further grouping customers.

If any evidence shows the counterparty faces significant financial difficulty and the collectible amount cannot be reasonably expected, the Group will directly offset the relevant accounts receivable but keep track of the receivables. The recovered amount is recognized in profit or loss.

The loss allowance for accounts receivable of the Group is measured as follows:

December 31, 2021 Expected credit loss(%) Total carrying amount Allowance for loss Amortized cost December 31, 2020 Expected credit loss(%) Total carrying amount Allowance for loss Amortized cost		0~90 days 0.1-0.2 $ 1,709,530 1,537 ) $ 1,707,993 0~90days	Aging 91~180 days	Aging 91~180 days	Aging 181~365 days 10-15.5 $ 263 ( 24 ) $ 239 Aging 181~365days	Aging 181~365 days 10-15.5 $ 263 ( 24 ) $ 239 Aging 181~365days	Aging over 365 days	Aging over 365 days		Total
	(		2-3.1 $ 36,809 ( 661 ) $ 36,148 Aging 91~180 days				(	100 $ 965 965 ) $ - Aging over 365days	(	$ 1,747,567 3,187 ) $ 1,744,380 Total
	(	0.1-0.2 $ 1,283,491 1,175 ) $ 1,282,316	(	2-3.1 $ 29,242 535 ) $ 28,707		10-15.5 $ - - $ -	(	100 $ 17,958 17,958 ) $ -	(	$ 1,330,691 19,668 ) $ 1,311,023

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Changes on allowance for accounts receivable loss are as follows::

Balance at the beginning of the yea Current impairment losses Current actual write-off Exchange differences on translation Balance at the end of the year Other receivables Time deposits with an initial maturity in three months Tax Refund Receivable Others Annual percentage rate of time deposits with an initial maturity in three months (%) .Inventories Raw materials Finished goods Work in process Products		2020
	$ 19,605 49 - 14 $ 19,668 December 31,2020
.
	$ 280,679 13,586 9,928 $ 304,193 0.12-0.815 December 31,2020
		$ 312,582 18,649 4,883 - $ 336,114

9. Other receivables

10. Inventories

Inventory-related operating costs as of 2021 and 2020 are NT$6,258,406,000 and

NT$5,158,502,000 respectively.

Operating costs include the following items:

Unamortized fixed production overheads Revenue from sale of scraps Inventory valuation loss (gain from price recovery)	2021 $ 5 ( 70,808 ) ( 39,380 )	2020
		$ 347 ( 35,485 ) 44,673

Inventory net realizable value recovery was due to the increase of the sales price of the inventory.

11. Subsidiaries

(1) Subsidiaries incorporated in the consolidated financial statements The basis for the consolidated financial statements is as follows:
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Investor Parent Company Lee Shin Investment Co., Ltd. Lingsen Holding (Samoa) Inc. Li Yuan Investments Co., Ltd.	Company Name Lingsen Holding (Samoa) Inc. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Lee Shin Investment Co., Ltd. Lingsen America Inc. Nexus Material Corporation Sooner Power Semiconductor Co., Ltd. Nexus Material Corporation Li Yuan Investments Co., Ltd. Ningbo Liyuan Technology Co., Ltd.	Eq uit yholdi ng (% )	Eq uit yholdi ng (% )
		2021 December 31 100 64 99 100 100 78 1 21 100 100	2020 December 31
			100 64 99 100 100 78 1 21 100 100

Please see Tables 4 and 5 for the location and business of aforementioned subsidiaries.

(2) Significant information on subsidiaries of non-controlling interests

CompanyName Panther Technology Co., Ltd.	Percentage of ownership (%)	Percentage of ownership (%)
	December 31,2021 36	December 31,2020
		36

The following summary of financial information of Panther Technology Co., Ltd. is prepared in accordance with the amount prior to elimination of intragroup transactions:

transactions:
Current assets Non-current assets Current liabilities Non-current liabilities Equity Interests attributed to: Owners of the Company Non-controlling interests of Panther Technology Co., Ltd. Operating income Current net profit Total comprehensive income	December 31,2021 $ 448,748 849,074 ( 286,330 ) ( 341,621 ) $ 669,871 $ 426,507 243,364 $ 669,871 2021 $ 907,618 $ 158,648 $ 158,648	December 31,2020
		$ 279,424 670,781 ( 172,596 ) ( 266,386 ) $ 511,223 $ 325,496 185,727 $ 511,223 2020
			$ 569,793 $ 6,032 $ 6,032

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			2021			2020
Net income attributable to:
Owners of the Company:		$	101,011		$	3,840
Non-controlling interests of
Panther Technology Co., Ltd.			57,637			2,192
		$	158,648		$	6,032
Total comprehensive income
attributable to:
Owners of the Company		$	101,011		$	3,840
Non-controlling interests of
Panther Technology Co., Ltd.			57,637			2,192
		$	158,648		$	6,032
Cash flow
From operating activities		$	286,183		$	106,161
From investing activities	(		281,455 )	(		190,301 )
From financing activities			75,693			105,893
Net cash inflow		$	80,421		$	21,753

12. Investments accounted for using the equity method

Investees Common stock that has never been listed on the TWSE or TPEx Qi Feng Technology Co., Ltd. Less: Accumulated impairment loss		December 31,2021 Amount Shareho lding $ 11,417 30% 11,417 ) $ -		December 31,2020	December 31,2020
		Amount $ 11,417 11,417 ) $ -		Amount $ 11,417 11,417 ) $ -	Shareho lding
	(		(		30%

Investments accounted for using the equity method as well as the Group's share of profit or loss and other comprehensive income are not calculated in accordance with auditors' reports. However, the management of the Group determines that it shall have little influence if financial statements of Qi Feng Technology Co., Ltd.are not audited.

13. Property, Plant and Equipment

Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment
December 31,2021 Assets used by the Company $ 3,794,027 Assets subject to operating leases 190,877 $ 3,984,904 (1) Assets used by the Company 2021 Balance at the beginning of theyear Increase Decrease Reclassificati on Cost Land $ 127,534 $ - $ - $ - Buildings 3,076,485 73,736 13,448 - Machinery and equipment 4,813,925 794,310 1,394,878 171,769

				Decrease
	Cost Land Buildings Machinery and equipment	$ 127,534 3,076,485 4,813,925	$ - 73,736 794,310	$ - 13,448 1,394,878	$ - - 171,769	$ - ( 2,429 ) ( 413 )	$ 127,534 3,134,344 4,384,713

