MSI — Audit Report / Information 2021

Nov 11, 2021

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Representation Letter

In connection with the Consolidated Financial Statements of Affiliated Enterprises of MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries (the “Consolidated FS of the Affiliates”), we represent to you that, the entities required to be included in the Consolidated FS of the Affiliates as of and for the year ended December 31, 2021 in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those required to be included in the Consolidated Financial Statements of MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries (the “Consolidated FS of the Group”) in accordance with International Financial Reporting Standard 10. Additionally, the information required to be disclosed in the Consolidated FS of Affiliates is disclosed in the Consolidated FS of the Group. Consequently, MICRO-STAR INTERNATIONAL CO., LTD. and its subsidiaries do not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

MICRO-STAR INTERNATIONAL CO., LTD. By

Joseph Hsu, Chairman March 21, 2022

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Opinion

We have audited the accompanying consolidated balance sheets of MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES (the “Group”) as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in the Republic of China (the “Norm”), and we have fulfilled our ethical responsibilities in accordance with the Norm. Based on our audits and the audit reports of other independent auditors, we believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in

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our audit of the consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2021 are stated as follows:

Recognition of sales revenue generated from own-brand products

Description

Please refer to Note 4(26) for accounting policies on revenue recognition. The sales revenue from own-brand products for the year ended December 31, 2021 is higher than previous year due to the substantial increase in demand for notebook computers and peripherals. The recognition of sales revenue generated from own-brand products is critical to the Group’s consolidated financial statements. Therefore, it was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of and assessed internal controls in relation to sales revenue, and validated the operating effectiveness of those above-mentioned internal controls.

• B. Obtained detailed listing of sales revenue from own-brand products in the current year, and validated supporting documents, including sales invoices, customer purchase orders and delivery documents to ensure the appropriateness of recognition.

• C. Inspected contents and relevant evidences in relation to sales returns and discounts occurring subsequent to the reporting period.

• D. Performed accounts receivable confirmation procedure to significant customers.

Estimation of allowance for inventory valuation losses

Description

Please refer to Note 4(13) for accounting policies on inventory valuation, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on inventory valuation, and Note 6(6) for details of inventories. As of December 31, 2021, the balances of inventories and allowance for inventory

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valuation losses are NT$38,492,257 thousand and NT$552,595 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of motherboards, interface cards, notebook computers and other electronic products. Due to the rapid technological innovations and competition within the industry as well as frequent releases of new products resulting in potential price fluctuations, there is a higher risk of inventory losses due from market value decline or obsolescence. The Group recognises inventories at the lower of cost and net realisable value. As the monetary values of allowance for inventory valuation losses is critical to the financial statements as of December 31, 2021. Therefore, it was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Inquired with management, and assessed the reasonableness in relation to the provision of allowance for inventory valuation losses.

• B. Validated the accuracy of the system logic in calculating the ageing of inventories, and confirmed the consistency with the Group’s policies.

• C. Validated the appropriateness of system logic of the report of individually identified obsolete inventory prepared by management and confirmed the consistency with the Group’s policies.

• D. Sampled and tested the net realisable value basis of the individual inventory and validated the appropriateness.

Other matter –Reference to audits of other independent auditors

We did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under the equity method that are included in the consolidated financial statements. Those financial statements were audited by other independent auditors, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on reports of the other independent auditors. Total assets of the above-mentioned entities (including investments accounted for under the equity method) amounted to NT$21,787,195 thousand and NT$18,755,869 thousand as of December 31, 2021 and 2020, constituting 21% and 24% of consolidated total assets, respectively. Sales revenue of the above-mentioned entities amounted to NT$46,487,205 thousand and NT$35,899,397 thousand for the years ended December 31, 2021 and 2020, constituting 23% and 25% of consolidated total sales revenue, respectively.

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Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion with other matter section on the parent company only financial statements of MICRO-STAR INTERNATIONAL CO., LTD. as of and for the years ended December 31, 2021 and 2020.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Independent auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

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decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

5.

6.

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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless

law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Liang, Hua-Ling

[Lai, Chung-Hsi ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 21, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) 6(6) 6(7) 6(3) 6(4) and 8 6(8) and 8 6(9) 6(11) 6(26)	December 31, 2021 AMOUNT % $ 23,654,801 23 98,813 - 432 - 93,220 - 29,178,913 29 292,862 - 3,893 - 37,939,662 38 2,125,713 2 93,388,309 92 104,847 - 601,754 1 5,710,853 6 390,801 - 145,917 - 1,004,168 1 112,941 - 8,071,281 8 $ 101,459,590 100	December 31, 2020	December 31, 2020
		AMOUNT $ 23,654,801 98,813 432 93,220 29,178,913 292,862 3,893 37,939,662 2,125,713 93,388,309 104,847 601,754 5,710,853 390,801 145,917 1,004,168 112,941 8,071,281 $ 101,459,590	AMOUNT $ 18,585,955 203,737 1,000,447 113,287 21,867,246 265,987 34,759 27,482,537 1,807,513 71,361,468 124,338 226,937 5,130,094 502,400 207,637 769,613 75,028 7,036,047 $ 78,397,515	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 130X Inventories, net 1410 Prepayments 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				24 - 1 - 28 - - 35 3
				91
				- - 7 1 - 1 -
				9
				100

(Continued)

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Liabilities and Equity

December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(12) $ 2,000,000 2 $ 3,000,000 4 6(2) 15,708 - 103,885 - 33,931,186 33 27,177,751 35 6(13) 7,891,676 8 5,344,410 7 2,999,077 3 1,604,500 2 6(16) 1,203,497 1 850,435 1 192,852 - 218,182 - 4,733,204 5 3,555,792 5 739,224 1 337,535 - 53,706,424 53 42,192,490 54 6(26) 17,136 - 6,928 - 145,314 - 225,548 1 6(15) 211,818 - 220,314 - 298,578 1 212,383 - 672,846 1 665,173 1 54,379,270 54 42,857,663 55 6(17) 8,448,562 8 8,448,562 11 6(18) 804,516 1 804,214 1 6(19) 6,336,840 6 5,541,298 7 674,458 1 794,525 1 31,717,738 31 20,625,711 26 ( 901,794) ( 1) ( 674,458) ( 1 ) 47,080,320 46 35,539,852 45 47,080,320 46 35,539,852 45 $ 101,459,590 100 $ 78,397,515 100

Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provision for liabilities - current 2280 Current lease liabilities 2365 Refund liabilities- current 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Net defined benefit liability, non- current 2670 Other non-current liabilities, others 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(20) $ 201,810,152 100 $ 146,502,789 100 6(6)(24) ( 163,565,876) ( 81) ( 125,199,949) ( 85) 38,244,276 19 21,302,840 15 6(24) ( 11,203,377) ( 5) ( 7,053,359) ( 5) ( 1,873,387) ( 1) ( 1,345,054) ( 1) ( 5,179,451) ( 3) ( 3,724,340) ( 3) ( 13,417) - 7,741 - ( 18,269,632) ( 9) ( 12,115,012) ( 9) 19,974,644 10 9,187,828 6 6(4)(21) 72,045 - 88,822 - 6(22) 872,154 - 576,975 - 6(23) ( 269,465) - ( 224,787) - ( 18,706) - ( 31,945) - 656,028 - 409,065 - 20,630,672 10 9,596,893 6 6(26) ( 3,709,667) ( 2) ( 1,637,388) ( 1) $ 16,921,005 8 $ 7,959,505 5 6(15) $ 150 - ($ 5,106) - 6(3) ( 19,491) - ( 27,637) - 6(26) 9,395 - 1,021 - ( 9,946) - ( 31,722) - ( 217,270) - 147,704 - ( 217,270) - 147,704 - ($ 227,216) - $ 115,982 - $ 16,693,789 8 $ 8,075,487 5 $ 16,921,005 8 $ 7,959,505 5 $ 16,693,789 8 $ 8,075,487 5 6(27) $ 20.03 $ 9.42 $ 19.78 $ 9.34

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit (loss) gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period Other comprehensive income Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Actuarial gain (loss) on defined benefit plan 8316 Unrealised losses from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Total other comprehensive (loss) income for the period 8500 Total comprehensive income for the period Profit attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the parent Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Equity attributable to owners of the parent

2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation of 2019 earnings Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2020 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation of 2020 earnings Legal reserve Special reserve Cash dividends Due to donated assets received Balance at December 31, 2021	Notes		Share capital - common stock				Capital R	e	serves						Retained Earnings	Retained Earnings		Other equityi	n	terest		Total equity
					Additional paid-in capital		Treasury stock transactions		Donated assets received	Employee stock warrants			Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(19) 6(19)		$ 8,448,562 - - - - - - - $ 8,448,562 $ 8,448,562 - - - - - - - $ 8,448,562		$ 628,134 - - - - - - - $ 628,134 $ 628,134 - - - - - - - $ 628,134		$ 130,592 - - - - - - - $ 130,592 $ 130,592 - - - - - - - $ 130,592		$ 732 - - - - - - 296 $ 1,028 $ 1,028 - - - - - - 302 $ 1,330		$ 44,460 - - - - - - - $ 44,460 $ 44,460 - - - - - - - $ 44,460		$ 4,982,577 - - - 558,721 - - - $ 5,541,298 $ 5,541,298 - - - 795,542 - - - $ 6,336,840	$ 505,966 - - - - 288,559 - - $ 794,525 $ 794,525 - - - - ( 120,067 ) - - $ 674,458		$ 17,065,967 7,959,505 ( 4,085 ) 7,955,420 ( 558,721 ) ( 288,559 ) ( 3,548,396 ) - $ 20,625,711 $ 20,625,711 16,921,005 120 16,921,125 ( 795,542 ) 120,067 ( 5,153,623 ) - $ 31,717,738		($ 794,525 ) - 147,704 147,704 - - - - ($ 646,821 ) ($ 646,821 ) - ( 217,270 ) ( 217,270 ) - - - - ($ 864,091 )	$ - - ( 27,637 ) ( 27,637 ) - - - - ($ 27,637 ) ($ 27,637 ) - ( 10,066 ) ( 10,066 ) - - - - ($ 37,703 )		$ 31,012,465 7,959,505 115,982 8,075,487 - - ( 3,548,396 ) 296 $ 35,539,852 $ 35,539,852 16,921,005 ( 227,216 ) 16,693,789 - - ( 5,153,623 ) 302 $ 47,080,320

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation (including right-of-use assets and investment properties) Amortization Expected credit loss (gain) Net (gain) loss on financial assets and liabilities at fair value through profit or loss Interest expense Interest income (Gain) loss on disposal of property, plant and equipment Loss (gain) on lease modification Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes receivable, net Accounts receivable Other receivables Inventories, net Prepayments Other non-current assets Changes in operating liabilities Accounts payable Other payables Provision for liabilities - current Refund liabilities- current Other current liabilities, others Net defined benefit liability Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2021 2020 $ 20,630,672 $ 9,596,893 6(24) 1,240,284 1,095,818 6(24) 162 200 13,417 ( 7,741 ) ( 125,652 ) 31,850 18,706 31,945 6(21) ( 72,045 ) ( 88,822 ) 6(23) ( 862 ) 540 6(9) 806 ( 366 ) 127,713 900 20,067 ( 66,173 ) ( 7,324,112 ) ( 4,652,441 ) ( 26,646 ) ( 37,322 ) ( 10,457,125 ) ( 4,954,697 ) ( 318,200 ) ( 131,812 ) 2,883 18,207 6,753,435 6,786,231 2,548,121 1,497,850 353,062 293,715 1,177,412 1,919,293 415,873 215,321 ( 8,346 ) ( 6,766 ) 87,161 - 15,056,786 11,542,623 71,732 86,784 ( 19,392 ) ( 29,945 ) ( 2,496,210 ) ( 774,794 ) 12,612,916 10,824,668

(Continued)

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at amortised cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment properties Increase in refundable deposits Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Repayment of the principal portion of lease liabilities Payment of long-term borrowings (Decrease) increase in guarantee deposits received Cash dividends paid Due to donated assets received Net cash flows used in financing activities Effect of exchange rate Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 $ 625,198 $ 200,464 ( 1,560,688 ) ( 970,766 ) 2,065 557 6(11) ( 914 ) ( 316 ) ( 34,300 ) ( 22,474 ) ( 968,639 ) ( 792,535 ) ( 1,000,000 ) 1,500,000 ( 243,022 ) ( 239,125 ) ( 13,786 ) ( 1,039 ) ( 966 ) 13,463 6(19) ( 5,153,623 ) ( 3,548,396 ) 302 296 ( 6,411,095 ) ( 2,274,801 ) ( 164,336 ) 119,578 5,068,846 7,876,910 6(1) 18,585,955 10,709,045 6(1) $ 23,654,801 $ 18,585,955

The accompanying notes are an integral part of these consolidated financial statements.

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MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

MICRO-STAR INTERNATIONAL CO., LTD. (the “Company”) was incorporated as a company limited by shares under the laws of the Republic of China (R.O.C.) in August 1986 and started its operations in the same year. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture and sale of motherboards and computer hardware. The shares of the Company have been listed on the Taiwan Stock Exchange since October 1998. The Company is the Group’s ultimate parent company.

1. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 21, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1) Effect of the adoption of new standards and amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest Rate Benchmark Reform— Phase 2’ Amendments to IFRS 16, ‘Covid-19-related rent concessions beyond 30 June 2021’	January 1, 2021 January 1, 2021 April 1, 2021(Note)

Note ： Earlier application from January 1, 2021 is allowed by FSC.

