LPI - Audit Report / Information 2021

Stock Code: 2369

Lingsen Precision Industries, Ltd.

Parent Company Only Financial Statements and Independent Auditors’ 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

Independent Auditors’ Report

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

Audit opinions

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

In our opinion, the accompanying unconsolidated financial statements present fairly, in all material respects, the unconsolidated financial position of the Company as of December 31, 2021 and 2020, and its unconsolidated financial performance and its unconsolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers 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 Unconsolidated Financial Statements section of our report. The auditors of the firm, subject to the independence regulations, have maintained independence from the Company 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

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

Key audit matters for the Company's unconsolidated financial statements for the year ended December 31, 2021 are stated as follows:

Authenticity of service revenue recognition

The main source of revenue of the Company relies on the service revenue from 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 20 of the unconsolidated 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.

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

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

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

Those charged with governance, Including the Audit Committee, are responsible for overseeing the Company’s financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the R.O.C. will always detect a material misstatement when it exists in the unconsolidated 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 unconsolidated 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 unconsolidated 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 an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management level.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. In case where we consider that such events or circumstances have a material uncertainty, then relevant disclosure of the unconsolidated financial statements are required to be provided in our audit report to allow users of unconsolidated financial statements to be aware of such events or circumstances, 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. However, future events or conditions may cause Lingsen Precision Industries, Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including relevant notes, and whether the unconsolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entity of the Company, and express an opinion on unconsolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the Company. We remain solely responsible for our audit opinion.

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

We also provide 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 significant in the audit of the Company’s 2021 unconsolidated

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. Parent Company Only Balance Sheets 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)		$	1,212,698			14			$	1,084,329			16
1140	Contract assets - current (Notes 4 and 21)			135,659			2				114,509			2
1170	Accounts receivable (Notes 4, 8, 20 and 26)			1,439,848			17				1,098,847			16
1200	Other receivables (Notes 4 and 9)			180,659			2				237,007			3
1220	Current tax assets (Notes 4 and 22)			210			-				514			-
1310	Inventories (Notes 4 and 10)			657,624			8				284,720			4
1470	Other current assets (Notes 4, 14, 26 and 27)			331,692			4				190,835			3
11XX	Total current assets			3,958,390			47				3,010,761			44
	Non-current assets
1517	Financial assets at fair value through other comprehensive income
	- non-current
	(Note 4 and 7)			9,982			-				8,457			-
1550	Investment accounted for using the equity method (Notes 4 and
	11)			938,874			11				829,935			12
1600	Property, plant and equipment (Notes 4, 12 and 27)			2,949,761			35				2,661,865			39
1755	Right-of-use assets (Notes 4 and 13)			150,220			2				155,098			2
1840	Deferred tax assets (Notes 4, 5 and 22)			23,008			1				89,751			1
1915	Prepayments for facilities			350,718			4				91,957			2
1920	Refundable deposits (Note 4)			324			-				241			-
1975	Net defined benefit assets - non-current (Notes 4 and 18)			12,009			-				-			-
1990	Other non-current assets			5,839			-				1,292			-
15XX	Total non-current assets			4,440,735			53				3,838,596			56
1XXX	Total assets		$	8,399,125			100			$	6,849,357			100
Code	Liabilities and Equity
	Current Liabilities
2100	Short-term bank borrowings (Notes 15)		$	194,118			2			$	134,759			2
2170	Accounts payable			479,409			6				310,405			5
2200	Other payables (Notes 16 and 26)			693,056			8				446,678			6
2230	Deferred tax liabilities (Notes 4 and 22)			26,506			-				-			-
2250	Liability reserve - current (Notes 4 and 17)			3,980			-				19,450			-
2280	Lease liabilities - current (Notes 4 and 13)			4,420			-				4,386			-
2320	Long-term borrowings due in one year (Notes 15 and 27)			290,814			4				417,600			6
2399	Other current liabilities			63,888			1				46,168			1
21XX	Total current liabilities			1,756,191			21				1,379,446			20
	Non-current liabilities
2540	Long-term banks borrowings (Notes 15 and 27)			589,886			7				314,000			5
2570	Deferred tax liabilities (Notes 4 and 22)			784			-				1,156			-
2580	Lease liabilities - non-current (Notes 4 and 13)			147,364			2				151,784			2
2640	Net defined benefit liabilities - non-current (Notes 4 and 18)			-			-				54,241			1
2645	Deposits received			51,822			-				1,822			-
25XX	Total non-current liabilities			789,856			9				523,003			8
2XXX	Total Liabilities			2,546,047			30				1,902,449			28
	Equity
3110	Ordinary shares			3,801,023			45				3,801,023			56
3200	Capital surplus			1,250,011			15				1,384,604			20
	Retained earnings
3320	Special reserve			160,419			2				192,020			3
3350	Unappropriated earnings (accumulated deficit)			912,825			11		(		166,267	)	(	3	)
3400	Other equities	(		71,372	)	(	1	)	(		64,644	)	(	1	)
3500	Treasury shares	(		199,828	)	(	2	)	(		199,828	)	(	3	)
3XXX	Total equity			5,853,078			70				4,946,908			72
	Total liabilities and equities		$	8,399,125			100			$	6,849,357			100

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd. Parent Company Only Statements 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, 20 and 26) 5000 Operating costs (Notes 10, 21 and 26) 5900 Gross profit Operating expenses (Notes 21 and 26) 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 Operating profit Non-operating income and expenses (Note 4) 7100 Interest income 7110 Rental income (Note 26) 7130 Dividend income 7190 Other income (Note 26) 7210 Gains on disposal of property, plant and equipment 7230 Net gain on foreign exchange 7510 Interest expenses 7775 Share of loss from subsidiaries and associated companies using the equity method 7000 Total non-operating incomes and expenses		2021		% 100 81 19 1 3 2 - 6 13 - - - 1 - - - 1 2		2020
		Amount $ 6,489,676 5,261,577 1,228,099 63,671 208,454 143,554 465 416,144 811,955 3,297 13,477 1,205 29,795 1,829 14,943 8,647 ) 89,182 145,081				Amount $ 4,628,930 4,260,775 368,155 50,968 142,056 138,918 358 332,300 35,855 5,694 14,342 909 47,886 490 3,482 9,480 ) 248,008 ) 184,685 )		%
	(				( ( (		( (	100 92 8 1 3 3 - 7 1 - - - 1 - - - 5 ) 4 )

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Code 7900 Net profit (loss) before income tax 7950 Income tax expenses (Notes 4 and 22) 8200 Net profit (loss) for the year Other comprehensive income (loss) (Note 4) 8310 Items not reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit plans (Note 18) 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive profits/losses of subsidiaries and associated companies accounted for using equity method 8349 Income tax related to items that will not be reclassified subsequently (Note 22) 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 amount after tax) 8500 Total comprehensive income (loss) for the year Earnings (losses) per share (Note 23) 9750 Basic 9850 Diluted		2021		% 15 2 ) 13 1 - - - 1 - 1 14		2020
		Amount $ 957,036 83,187 ) 873,849 48,720 1,525 5,797 ) 9,744 ) 34,704 2,456 ) 32,248 $ 906,097 $ 2.35 $ 2.32				Amount $ 148,830 ) 15,513 ) 164,343 ) 1,828 1,352 6,102 366 ) 8,916 139 ) 8,777 $ 155,566 ) $ 0.44 ) $ 0.44 )		%
	( ( ( (		(		( ( ( ( ( ( ( (		( ( (	3 ) - 3 ) - - - - - - - 3 )

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd. Parent Company Only Statement of Changes in Equity For the Years from January 1 to December 31, 2021 and 2020

Unit: In Thousands of New Taiwan Dollars

Capital surplus (Note 19) $ 1,451,696 - - 64 ( 67,156 ) - - - - - - 1,384,604 - 73 ( 134,666 ) - - - $ 1,250,011		Retained earnings(Note 19) Undistributed earnings (losses to be covered) (Note 4) 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 19) Undistributed earnings (losses to be covered) (Note 4) 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 19) Undistributed earnings (losses to be covered) (Note 4) 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 19) ($ 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
( (	(		( (	( ( ( ( ( (	( ( ( ( ( ( (	( ( ( ( (	( ( ( (	( ( ( (	$ 5,126,710 - - 64 - 164,343 ) 8,777 155,566 ) 23,413 ) 887 ) - 4,946,908 - 73 - 873,849 32,248 906,097 $ 5,853,078

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd.