30 -

2021	Balance at the beginning of theyear	Balance at the beginning of theyear		Increase		Decrease	Reclassificati on	Net exchange difference	Balance at the end of the year	Balance at the end of the year
Transportation Equipment Office equipment Other equipment Unfinished construction Total cost Accumulated depreciation Buildings Machinery and equipment Transportation Equipment Office equipment Other equipment Total accumulated depreciation Accumulated impairment loss Land Buildings Machinery and equipment Office equipment Other equipment Total accumulated impairment loss 2020	23,029 76,307 306,935 - 8,424,215 1,287,320 3,426,012 19,095 53,033 182,145 4,967,605 59,787 60,805 40,943 708 2,954 165,197 $ 3,291,413 Balance at the beginning of theyear			1,466 2,199 107,837 111,680 $ 1,091,228 $ 124,014 551,120 1,429 9,447 63,820 $ 749,830 $ - - - - - $ - Increase		- 35,127 77,184 - $ 1,520,637 $ 12,565 1,357,224 - 35,124 75,939 $ 1,480,852 $ - 1,160 40,212 3 1,465 $ 42,840 Decrease	- - - - $ 171,769 $ - 12,683 - - - $ 12,683 $ - - - - - $ - Reclassificati on	( 29 ) ( 5 ) ( 196 ) - ($ 3,072 ) ( $ 1,787 ) ( 257 ) ( 16 ) ( 2 ) ( 85 ) ($ _2,147 ) $ - - - - - $ - Net exchange difference	24,466 43,374 337,392 111,680 8,163,503 1,396,982 2,632,334 20,508 27,354 169,941 4,247,119 59,787 59,645 731 705 1,489 122,357 $ 3,794,027 Balance at the end of the year
Cost Land Buildings Machinery and equipment Transportation Equipment Office equipment Other equipment Total cost Accumulated depreciation Buildings Machinery and equipment Transportation Equipment Office equipment Other equipment Total accumulated depreciation Accumulated impairment loss Land Buildings Machinery and equipment Office equipment Other equipment Total accumulated impairment loss		$ 127,534 3,147,941 5,368,285 23,191 75,982 314,612 9,057,545 1,240,194 3,571,423 19,889 45,660 188,471 5,065,637 59,787 57,954 - - - 117,741 $ 3,874,167		$ - 6,840 208,384 2,271 4,603 56,398 $ 278,496 $ 127,211 614,805 1,609 11,658 58,076 $ 813,359 $ - 2,851 40,943 708 2,954 $ 47,456		$ - 85,309 754,934 2,382 4,289 64,659 $ 911,573 $ 85,309 749,523 2,382 4,289 64,653 $ 906,156 $ - - - - - $ -	$ - - ( 9,033 ) - - - ($ 9,033 ) $ - ( 11,464 ) - - - ($ 11,464 ) $ - - - - - $ -	$ - 7,013 1,223 ( 51 ) 11 584 $ 8,780 $ 5,224 771 ( 21 ) 4 251 $ 6,229 $ - - - - - $ -		$ 127,534 3,076,485 4,813,925 23,029 76,307 306,935 8,424,215 1,287,320 3,426,012 19,095 53,033 182,145 4,967,605 59,787 60,805 40,943 708 2,954 165,197 $ 3,291,413

31 -

Due to the slow sales of parts of the Group's products, the Group expects that the future economical benefit on the machinery equipment of the products is decreased, resulting in the recoverable amount being less than carrying amount. Consequently, the impairment loss of NT$47,456,000 was recognized in 2020. Such impairment loss has been listed in consolidated statement of comprehensive income.

In 2021, the Group disposed relevant equipment that had been recognized for impairment loss, and the actual disposal price was used as the recoverable amount, and an impairment loss of NT$42,417,000 was reversed. For 2021, since there was no impairment loss, the Group had not conducted the impairment loss evaluation.

Depreciation is computed on a straight-line basis over the following estimated useful life:

Buildings
Plant building	45 ~ 50 years
Hydropower air-conditioning engineering	3 ~ 20 years
Machinery and equipment	3 ~ 10 years
Transportation Equipment	4 ~ 7 years
Office equipment	3 ~ 7 years
Other equipment	3 ~ 7 years

Please see note 28 for the amount of property, plant, and equipment used by the Group pledged as collaterals.

(2) Assets subject to operating leases

2021 Cost Buildings Machinery and equipment Accumulated depreciation Buildings Machinery and equipment Interest expenses 2020 Cost Buildings Machinery and equipment Accumulated depreciation Buildings Machinery and equipment Interest expenses	Balance at the beginning of theyear $ 279,629 15,933 295,562 83,961 11,464 95,425 $ 200,137 $ 279,629 - 279,629 79,170 - 79,170 $ 200,459		Increase $ - - $ - $ 4,791 1,219 $ 6,010 $ - - $ - $ 4,791 - $ 4,791	Reclassificatio n $ - ( 15,933 ) ($ 15,933 ) $ - ( 12,683 ) ($ 12,683 ) $ - 15,933 $ 15,933 $ - 11,464 $ 11,464	Balance at the end of theyear	Balance at the end of theyear
						$ 279,629 - 279,629 88,752 - 88,752 $ 190,877 $ 279,629 15,933 295,562 83,961 11,464 95,425 $ 200,137

The Group has used buildings based on operating leases with a lease term of 1 to 18 years. All operating lease contracts include the clause where the lessee shall adjust the lease payment according to market rent when a right of renewal is exercised. The lessee has no bargain purchase option on such asset after the end of the lease period.

32 -

The operating lease payments receivable for the buildings is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years	December 31,2021 $ 12,468 6,061 6,061 6,061 6,061 27,584 $ 64,296	December 31,2020	December 31,2020
			$ 12,255 9,690 4,530 4,530 4,530 20,888 $ 56,423

Depreciation is computed on a straight-line basis over the following estimated useful life:

Buildings 45 ~ 50 years Machinery and equipment 5 ~ 7 years

14. Lease agreements

Lease agreements
(1) Right-of-use assets Carrying amount of right-of-use assets Land Buildings Addition to right-of-use assets Depreciation expense of right-of-use assets Land Buildings Sublease income of right-of-use assets (Rent Income from sublease)	December 31,2021 $ 152,952 1,292 $ 154,244 2021 $ 370 $ 4,485 1,937 $ 6,422 ($ 2,805 )	December 31,2020
			$ 161,942 2,859 $ 164,801 2020
	(	(	$ 2,211 $ 4,628 1,902 $ 6,530 $ 1,464 )

Except for the depreciation expenses recognized above, there were no major sublease and impairment loss of the right-of-use assets of the Group in 2021 and 2020.

(2) Lease liabilities December 31,2021 Carrying amount of lease liabilities Current $ 5,027 Non-current $ 147,411 Ranges of discount rates for lease liabilities are as follow December 31,2021 Land 0.67%-0.91% Buildings 0.67%-1.65%	December 31,2020
	$ 5,494 $ 152,251 December 31,2020
	0.67%-0.91% 0.67%-1.65%

33 -

(3) Material leases and terms

The Group leases several lands and buildings for the use of plants, office buildings and employee dormitories with a lease term of 1 to 10 years. Upon the termination of the lease period, the Group has no bargain purchase option for leased lands and buildings.

(4) Sublease

The Group subleases right-of-use of land as operating lease, with a lease term of 20 years. The lessee shall adjust the lease payment according to market rent when a right of renewal is exercised. The Group has sold all of the subleases of the right-of-use of land in China region in August 2021.

right-of-use of land in China region in August 2021.
Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years	December 31,2020
		$ 1,464 1,464 1,464 1,464 1,464 16,470 $ 23,790

(5) Information on other lease

Please see Note 13 for agreements that the Group sells property, plant and equipment used by the Group under operating leases.

Expenses relating to short-term leases Total cash outflow for leases		2021 $ 89,322 $ 97,293 )		2020
	(		(	$ 54,387 $ 62,398 )

The Group leases certain machinery and equipment, buildings and building leases which qualify as short-term leases. The Group has elected to apply the recognition exemption and thus did not recognize right-of-use assets and lease liabilities for these leases.

(15) Other assets

er assets
Current Supply inventory Time deposit pledge (Note 28) Prepayments Input tax Payments on behalf of others Tax overpaid retained for offsetting future tax payable Others	December 31,2021 $ 202,866 103,889 17,464 12,579 8,784 6,565 600 $ 352,747	December 31,2020
			$ 105,225 71,888 13,993 2,733 5,086 25,305 604 $ 224,834

34 -

16. Borrowings

(1) Short-term bank loans

(1)	Short-term bank loans
(2)	Credit loans Import/export financing loans Annual interest rate (%) Credit loans Import/export financing loans Long-term bank loans Mortgage loan Credit loans Less: Amount falling due in one year Amount falling due after one year Annual interest rate (%) Mortgage loan Credit loans Maturity date Mortgage loan Credit loans	December 31,2021 $ 160,720 144,118 $ 304,838 0.80-4.98 0.88-0.90 December 31,2021 $ 673,591 618,700 1,292,291 ( 360,830 ) $ 931,461 0.42-1.54 0.58-1.61 111.04-116.07 111.04-115.05	December 31,2020
			$ 163,920 84,759 $ 248,679 0.80-4.98 0.90-1.32 December 31,2020
			$ 965,876 98,000 1,063,876 ( 486,287 ) $ 577,589 0.42-1.54 0.42-1.6 110.11-116.03 110.11-111.04

17. Other payables

r payables
Payables for Wages and bonuses Payables for factory supplies Payables for Employees’ bonuses and remuneration of directors and supervisors Payables for annual leave Payables for purchases of equipment Others	December 31,2021 $ 270,662 212,091 154,978 62,169 56,188 130,507 $ 886,595	December 31,2020
			$ 208,859 178,822 1,062 56,561 23,488 114,081 $ 582,873

18. Provisions - Current

Provisions for sales returns and allowances are, estimated under experiences, judgment of the management and other known reasons for the probable sales returns and

35 -

allowances, and recognized as the subtraction of operating revenue upon the related service is provided and products are sold at the current year.