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘ Property, plant and equipment: proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘ Onerous contracts — cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
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, 'Insurance contracts'	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 – comparative information'	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

• The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• (d) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All

~17~

amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiaries	Main business activities	Ownership(%)	Ownership(%)	Note
			2021/12/31	2020/12/31
MICRO-STAR INTERNATIONAL CO., LTD. 〃 〃 〃 〃 〃 〃 MSI (HOLDING) 〃 〃	MICRO-STAR NETHERLANDS HOLDING B.V. [MSI (HOLDING)] MSI COMPUTER CORP. [MSI (LA)] MSI PACIFIC INTERNATIONAL HOLDING CO., LTD. [MSI (PACIFIC)] MSI COMPUTER JAPAN CO., LTD. [MSI (JAPAN)] MSI COMPUTER (AUSTRALIA) PTY. LTD. [MSI (AUSTRALIA)] MSI COMPUTER (CAYMAN) CO., LTD. [MSI COMPUTER (CAYMAN)] MICRO-STAR CANADA LTD. [MSI (CANADA)] MYSTAR COMPUTER B.V. [MYSTAR] MSI COMPUTER SARL [MSI (SARL)] MSI COMPUTER (UK) LTD. [MSI (UK)]	Holding company Sales and after-sales service of computers and electronic components Holding company Sales support and after-sales service of computers and electronic components 〃 Holding company Sales support and after-sales service of computers and electronic components Sales support of computers and electronic components 〃 〃	100 100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100 100 100	B 〃 A 〃 〃 B A and D B 〃 〃

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Main business Ownership(%)
Name of investor Name of subsidiaries activities 2021/12/31 2020/12/31 Note
----- End of picture text -----

Name of investor	Name of subsidiaries	activities	2021/12/31	2020/12/31	Note
MSI (HOLDING)	MSI POLSKA SP. Z O. O.	Sales support and	99	99	B
	[MSI (POLSKA)]	after-sales services of
		computers and
		electronic components
〃	MSI COMPUTER	Logistics services of	100	100	〃
	EUROPE B.V.	computers and
	[MSI (EUROPE)]	electronic components
〃	LLC MSI COMPUTER	Sales support and	99	99	〃
	[MSI (RUSSIA)]	after-sales service of
		computers and
		electronic components
〃	MSI COMPUTER	Sales support of	99	99	B and C
	TECHNOLOGIES	computers and
	LIMITED COMPANY	electronic components
	[MSI (TURKEY)]
〃	MSI ITALY S.R.L.	〃	100	100	B
	[MSI (ITALY)]
〃	MSI IBERIA S.L.	〃	100	100	〃
	[MSI (IBERIA)]
MSI (EUROPE)	MSI POLSKA SP. Z O. O.	Sales support and	1	1	〃
	[MSI (POLSKA)]	after-sales services of
		computers and
		electronic components
〃	LLC MSI COMPUTER	〃	1	1	〃
	[MSI (RUSSIA)]
〃	MSI COMPUTER	Sales support of	1	1	B and C
	TECHNOLOGIES	computers and
	LIMITED COMPANY	electronic components
	[MSI (TURKEY)]
MSI (PACIFIC)	MSI KOREA CO.,	Sales and after-sales	100	100	B
	LTD. [MSI (KOREA)]	service of computers
		and electronic
		components
〃	STAR INFORMATION	Holding company	100	100	A
	HOLDING CO., LTD.
	[STAR INFORMATION]
〃	MICRO-STAR	〃	100	100	〃
	INTERNATIONAL
	(B.V.I) HOLDING
	CO., LTD. [MSI (B.V.I.)]

~19~

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Main business Ownership(%)
Name of investor Name of subsidiaries activities 2021/12/31 2020/12/31 Note
----- End of picture text -----

Name of investor	Name of investor	Name of investor	Name of subsidiaries	activities	2021/12/31	2020/12/31	Note
MSI (PACIFIC)			MICRO ELECTRONICS	Holding company	100	100	A
			HOLDING CO., LTD.
			[MICRO ELECTRONICS]
	〃		MEGA TECHNOLOGY	〃	100	100	〃
			HOLDING CO., LTD.
			[MEGA TECHNOLOGY]
	〃		MEGA COMPUTER CO.,	Sales support of	100	100	B
			LTD. [MEGA	computers and
			COMPUTER]	electronic components
	〃		MHK INTERNATIONAL	〃	100	100	〃
			CO., LTD. [MSI (MHK)]
	〃		MSI (SHANGHAI) CO.,	Sales and after-sales	100	100	A
			LTD. [MSI (SHANGHAI)]	service of computers
				and electronic
				components
	〃		SHENZHEN MEGA	After-sales service of	100	100	〃
			INFORMATION CO.,	computers, and
			LTD. [SHENZHEN	electronic components
			MEGA INFORMATION]
MICRO			MSI ELECTRONICS	Manufacture and	100	100	〃
ELECTRONICS			(KUNSHAN) CO., LTD.	after-sales service of
			[MSI ELECTRONICS	computers, and
			(KUNSHAN)]	electronic components
STAR			MSI (SHENZHEN) CO.,	Sales and after-sales	-	100	A and E
INFORMATION			LTD. [MSI SHENZHEN]	service of computers
				and electronic
				components
MSI (B.V.I.)			MSI COMPUTER	Manufacture and	100	100	A
			(SHENZHEN) CO., LTD.	after-sales service of
			[MSI COMPUTER	computers, and
			(SHENZHEN)]	electronic components
MEGA			RAIDEALS INC.	Sales computers	100	100	〃
TECHNOLOGY			[RAIDEALS]	and electronic
				components
Note	A:	These investee companies are		included in the consolidated financial statements based
		on their financial statements which were audited by			the Group’s independent auditors
		for the corresponding period.
Note	B:	There investee companies are		included in the consolidated financial statements based
		on their financial statements which were audited by			other independent auditors for the
		corresponding period.
Note	C:	The subsidiary is in the process of liquidation.
Note	D:	MSI CANADA received capital infusion from MSI on April 8, 2020. Thus, it has been

~20~

included in the consolidated financial statements from that date.

Note E: On October 8, 2021, this subsidiary has cancelled its registration.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

iii. All resulting exchange differences are recognised in other comprehensive income.

~21~

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settle within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

• Cash equivalents refer to short-term highly liquid investments that readily convert to known amount of cash and subject to an insignificant effect of value of changes in rate. Time deposits and money market fund that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

~22~

(8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b) The assets’ contractual cash flows represents solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

• For financial assets measured at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the

~23~

impairment provision for lifetime ECLs.

• －

• (12) Leasing arrangements (lesser) Operating leases

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

• (13) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work-in-process comprises raw materials, direct labour, other direct costs and related production overheads. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(14) Property, plant and equipment

• A Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 3~55 years Machinery and equipment 1.5~10 years Other properties (includes transportation equipment, office equipment, 1.5~10 years and leasehold improvements)

~24~

(15) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are mainly fixed payments, less any lease incentives that can be received.

• The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost mainly comprising the amount of the initial measurement of lease liability.

• The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 years.

(17) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(18) Borrowings

Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption

~25~

value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(19) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (20) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• (21) Provisions

• Provisions of warranties are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(22) Employee benefits

• A. 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, and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit

~26~

obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past service costs. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

     - ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognised immediately in profit or loss.

• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ and supervisors’ remuneration

  • Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (23) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises

~27~

from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• (24) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• (25) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

• (26) Revenue recognition

• A. Sales of goods

  • (a) The Group manufactures and sells motherboards, graphic card products, a variety of computer hardware, and electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Revenue from the products is recognised based on the price specified in the contract, net of the estimated value added tax, returns and volume discounts and rebates. The volume discounts to the customers are estimated based on the anticipated annual sales quantities and

~28~

the right of return for defective products is estimated on the basis of historical experience. Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. The period between the transfer of the promised goods or services to the customer and payment by the customer does not exceed one year. As a result, the Group does not adjust any of the transaction prices for the time value of money.

• (c) The Group’s obligation to provide a refund for faulty products under the standard warranty terms is recognised as a provision.

• (d) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognises the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

Lease term

In determining the lease term, the Group takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option, including the expected changes of all facts and situation for the period from the commencement date of lease to the execution date of options. Also, the Group took into consideration the main factors, such as the contract terms and conditions during the option covered period and the importance to lessee’s operation if the significant lease improvement and underlying assets incurred during the contract terms. When significant events or significant changes occur within the Group’s control, the lease term will be re-estimated.

~29~

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2021, the carrying amount of inventories was $37,939,662.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

there might be material changes to the evaluation. As inventories was $37,939,662. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents	of December 31, 2021,	the carrying amount o
Cash on hand and petty cash Checking accounts and demand deposits Time deposits Total	December 31, 2021 2,914 $ 16,623,197 7,028,690 23,654,801 $	December31,2020
		2,979 $ 13,480,057 5,102,919
		18,585,955 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group’s time deposits with maturity periods over three months or pledged to others are reclassified as “financial assets at amortised cost.” Details of financial assets at amortised cost are provided in Notes 6(4) and 8.

(2) Financial assets and liabilities at fair value through profit or loss - current

Assetitems Financial assets mandatorily measured at fair value through profit or loss Stock of publicly traded or listed companies Derivatives – Forward exchange contract Derivatives – Foreign exchange swap Evaluation adjustment Total Liabilityitems Financial liabilities held for trading Derivatives – Forward exchange contract Derivatives – Foreign exchange swap Total	December31,2021 December31,2020 - $ 126,045 $ 40,175 37 58,638 79,260 98,813 205,342 - 1,605) ( 98,813 $ 203,737 $ December31,2021 December31,2020 15,708 $ 103,885 $ - - 15,708 $ 103,885 $	December31,2020
		126,045 $ 37 79,260
		203,737 $
		December31,2020
		103,885 $ -
		103,885 $

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• A. Amounts recognised in profit or loss in relation to financial assets and liabilities at fair value through profit or loss are listed below:

Financial assets and liabilities mandatorily measured at fair value through profit or loss Equity instruments Derivatives	2021 2020 17,959 $ 24,436 $ 474,823 57,442) ( 492,782 $ 33,006) ($

• B. The Group entered into contracts related to derivative financial assets and liabilities which were not accounted for under hedge accounting. The contract information are as follows:

Derivative Financial Assets		December	31,2021
		Contract Amount Notional Principal (In thousands) AUD 1,000 CAD 8,000 RUB 666,825 EUR 60,000 USD 324,000 CNY 509,265 December	Contractperiod
Forward exchange contracts 〃 〃 〃 Foreign exchange swap 〃 DerivativeFinancial Liabilities			2021.10.27~2022.01.10 2021.10.12~2022.02.24 2021.12.09~2022.01.18 2021.10.14~2022.04.01 2021.12.14~2022.05.09 2021.08.12~2022.04.19 31, 2021
		Contract Amount Notional Principal (In thousands) GBP 14,500 AUD 15,000 SEK 13,621 EUR 48,000 December	Contract period
Forward exchange contracts 〃 〃 〃 DerivativeFinancial Assets			2021.12.13~2022.02.24 2021.12.08~2022.02.24 2021.12.29~2022.02.08 2021.12.06~2022.03.24 31, 2020
		Contract Amount Notional Principal (Inthousands) CAD 1,000 USD 80,000 CNY 591,911	Contract period
Forward exchange contracts Foreign exchange swap 〃			2020.12.16～2021.03.24 2020.11.06～2021.02.09 2020.08.13～2021.05.17

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Contract Amount DerivativeFinancial Liabilities Notional Principal (Inthousands) Forward exchange contracts GBP 6,000 〃 AUD 8,200 〃 CAD 6,000 〃 KRW 6,576,400 〃 SEK 7,575 〃 EUR 68,000 December	Contract period 31,2020
	2020.10.22～2021.03.08 2020.10.28～2021.02.24 2020.11.06～2021.03.24 2020.12.02～2021.01.28 2020.11.20～2021.02.08 2020.08.25～2021.03.16

The Group entered into forward foreign exchange contracts to hedge exchange risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• C. The Group has no financial assets at fair value through profit or loss pledged to others.

• D. Information relating to price risk and fair value of financial assets at fair value through profit or loss is provided in Note 12(2)(3).

(3) Financial assets at fair value through other comprehensive income

Items		December	31,2021		December	31, 2020
Non-current items:
Equity instruments
Unlisted stocks		$	151,975		$	151,975
Valuation adjustment	(		47,128)	(		27,637)
Total		$	104,847		$	124,338

• A. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $104,847 and $124,338 as at December 31, 2021 and 2020, respectively.

• B. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $104,847 and $124,338, respectively.

• C. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• D. Information relating to price risk and fair value of financial assets at fair value through other comprehensive income is provided in Note 12(2)(3).

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(4) Financial assets at amortised cost

Financial assets at amortised cost
Items Current items: Time deposits over three months Non-current items: Pledge bank deposits Others Total	December31,2021 432 $ 599,638 $ 2,116 601,754 $	December31,2020
		1,000,447 $
		225,844 $ 1,093
		226,937 $

• A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

		2021		2020
Interest income	$	12,328	$	7,362

• B. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group were $602,186 and $1,227,384, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Notes and accounts receivable

Notes and accounts receivable
		December31,2021			December31,2020
Notes receivable		$	93,220		$	113,287
Accounts receivable		$	29,207,301		$	21,885,338
Less: Allowance for doubtful accounts	(		28,388)	(		18,092)
		$	29,178,913		$	21,867,246

A. The ageing analysis of accounts receivable and notes receivable:

Not past due 1 to 75 days 76 to 365 days Over 365 days	December	Notes receivable 93,220 $ - - - 93,220 $ 31,2021	December	31,2020
	Accounts receivable 24,143,650 $ 4,985,343 77,658 650 29,207,301 $		Accounts receivable 19,204,696 $ 2,633,841 45,859 942 21,885,338 $	Notes receivable
				113,287 $ - - -
				113,287 $

The above ageing analysis was based on past due date.

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• B. As of December 31, 2021 and 2020, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2020, the balance of receivables from contracts with customers amounted to $17,205,783.