Parent Company Only 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 A22400 Share of loss (profit) from subsidiaries and associated companies using the equity method A22500 Gains on disposal of property, plant and equipment A23800 Loss for market price decline and obsolete and slow-moving inventories. A24100 Net gain on foreign exchange A29900 Amortization of prepayments A32200 Provision (reversal) for liabilities 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 A32150 Accounts payable A32180 Other payables 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 $ 957,036 584,787 465 8,647 ( 3,297 ) ( 1,205 ) ( 89,182 ) ( 1,829 ) 6,020 ( 3,659 ) 1,952 ( 15,470 ) ( 21,150 ) - ( 342,267 ) 62,719 ( 378,924 ) ( 147,230 ) 171,193 237,916 17,720 ( 17,530 ) 1,026,712 3,299 ( 7,406 ) 250 1,022,855	2020
		( $ 148,830 ) 668,151 358 9,480 ( 5,694 ) ( 909 ) 248,008 ( 490 ) 1,653 ( 2,789 ) 1,480 7,072 ( 33,948 ) 36 ( 211,560 ) 72,312 ( 61,691 ) ( 45,963 ) 47,346 52,627 ( 57,253 ) ( 21,287 ) 518,109 5,964 ( 8,458 ) 15,541 531,156

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Code Cash flows from investing activities B02200 Net cash outflow for obtaining subsidiaries 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 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 ( $ 28,010 ) ( 771,136 ) 5,002 ( 83 ) ( 6,499 ) ( 349,090 ) 1,205 (1,148,611 ) 1,133,187 ( 1,072,721 ) 616,700 ( 467,600 ) 50,000 ( 5,514 ) - 73 254,125 128,369 1,084,329 $1,212,698	2020
		( $ 308,170 ) ( 132,995 ) 5,901 ( 7 ) ( 844 ) ( 89,496 ) 909 ( 524,702 ) 524,328 ( 575,868 ) - ( 345,600 ) 909 ( 5,557 ) ( 23,413 ) 64 ( 425,137 ) ( 418,683 ) 1,503,012 $1,084,329

The accompanying notes are an integral part of the unconsolidated financial report

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Lingsen Precision Industries, Ltd.

Notes to Parent Company Only 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 parent company only financial statements were expressed in New Taiwan dollars, which is the Company's functional currency.

2. Approval Date and Procedures of the Financial Statements

These parent company only 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's accounting policies.

(2) IFRSs endorsed by FSC applicable in 2022

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

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Note 1: Amendments to IFRS 9 are applicable to exchange of financial liabilities or clause amendment occurred during the annual reporting period beginning on 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 financial statements were authorized for issue, the Company has assessed the possible impact that the application of other standards and interpretations would have on the Company’s financial position and financial performance, and has determined that there would be no such material impact.

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

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

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)

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

These parent company only financial statements were prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation

The parent company only 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:

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

In preparing the parent company only financial statements, the equity method is adopted to the investments in subsidiaries and associates. For the purpose of making the current profit and loss, other comprehensive income and equity in the parent company only financial statements identical to those in the Company's owner, several accounting treatment differences under individual and this basis are adjusted into “Investments Accounted for Using Equity Method”, “Share of the Profit or Loss of Subsidiaries and Associates Accounted for Using the Equity Method”, “Share of Other Comprehensive Income of Subsidiaries and Associates Accounted for Using Equity Method” and related items.

(3) Classification of Current and Non-current Assets and Liabilities

Current assets include:

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1) Assets held primarily for the purpose of trading;
2) Assets that are expected to be realized within twelve months from the balance sheet date; and
3) 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).

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) 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
3) 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) Foreign Currency

In preparing the financial statements, transactions in currencies (foreign currencies) other than the Company’s functional currency are recognized at the exchange rates 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 parent company only financial statements, assets and liabilities from foreign operation, 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.

(5) Inventories

Inventories include raw materials, finished goods , work in process. 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.

(6) Investment in subsidiaries

The Company’s investments in the subsidiaries are accounted for using the equity

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method.

Subsidiaries are entities which the Company holds the control of.

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

Changes in equity in the ownership of subsidiaries which do not result in loss of control are disposed as equity transaction. The difference between carrying amount invested and the fair value paid and payable or received and receivable is directly recognized as equity.

The loss of shares of the subsidiary equals or exceeds the Company's interest in that subsidiary, including the carrying amount of that subsidiary under equity method and other long-term equity as the Company's net investment in that subsidiary, is recognized as loss according to proportion of shareholding.

The Company considers cash-generating unit in the entire financial statement as testing for impairment and compares its recoverable amount with its carrying amount. If the recoverable amount of assets increases, the reversal of impairment loss will be recognized as profit. However, the carrying amount of assets after the reversal of impairment loss shall not exceed the carrying amount that would have been determined net of required amortization and have no impairment loss been recognized. Impairment loss of goodwill shall not reverse in the subsequent period.

If the Company loses the control of its subsidiary, it remeasures the retained investments in its former subsidiary as the fair value on initial recognition of a financial asset. The difference between the fair value of the retained investments and any disposal proceeds and the carrying amount of investment at the date is recognized in the current profit or loss. All amount related to that subsidiary is also recognized in other comprehensive income. The accounting treatment is compliance with the basis of rules that Company needs to follow for its direct disposal of assets or liabilities.

Unrealized profit and loss from downstream transactions with a subsidiary are eliminated in the parent company only financial statements. Profit and loss from upstream and sidestream transactions between subsidiaries are recognized in the Company’s parent company only financial statements only to the extent that interests in the subsidiary are not related to the Company.

(7) Investment in Associates

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

The Company’s 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 Company’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.

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

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

The property, plant and equipment are recognized at costs and subsequently measured at costs of the amount less accumulated depreciation

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.

Depreciation is recognized using the straight-line method, and each significant part is depreciated separately. The Company 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 Company 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 Company 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,

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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 liabilities shall be recognized in the parent company only financial statements when the Company 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. 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 Company are classified to financial assets measured at amortized cost and investments in equity instruments measured at fair value through other comprehensive income.

i. Financial assets measured at amortized cost

When the financial assets invested by the Company 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.

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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 Company 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 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 Company'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 Company 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 Company 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.

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3) Derecognition of financial assets

The Company derecognizes the financial assets only when the contractual rights to the cash flows from the financial assets expire, or when it transfers the financial assets and substantially all the risks and rewards of ownership of the financial assets to another entity.

On derecognition of financial assets at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of 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 Company 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 Company's performance of packaging and final testing service, or the customer controls an asset which the Company's performance has created or enhanced, the related revenue is recognized. Packaging of products counts on involvement of technicians. The Company measures the work in progress by the percentage of completion. The contract with customer states that the customer will be billed after the packaging or the delivery is

20 -

completed. A contract asset is thus recognized when the Company renders the service and transferred to accounts receivable when the packaging or delivery is completed. Final testing counts on the involvement of technicians. The Company measures the work in progress by the percentage of completion. Contract customer will be billed after the completion of service, and the Company will recognize accounts receivable when rendering the service.

(13) Leases

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

1) The Company as 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.

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

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(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 Company 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.

(17) Income tax

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

1) Current tax

The Company has determined the current losses and calculated receivable taxes 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

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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 Company 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 Company expects, at the date of balance sheet, to recover or settle the carrying amount of its assets and liabilities.