Changes on provisions are as below:

Changes on provisions are as below:
Balance at the beginning of the year Current recognition (reversal) Balance at the end of the year		2021 $ 19,450 15,470 ) $ 3,980		2020
	(			$ 12,378 7,072 $ 19,450

19. Retirement benefits plan

(1) Defined contribution plans

The labor pension system under the “Labor Pension Act” applicable to the Company, Panther Technology Co., Ltd., Nexus Material Corporation, and Sooner Power Semiconductor Co., Ltd. of the Group refers to the defined contribution retirement benefit plans managed by the government. The employer shall contribute labor pension funds equal to 6 percent of an employee's monthly salary to individual labor pension accounts at the Bureau of Labor Insurance (the Bureau) for employees.

Ningbo Liyuan Technology Co., Ltd. participated in social insurance plan managed and planned by government of China, which refers to a defined contribution plan. The endowment insurance paid for the social insurance plan managed by the government is recognized as current expense upon withdrawal.

The retirement procedure and system has not established for Lingsen America Inc.

As investment companies or no employees hired, there is no retirement procedure or system established for Lee Shin Investment Co., Ltd., Lingsen Holding (Samoa) Inc., Li Yuan Investments Co., Ltd.

(2) Defined benefit plans

The Company of the Group has labor pension system as defined benefit plans under the Labor Standards Act of R.O.C.. The payment of the employee pension is made based on an employee’s length of service and average monthly salary for the six-month period prior to retirement approved. The Company contributes an amount equal to 3 percent of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the balance in the Funds is assessed. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees qualified with retirement requirements in the next year, the Company is required to make up the difference all at once with one appropriation, which is required to be made before the end of March of next year. The Funds are operated and managed by the government’s designated authorities. Accordingly, the Group does not have any right to intervene in the investments of the Funds.

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The amount of defined benefit plans recognized in the consolidated balance sheets is as follows: December 31,2021 December 31,2020 Present value of defined benefit obligation $ 730,046 $ 788,843 Fair value of plan assets ( 742,055 ) ( 734,602 ) Net defined benefit liabilities (assets) ($ 12,009 ) $ 54,241	The amount of defined benefit plans recognized in the consolidated balance sheets is as follows: December 31,2021 December 31,2020 Present value of defined benefit obligation $ 730,046 $ 788,843 Fair value of plan assets ( 742,055 ) ( 734,602 ) Net defined benefit liabilities (assets) ($ 12,009 ) $ 54,241	The amount of defined benefit plans recognized in the consolidated balance sheets is as follows: December 31,2021 December 31,2020 Present value of defined benefit obligation $ 730,046 $ 788,843 Fair value of plan assets ( 742,055 ) ( 734,602 ) Net defined benefit liabilities (assets) ($ 12,009 ) $ 54,241
	(	$ 788,843 734,602 ) $ 54,241

Movements the net defined benefit liabilities (assets) are as follows:

Balance at January 1, 2021 Service cost Current service cost Interest expense (income) Defined benefit costs recognized in profit or loss Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) Actuarial loss (gain) - changes in demographic assumptions - changes in financial assumptions - experience adjustments Defined benefit costs recognized in other comprehensive income Contributions from employer Benefits paid Balance as of December 31, 2021 Balance as of January 1, 2020 Service cost Current service cost Interest expense (income) Defined benefit costs recognized in profit or loss Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) Actuarial loss (gain) - changes in demographic assumptions - changes in financial assumptions - experience adjustments Defined benefit costs recognized in other comprehensive income Contributions from employer Benefits paid Balance as of December 31, 2020	Present value of defined benefit obligation $ 788,843 8,079 2,339 10,418 - 1,253 ( 30,169 ) 255 ( 28,661 ) - ( 40,554 ) ( 40,554 ) $ 730,046 $ 786,506 8,246 5,764 14,010 - 1,460 36,809 ( 9,714 ) 28,555 - ( 40,228 ) ( 40,228 ) $ 788,843	Fair value of plan assets ($ 734,602 ) - ( 2,221 ) ( 2,221 ) ( 20,059 ) - - - ( 20,059 ) ( 24,500 ) 39,327 14,827 ($ 742,055 ) ($ 709,150 ) - ( 5,297 ) ( 5,297 ) ( 30,383 ) - - - ( 30,383 ) ( 30,000 ) 40,228 10,228 ($ 734,602 )	Net defined benefit liabilities(assets) $ 54,241 8,079 118 8,197 ( 20,059 ) 1,253 ( 30,169 ) 255 ( 48,720 ) ( 24,500 ) ( 1,227 ) ( 25,727 ) ($ 12,009 ) $ 77,356 8,246 467 8,713 ( 30,383 ) 1,460 36,809 ( 9,714 ) ( 1,828 ) ( 30,000 ) - ( 30,000 ) $ 54,241	Net defined benefit liabilities(assets) $ 54,241 8,079 118 8,197 ( 20,059 ) 1,253 ( 30,169 ) 255 ( 48,720 ) ( 24,500 ) ( 1,227 ) ( 25,727 ) ($ 12,009 ) $ 77,356 8,246 467 8,713 ( 30,383 ) 1,460 36,809 ( 9,714 ) ( 1,828 ) ( 30,000 ) - ( 30,000 ) $ 54,241
	( ( ( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( (		$ 54,241 8,079 118 8,197 20,059 ) 1,253 30,169 ) 255 48,720 ) 24,500 ) 1,227 ) 25,727 ) $ 12,009 ) $ 77,356 8,246 467 8,713 30,383 ) 1,460 36,809 9,714 ) 1,828 ) 30,000 ) - 30,000 ) $ 54,241

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Due to the defined benefit plans under the Labor Standards Act of R.O.C. the Group is exposed to the following risks:

1) Investment risk: The pension funds are invested in domestic and foreign equity securities, debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds’ designated authorities or under the mandated management. However, the distributable amount of plan assets of the Group shall not be less than the return calculated by the average interest rate on a two-year time deposit published by the local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation. However, the return on the debt investments of the plan assets will increase as well. The two will be partially offset on net defined benefit liabilities
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation of the Group are carried out by qualified actuaries. The principal assumptions are as follows:

follows:
Discount rate Expected salary increase rate	December 31,2021 0.70% 2.00%	December 31,2020
		0.30% 2.00%

If reasonably likely changes respectively occur in the principal assumptions and all other assumptions are held constant, the amount of present value of the defined benefit obligation is increased or decreased as follows:

Discount rate Increase by 0.25% Decrease by 0.25% Expected salary increase rate Increase by 0.25% Decrease by 0.25%	December 31,2021 ($ 18,181 ) $ 18,861 $ 18,570 ($ 17,997 )	December 31,2020	December 31,2020
	( (	( (	$ 20,822 ) $ 21,640 $ 21,219 $ 20,531 )

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

Contributions expected in one year Average maturity of defined benefit obligation	December 31,2021 $ 18,000 10 years	December 31,2020	December 31,2020
			$ 30,000 10 years

38 -

20. Equity

(1) Ordinary shares

Ordinary shares
Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2021 500,000 $ 5,000,000 380,102 $ 3,801,023	December 31,2020
			500,000 $ 5,000,000 380,102 $ 3,801,023

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

(2)

Capital surplus Additional paid-in capital From convertible bonds Donations Treasury stock transactions	December 31,2021 $ 1,123,151 126,434 426 - $ 1,250,011	December 31,2020	December 31,2020
			$ 1,123,151 252,910 353 8,190 $ 1,384,604

The capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, convertible bonds, treasury stocks and difference between the price of acquisition or disposal of subsidiaries' equity and the book value) may be used to offset a deficit. In addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or stock dividends to the paid-in capital. However, stock dividends may not exceed a certain percent of the paid-in capital.