• C. Most of the Group’s accounts receivable have been insured or have collateral as security, and the Group will be able to obtain insurance claims or enforce a collateral in case these accounts default.

• D. As of December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable were $93,220 and $113,287; $29,178,913 and $21,867,246, respectively.

• E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(6) Inventories

12(2). Inventories
Raw materials Work-in-process Finished goods Raw materials Work-in-process Finished goods		December31,2021
	Cost 15,212,486 $ - 23,279,771 38,492,257 $	Allowance for valuation loss 119,602) ($ - 432,993) ( 552,595) ($ December31,2020	Bookvalue
			15,092,884 $ - 22,846,778
			37,939,662 $
	Cost 8,292,346 $ 1,502,072 18,172,487 27,966,905 $		Bookvalue
			8,137,473 $ 1,499,874 17,845,190
			27,482,537 $

The cost of inventories recognised as expense for the period:

Cost of inventories recognised as expense Losses of decline (gains on reversal) in market value	2021 2020 163,565,876 $ 125,199,949 $ 71,501 48,625) (

The Group reversed a previous inventory write-down and accounted for as reduction of cost of goods sold because some inventories which were recognized as expense have been sold for the year ended December 31, 2020.

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(7) Prepayments

Overpaid tax for offsetting the future tax payable Office supplies Prepayment for goods Others	December31,2021 922,305 $ 820,829 42,257 340,322 2,125,713 $	December31,2020 972,344 $ 539,955 57,650 237,564 1,807,513 $

(8) Property, plant and equipment

							2021
			Land		Buildings	Machineries			Others		Total
At January 1
Cost		$	1,462,807	$	5,635,658	$	3,239,657	$	1,906,219	$	12,244,341
Accumulated depreciation			-	(	3,895,827)	(	1,798,346)	(	1,420,074)	(	7,114,247)
		$	1,462,807	$	1,739,831	$	1,441,311	$	486,145	$	5,130,094
Balance at January 1		$	1,462,807	$	1,739,831	$	1,441,311	$	486,145	$	5,130,094
Additions			-		75,957		1,096,886		387,845		1,560,688
Reclassifications			-		62,243		2,609	(	55,106)		9,746
Disposals			-		-	(	85)	(	1,118)	(	1,203)
Depreciation charge			-	(	264,304)	(	463,809)	(	219,785)	(	947,898)
Net exchange differences	(		10,363)	(	16,001)	(	9,491)	(	4,719)	(	40,574)
Balance at December 31		$	1,452,444	$	1,597,726	$	2,067,421	$	593,262	$	5,710,853
At December 31
Cost		$	1,452,444	$	5,752,635	$	4,259,943	$	2,142,379	$	13,607,401
Accumulated depreciation			-	(	4,154,909)	(	2,192,522)	(	1,549,117)	(	7,896,548)
		$	1,452,444	$	1,597,726	$	2,067,421	$	593,262	$	5,710,853

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At January 1 Cost Accumulated depreciation Balance at January 1 Additions Reclassifications Disposals Depreciation charge Net exchange differences Balance at December 31 At December 31 Cost Accumulated depreciation

Land Buildings Machineries Others Total 1,462,282 $ 5,251,609 $ 2,550,199 $ 1,776,223 $ 11,040,313 $ - 3,387,842) ( 1,443,341) ( 1,315,697) ( 6,146,880) ( 1,462,282 $ 1,863,767 $ 1,106,858 $ 460,526 $ 4,893,433 $ 1,462,282 $ 1,863,767 $ 1,106,858 $ 460,526 $ 4,893,433 $ - 49,919 638,484 282,363 970,766 - 85,038 43,543 84,090) ( 44,491 - 225) ( 106) ( 766) ( 1,097) ( - 267,855) ( 356,338) ( 173,271) ( 797,464) ( 525 9,187 8,870 1,383 19,965 1,462,807 $ 1,739,831 $ 1,441,311 $ 486,145 $ 5,130,094 $ 1,462,807 $ 5,635,658 $ 3,239,657 $ 1,906,219 $ 12,244,341 $ - 3,895,827) ( 1,798,346) ( 1,420,074) ( 7,114,247) ( 1,462,807 $ 1,739,831 $ 1,441,311 $ 486,145 $ 5,130,094 $ 2020

Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

－ (9) Leasing arrangements lessee

A. The Group leases various assets including land, buildings, machinery and equipment, and other equipment. Rental contracts are typically made for periods of 3 months to 9 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

borrowing purposes. The carrying amount of right-of-use assets and the	depreciation charge are	as follows:
Land Buildings Machinery and equipment Other equipment	December31,2021 Carryingamount 56,792 $ 294,296 7,196 32,517 390,801 $	December31,2020
		Carryingamount
		62,903 $ 387,566 7,803 44,128
		502,400 $

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Land Buildings Machinery and equipment Other equipment	2021 2020 Depreciation charge Depreciation charge 5,460 $ 8,594 $ 220,602 217,471 2,807 2,760 18,881 21,127 247,750 $ 249,952 $

• C. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $166,505 and $301,039, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

2021 Items affecting profit or loss Interest expense on lease liabilities $ 6,383 Expense on leases of low-value or short-term assets 52,751 Expense on variable lease payments 27,493 (Loss) gain on lease modification 806) (	2020
	$ 10,050 58,122 29,530 366

• E. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $329,584 and $336,687, respectively.

• F. The Group has applied the practical expedient to “Covid-19-related rent concessions”. The amount is not significant, and the Group recognised changes in lease payments caused by rent concessions as deductions for expenses.

• (10) Leasing arrangements – lessor

• A. The Group leases buildings. Rental contracts are typically made for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

• B. The Group recognised rental income of $99,240 and $102,153 based on operating lease contracts for the years ended December 31, 2021 and 2020, respectively. None of these included variable lease payments.

• C. The maturity analysis of lease payments in the operating lease is as follows:

Less than 1 year Between 1 and 5 years Total	December31,2021 91,533 $ 53,852 145,385 $	December31,2020
		83,885 $ 105,775
		189,660 $

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(11) Investment property

Investment property
			2021			2020
			Buildings			Buildings
At January 1
Cost		$	950,590		$	1,167,190
Accumulated depreciation	(		742,953)	(		866,631)
		$	207,637		$	300,559
Balance at January 1		$	207,637		$	300,559
Additions			914			316
Reclassifications	(		16,404)	(		48,800)
Depreciation charge	(		44,636)	(		48,402)
Net exchange differences	(		1,594)			3,964
Balance at December 31		$	145,917		$	207,637
At December 31
Cost		$	888,248		$	950,590
Accumulated depreciation	(		742,331)	(		742,953)
		$	145,917		$	207,637

• A. Rental income from the lease of the investment and direct operating expenses arising from the investment property:

investment property:
Rental income from the lease of the investment property Direct operating expenses arising from the investment property	2021 99,240 $ 61,756 $	2020
		102,153 $
		67,220 $

B. As of December 31, 2021 and 2020, the fair value of the Group’s investments in property amounting to $2,156,294 and $2,437,773, respectively, as derived from market prices in the nearby area, are under Level 2 fair value measurement.