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.

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

In the application of the Company’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 Company has taken the possible impact of COVID-19 on domestic development

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and economic environment into consideration on significant accounting estimates of cash flow estimation, growth rate, discount rate and profitability. 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 – Income Tax

Upon the date of December 31, 2020, the balance of unused loss carryforwards was NT$719,458,000. The carrying amount of deferred tax assets related to unused tax losses was NT$55,999,000. In addition, up to the date of December 31, 2021, with the improvement of the overall operational condition of the Company, unused loss carryforwards have been used completely in this year. The carrying amount of deferred tax assets related to temporary differences for 2021 and 2020 were NT$23,008,000 and NT$33,752,000 respectively. The main source of estimation uncertainly relies on the realization of differed income tax assets, and it mainly depends on whether there is sufficient profit or taxable temporary difference in the future. In 2021, due to the subsequent development of COVID-19 pandemic, the business operation of the Group may be interrupted, such that significant uncertainty may occur to the aforementioned estimation. 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.

6. Cash and cash equivalents

nd 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 $ 273 507,575 605,000 99,850 $ 1,212,698 0.001-0.05 0.13-0.41 0.23	December 31,2020
			$ 263 443,140 490,000 150,926 $ 1,084,329 0.001-0.05 0.12-0.42 0.23

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

Listed and OTC stocks ETREND Hightech Corp. Emerging stocks Amtek Semiconductors Co., Ltd. Xpert Semiconductor Inc.	December 31,2021 $ 2,877 7,105 - $ 9,982	December 31,2020	December 31,2020
			$ 2,265 6,192 - $ 8,457

The Company invests the aforementioned common stocks in accordance with long-term strategic objectives and expects to profit from long-term investments. The management of the Company deems if the short-term volatility at fair value of such investments recognized in profit or loss is not consistent with the aforementioned long-term

24 -

investment plan, it will be determined that such investments are measured through other comprehensive income at fair value.

8. Accounts receivable

nts receivable
Amortized cost Total carrying amount Less: Allowance for bad debts	December 31,2021 $ 1,441,962 ( 2,114 ) $ 1,439,848	December 31,2020
	(	(	$ 1,100,496 1,649 ) $ 1,098,847

The average collection period for selling products and rendering service of the Company 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 Company 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 Company 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 of the Company shall be reviewed individually at the date of balance sheet to ensure the uncollectible accounts receivable has been listed to appropriate impairment loss. Accordingly, the management of the Company considers the Company's credit risk has significantly decreased.

The loss allowance for accounts receivable of the Company 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 Company'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 Company 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 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	Aging 91~180 days	Aging 91~180 days	Aging 181~365 days	Aging 181~365 days	Aging over 365 days	Aging over 365 days		Total
	( (	0.1 $ 1,406,621 1,407 ) $ 1,405,214 0.1 $ 1,071,719 1,073 ) $ 1,070,646	( (	2 $ 35,341 707 ) $ 34,634 2 $ 28,777 576 ) $ 28,201		10 $ - - $ - 10 $ - - $ -		100 $ - - $ - 100 $ - - $ -	( (	$ 1,441,962 2,114 ) $ 1,439,848 $ 1,100,496 1,649 ) $ 1,098,847

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Changes on allowance for accounts receivable loss are as follows:

		2021		2020
Balance at the beginning of the
year	$	1,649	$	1,291
Provision		465		358
Balance at the end of the year	$	2,114	$	1,649
Other receivables
	December 31,2021		December 31,2020
Time deposits with an initial
maturity in three months	$	160,000	$	220,000
Tax Refund Receivable		19,959		13,586
Others		700		3,421
	$	180,659	$	237,007
Annual percentage rate of time
deposits with an initial maturity
in three months (%)	0.11-0.815			0.3-0.815
.Inventories
	December 31,2021		December 31,2020
Raw materials	$	657,624	$	284,709
Finished goods		-		11
Work in process		-		-
	$	657,624	$	284,720

9. Other receivables

10. Inventories

Inventory-related operating costs as of 2021 and 2020 are NT$5,261,577,000 and NT$4,260,775,000 respectively.

Operating costs include the following items:

	NT$4,260,775,000 respectively. Operating costs include the following items:
11.	2021 Revenue from sale of scraps ( $ 66,650 ) Inventory valuation losses 6,020 Investments accounted for using the equity method December 31,2021 Investment in subsidiaries $ 938,874 Investment in Associates $ -	2020
		( $ 34,329 ) 1,653 December 31,2020
			$ 829,935 $ -

	December 31,		December 31,2020	December 31,2020
	Amount $ 157,776 426,506 215,148 235,569 59,502 27,102 1,121,603 176,415 ) 6,314 ) $ 938,874		Amount $ 175,821 325,495 188,779 235,215 60,192 27,162	Equity%
				100 64 99 100 100 78
( (		( (	1,012,664 176,415 6,314 $ 829,935

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The Company has been approved by Investment Commission, MOEA to invest in Lingsen Holding (Samoa) Inc. at NT$28,010,000 (US$1,000,000), NT$30,040,000 (US$1,000,000) and NT$28,130,000 (US$1,000,000) respectively in July 2021 as well as May and December, 2020. In the meanwhile, Lingsen Holding (Samoa) Inc. indirectly reinvested in Ningbo Liyuan Technology Co., Ltd. through the investment company Li Yuan Investments Co., Ltd.

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%.

Please see Tables 3 and 4 for detailed investments in subsidiaries indirectly held by the Company.

The share of profit or loss and other comprehensive income of subsidiaries accounted for using the equity method in 2021 and 2020 are in accordance with auditors' reports of each subsidiaries as of the same period.

(2) Investment in Associates

Investment in Associates
Investees Private entity Qi Feng Technology Co., Ltd. Less: Accumulated impairment loss		December 31,2021 Amount Sharehol ding $ 11,417 30% 11,417 ) $ -		December 31,2020
		Amount $ 11,417 11,417 ) $ -		Amount $ 11,417 11,417 ) $ -	Sharehol ding
	(		(		30%

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

12. Property, Plant and Equipment

Property, Plant and Equipment
Assets used by the Company Assets subject to operating leases (1) Assets used by the Company 2021 Balance at the beginning of theyear Cost Buildings $ 2,226,536 Machinery and equipment 3,738,206 Transportation Equipment 19,385 Office equipment 57,995 Other equipment 228,907 Unfinished construction - Total cost 6,271,029		December 31,2021 $ 2,758,884 190,877 $ 2,949,761 Increase Decrease $ 53,966 $ 8,021 520,985 1,179,169 - - 1,357 33,456 92,661 65,102 111,680 - $ 780,649 $ 1,285,748	December 31,2021	December 31,2020 $ 2,466,197 195,668 $ 2,661,865 Reclassificati on Balance at the end of the year $ - $ 2,272,481 90,329 3,170,351 - 19,385 - 25,896 - 256,466 - 111,680 $ 90,329 5,856,259	December 31,2020
							$ 2,272,481 3,170,351 19,385 25,896 256,466 111,680 5,856,259

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2021 Accumulated depreciation Buildings Machinery and equipment Transportation Equipment Office equipment Other equipment Total accumulated depreciation 2020 Cost 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	Balance at the beginning of theyear 812,404 2,780,039 17,039 45,296 150,054 3,804,832 $ 2,466,197 Balance at the beginning of theyear	Balance at the beginning of theyear 812,404 2,780,039 17,039 45,296 150,054 3,804,832 $ 2,466,197 Balance at the beginning of theyear		Increase $ 94,998 422,128 582 6,861 50,549 $ 575,118 Increase		Decrease $ 8,021 1,175,996 - 33,456 65,102 $ 1,282,575 Decrease	Reclassificati on $ - - - - - $ - Reclassificati on	Reclassificati on $ - - - - - $ - Reclassificati on	Balance at the end of the year	Balance at the end of the year
									899,381 2,026,171 17,621 18,701 135,501 3,097,375 $ 2,758,884 Balance at the end of the year
		$ 2,279,636 4,322,982 19,114 59,177 250,060 6,930,969 774,065 2,917,306 18,039 39,995 161,340 3,910,745 $ 3,020,224		$ 6,240 56,025 2,271 2,463 35,922 $ 102,921 $ 97,679 505,023 1,000 8,946 45,789 $ 658,437		$ 59,340 647,701 2,000 3,645 57,075 $ 769,761 $ 59,340 642,290 2,000 3,645 57,075 $ 764,350		$ - 6,900 - - - $ 6,900 $ - - - - - $ -		$ 2,226,536 3,738,206 19,385 57,995 228,907 6,271,029 812,404 2,780,039 17,039 45,296 150,054 3,804,832 $ 2,466,197

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 ~ 7 years
Transportation Equipment	5 ~ 7 years
Office equipment	3 ~ 7 years
Other equipment	3 ~ 7 years

Please see note 27 for the amount of property, plant, and equipment used by the Company pledged as collaterals.