(3) Retained earnings and dividend policy

Surplus earning distribution policy under the Company's Articles of Incorporation states that when allocating earnings, the Group shall pay the tax, offset its losses, set aside its legal capital reserve at 10% of the retained earnings, and then set aside or reverse special capital reserve in accordance with relevant laws or regulations; if here are earnings left, along with accumulated unappropriated earnings, the Board of Directors shall propose the surplus earning distribution for shareholders' meeting to determine the allocation of dividends and bonus. Please see Note 22 for distribution policy for employees’ compensation, and remuneration of directors under the Company's Articles of Incorporation.

Legal capital reserve shall be set aside until its balance equals to full amount of the paid-in capital. The reserve may be used to offset a deficit. When the Group has no deficit, the portion in excess of 25% of the paid-in capital may be used to distributed as dividends in stocks or cash.

The Company approved loss make-up proposal of 2019 in the shareholders' meeting in June 2020. Due to losses in 2019, after the deficit was compensated with the reversal of special reserve of NT$34,836,000 and legal reserve of NT$359,085,000 as well as capital reserve 67,156,000, no distribution of earnings was made.

39 -

The Company approved loss make-up proposal of 2020 in the shareholders' meeting in August 2021. Due to losses in 2020, after the deficit was compensated with the reversal of special reserve of NT$31,601,000 and legal reserve of NT$134,666,000, no distribution of earnings was made.

The distribution of earnings for 2021 had been proposed by the board of directors on March 17, 2022 as follows:

March 17, 2022 as follows:
Cash dividends Cash dividend per share (NT$)		2021
		$ 490,000 $ 1.29

The distribution of earnings for 2021 are subject to the resolution of the shareholders’ meeting to be held in June 2022.

(4) Non-controlling interests

Sooner Power Semiconductor Co., Ltd. has conducted the capital increase of NT$250,000,000 in December 2020, which was all subscribed by the Company to maintain its share at 99%.

The aforementioned transaction which does not change the Group's controlling the subsidiary are accounted for as equity transactions

(5) Treasury stocks

On June 16, 2020, in the purpose of transferring stocks to employees, the board of directors has determined, from of June 17, 2020 to August 14, 2020, to repurchase 2,000,000 shares to increase treasury stocks at a centralized securities exchange market, at the price of NT$7.28~NT$13. The total number of shares and total amount of repurchase already made by the Company are 2,000,000 shares NT$23,413,000 respectively.

The treasury stocks held by the Company, in accordance with Securities and Exchange Act, shall not be pledged and the Company is not entitle to distribute dividends and to vote.

The relevant information on the Company's shares held by Li Xin Investment Co., Ltd. is as follows:

Ltd. is as follows:
December 31, 2021 December 31, 2020	Total shares held(shares) 5,658,911 5,658,911	C a r r y i n g a m o u n t $ 156,752 $ 80,639	Market value $ 156,752 $ 80,639
				$ 156,752 $ 80,639

The shares of the Company held by a subsidiary shall be regarded as treasury stocks. It is given the same rights as the common shareholders, except for cash increase from the Company and voting.

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21. Revenue

					2021			2020
	Revenue from contracts with
	customers
	Service income			$ 7,691,947			$ 5,405,885
	Sales revenue				41,355			51,701
				$ 7,733,302			$ 5,457,586
(1)	Contract balance
		December		31,	December 31,
			2021			2020	January1,2020
	Contract assets - current	$	150,260		$	126,485	$	90,702
	Notes receivable		5,593			9,386		6,968
	Accounts receivable		1,744,380			1,311,023		1,083,869
		$	1,900,233		$	1,446,894	$	1,181,539

(2) Details of revenue from contracts with customers

Please see Note 32 for the information on details of revenue from contracts with customers.

(3) Timing o f revenue recognition

Timingof revenue recognition
Performance obligation satisfied over time Performance obligation satisfied at a point in time		2021 $ 7,691,947 41,355 $ 7,733,302		2020
				$ 5,405,885 51,701 $ 5,457,586

22. Employee benefits and depreciation expenses

Classified as 2021 Employee benefit expense Short-term employee benefits Pensions Defined contribution plans Defined benefit plans Other employee benefits Depreciation expenses Classified as 2020 Employee benefit expense Short-term employee benefits Pensions Defined contribution plans Defined benefit plans Other employee benefits Depreciation expenses	operatingcosts $ 1,602,060 51,341 7,161 128,588 697,067 operatingcosts $ 1,272,351 41,743 7,525 104,409 759,937	operatingexpenses $ 359,422 10,137 1,036 20,202 65,195 operatingexpenses $ 246,325 8,816 1,188 18,217 64,743	Total
			$ 1,961,482 61,478 8,197 148,790 762,262 Total
			$ 1,518,676 50,559 8,713 122,626 824,680

Under the Company's Articles of Incorporation, the Company shall accrue employees’ compensation and remuneration of directors at the rates of no less than 10% and no higher than 2% respectively, of net profit before income tax, of remuneration of

41 -

employees and remuneration of directors. According to the resolution of the board of directors meeting in March 2022, the 2021 remuneration of employees and remuneration of directors are as follows:

remuneration of directors are as follows:
Remuneration of employees Remuneration of directors	2021
		A m o u n t
	Accrual Rate	(	c a s h )
	10% 2%		$ 108,754 $ 21,751

Due to a deficit in 2020, the remuneration of employees and remuneration of directors have not been estimated yet.

If the amount in the annual consolidated financial statements still has any changes after the date it is approved and published, it is regarded as changes on accounting estimates and will be adjusted to the next year.

Please see “Market Observation Post System” (MOPS) under the Taiwan Stock Exchange for the information on the remuneration of employees and remuneration of directors determined by the board of directors.

23. Income tax

(1) Main components of income tax expense recognized in profit or loss

2021 Current tax Income tax expense generated in the current year $ 51,873 Adjustment on prior years ( 280 ) 51,593 Deferred tax Income tax expense generated in the current year ( 34,032 ) Adjustment on prior years 86,639 52,607 Income tax expense recognized in profit or loss $ 104,200 A reconciliation of accounting income and income tax expense is as follows: 2021 Income tax expense (benefit) calculated at the statutory rate $ 207,158 Permanent differences ( 21,824 ) Temporary differences ( 15,796 ) Current loss carryforward ( 144,240 ) Unrecognized loss carryforward 21,670 Current investment tax credit used ( 10,834 ) Effect of exchange rate changes applicable to the consolidated entities 15,739 Deferred tax Income tax expense generated in the current year ( 34,032 ) Adjustment on prior years 86,639 Adjustment on prior years ( 280 ) Income tax expense recognized in profit or loss $ 104,200		2020
	(	$ 954 43 ) 911 15,703 110 15,813 $ 16,724 2020
	( ( ( (	$ 29,283 ) 45,193 18,191 17,598 ) 20,682 - 36,231 ) 15,703 110 43 ) $ 16,724

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(2) Deferred tax assets and liabilities