• (12) Short-term borrowings

Short-term borrowings
Type ofborrowings Bank borrowings Unsecured borrowings Type of borrowings Bank borrowings Unsecured borrowings	December31,2021 2,000,000 $ December31,2020 3,000,000 $	Interestraterange 0.68%~0.78% Interest rate range 0.73%~0.85%	Collateral
			None Collateral
			None

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(13) Other payables

Other payables
	December	31,2021	December	31,2020
Accrued salary and bonus	$	2,488,797	$	1,685,707
Accrued freight and
import export expense		1,780,045		1,171,050
Directors’ remuneration and
employees’ compensation		1,647,800		796,500
Advertising expenses payable		734,784		659,268
Accrued molding expense		349,850		333,861
Other accrued expenses		890,400		698,024
	$	7,891,676	$	5,344,410

- (14) Long term borrowings

December 31, 2021: None.

Borrowing period and Type of borrowings repayment term Interest rate range Collateral December 31, 2020 Long-term bank borrowings Secured Starting from March 24, Three month Land and $ 14,184 borrowings 2016 to March 24, 2021, LIBOR plus Building repayment of principal 1.75% and interest of USD 4,307.77 monthly and remaining principal on the due date.

Less: current portion

( 14,184) - $

(15) Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following

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year, the Company will make contributions for the deficit by next March.

(b) The amounts recognised in the balance sheet are as follows:

		December	31,2021		December	31,2020
Present value of defined benefit obligations		$	538,812		$	535,344
Fair value of plan assets	(		326,994)	(		315,030)
Net defined benefit liability		$	211,818		$	220,314

(c) Movements in net defined benefit liabilities are as follows:

Present value of defined benefit obligations 2021 Balance at January 1 535,344 $ Current service cost 2,862 Interest expense (income) 1,606 539,812 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in population assumptions 440 Change in financial assumptions 20,605) ( Experience adjustments 24,754 4,589 Pension fund contribution - Paid pension 5,589) ( Balance at December 31 538,812 $	Fair value of plan assets	Net defined benefit liability
	315,030) ($ - 945) ( 315,975) ( 4,739) ( - - - 4,739) ( 11,869) ( 5,589 326,994) ($	220,314 $ 2,862 661 223,837 4,739) ( 440 20,605) ( 24,754 150) ( 11,869) ( - 211,818 $

~40~

Present value of defined benefit obligations 2020 Balance at January 1 524,869 $ Current service cost 3,359 Interest expense (income) 3,674 531,902 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in financial assumptions 20,532 Experience adjustments 5,112) ( 15,420 Pension fund contribution - Paid pension 11,978) ( Balance at December 31 535,344 $	Fair value of plan assets	Net defined benefit liability
	302,895) ($ - 2,120) ( 305,015) ( 10,314) ( - - 10,314) ( 11,679) ( 11,978 315,030) ($	221,974 $ 3,359 1,554 226,887 10,314) ( 20,532 5,112) ( 5,106 11,679) ( - 220,314 $

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and its domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and its domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

	2021	2020
Discount rate	0.70%	0.30%
Future salary increases	2.75%	2.75%

Assumptions regarding future mortality experience are set based on the sixth round of empirical life tables of the Taiwan life insurance industry.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

		Discountrate	Discountrate			Future salaryincreases	Future salaryincreases	Future salaryincreases
	Increase 0.25%		Decrease 0.25%		Increase 0.25%		Decrease 0.25%
December 31, 2021
Effect on present value of
defined benefit obligation	($	12,052)	$	12,472	$	10,852	($	10,559)
December 31, 2020
Effect on present value of
defined benefit obligation	($	12,970)	$	13,446	$	11,756	($	11,422)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2022 amount to $11,791.

• (g) As of December 31, 2021, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-3 years 3-4 years 4-5 years 6-10 years Over 10 years	65,880 $ 40,977 20,780 17,797 22,956 151,597 254,865
	574,852 $

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• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• (c) The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $319,372 and $247,872, respectively.

(16) Provisions for liabilities

Warranty			2021			2020
At January 1		$	850,435		$	556,720
Additional provisions			1,171,340			852,712
Used during the period	(		818,343)	(		558,931)
Exchange differences			65	(		66)
At December 31		$	1,203,497		$	850,435
Analysis of total provisions:
		December31,2021			December31,2020
Current		$	1,203,497		$	850,435

Current

The Group gives warranties on computer components and personal computers sold. Provision for warranty is estimated based on historical warranty data.

(17) Share capital

As of December 31, 2021, the Company’s authorized capital was $15,000,000 (including 80,000 thousand shares reserved for employee stock options and 150,000 thousand shares reserved for convertible bonds issued by the Company), and the paid-in capital was $8,448,562 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

(18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the

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paid-in capital each year. A company shall not use the capital reserve to make good its capital loss, unless the surplus reserve is insufficient to make good such loss.

(19) Retained earnings

• A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior year's operating losses, then 10% of the remaining amount shall be set aside or reversed as legal reserve. The balance plus unappropriated retained earnings at the beginning of the period shall be appropriated 10%~90% as proposed by the Board of Directors and resolved by the stockholders during their meeting.

• B. The Company’s dividend policy is summarized below: as the Company operates in a volatile business environment and is in the stable growth stage, except for the Company’s future expansion plans, stockholders’ interest is taken into consideration. The Group appropriated dividends in proportion to total number of shares, dividends could be distributed in stock or cash, and cash dividends shall account for at least 30% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriations of 2020 earnings had been resolved at the stockholders’ meeting on July 16, 2021, and the appropriation of 2019 earnings had been resolved at the stockholders’ meeting on June 10, 2020, respectively, were as follows:

June 10, 2020, respectively, were as follows:
Amount Dividends per share (dollar) Legal reserve 795,542 $ Special reserve 120,067) ( Cash dividend 5,153,623 6.10 $ 2020	Amount Dividends per share (dollar) 558,721 $ 288,559 3,548,396 4.20 $ 2019
	Amount 558,721 $ 288,559 3,548,396
		4.20 $

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The appropriation of 2020 earnings approved by the stockholders is the same as the appropriation resolved by the Board of Directors during its meeting on March 22, 2021. Information about earnings appropriation of the Company as resolved by Board of Directors is posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• F. The appropriations of 2021 earnings had been resolved at the stockholders’ meeting on March 21, 2022,respectively, were as follows:

2022,respectively, were as follows:
		2021
				Dividends per
		Amount		share (dollar)
Legal reserve	$	1,692,113
Special reserve		227,336
Cash dividend		8,870,990	$	10.50

The appropriations of 2021 earnings have not been approved by the stockholders as of financial report.