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(2) Assets subject to operating leases

2021 Cost Buildings Accumulated depreciation Buildings 2020 Cost Buildings Accumulated depreciation Buildings	Balance at the beginning of the year $ 279,629 83,961 $ 195,668 $ 279,629 79,170 $ 200,459		Increase $ - $ 4,791 $ - $ 4,791	Balance at the end of theyear	Balance at the end of theyear
					$ 279,629 88,752 $ 190,877 $ 279,629 83,961 $ 195,668

The Company 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.

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 $ 12,267 6,061 6,061 6,061 6,061 27,584 $ 64,095	December 31,2020	December 31,2020
			$ 10,735 9,690 4,530 4,530 4,530 20,888 $ 54,903

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

(1)	Buildings Lease agreements Right-of-use assets Carrying amount of right-of-use assets Land Buildings Depreciation expense of right-of-use assets Land Buildings	December31,2021	December31,2021	45 ~ 50 years December31,2020 $ 153,804 1,294 $ 155,098 2020 $ 4,277 646 $ 4,923
			$ 149,573 647 $ 150,220 2021
			$ 4,231 647 $ 4,878

13. Lease agreements

Except for the depreciation expenses recognized above, there were no major sublease

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and impairment loss of the right-of-use assets of the Company in 2021 and 2020.

(2) Lease liabilities

Lease liabilities
December 31,2021 Carrying amount of lease liabilities Current $ 4,420 Non-current $ 147,364 Ranges of discount rates for lease liabilities are as follow December 31,2021 Land 0.67%-0.91% Buildings 0.67%-0.91%	December 31,2020 $ 4,386 $ 151,784 December 31,2020 0.67%-0.91% 0.67%-0.91%

		0.67%-0.91% 0.67%-0.91%

(3) Material leases and terms

The Company 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 Company has no bargain purchase option for leased lands and buildings.

(4) Information on other lease

Please see Note 12 for agreements that the Company sells property, plant and equipment used by the Company under operating leases.

Expenses relating to short-term leases Total cash outflow for leases		2021 $ 1,740 $ 8,382 )	(	2020
	(			$ 120 $ 6,837 )

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

14. Other assets

r assets
Current Supply inventory Time deposit pledge (Note 27) Input tax Prepayments Payments on behalf of others Others	December 31,2021 $ 196,415 103,000 12,579 10,393 8,784 521 $ 331,692	December 31,2020
			$ 102,003 71,000 2,284 10,245 5,086 217 $ 190,835

15. Borrowings

(1) Short-term bank loans

Short-term bank loans
Credit loans Import/export financing loans	December 31,2021 $ 50,000 144,118 $ 194,118	December 31,2020
			$ 50,000 84,759 $ 134,759

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(2)	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 0.8 0.88-0.90 December 31,2021 $ 264,000 616,700 880,700 ( 290,814 ) $ 589,886 0.42-1.30 0.42-1.14 December 31,2021 2022.04-2022.12 2024.04-2026.05	December 31,2020 0.8 0.90-1.32 December 31,2020 $ 641,600 90,000 731,600 ( 417,600 ) $ 314,000 0.42-1.30 0.42-1.34 December 31,2020 2021.11-2022.12 2021.11-2022.04	December 31,2020

16. 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 $ 231,405 156,449 130,505 52,741 29,530 92,426 $ 693,056	December 31,2020
			$ 172,667 124,636 - 48,290 20,963 80,122 $ 446,678

17. 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 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

18. Retirement benefits plan

(1) Defined contribution plans

The pension system of the “Labor Pension Act” is applicable to the Company,

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belonging to the affirmed appropriation of pension plan under the management of the government, and pension is appropriated at the rate of 6% of the monthly salary of employees into the personal dedicated account of the Bureau of Labor Insurance.

(2) Defined benefit plans

The Company 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 % 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 Company does not have any right to intervene in the investments of the Funds.

The amount of defined benefit plans recognized in the parent company only 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 Movements in net defined benefit (assets) liabilities are as follows: Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets) Balance at January 1, 2021 $ 788,843 ($ 734,602 )$ 54,241 Service cost Current service cost 8,079 - 8,079 Interest expense (income) 2,339 ( 2,221 ) 118 Defined benefit costs recognized in profit or loss 10,418 ( 2,221 ) 8,197 Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) - ( 20,059 ) ( 20,059 ) Actuarial loss (gain) - changes in demographic assumptions 1,253 - 1,253	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 Movements in net defined benefit (assets) liabilities are as follows: Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets) Balance at January 1, 2021 $ 788,843 ($ 734,602 )$ 54,241 Service cost Current service cost 8,079 - 8,079 Interest expense (income) 2,339 ( 2,221 ) 118 Defined benefit costs recognized in profit or loss 10,418 ( 2,221 ) 8,197 Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) - ( 20,059 ) ( 20,059 ) Actuarial loss (gain) - changes in demographic assumptions 1,253 - 1,253	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 Movements in net defined benefit (assets) liabilities are as follows: Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets) Balance at January 1, 2021 $ 788,843 ($ 734,602 )$ 54,241 Service cost Current service cost 8,079 - 8,079 Interest expense (income) 2,339 ( 2,221 ) 118 Defined benefit costs recognized in profit or loss 10,418 ( 2,221 ) 8,197 Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) - ( 20,059 ) ( 20,059 ) Actuarial loss (gain) - changes in demographic assumptions 1,253 - 1,253
	$
	$

		$ 54,241 8,079 118 8,197 ( 20,059 ) 1,253

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- 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 ( 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 - - ( 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)
			( 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

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

i) 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
33 -

mandated management. However, the distributable amount of plan assets of the Company shall not be less than the return calculated by the average interest rate on a two-year time deposit published by the local banks. .

ii) 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
iii) 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 Company are carried out by qualified actuaries. The principal assumptions are as 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 Equity (1) Ordinary shares Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2021 $ 18,000 10 years December 31,2021 500,000 $ 5,000,000 380,102 $ 3,801,023	December 31,2021	December 31,2020 $ 30,000 10 years December 31,2020 500,000 $ 5,000,000 380,102 $ 3,801,023	December 31,2020

19. Equity

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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

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
			$ 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 Company 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 21 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.

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

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

(4) 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		Carrying amount $ 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.