														Defined	Defined	Defined
								Defined					benefit costs
	Balance at			Adjustment				benefit			costs		recognized
		the			at the			recognized						in	other									Balance at
	beginning			beginning				in	profit or				comprehens						Translation					the end of
2021	of	theyear		of	theyear				loss				ive		income				differences					theyear
Deferred tax income
assets
Temporary differences
Defined benefit
retirement plans	$	14,718		$			-	$			-		(	$	9,744			)		$	-			$	4,974
Inventory falling price
reserves		5,485					-			1,204							-				-				6,689
Vacation pay payable		11,061					-			1,272							-				-				12,333
Provision for liabilities		3,890					-	(		3,094		)					-				-				796
Others		152					-			3,658							-		(		2	)			3,808
		35,306					-			3,040			(		9,744			)	(		2	)			28,600
Loss carryforwards		55,999			86,639			(	142,638			)					-				-				-
	$	91,305		$	86,639			($	139,598			)	(	$	9,744			)	(	$	2	)		$	28,600
Deferred income tax
liabilities
Temporary differences
Difference on
depreciation
methods	$	448		$			-	( $			165	)		$			-			$	-			$	283
Others		708					-	(			187	)					-				-				521
	$	1,156		$			-	($			352	)		$			-			$	-			$	804
											Defined
						Defined					benefit			costs
		Balance at				benefit costs					recognized
			the			recognized					in		other										Balance at
		beginning of				in	profit		or		comprehens						Translation						the end of
2020		the		year			loss				ive		income				differences						theyear
Deferred tax income assets
Temporary differences
Defined benefit retirement
plans		$	15,084			$			-		( $			366		)		$		-			$	14,718
Inventory falling price
reserves			5,154					331							-					-				5,485
Vacation pay payable			10,723					338							-					-				11,061
Provision for liabilities			2,476					1,414							-					-				3,890
Right-of-use assets				110		(		110		)					-					-					-
Others				558		(		399		)					-		(			7	)				152
			34,105					1,574			(			366		)	(			7	)			35,306
Loss carryforwards			73,123			(	17,124			)					-					-				55,999
		$ 107,228				($	15,550			)	($			366		)	(	$		7	)		$	91,305
Deferred income tax
liabilities
Temporary differences
Difference on depreciation
methods		$		633		( $		185		)	$				-			$		-			$		448
Others				260				448							-					-					708
		$		893		$		263			$				-			$		-			$	1,156

(3) Amount of unused loss carryforwards of deferred income tax assets which was not recognized in the consolidated balance sheet.

43 -

Y e a r o f m a t u r i t y 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031	December 31,2021 $ - 208,477 196,476 210,734 183,598 119,192 122,573 104,397 124,296 103,475 51,722 $ 1,424,940	December 31,2020	December 31,2020
			$ 228,296 208,477 196,476 210,734 183,598 119,192 122,573 104,397 508,617 103,475 - $ 1,985,835

(4) Relevant information on unused loss carryforwards

Last taxyear 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031	Sooner Power Semiconductor C o .,L t d . $ 105,558 116,449 112,206 127,847 119,180 122,548 104,373 117,998 103,410 51,646 $1,081,215	N e x u s M a t e r i a l Corporation $ 26,386 20,464 31,430 8 12 25 24 25 65 76 $ 78,515	L e e S h i n I n v e s t m e n t C o .,L t d . $ - - - - - - - 6,273 - - $ 6,273	Ningbo Liyuan Te c h n o l o g y C o .,L t d .	Ningbo Liyuan Te c h n o l o g y C o .,L t d .
					$ 76,533 59,563 67,098 55,743 - - - - - - $ 258,937

(5) The total amount of deductible temporary differences for which is relevant to invested subsidiaries and no deferred tax assets have been recognized is as follows:

December 31, 2021 December 31, 2020 $ 2,425,194 $ 2,514,376

(6) Income tax examination

The tax authorities have examined income tax returns of the Company and domestic subsidiaries through 2019, except that Nexus Material Corporation has been examined by the taxation authority to the year of 2018.

(7) Relevant information on income tax of foreign subsidiaries

The profit-seeking enterprise income tax of Ningbo Liyuan Technology Co., Ltd. is calculated in accordance with the tax law in China. As of the end of 2020, there are accumulated losses and no income tax payable.

As locally registered companies, Lingsen Holding (Samoa) Inc. and Li Yuan Investments Co., Ltd. are, under the regulation of the local law, exempt for income from offshore.

44 -

The profit-seeking enterprise income tax of Lingsen America Inc. is calculated in accordance with the tax law in America.

24. Earnings (Loss) per Share

ings (Loss) per Share
2021 Basic earnings per share Net profit attributed to the owners of the Company Potentially dilutive ordinary shares effect Remuneration of employees Diluted earnings per share Net profit attributed to the owners of the Company Plus potentially dilutive ordinary shares effect 2020 Basic and diluted loss per share Net loss attributable to owners of the Company	Net profit (loss) attributable to owners of the Company $ 873,849 - $ 873,849 ($ 164,343 )	Number of shares (denominator) (in thousand) 372,443 3,926 376,369 373,465	Earnings (Loss) per share(NT$)
	(		(	$ 2.35 $ 2.32 $ 0.44 )

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

25. Capital risk management

The Group manages its capital to ensure that it will be able to maximize shareholders return as a going concern through the optimization of the debt and equity balance. The overall strategy has not changed.

The Group's capital structure consists of net debt (leases less cash and cash equivalent) and equity attributed to the Company's owner (common stocks, capital surplus, retained earnings and other equity).

The Group is allowed not to follow other external laws or regulations on capital.

45 -

The key management of the Group reviews its capital structure for each season, including the consideration on costs of all types of capital and relevant risks. Based on the key management's advice, the Group balances its overall capital structure by paying dividend payments, new shares issuance, share repurchase and new debt issuance or debt repayment, etc.

26. Financial instruments

(1) Information on fair value
1) Financial instruments that are not measured at fair value

The management of the Group considers that the carrying amounts of financial assets and liabilities that are not measured at fair value approximates its fair value or its fair value cannot be reliably measured.

2) Financial instruments that are measured at fair value on a recurring basis i) Fair value hierarchy

Fair value hierarchy
December 31,2021 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks December 31,2020 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks	L	e v e l 1 $ - 8,630 $ 8,630 $ - 6,795 $ 6,795	L	e v e l 2 $ - - $ - $ - - $ -	L	e v e l 3 $ 26,079 - $ 26,079 $ 32,186 - $ 32,186	T	o t a l
								$ 26,079 8,630 $ 34,709 $ 32,186 6,795 $ 38,981

There was no transfer of fair value measurements between Level 1 and Level 2 for 2021 and 2020.

ii) Reconciliation of Level 3 fair value measurements on financial instruments

instruments
Financial assets Balance at the beginning of the year Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at the end of the year	Financial assets at fair value through other comprehensive income
		Equityinstruments
		2021 $ 32,186 6,107 ) $ 26,079	2020
	(		$ 26,295 5,891 $ 32,186

iii) Valuation techniques and input value used in Level 3 fair value measurement

The securities of emerging stocks held by the Group have no market

46 -

price reference and thus are evaluated under the cost approach. Its fair value is computed in reference to investment assets.

(2) Categories of financial instruments

Categories of financial instruments
Financial assets Financial assets measured at amortized cost Financial assets at fair value through other comprehensive income Financial liabilities Amortized cost	December 31,2021 $ 3,895,491 34,709 2,562,620	December 31,2020
		$ 3,196,934 38,981 1,963,148

Balance of financial assets measured at amortized cost includes cash and cash equivalent. contract assets, notes and accounts receivable, other receivables, pledged time deposit and refundable deposits, and other financial assets measured at amortized cost.

Balance of financial liabilities measured at amortized cost includes short-term bank loans, accounts payable, other payables, long-term bank loans (including amount falling due in one year) and guarantee deposits received and other financial liabilities measured at amortized cost.

(3) Financial risk management objectives and policies

The majority of financial instruments include equity instrument investments, accounts receivable, accounts payable, borrowings and lease liabilities, etc. The financial management department provides service for each unit by organizing and coordinating the market operation nationally and internationally, supervising and reporting the internal risks by analyzing risk exposure according to the extent and breadth of risk, and managing financial risks associated with the Group's operation. Such risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group is exposed to the financial market risks, primarily changes in foreign currency exchange rates and interest rates, due to its operation.

The Group is exposed to market risk associated with financial instruments and the management and measurement of such exposure have not changed.

i) Foreign currency risk

The Group's sales and purchase transactions are denominated in foreign currency, which exposes the Group to foreign currency risk. Approximately 15%~19% of sales revenue is not denominated in functional currency and approximately 41%~45% of the cost is not denominated in functional currency.