(20) Operating revenue

The Group derives revenue from the transfer of goods at a point in time in the following major segment:

		Computer and
2021	peripherals segment				Other			Total
Total segment revenue	$	201,807,778		$	2,374		$	201,810,152
Timing of revenue recognition
At a point in time	$	201,807,778		$	2,374		$	201,810,152
		Computer and
2020	peripherals segment				Other			Total
Total segment revenue	$	146,342,698		$	160,091		$	146,502,789
Timing of revenue recognition
At a point in time	$	146,342,698		$	160,091		$	146,502,789
Interest income
			2021					2020
Interest income from bank deposits		$			59,717	$		81,460
Interest income from financial assets measured at
amortised cost					12,328			7,362
		$			72,045	$		88,822

(21) Interest income

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(22) Other income

Rental revenue Others	2021 2020 99,240 $ 102,153 $ 772,914 474,822 872,154 $ 576,975 $

(23) Other gains and losses

Other gains and losses
	2021		2020
Net currency exchange losses	720,305) ($	($	77,078)
Gains (losses) on financial assets and liabilities at fair
value through profit or loss	492,782	(	33,006)
Net gains (losses) on disposal of property, plant and
equipment	862	(	540)
Other losses	42,804) (	(	114,163)
	269,465) ($	($	224,787)

(24) Expenses by nature

Expenses by nature
Employee benefit expense Employee benefit expense Depreciation charges Amortisation charges Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Total	2021 11,408,802 $ 1,240,284 162 12,649,248 $ 2021 10,243,706 $ 502,296 322,895 339,905 11,408,802 $	2020
		8,192,801 $ 1,095,818 200
		9,288,819 $
		2020
		7,229,216 $ 415,089 252,785 295,711
		8,192,801 $

(25) Employee benefit expense

• A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 6%~10% for employees’ compensation and shall not be higher than 1% for directors’ remuneration.

• B. For the years ended December 31, 2021 and 2020, employees’ remuneration was accrued at $1,540,000 and $725,000, respectively; while directors’ remuneration was accrued at $107,800 and $71,500, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ remuneration were estimated and accrued based on the historical distribution ratio and the profit of the current year for the year ended December 31, 2021.

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Employees’ compensation and directors’ remuneration of 2020 as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2020 financial statements.

Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors and shareholders is posted in the “Market Observation Post System” website of the Taiwan Stock Exchange.

(26) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

tem” website of the Taiwan Stock Exchange. e tax ome tax expense Components of income tax expense:
			2021		2020
Current tax:
Current tax on profits for the period		$	3,968,967	$	1,959,074
Prior year income tax overestimation	(		44,348)	(	4,331)
Total current tax			3,924,619		1,954,743
Deferred tax:
Origination and reversal of temporary differences	(		214,952)	(	317,355)
Total deferred tax	(		214,952)	(	317,355)
Income tax expense		$	3,709,667	$	1,637,388
The income tax charge relating to components of	other		comprehensive income:
			2021		2020
Remeasurement of defined benefit obligations	($		30)	$	1,021
Unrealised losses from investments in equity
instruments measured at fair value through other
comprehensive income			9,425		-
		$	9,395	$	1,021

• (b) The income tax charge relating to components of other comprehensive income:

• (c) The income tax charged/(credited) to equity during the period: None.

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B. Reconciliation between income tax expense and accounting profit

			2021			2020
Tax calculated based on profit before tax and
statutory tax rate (Note)		$	4,375,780		$	2,063,059
Effect from items disallowed by tax regulation			24,811			16,800
Temporary differences not recognised as deferred
tax liabilities	(		308,075)	(		133,514)
Effect from investment tax credits	(		407,669)	(		302,078)
Prior year income tax overestimation	(		44,348)	(		4,331)
Effect of different tax rates in countries in which the
group operates	(		32,494)	(		54,499)
Tax on undistributed earnings			102,049			52,357
Other	(		387)	(		406)
Income tax expense		$	3,709,667		$	1,637,388

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

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• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

						2021	2021	2021
									Recognised
									in other
						Recognised in		comprehensive
			January1			profit or loss			income		December31
Temporary differences:
-Deferred tax assets:
Unrealized gross profit		$	438,111		$	130,092		$	-	$	568,203
Loss on inventory			96,541			17,367			-		113,908
Remeasurement of defined
benefit obligations			35,156			-	(		30)		35,126
Unrealised exchange loss			-			15,254			-		15,254
Unrealised loss on financial
assets at fair value through
other comprehensive income			-			-			9,425		9,425
Allowance for bad debts excess
tax limitation			2,277			4,924			-		7,201
Unrealised loss on financial
assets (liabilities) at fair value
through profit or loss			4,918	(		4,918)			-		-
Others			192,610			62,441			-		255,051
Subtotal			769,613			225,160			9,395		1,004,168
-Deferred tax liabilities:
Unrealised exchange gain	(		6,084)			6,084			-		-
Unrealised loss on financial
assets (liabilities) at fair value
through profit or loss			-	(		16,621)			-	(	16,621)
Others	(		844)			329			-	(	515)
Subtotal	(		6,928)	(		10,208)			-	(	17,136)
Total		$	762,685		$	214,952		$	9,395	$	987,032

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					2020	2020
						Recognised
						in other
					Recognised in	comprehensive
			January1		profit or loss	income			December31
Temporary differences:
-Deferred tax assets:
Unrealized gross profit		$	203,265	$	234,846	$	-	$	438,111
Loss on inventory			110,357	(	13,816)		-		96,541
Allowance for bad debts excess
tax limitation			7,258	(	4,981)		-		2,277
Unrealised loss on financial
assets at fair value through
other comprehensive income			-		4,918		-		4,918
Remeasurement of defined
benefit obligations			34,135		-		1,021		35,156
Others			116,508		76,102		-		192,610
Subtotal			471,523		297,069		1,021		769,613
-Deferred tax liabilities:
Unrealised exchange gain	(		20,490)		14,406		-	(	6,084)
Unrealised loss on financial
assets at fair value through
other comprehensive income	(		6,340)		6,340		-		-
Others	(		384)	(	460)		-	(	844)
Subtotal	(		27,214)		20,286		-	(	6,928)
Total		$	444,309	$	317,355	$	1,021	$	762,685

D. The Company has not recognised taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2021 and 2020, the amounts of temporary difference unrecognised as deferred tax liabilities were $7,167,374 and $5,887,126, respectively.