20. Revenue

Revenue
2021 Revenue from contracts with custome Service income $ 6,455,112 Sales revenue 34,564 $ 6,489,676 (1) Contract balance December 31, 2021 December 31, 2020 Contract assets - current $ 135,659 $ 114,509 Notes receivable - - Accounts receivable 1,439,848 1,098,847 $ 1,575,507 $ 1,213,356 (2) Timing of revenue recognition 2021 Performance obligation satisfied over time $ 6,455,112 Performance obligation satisfied at a point in time 34,564 $ 6,489,676		2020
		$ 4,561,972 66,958 $ 4,628,930 January 1, 2020 $ 80,561 36 888,935 $ 969,532 2020


	$		4,561,972 66,958 4,628,930
	$

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21. Employee benefits and depreciation expenses

Classified as 2021 Employee benefit expense Short-term employee benefits Labor and health insurance expense Pensions Defined contribution plans Defined benefit plans Remuneration of Directors Other employee benefits Depreciation expenses 2020 Employee benefit expense Short-term employee benefits Labor and health insurance expense Pensions Defined contribution plans Defined benefit plans Remuneration of Directors Other employee benefits Depreciation expenses	operatingcosts $ 1,238,346 131,452 40,007 7,161 - 101,129 537,075 971,540 106,996 35,153 7,525 - 80,209 611,629	operating expenses $ 226,774 15,984 6,495 1,036 23,551 10,846 47,712 159,731 14,262 6,109 1,188 1,800 9,593 56,522	Total
			$ 1,465,120 147,436 46,502 8,197 23,551 111,975 584,787 1,131,271 121,258 41,262 8,713 1,800 89,802 668,151

For the years of 2021 and 2020, the Company had average 2,406 and 2,187 employees respectively, which included 5 non-employee directors for both years.

Average labor cost for the years ended December 31, 2021 and 2020 were NT$741,000 and 638,000 respectively. Average salary and bonus for the years ended December 31, 2020 and 2019 were NT$610,000 and 518,000 respectively. The average salary and bonus increased by 18% year over year.

The Company had no supervisors in 2021 and 2020; therefore, there were no relevant remunerations for supervisors.

The Company's remuneration policy

Except for independent directors receive a certain amount of remuneration, the remuneration of directors is reasonably provided according to the result of corporate

37 -

operation and the director's performance and participation. For remunerations of managerial officers and employees, remunerations are paid according to their respective job positions, responsibilities, future risk and contribution level to the business objectives and according to the remuneration management regulations of the Company.

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 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
	Accrual Rate	Amount
	10% 2%	$ 108,754 $ 21,751

If there is a change in the amounts after the annual parent company only financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

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

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.

22. 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 $ 26,560 Deferred tax Income tax expense generated in the current year ( 30,012 ) Adjustment on prior years 86,639 Income tax expense recognized in profit or loss $ 83,187 A reconciliation of accounting income and income tax expense is as follows: 2021 Income tax expense (benefit) calculated at the statutory rate $ 191,407 Permanent differences ( 21,582 ) Temporary differences ( 627 ) Current loss carryforward ( 142,638 ) Deferred tax Income tax expense generated in the current year ( 30,012 ) Adjustment on prior years 86,639 Income tax expense recognized in profit or loss $ 83,187		2020
		$ - 15,403 110 $ 15,513 2020
	( (	$ 29,766 ) 45,169 1,721 17,124 ) 15,403 110 $ 15,513

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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 of				beginning of		in		profit or					comprehensi					the end of
2021	theyear				theyear				loss						ve	income			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		9,659				-					890						-			10,549
Provision for liabilities		3,890				-	(			3,094			)				-			796
		33,752				-	(			1,000			)	(		9,744		)		23,008
Loss carryforwards		55,999				86,639	(		142,638				)				-			-
	$	89,751			$	86,639	(	$	143,638				)	(	$	9,744		)	$	23,008
Deferred income tax
liabilities
Temporary differences
Difference on
depreciation
methods	$		448		$	-	(	$			165		)		$		-		$	283
Foreign exchange gain			708			-	(				207		)				-			501
	$	1,156			$	-	(	$			372		)		$		-		$	784
											Defined benefit
														costs
						Defined benefit					recognized in
		Balance			at the	costs								other
		beginning of				recognized			in		comprehensive							Balance at the
2020			theyear			profit or loss								income				end of		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				9,420			239									-				9,659
Provision for liabilities				2,476			1,414									-				3,890
Right-of-use assets					110	(	110			)						-				-
			32,244				1,874				(					366	)			33,752
Loss carryforwards			73,123			(	17,124			)						-				55,999
		$	105,367			($	15,250			)	(	$				366	)		$	89,751
Deferred income tax
liabilities
Temporary differences
Difference on depreciation
methods		$			633	( $	185			)		$				-			$	448
Foreign exchange gain					260		448									-				708
		$			893	$	263					$				-			$	1,156

(3) 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:

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

(4) Income tax examination

The tax authorities have examined the income tax returns of the Company through 2019.

23. Earnings (Loss) per share

ings (Loss) per share
2021 Basic earnings per share Net profit attributed to the owners of the Company Effect of potentially dilutive ordinary shares Remuneration of employees Diluted earnings per share Effect of net profit attributed to the owners of the Company plus potential ordinary shares 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 Company offered to settle compensation paid to employees in cash or shares, the Company 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.

24. Capital risk management

The Company manages its capital to ensure that it is 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 Company's capital structure is consist of net debt (leases less cash and cash equivalent) and equity (common stocks, capital surplus, retained earnings and other equity).

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

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

25. Financial instruments

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

The management of the Company 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

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		Level 1 $ - 2,877 $ 2,877 $ - 2,265 $ 2,265		Level 2 $ - - $ - $ - - $ -		Level 3 $ 7,105 - $ 7,105 $ 6,192 - $ 6,192		Total
								$ 7,105 2,877 $ 9,982 $ 6,192 2,265 $ 8,457

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

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	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income
		Equityinstruments
		2021 $ 6,192 913 $ 7,105		2020
				$ 5,362 830 $ 6,192

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

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

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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 $ 3,072,188 9,982 1,884,454	December 31,2020
		$ 2,605,933 8,457 1,404,307

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

The Company 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 Company's sales and purchase transactions are denominated in foreign currency, which exposes the Company 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.

42 -

Please see Note 29 for the carrying amount of monetary assets and liabilities denominated in non-functional currency at the date of balance sheet.

Sensitivity analysis

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

The following table details the Company’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 rates. 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 $ 1,094 8	2020
		$ 962 80

ii) Interest rate risk

The Company is exposed to interest rate risk for the reason that it has borrowed money at both fixed and variable rate. The Company 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:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31,2021 $ 530,850 251,363 941,282 975,239	December 31,2020 $ 481,925 258,555 889,428 763,974

Sensitivity analysis

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

43 -

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 is expressed as the increment or decrement by 1% when reporting to the management personnel internally of the Company, which also represents the management's assessment of the reasonable interest rate change.

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 Company in 2021 and 2020 are NT$340,000 and NT$1,255,000 respectively.

iii) Other price risk

The Company is exposed to price risk due to investments in equity secures. The management of the Company manages 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$29,000 and NT$22,000 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 Company. The maximum credit risk exposure due to the financial loss arising from the counterparty not performing its obligation and the Company's financial guarantee primarily results from:

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

The Company'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 Company manages and maintains a level of cash and cash equivalents adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, the management of the Company monitors the utilization of borrowings and ensures compliance with loan conditions.

44 -

The bank borrowing is a material source of liquidity to the Company. As of December 31, 2021 and 2020, the undrawn loan amounts are as follows:

Undrawn loan amounts	December 31,2021 $ 1,283,022	December 31,2020	December 31,2020
			$ 1,236,331

Liquidity and interest risks of non-derivative financial liabilities

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

The maturity of the Company’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 $ 757,814 5,514 385,353 99,579 $ 1,248,260 $ 536,126 5,514 449,974 102,385 $ 1,093,999		1 to 3years $ - 9,554 373,525 - $ 383,079 $ - 10,303 314,000 - $ 324,303	More than 3years	More than 3years
						$ - 161,179 216,361 - $ 377,540 $ - 165,944 - - $ 165,944

The further information on a maturity analysis of lease liability is below:

December 31, 2021 Lease liabilities December 31, 2020 Lease liabilities		Within 1 year		1-5years		5~10 years		10~15 years		15~20 years		Over 20 years
		$ 5,514 $ 5,514		$ 19,024 $ 19,834		$151,709 $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.