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Please see Note 30 for the carrying amount of monetary assets and liabilities denominated in non-functional currency at the date of balance sheet.

Sensitivity analysis

The Group is mainly affected by fluctuations in USD and JPY.

The following table details the Group’s sensitivity analysis to a 1% increase and decrease in NTD against the relevant foreign currency. The rate of 1% is the sensitivity rate used when reporting foreign currency risk internally to the key management and represents the management’s assessment of the reasonably likely change in foreign exchange rate. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and the end-of-year exchange rate is adjusted to 1% increase and decrease. The following table details the amount resulting in changes in net loss before tax to a 1% increase and decrease in NTD against the relevant foreign currency.

Impact of fluctuations in exchange rate on profit or loss

Categories of currency USD Japanese yen	2021 $ 1,031 10	2020
		$ 254 79

ii) Interest rate risk

The Group is exposed to interest rate risk for the reason that it has borrowed money at both fixed and variable rate. The Group maintains an appropriate fixed and floating rate for portfolio to manage interest rate risk. The hedge is evaluated on a regular basis, which makes its point of view and the established risk preference identical, to ensure the most efficient hedging strategy is adopted.

The carrying accounts of financial assets and liabilities exposed to interest rate risk at the date of balance sheet are as follows:

December 31, 2021 December 31, 2020

Fair value interest rate
risk
Financial assets	$	740,851	$	531,493
Financial liabilities		252,017		260,130
Cash flow interest rate
risk
Financial assets		1,224,360		1,188,672
Financial liabilities		1,497,550		1,210,170

Sensitivity analysis

The following sensitivity analysis is determined in accordance with interest rate risk of non-derivative instruments at the date of balance

48 -

sheet. For the floating rate liabilities, the analysis is to assume that the amount of liabilities outstanding at the date of balance sheet is all outstanding at the reporting period. The rate of change used to report interest rate to the key management of the Group is 1% increase and decrease in interest rate and represents the management's assessment of reasonable likely changes in interest rate.

For floating-rate financial assets and liabilities, when interest rate is increase by 1% and other conditions remain unchanged, the net profit (loss) before tax of the Group in 2021 and 2020 are NT$2,732,000 and NT$215,000 respectively.

iii) Other price risk

The Group is exposed to price risk due to investments in equity secures. The management manage the risk by investing in portfolio with different risks.

Sensitivity analysis

The following sensitivity is analyzed according to the exposure to equity price risk at the date of balance sheet.

If the equity price changes by 1%, the other comprehensive income in 2021 and 2020 will increase and decrease NT$86,000 and NT$68,000 respectively due to changes in fair value of financial assets measured at fair value through profit or loss.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The maximum credit risk exposure due to the financial loss arising from the counterparty not performing its obligation and the Group's financial guarantee primarily results from:

The carrying amount of financial assets recognized in the consolidated balance sheet.
ii) The Group has given financial guarantee and not taken the maximum amount to be paid into consideration.

The Group's credit risk is mainly resulted from its five largest customers. As of December 31, 2021, and 2020, the aforementioned customers are accounted for 52% and 45% of accounts receivable and contract assets, respectively.

3) Liquidity risk

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

The bank borrowing is a material source of liquidity to the Group. As of

49 -

December 31, 2021, and 2020, the undrawn loan amounts are as follows:

December 31, 2021 December 31, 2020 Undrawn loan amounts $ 1,471,202 $ 2,181,311

Liquidity and interest risks of non-derivative financial liabilities

The funds are adequate to the Group's operations and thus the Group is not exposed to liquidity risk and financing to meet the contractual obligations.

The maturity of the Group’s non-derivative financial liabilities which the repayment period has been committed is as follows:

December 31,2021 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities Fixed-rate liabilities December 31,2020 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities Fixed-rate liabilities		Within 1year $ 913,669 5,701 566,089 99,579 $ 1,585,038 Within 1year		1 to 3years $ - 9,554 553,330 - $ 562,884 1 to 3years	More than 3years	More than 3years
					$ - 161,178 378,131 - $ 539,309 More than 3years
		$ 648,771 6,637 632,581 102,385 $ 1,390,374		$ - 10,771 428,864 - $ 439,635		$ - 165,944 148,725 - $ 314,669

The further December 31, 2021 Lease liabilities December 31, 2020 Lease liabilities	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	information on a maturity analysis of lease liability Within 1 year 1-5years 5~10 years 10~15 years 15~20 years $ 5,701 $ 19,024 $151,708 $ - $ - $ 6,637 $ 20,302 $156,413 $ - $ -	is below: Over 20 years	is below: Over 20 years
		$ 5,701 $ 6,637		$ 19,024 $ 20,302		$151,708 $156,413		$ - $ -	$ - $ -		$ - $ -

The amount of the aforementioned floating rate instrument of non-derivative liabilities will change resulting from the floating rate is different from the interest rate estimated at the date of balance sheet.

27. Related-party transactions

Transactions, balances, income and expenses between the Company and subsidiaries (related parties of the Company) may be all eliminated in consolidation, which are thus not disclosed in the note. Except for other notes disclosed, transactions between the Group and other related parties are as follows.

Remuneration of key management personnel

Short-term employee benefits Pensions		2021 $ 89,036 820 $ 89,856		2020
				$ 40,186 917 $ 41,103

50 -

The remuneration of directors and other key management personnel were determined by the Remuneration Committee in accordance with the individual performance and the market trends.

28. Pledged assets

The following assets are provided as collaterals and import duty payable for maximum loan amount:

loan amount:
Property, plant and equipment Pledged time deposits (recognized in other current assets)	December 31,2021 $ 1,647,120 103,889 $ 1,751,009	December 31,2020
			$ 1,823,785 71,888 $ 1,895,673

29. Significant contingent liabilities and unrecognized commitments

Significant contingent commitments of the Group at the end of balance sheet, excluding those disclosed in other notes, are as follows:

(1) For customs duties guarantee and other objectives, the financial institution has provided guarantee details as follows:

provided guarantee details as follows:
December 31,2021 $ 28,000 (2) Unrecognized commitments are as follows: December 31,2021 Purchase of property, plant and equipment $ 468,895	December 31,2020
	$ 33,950 December 31,2020
		$ 429,517

30. Significant information on exchange rate of foreign currency financial assets and liabilities

The following information is summarized according to the foreign currencies other than the functional currency of the Group. The exchange rates disclosed are used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies are as follows:

Foreign currency assets Monetary items USD Japanese yen Foreign currency liabilities Monetary items USD Japanese yen	December 31,2021 Foreign Currency Exchange rate NTD $ 25,105 27.68 $ 694,906 173,864 0.2405 41,814 21,382 27.68 591,854 178,026 0.2405 42,815	December 31,2021 Foreign Currency Exchange rate NTD $ 25,105 27.68 $ 694,906 173,864 0.2405 41,814 21,382 27.68 591,854 178,026 0.2405 42,815	December 31,2020	December 31,2020	December 31,2020
	Foreign Currency $ 25,105 173,864 21,382 178,026	Exchange rate 27.68 0.2405 27.68 0.2405	Foreign Currency $ 16,668 86,438 17,561 57,930	Exchange rate 28.48 0.2763 28.48 0.2763	NTD
					$ 474,705 23,883 500,137 16,006

51 -

Significant unrealized exchange gains or losses are as follows:

Foreign Currency USD USD Japanese yen Japanese yen Euro	2021		Net exchange gains (losses) $ 1,896 1,629 253 ) 2 85 $ 3,359	2020
	Exchange rate 27.68 (USD : NTD) 6.3757 (USD : CNY) 0.2405 (JPY: NTD) 0.0556 (JPY : CNY) 31.32 (EUR : NTD)			Exchange rate 28.48 (USD : NTD) 6.5249 (USD : CNY) 0.2763 (JPY: NTD) 0.0634 (JPY : CNY) 35.02 (EUR : NTD)		Net exchange gains (losses)
		(			( (	$ 2,459 6,906 ) 104 - - $ 4,343 )

31. Other disclosures

(1) Information on significant transactions and (ii) investees
1) Financing provided to others: None.
2) Endorsements/guarantees provided: Table 1.
3) Marketable securities held (excluding investment in subsidiaries, associates): Table 2.
4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
9) Trading in derivative instruments: None.
10) Others: The business relationship between the parent and the subsidiaries and significant transactions between them: Table 3.
11) Information on investees: Table 4.
(3) Information on Investment in Mainland China
1) The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Table 5.
52 -
2) Significant direct or indirect transactions through a third area with the investee in the Mainland Area, and its prices and terms of payment, unrealized gain or loss are as follows:
The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None.
ii) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: None.
iii) The amount of property transactions and the amount of the resultant gains or losses: None.
iv) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 1.
v) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: None.
vi) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: Table 3.