26. Related-party transactions

The transactions between the Company and other related parties, excluding those disclosed in other notes, are as follows:

(1) Related party name and categories Related Party Name Relationship with the Company Lingsen America Inc. Subsidiary Ningbo Liyuan Technology Co., Ltd. Second-tier subsidiary Lee Shin Investment Co., Ltd. Subsidiary Panther Technology Co., Ltd. Subsidiary Sooner Power Semiconductor Co., Ltd. Subsidiary

45 -

(2)	Operating income Relatedpartycategory Subsidiary		2021 $ 439		2020
					$ 2,876

The operating revenue from subsidiaries is processing fee income paid for work in process outsourced to the Company and no other similar non-related party transaction can be compared. The payment will be collected at 60 days T/T following the date the goods are sold.

(3)	Purchase Relatedpartycategory Second-tier subsidiary		2021 $ 1,050		2020
					$ -

Raw materials are purchased form subsidiary, and no other similar non-related party transaction can be compared. The payment is collected at 30 days T/T following the date the goods are sold in principle.

	date the goods are sold in principle.
(4)	Operating expense - miscellaneous expense Relatedpartycategory 2021 Second-tier subsidiary $ 420		2020
			$ -

Parts are purchased form subsidiary, and no other similar non-related party transaction can be compared. The payment is collected at 30 days T/T following the date the goods are sold in principle.

(5) Operating expense - commission expense

The Company has signed a commission agreement with Lingsen America Inc. states that the Company shall pay a 2% commission on monthly sales revenue of particular exports in the U.S.A. (in USD). The commission expenses in 2021 and 2020 are NT$6,569,000 and NT$5,793,000, respectively. The commissions payable as of December 31 2021 and 2020 are NT$529,000 and NT$1,979,000, respectively.

(6) Non-operating income - rent income

Non-operating income - rent income
Related PartyCategory/Name Subsidiary Sooner Power Semiconductor Co., Ltd. Panther Technology Co., Ltd. Lee Shin Investment Co., Ltd.	2021 $ 720 178 36 $ 934	2020 $ 2,160 1,556 36 $ 3,752

The majority of non-operating income is rent income of machinery and equipment and office.

(7) (8)	Non-operating income - other revenue Relatedpartycategory 2021 Subsidiary $ 566 Accounts receivable Relatedpartycategory December 31,2021 Subsidiary $ -		2020
		$ 122 December 31,2020
			$ 32

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(9) Endorsements/guarantees

Company Subsidiary	Guarantees Bank loans Bank loans	December 31, 2021 $ 210,000 USD 5,000	December 31, 2020
			$ 210,000 USD 5,000

The following assets are pledged by the Company as collaterals for subsidiaries' loans:

loans:
December 31,2021 Pledged time deposits $ 103,000 Remuneration of key management personnel 2021 Short-term employee benefits $ 76,452 Pensions 425 $ 76,877	December 31,2020
		$ 71,000 2020
		$ 28,853 507 $ 29,360

(10) Remuneration of key management personnel

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.

27. Pledged assets

The following assets are pledged as collaterals for bank loan limit:

Property, plant and equipment Pledged time deposits (recognized in other current assets)	December 31,2021 $ 1,007,528 103,000 $ 1,110,528	December 31,2020	December 31,2020
			$ 1,265,329 71,000 $ 1,336,329

28. Significant Contingent Liabilities and Unrecognized Commitments

Significant contingent commitments of the Company 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 $ 383,128	December 31,2020
	$ 33,950 December 31,2020
		$ 342,880

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 Company. 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:

47 -

Foreign currency assets Monetary items USD Japanese yen Non-monetary items Investment accounted for using the equity method USD Foreign currency liabilities Monetary items USD Japanese yen Euro	December31,2021 Foreign Currency Exchange rate NTD $ 13,284 27.68 $ 367,701 173,864 0.2405 41,814 7,850 27.68 217,288 17,235 27.68 477,065 177,046 0.2405 42,580 427 31.32 13,374	December31,2021 Foreign Currency Exchange rate NTD $ 13,284 27.68 $ 367,701 173,864 0.2405 41,814 7,850 27.68 217,288 17,235 27.68 477,065 177,046 0.2405 42,580 427 31.32 13,374	December31,2020	December31,2020	December31,2020
	Foreign Currency $ 13,284 173,864 7,850 17,235 177,046 427	Exchange rate 27.68 0.2405 27.68 27.68 0.2405 31.32	Foreign Currency $ 9,948 86,438 8,287 13,326 57,575 -	Exchange rate 28.48 0.2763 28.48 28.48 0.2763 -	NTD
					$ 283,319 23,883 236,014 379,524 15,908 -

Significant unrealized exchange gains (losses) are as follows:

Foreign Currency USD Japanese yen Euro	2021	Net exchange gains (losses) $ 2,671 ( 252 ) 85 $ 2,504	2020
	Exchange rate 27.68 (USD : NTD) 0.2405 (JPY: NTD) 31.32 (EUR : NTD)		Exchange rate 28.48 (USD : NTD) 0.2763 (JPY: NTD) 35.02 (EUR : NTD)	Net exchange gains (losses)
					$ 3,433 104 - $ 3,537

30. Other disclosures

(1) Information on significant transactions and (2) 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
48 -

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) Information on investees: Table 3.
(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 4.
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:
- i) 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: Note 26.
(4) Information of major shareholders: names, numbers of shares held, and shareholding percentages of shareholders who hold 5% or more of the equity: Table 5.
49 -

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.

50 -

Lingsen Precision Industries, Ltd. and its subsidiaries

Marketable securities held

December 31, 2021

Table 2

Unit: Amounts expressed in thousands of New Taiwan Dollars/ 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 2)
Parent Company Lee Shin Investment Co., Ltd.	Stock Amtek Semiconductors Co., Ltd. ETREND Hightech Corp. Xpert Semiconductor Inc. Stock Parent Company 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 Tables 3 and 4 for related information on investment in subsidiaries.

Note 2: Fair value of investment in emerging stocks is computed in reference to investment assets under the cost approach.

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Lingsen Precision Industries, Ltd. and its subsidiaries

Information on investees

For the year ended December 31, 2021

Table 3

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

Investor	Investee	Location	Main business	Initial investment amount	Initial investment amount	Balance	at December 31,2020	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. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Lee Shin Investment Co., Ltd. (Note 1)) Nexus Material Corporation (Note 2) Lingsen America Inc. Qi Feng Technology Co., Ltd. (Note 2) Sooner Power Semiconductor Co., Ltd. Nexus Material Corporation Li Yuan Investments Co., Ltd.	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: See Table 4 for related information on investee in Mainland China.

52 -

Lingsen Precision Industries, Ltd. and Subsidiaries

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

Table 4

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.	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	$ -

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'.

53 -

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

Table 5

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 parent company only 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 10% 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.
54 -

§Statements of Major Accounting Items

Item
Statements of assets, liabilities, and equity items
Statement of cash and cash equivalents
Statement of accounts receivable
Statement of other receivables
Statement of inventories
Statement of other current assets
Statement of changes in financial assets measured at fair value
throughother comprehensive income- non-current
Statement of changes in investments accounted for using the
equity method
Statement of changes in property, plant and equipment
Statement of changes in right-of-use assets
Statement of deferred tax assets
Statement of short-term borrowings
Statement of accounts payable
Statement of other payables
Statement of provisions - current
Statement of lease liabilities
Statement of long-term borrowings
Statement of deferred tax liabilities
Statements of profit or loss items
Statement of operating revenue
Statement of operating costs
Statement of operating expenses
Summary statement of current period employee benefits and
depreciation expenses by function

No./Index

Table 1
Table 2
Note 9
Table 3
Note 14
Table 4
Table 5
Note 12
Table 6
Note 22
Table 7
Table 8
Note 16
Note 17
Table 9
Table 10
Note 22
Table 11
Table 12
Table 13
Note 21

55 -

Lingsen Precision Industries, Ltd.

Statement of cash and cash equivalents

December 31, 2021

Table 1

Unit In Thousands of New Taiwan Dollars,

Unless Stated Otherwise

Item Cash Cash on hand and petty cash Cash in banks Checking accounts Demand deposits Foreign currency demand deposit (Note 1) Time deposits Cash equivalents Time deposits with an initial maturity of less than three months Short-term notes and bills Less: Time deposit pledge (Note 2) Time deposits with an initial maturity in three months		Amount
	$ 273 3,292 388,523 115,760 263,000 770,848 605,000 99,850 1,475,698 ( 103,000 ) ( 160,000 ) $ 1,212,698

Note 1: It includes US$2,671,000 and JPY 173,864,000, converted at the exchange rate of ＝＝
US$1 NT$27.68 and JPY$1 NT$0.2405.
Note 2: The due period is between January and February 2022, at an annual percentage rate of 0.38%/0.11%. It has been provided to the bank as collateral, transferred to other current assets, to make endorsement and guarantee for Ningbo Liyuan Technology Co., Ltd.
56 -

Lingsen Precision Industries, Ltd.

Statement of accounts receivable

December 31, 2021

Table 2

Unit: Amounts expressed in thousands of New Taiwan Dollars

Customer name Company A Company B Company C Company D Company E Others (Note) Less: Allowance for bad debts		Amount
	(	$ 424,164 200,710 151,185 109,625 83,274 473,004 1,441,962 2,114 ) $ 1,439,848

Note: The amount of individual customer does not exceed 5% of the account balance.

57 -

==> picture [445 x 233] intentionally omitted <==

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

Lingsen Precision Industries, Ltd.
Statement of inventories
December 31, 2021
Table 3 Unit: Amounts expressed in thousands of
New Taiwan Dollars
Item Cost Net realizable value
Raw materials $ 657,624 $ 657,624
Finished goods - -
- -
Work in process
$ 657,624 $ 657,624
----- End of picture text -----

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Lingsen Precision Industries, Ltd.

Statement of changes in financial assets measured at fair value through other comprehensive income - non-current

For the year ended December 31, 2021

Table 4

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

Financial instrument name Listed domestic company ETREND Hightech Corp. Emerging stocks Amtek Semiconductors Co., Ltd. Xpert Semiconductor Inc.	Balance at the beginning	Balance at the beginning	of theyear Fair value $ 2,265 6,192 - 6,192 $ 8,457	Unrealized gains or losses of Financial assets $ 612 913 - 913 $ 1,525	Balance at the end of theyear Number of shares Fair value 75 $ 2,877 527 7,105 45 - 7,105 $ 9,982	Balance at the end of theyear Number of shares Fair value 75 $ 2,877 527 7,105 45 - 7,105 $ 9,982	Guarantee or pledge status
	Number of shares 75 527 45				Number of shares 75 527 45
							None None None

59 -

Lingsen Precision Industries, Ltd.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2021

Table 5

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

Investee Lingsen Holding (Samoa) Inc. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Lee Shin Investment Co., Ltd. Lingsen America Inc. Nexus Material Corporation Qi Feng Technology Co., Ltd. Less: Transferred treasury shares Accumulated impairment loss	Balance at the beginning of theyear Number of shares Amount 52,000 $ 175,821 22,923 325,495 60,422 188,779 30,000 235,215 1,000 60,192 5,348 27,162 2,400 11,417 1,024,081 ( 176,415 ) ( 17,731 ) $ 829,935	Balance at the beginning of theyear Number of shares Amount 52,000 $ 175,821 22,923 325,495 60,422 188,779 30,000 235,215 1,000 60,192 5,348 27,162 2,400 11,417 1,024,081 ( 176,415 ) ( 17,731 ) $ 829,935	Increase (Decrease) Number of shares Amount 1,000 $ 28,010 - - - - - - - - - - - - $ 28,010	Increase (Decrease) Number of shares Amount 1,000 $ 28,010 - - - - - - - - - - - - $ 28,010	Gains (losses) of investments ( $ 45,302 ) 101,011 26,369 6,151 1,013 ( 60 ) - 89,182	Exchange differences on translation of the financial statements of foreign operations ( $ 753) - - - ( 1,703 ) - - ( 2,456 )		Unrealized gains or losses of Financial assets $ - - - ( 5,797 ) - - - $ 5,797 )	Balance at the end of the year Number of shares Shareholding % Amount 53,000 100 $ 157,776 22,923 64 426,506 60,422 99 215,148 30,000 100 235,569 1,000 100 59,502 5,348 78 27,102 2,400 30 11,417 1,133,020 ( 176,415 ) ( 17,731 ) $ 938,874	Balance at the end of the year Number of shares Shareholding % Amount 53,000 100 $ 157,776 22,923 64 426,506 60,422 99 215,148 30,000 100 235,569 1,000 100 59,502 5,348 78 27,102 2,400 30 11,417 1,133,020 ( 176,415 ) ( 17,731 ) $ 938,874	Balance at the end of the year Number of shares Shareholding % Amount 53,000 100 $ 157,776 22,923 64 426,506 60,422 99 215,148 30,000 100 235,569 1,000 100 59,502 5,348 78 27,102 2,400 30 11,417 1,133,020 ( 176,415 ) ( 17,731 ) $ 938,874	Market value or equity net value	Market value or equity net value
	Number of shares 52,000 22,923 60,422 30,000 1,000 5,348 2,400		Number of shares 1,000 - - - - - -						Number of shares 53,000 22,923 60,422 30,000 1,000 5,348 2,400	Shareholding % 100 64 99 100 100 78 30			(Note)
							(						$ 157,776 426,506 215,148 59,154 59,502 20,788 - $ 938,874

Note: Net income or loss is primarily computed according to investee's financial statement and the percentage of the Company's share.

60 -

Lingsen Precision Industries, Ltd.

Statement of Changes in Right-of-use Assets and Accumulated Depreciation For the year ended December 31, 2021

Unit: Amounts expressed in thousands of New Taiwan Dollars

Cost Land Buildings Accumulated depreciation Land Buildings	Balance at the beginning of the year $ 162,849 2,586 165,435 9,045 1,292 10,337 $ 155,098		Increase $ - - $ - $ 4,231 647 $ 4,878	Balance at the end of theyear	Balance at the end of theyear
					$ 162,849 2,586 165,435 13,276 1,939 15,215 $ 150,220

61 -

Lingsen Precision Industries, Ltd.

Statement of short-term borrowings

December 31, 2021

Table 7

Unit: Amounts expressed in thousands of

New Taiwan Dollars

Loan type and bank Credit loans Taipei Fubon Bank (Zhonggang Branch) Import/export financing loans Taishin International Bank (Taichung Branch) Mega International Commercial Bank (Tan Zi Branch)	Maturity date (Note) 2022.6.27 2022.1.26 2022.3.29	Annual interest rate(%) 0.8 0.88 0.901		Amount
				$ 50,000 49,579 94,539 $ 194,118

Note: The maturity date refers to the last maturity date among several loans.

62 -

Lingsen Precision Industries, Ltd.

Statement of accounts payable

December 31, 2021

Table 8

Unit: Amounts expressed in thousands of

New Taiwan Dollars

Companyname Company A Company B Company C Company D Company E Company F Others (Note)	Amount
	$ 104,985 90,899 55,422 54,608 40,123 26,526 106,846 $ 479,409

Note: The amount of individual customer does not exceed 5% of the account balance.

63 -

Lingsen Precision Industries, Ltd.

Statement of lease liabilities

December 31, 2021

Table 9 Item Land Buildings Less: Amount falling due in one year	Description Plant and office Plant and office	Unit: Amounts expressed in thousands of New Taiwan Dollars Lease term Discount rate (%) Balance at the end of theyear 2013.04.16-2031.10. 21 0.67-0.91 $ 151,131 2020.01.01-2022.12. 31 0.67-0.91 653 151,784 ( 4,420 ) $ 147,364

64 -

Lingsen Precision Industries, Ltd.