(4) Information of major shareholders: names, numbers of shares held, and shareholding percentages of shareholders who hold 5% or more of the equity: Table 6.

32. Information on department

Information provided the key operating decision maker for resources allocation and performance evaluation of department focuses on each classification of products provided or service rendered. The department which shall be reported is IC packing and testing and others.

(1) Departmental income and operation results

Packaging and final testing of IC Others Total amount of continuing operations Interest revenue Rental income Dividend income Ordinary income and interest Gains on disposal of property, plant and equipment Net gain on foreign exchange Impairment loss (reversal gain) on disposal and discard of property, plant and equipment Interest expenses Company ordinary expense and loss Impairment loss Net income (loss) before tax of continuing operations		Departmental income 2021 2020 $ 7,691,947 $ 5,405,885 41,355 51,701 $ 7,733,302 $ 5,457,586	Departmental income 2021 2020 $ 7,691,947 $ 5,405,885 41,355 51,701 $ 7,733,302 $ 5,457,586		Departmentalprofits or losses	Departmentalprofits or losses
		2021 $ 7,691,947 41,355 $ 7,733,302				2020
						( $ 35,080 ) ( 128,450 ) ( 163,530 ) 6,821 18,906 1,165 52,855 484 3,361 - ( 18,563 ) ( 459 ) ( 47,456 ) ($ 146,416 )

53 -

The reported departmental income are generated from transactions with external customers. There were no intragroup sales occurred in 2021 and 2020.

Departmental interest refers to profits made by each department, excluding interest revenue, rental income, dividend income, disposal of income of property, plant and equipment, exchange gain or loss, financial cost and income tax expense. The amount of measurement provided to the key operating decision maker for resource allocation and performance evaluation of departments.

(2) Total assets and liabilities of department

The Group did not provide reportable information on departments' asset to the operating decision maker, and thus the measurement of assets is zero.

(3) Major income from products and service

The main business of the Group is IC packing and testing as well as optoelectronic devices, both as single category.

(4) Information by regions

The Group is located mainly in Asia, Americas and Europe.

Information on the Group’s income from continuing operations by locations of operation and non-current assets by location of assets, from external customers, are as follows:

Income from external

as follows:	Income from external
Asia Europe Americas Africa	customers 2021 2020 $ 7,068,669 $ 4,874,706 402,248 274,218 262,385 308,519 - 143 $ 7,733,302 $ 5,457,586	Non-current assets
	2021 $ 7,068,669 402,248 262,385 - $ 7,733,302	December 31, 2021 $ 4,515,665 - 348 - $ 4,516,013	December 31, 2020
				$ 3,826,276 - 558 - $ 3,826,834

Non-current assets exclude financial assets and deferred income tax assets.

(5) Information on major customers

Income from a single customer which exceed 10% of total income of the Group is as follows:

follows:
Customer name Customer A	2021	% 19	2020
	Amount $ 1,464,248		Amount $ 862,649	%
				16

54 -

Lingsen Precision Industries, Ltd. and Subsidiaries

Endorsements/guarantees provided For the year ended December 31, 2021

Table 1

Unit: Amounts expressed in New Taiwan Dollars and in thousands of foreign currency

No.	Endorsement/ guarantee provider	Guaranteed party	Guaranteed party	Limits on endorsement/g uarantee amount provided to each guaranteed party (Note)	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of accumulated endorsement/g uarantee to net equity per latest financial statements(%)	Maximum amount of endorsement/g uarantee allowance (Note)	Guarantee provided by parent company	Guarantee provided by subsidiary	Guarantee provided to subsidiaries in Mainland China
		Company Name	Relationship
0	Parent Company	Sooner Power Semiconduct or Co., Ltd. Ningbo Liyuan Technology Co., Ltd.	Subsidiary Third-tier subsidiary	$ 877,961 877,961	$ 210,000 138,400 ( USD 5,000 )	$ - 138,400 ( USD 5,000 )	$ - 110,720 (US$ 4,000 )	$ - 103,000	- 2	$ 1,755,923 1,755,923	Y Y	－－	－ Y

Note: Limits on endorsement/guarantee amount provided to each guaranteed party shall not exceed 15% of the net worth and maximum amount allowance shall not exceed 30% of the net worth.

55 -

Lingsen Precision Industries, Ltd. and its subsidiaries

Marketable securities held

December 31, 2021

Table 2

Unit: Amounts expressed in thousands of New Taiwan Dollars/ of shares

Holding company name	Marketable securities types and name	Relationship with the issuers	Financial statement account		End ofyear	End ofyear
				Shares/Units	Carrying amount	Shareholding %	Fair value (Note 3)
Parent Company Lee Shin Investment Co., Ltd.	Stock Amtek Semiconductors Co., Ltd. ETREND Hightech Corp. Xpert Semiconductor Inc. Stock The Company (Note 2) Enrich Tech CO., Ltd. ETREND Hightech Corp. Anwell Semiconductor Co., Ltd.	None None None Parent company None None None	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current	527,280 75,000 44,891 5,658,911 1,897,836 150,000 155,163	$ 7,105 2,877 - 156,752 18,974 5,753 -	2 - - 1 19 - 11	$ 7,105 2,877 - 156,752 18,974 5,753 -

Note 1: Please see Table 4 and 5 for related information on investment in subsidiaries. Note 2: The amount has been written-off in preparation of the consolidated financial statements

Note 3: Fair value of investment in emerging stocks is computed in reference to investment assets under the cost approach.

56 -

Lingsen Precision Industries, Ltd. and its subsidiaries

The business relationship between the parent and the subsidiaries and significant transactions between them

For the year ended December 31, 2021

Table 3

Unit: Amounts expressed in thousands of New Taiwan Dollars

No.	Name	Transaction party	Relationship with the transaction party (Note 1)		Transaction status	Transaction status
				Item	Amount (Note 2)	Transaction condition	Percentage of total revenue or total assets the consolidation(%)
0 1 2	Parent Company Sooner Power Semiconductor Co., Ltd. Panther Technology Co., Ltd.	Lingsen America Inc. Lee Shin Investment Co., Ltd. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Ningbo Liyuan Technology Co., Ltd. Panther Technology Co., Ltd. Ningbo Liyuan Technology Co., Ltd. Nexus Material Corporation	1 1 1 1 1 2 2 2	Commissions expense Expenses payable Rental income Rental income Other income Rental income Miscellaneous expense Purchase Other income Sales revenue Other income Rent expense Operating income Purchase Rental income	$ 6,569 529 36 178 85 720 420 1,050 481 439 356 2,744 456 976 36	60 days 60 days `－` `－` 60 days 60 days 30 days 30 days 30 days 30 days 60 days `－` 60 days 60 days 60 days	- - - - - - - - - - - - - - -

Note 1: (1) Parent company to subsidiary.

(2) Subsidiary to parent company.