Statement of long-term borrowings December 31, 2021

Table 10

Unit: Amounts expressed in thousands of New Taiwan Dollars

Loan type and bank Mortgage loan Mega International Commercial Bank (Tan Zi Branch) CTBC Bank (Taichung Regional Center) KGI Bank (Shizheng Branch) Credit loans CTBC Bank (Taichung Regional Center)	Loan period 2014.03.28-2022.12.15 2019.11.29-2022.07.04 2015.06.03-2021.11.25 2015.12.02-2021.11.25 2016.05.13-2021.11.25 2015.01.16-2021.11.25 2019.04.30-2022.04.30 2014.11.25-2021.11.25	Repayment method Down payment is repaid from the 15th day of the first month until two years after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 28 periods. (NT$25,000,000 repayment for each period) The settlement shall be made within twelve months; however, it shall be made before the drawdown period. Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$6,000,000 repayment for each period) Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$5,650,000 repayment for each period) Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$1,750,000 repayment for each period) Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$20,000,000 repayment for each period) Down payment is repaid from the first date until 12 months after first drawdown date. After that, the equal principal shall be repaid every six months, divided into 5 periods. (NT$40,000 repayment for each period) Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$500,000 repayment for each period)	Annual interest rate 0.42%-0.68% 1.1% 0.42%-0.67% 0.42%-0.67% 0.42%-0.67% 0.42%-0.67% 1.13%-1.30% 0.42%-0.67%	Amount falling due in oneyear $ 100,000 128,000 - - - - 36,000 -	Amount falling due after oneyear $ - - - - - - - -	Total
						$ 100,000 128,000 - - - - 36,000 -

65 -

Loan type and bank Loan period Repayment method Annual interest rate Amount falling due in oneyear Amount falling due after oneyear	Loan type and bank Loan period Repayment method Annual interest rate Amount falling due in oneyear Amount falling due after oneyear	Loan type and bank Loan period Repayment method Annual interest rate Amount falling due in oneyear Amount falling due after oneyear	Total
2016.10.14-2021.11.25 Down payment is repaid from the first date until 24 months after first drawdown date. After that, the equal principal shall be repaid every three months, divided into 20 periods. (NT$9,500,000 repayment for each period) 0.42%-0.67% 2021.03.05-2026.03.05 Grace period refers to 18 months from the first drawdown date. Starting from October 15, 2022, the equal principle shall be paid on the 15th day of each month, and the remaining amount shall be repaid at a lump sum upon maturity, and interest is collected on a monthly basis. 0.7% Taipei Fubon Bank (Zhonggang Branch) 2021.08.20-2024.04.10 Each drawdown date shall not exceed final maturity date, which is one business day prior to final drawdown date. The principal shall fully be repaid in one lump sum upon its maturity. 1.14% 2021.05.20-2026.05.20 Grace period refers to the first 2 years of the 60 months from the first drawdown date. Starting from the 3rd year, the equal principle shall be paid on the 15th day of each month. 0.58% O-Bank (Taichung Branch) 2021.04.26-2026.04.15 Grace period refers to 36 months from the first drawdown date. The equal principle shall be paid on the 15th day of each month, and divided into 25 period for payment. 0.74%	- 26,814 - - - $ 290,814	- 305,886 100,000 84,000 100,000 $ 589,886	- 332,700 100,000 84,000 100,000 $ 880,700

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Lingsen Precision Industries, Ltd. Statement of operating revenue

For the year ended December 31, 2021

Table 11

Unit: Amounts expressed in thousands of New Taiwan Dollars

Item Packaging and final testing of IC Revenue from contracts with customers Other operating income Less: Sales allowance Operating income	Quantity (thousand PCS) Around 5,432,850		Amount
		(	$ 6,334,062 135,659 34,564 6,504,285 14,609 ) $ 6,489,676

67 -

Lingsen Precision Industries, Ltd.

Statement of operating costs

For the year ended December 31, 2021

Table 12

Unit: Amounts expressed in thousands of

New Taiwan Dollars

Item
Raw material at the beginning of year
Current net purchase
Raw material at the end of year
Sales of raw materials
Other expenses
Raw material consumption
Direct labor
Production overheads
Production cost
Work in process at the beginning of the year
Work in process at the end of the year
Cost of finished goods inventory
Finished goods inventory at the beginning of the
year
Finished goods inventory at the end of the year
Cost of sales
Income from sale of scrap
Inventory valuation losses
Cost of sales of raw materials
Operating costs

Amount

$ 307,300
2,497,325
(
686,260 )
(
33,561 )
(
33,921
)
2,050,883
793,384

2,444,342
5,288,609
2,563
(
2,554
)
5,288,618
2,281
(
2,253
)
5,288,646
(
66,650 )
6,020

33,561
$ 5,261,577

68 -

Lingsen Precision Industries, Ltd. Statement of operating expenses For the year ended December 31, 2021

Table 13

Unit: Amounts expressed in thousands of New Taiwan Dollars

Item Salary expense Depreciation Insurance expense Commissions expense Others		Selling expenses $ 38,230 324 3,036 7,696 14,385 $ 63,671	Administrativ e expenses $ 127,459 14,437 8,244 - 58,314 $ 208,454	Research and development expenses $ 92,602 32,951 7,161 - 10,840 $ 143,554		Total
						$ 258,291 47,712 18,441 7,696 83,539 $ 415,679

69 -

AI assistant

LPI — Audit Report / Information 2021

52036_rns_2021-11-09_b998a1bf-388a-4b4f-94db-0fb73343ad82.pdf

Lingsen Precision Industries, Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

Independent Auditors’ Report

Audit opinions

Basis for Opinion

Key Audit Matters

Authenticity of service revenue recognition

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

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

Lingsen Precision Industries, Ltd. Parent Company Only Balance Sheets December 31, 2021 and 2020

Lingsen Precision Industries, Ltd. Parent Company Only Statements of Comprehensive Income

(Continued from previous page)

Lingsen Precision Industries, Ltd. Parent Company Only Statement of Changes in Equity For the Years from January 1 to December 31, 2021 and 2020

Lingsen Precision Industries, Ltd.

Parent Company Only Statement of Cash Flows

(Continued from previous page)

1. Company History

2. Approval Date and Procedures of the Financial Statements

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

4. Summary of Significant Accounting Policies

(4) Foreign Currency

(5) Inventories

method.

(7) Investment in Associates

(8) Property, plant and equipment

(10) Financial instruments

Financial assets

3) Derecognition of financial assets

Financial liabilities

1) Follow-up measurement

(11) Provision for liabilities

(12) Revenue recognition

1) Sales revenue

(13) Leases

(14) Borrowing costs

(15) Government grants

(16) Employee benefits

(17) Income tax

5. Significant Accounting Assumptions and Judgment, And Major Sources of Estimation 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

12. Property, Plant and Equipment

13. Lease agreements

14. Other assets

15. Borrowings

16. Other payables

17. Provisions - Current

18. Retirement benefits plan

(2) Defined benefit plans

19. Equity

(2) Capital surplus

(3) Retained earnings and dividend policy

(4) Treasury stocks

20. Revenue

21. Employee benefits and depreciation expenses

22. Income tax

(2) Deferred tax assets and liabilities

(4) Income tax examination

23. Earnings (Loss) per share

24. Capital risk management

25. Financial instruments

1) Market risk

Sensitivity analysis

Sensitivity analysis

iii) Other price risk

Sensitivity analysis

2) Credit risk

3) Liquidity risk

26. Related-party transactions

27. Pledged assets

28. Significant Contingent Liabilities and Unrecognized Commitments

30. Other disclosures

Lingsen Precision Industries, Ltd. and Subsidiaries

Table 1

LPI Audit Report / Information 2021