Note 2: The amount has been written-off in preparation of the consolidated financial statements

57 -

Lingsen Precision Industries, Ltd. and its subsidiaries

Information on investees

For the year ended December 31, 2021

Table 4						Unit: Amounts expressed in	Unit: Amounts expressed in	Unit: Amounts expressed in	thousands of New Taiwan Dollars/ shares	thousands of New Taiwan Dollars/ shares
Investor	Investee	Location	Main business	Initial investment amount		Balance	at December 31,2020		Current income (losses) of the investee	Share of income (losses) recognized
				End of current year	End of last year	Number of shares	Ratio %	Carrying amount
Parent Company Lee Shin Investment Co., Ltd. Lingsen Holding (Samoa) Inc.	Lingsen Holding (Samoa) Inc. (Note 3) Panther Technology Co., Ltd. (Note 3) Sooner Power Semiconductor Co., Ltd. (Note 3) Lee Shin Investment Co., Ltd. (Notes`１`and 3) Nexus Material Corporation (Notes 2 and 3) Lingsen America Inc. (Note 3) Qi Feng Technology Co., Ltd. (Note 2) Sooner Power Semiconductor Co., Ltd. (Note 3) Nexus Material Corporation (Note 3) Li Yuan Investments Co., Ltd. (Note 3)	Samoan Islands Hsinchu County, Taiwan Hsinchu County, Taiwan Taichung City Hsinchu County, Taiwan California, U.S.A. Taichung City Hsinchu County, Taiwan Hsinchu County, Taiwan Cayman Islands	General investments IC testing Electronic parts and components manufacturing General investments Wholesale of electronic materials and electronic parts and components manufacturing Intermediary Electronic parts and components production and processing Electronic parts and components manufacturing Wholesale of electronic materials and electronic parts and components manufacturing General investments	$ 1,688,748 230,146 604,223 300,000 53,483 32,311 24,000 2,561 14,192 1,688,748	$ 1,660,738 230,146 604,223 300,000 53,483 32,311 24,000 2,561 14,192 1,660,738	53,000,000 22,922,899 60,422,257 30,000,000 5,348,315 1,000,000 2,400,000 277,080 1,419,214 53,000,000	100 64 99 100 78 100 30 1 21 100	$ 157,776 426,506 215,148 59,154 20,788 59,502 - 987 5,516 157,776	( $ 45,302 ) 158,648 26,595 6,151 ( 76 ) 1,013 - 26,595 ( 76 ) ( 45,302 )	( $ 45,302 ) 101,011 26,369 6,151 ( 60 ) 1,013 - 121 ( 16 ) ( 45,302 )

Note 1: Treasury stocks have been deducted from the carrying amount of Lee Shin Investment Co., Ltd.

Note 2: Accumulated impairment loss has been deducted from the carrying amount of Nexus Material Corporation and Qi Feng Technology Co., Ltd.

Note 3: The amount has been written-off in preparation of the consolidated financial statements.

Note 4: Please see Table 5 for relevant information on the investee in mainland China.

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Lingsen Precision Industries, Ltd. and Subsidiaries

Information on Investment in Mainland China For the year ended December 31, 2021

Table 5

Unit: Amounts expressed in New Taiwan Dollars and in thousands of foreign currency

Name of Investee in Mainland China	Main business	Paid-in capital	Investment method	Accumulated investment amount of outflow from Taiwan at the beginning of theyear	Outward remittance or repatriation of investment amount at beginningof theyear	Outward remittance or repatriation of investment amount at beginningof theyear	Accumulated investment amount of outflow from Taiwan at the end of the year	Current income (losses) of the investee	Ownership percentage of direct or indirect investment	Investment gain (loss) recognized for the year (Note 2)	Book value of investment at the end of year	Inflow of investment revenue to Taiwan upon the end of the year
					Outward remittance	Repatriation
Ningbo Liyuan Technology Co., Ltd. (Note 4)	IC packing and testing as well as optoelectronic devices	USD 53,000	(Note 1)	$ 1,660,738 ( USD 52,000 )	$ 28,010 ( USD 1,000 )	$ -	$ 1,688,748 ( USD 53,000 )	( $ 45,302 )	100%	( $ 45,302 )	$ 157,776	$ -

					limitation on investee regulated under Investment Commission, MOEA (Note 3) $ 3,511,846
Accumulated investment amount of outflow in China mainland from Taiwan at the end of theyear		Investment amount approved by Investment Commission, MOEA			limitation on investee regulated under Investment Commission, MOEA (Note 3)
$ 1,688,748 ( USD 53,000 )		USD 55,000			$ 3,511,846

Note 1: Investment in Mainland China companies through a company invested and established in a third region.

Note 2: Investment in profit or loss in accordance with reports audited by the CPA from the parent company.

Note 3: Limitation is calculated under 'Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China'. Note 4: The amount has been written-off in preparation of the consolidated financial statements.

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Lingsen Precision Industries, Ltd. Information of Major Shareholders December 31, 2021

Table 6

Name of major shareholder	Shares	Shares
	Total shares held (shares)	Shareholding percentage
Trust account in CTBC Bank for ESOP committee of Lingsen Precision Industries, ltd. RUBYTOP Investment Co., Ltd (British Virgin Islands)	23,843,020 19,239,854	6.27% 5.06%

Note 1: This table is based on the information provided by the Taiwan Depository & Clearing Corporation for shareholders holding greater than five percent of the shares completed the process of registration and book-entry delivery in dematerialized form, including treasury stocks, at the last business date of current quarter. There may be a discrepancy in the number of shares recorded on the consolidated financial statements and its dematerialized securities arising from the difference in basis of preparation.
Note 2: As table above, the shareholder who delivers the shares to the trust is disclosed by the individual trustee who opened the trust account. In accordance with the Security Exchange Act, the shareholders have to disclose the insider equity more than ten percent of the shares, including their own shares and their delivery to the trust, and have the right to make decisions on the trust property. Information on insider equity is available on the Market Observation Post System (MOPS) website.
60 -

AI assistant

LPI — Annual Report 2021

52036_rns_2021-11-09_e694cb56-bfa3-4cf7-967c-d52e974139c5.pdf

Lingsen Precision Industries, Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditor’s Report

Representation Letter

Independent Auditors’ Report

Audit opinions

Basis for Opinion

Key Audit Matters

Other Matters

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Lingsen Precision Industries, Ltd. and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Lingsen Precision Industries, Ltd. and Subsidiaries Statement of Comprehensive Income For the Years from January 1 to December 31, 2021 and 2020

Equity attributable to owners of the company

Lingsen Precision Industries, Ltd. and Subsidiaries

Statement of Cash Flows

(Continued from previous page)

1. Company History

2. Approval Date and Procedures of the Consolidated Financial Statements

3. Application Of New, Amended And Revised Standards And Interpretations

4. Summary of Significant Accounting Policies

(6) Inventories

(7) Investment in Associates

(8) Property, plant and equipment

Financial assets

Financial liabilities

1) Follow-up measurement

(11) Provision for liabilities

(12) Revenue recognition

1) Sales revenue

(14) Borrowing costs

(15) Government grants

(16) Employee benefits

(17) Income tax

1) Current tax

2) Deferred tax

Major source of estimates and assumption uncertainty

6. Cash and cash equivalents

7. Financial assets at fair value through other comprehensive income- non-current

8. Accounts receivable

9. Other receivables

10. Inventories

11. Subsidiaries

12. Investments accounted for using the equity method

13. Property, Plant and Equipment

14. Lease agreements

(4) Sublease

(15) Other assets

16. Borrowings

17. Other payables

18. Provisions - Current

19. Retirement benefits plan

(1) Defined contribution plans

(2) Defined benefit plans

20. Equity

(1) Ordinary shares

(2)

21. Revenue

22. Employee benefits and depreciation expenses

23. Income tax

(2) Deferred tax assets and liabilities

24. Earnings (Loss) per Share

25. Capital risk management

26. Financial instruments

1) Market risk

Sensitivity analysis

Sensitivity analysis

iii) Other price risk

Sensitivity analysis

2) Credit risk

3) Liquidity risk

Liquidity and interest risks of non-derivative financial liabilities

27. Related-party transactions

Remuneration of key management personnel

28. Pledged assets

29. Significant contingent liabilities and unrecognized commitments

30. Significant information on exchange rate of foreign currency financial assets and liabilities

31. Other disclosures

LPI Annual Report 2021