• E. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

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(27) Earnings per share

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2021
Retroactively adjusted
weighted-average
outstanding ordinary Earnings per share
Amount after tax shares (in thousands) (in NT dollars)
Basic earnings per share
Profit attributable to ordinary
$ 16,921,005 844,856 $ 20.03
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 16,921,005 844,856
Assumed conversion of all dilutive
potential ordinary shares
Employees’ compensation - 10,724
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary shares $ 16,921,005 855,580 $ 19.78
2020
Retroactively adjusted
weighted-average
outstanding ordinary Earnings per share
Amount after tax shares (in thousands) (in NT dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 7,959,505 844,856 $ 9.42
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 7,959,505 844,856
Assumed conversion of all dilutive
potential ordinary shares
-
Employees’ compensation 7,225
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary shares $ 7,959,505 852,081 $ 9.34
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(28) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31 At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31	Short-term borrowings	Short-term borrowings	Lease liabilities	Lease liabilities	Long-term borrowings 14,184 $ 13,786) ( 398) ( - - $ 2021 2020	Long-term borrowings 14,184 $ 13,786) ( 398) ( - - $ 2021 2020	Guarantee deposits received 212,383 $ 966) ( - - 211,417 $	Guarantee deposits received 212,383 $ 966) ( - - 211,417 $	Liabilities from financing activities-gross	Liabilities from financing activities-gross
	3,000,000 $ 1,000,000) ( - - 2,000,000 $		443,730 $ 243,022) ( 16,289) ( 153,747 338,166 $						3,670,297 $ 1,257,774) ( 16,687) ( 153,747 2,549,583 $
		Short-term borrowings		Lease liabilities		Long-term borrowings		Guarantee deposits received		Liabilities from financing activities-gross
		1,500,000 $ 1,500,000 - - 3,000,000 $	406,848 $ 239,125) ( 1,153 274,854 443,730 $		16,026 $ 1,039) ( 803) ( - 14,184 $			198,920 $ 13,463 - - 212,383 $		2,121,794 $ 1,273,299 350 274,854 3,670,297 $

1. RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship None.

(2) Significant related party transactions None.

(3) Key management compensation

Salaries and other employee benefits

2021 2020 $ 762,705 $ 464,093

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8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

			Book	value	value
		December	31,		December 31,
Asset items		2021			2020	Purpose
Non-current financial assets at						Performance security
amortised cost	$	599,638		$	225,844	guarantee
						For guarantee of
Property, plant and equipment			-		116,383	long-term loans
	$	599,638		$	342,227

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

• (1) Contingencies ： None.

• (2) Commitments ： None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or repurchase outstanding shares.

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(2) Financial instruments

A. Financial instruments by category

ancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading Financial liabilities at amortised cost Short-term borrowings Accounts payable Other payables Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	December31,2021 98,813 $ 104,847 23,654,801 602,186 93,220 29,178,913 292,862 99,016 54,124,658 $ 15,708 $ 2,000,000 33,931,186 7,891,676 - 211,417 44,049,987 $ 338,166 $	December31,2020
		203,737 $ 124,338 18,585,955 1,227,384 113,287 21,867,246 265,987 64,716
		42,452,650 $
		103,885 $ 3,000,000 27,177,751 5,344,410 14,184 212,383
		35,852,613 $
		443,730 $

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B. Risk management policies

The Group’s activities expose it to a variety of financial risks: including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency.

• iii. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.

• iv. The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).

• v. The Group’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2021

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD EUR: NTD Financial liabilities Monetary items USD: NTD	Foreign Currency Amount (In Thousands) 699,207 $ 77,229 1,304,280	Exchange rate 27.6800 31.3200 27.6800	Book Value (NTD)
			19,354,055 $ 2,418,806 36,102,464

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			December31,2020
(Foreign currency:	Foreign Currency Amount				Book Value
functionalcurrency)		(In Thousands)	Exchangerate		(NTD)
Financial assets
Monetary items
USD: NTD	$	471,844	28.4800	$	13,438,119
EUR: NTD		94,927	35.0200		3,324,351
RMB: NTD		142,167	4.3770		622,264
GBP: NTD		10,763	38.9000		418,664
Financial liabilities
Monetary items
USD: NTD		982,170	28.4800		27,972,190
EUR: NTD		25,630	35.0200		897,561
USD: RMB		23,215	6.5067		661,151

• vi. The exchange loss arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020 amounted to $720,305 and $77,078, respectively.

• vii. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
(Foreign currency: functional currency)			Effect on profit or loss (before tax) Effect on other comprehensive income 193,541 $ - $ 24,188 - 361,025 - 2021 Sensitivity analysis
		Degree of variation
Financial assets Monetary items USD: NTD EUR: NTD Financial liabilities Monetary items USD: NTD		1% 1% 1%

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			2020
		Sensitivity analysis
			Effect on profit		Effect on other
(Foreign currency:	Degree of		or loss		comprehensive
functionalcurrency)	variation		(before tax)		income
Financial assets
Monetary items
USD: NTD	1%	$	134,381	$	-
EUR: NTD	1%		33,244		-
RMB: NTD	1%		6,223		-
GBP: NTD	1%		4,187		-
Financial liabilities
Monetary items
USD: NTD	1%		279,722		-
EUR: NTD	1%		8,976		-
USD: RMB	1%		6,612		-

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group has investments in equity securities. The prices of equity securities would change due to the change in the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, posttax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $0 and $996, as a result of gain or loss of equity instruments at fair value through profit or loss. Also, other components of equity would have increased/decreased by $839 and $995, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. For the year ended December 31, 2020, the Group borrowings are issued at variable rate denominated in US dollars.

• ii. The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate

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shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions.

• iii. As at December 31, 2021 and 2020, if interest rates on USD and NTD denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have been $0 and $113 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable, notes receivable and financial assets at amortised cost cash flow based on the agreed terms.

• ii. The Group manages their credit risk taking into consideration the entire Group’s concern. For banks and financial institutions, only parties with a rating of investment grade are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the management. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to wholesale and retail customers, including outstanding receivables.

• iii. The Group adopts assumptions, if the contract payments were past due over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 150 days.

• v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii) Default or delinquency in interest or principal repayments;

  • (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• vi. The Group applies the modified approach using provision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis.

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• vii. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• viii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of debt instrument as at December 31, 2021 and 2020. The expected credit loss rate of the Group’s overdue accounts receivable was not material as of December 31, 2021 and 2020.

• ix. The Group applies the simplified approach to provide loss allowance for accounts receivable that have no significant impact. The Group had not recognized related impact as at December 31, 2021 and 2020.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Group’s internal balance sheet ratio targets and external regulatory or legal requirements.

• ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Non-derivative financial liabilities:

December 31, 2021 Less than 1 year Short-term borrowings 2,001,156 $ Accounts payable 33,931,186 Other payables 7,891,676 Lease liabilities 194,588 Other financial liabilities 681 Non-derivative financial liabilities: December 31, 2020 Less than 1 year Short-term borrowings 3,001,922 $ Accounts payable 27,177,751 Other payables 5,344,410 Lease liabilities 225,892 Long-term borrowings (including current portion) 13,552 Other financial liabilities 1,228	Less than 1 year	Between 1 to2years	Between 2 to 3 years	Over3 years
		- $ - - 72,142 103,008 Between 1 to2years	- $ - - 33,096 - Between 2 to 3 years	- $ - - 38,886 107,728 Over3 years
December 31, 2020 Short-term borrowings Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Other financial liabilities
	3,001,922 $ 27,177,751 5,344,410 225,892 13,552 1,228	- $ - - 159,964 - 103,826	- $ - - 41,619 - -	- $ - - 22,011 - 107,329

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Derivative financial liabilities

As of December 31, 2021 and 2020, the derivative financial liabilities mature within 1 year.

• iii. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability.

• B. The fair value information of the Group’s investments in property is provided in Note 6(11).

• C. Financial instruments not measured at fair value

• The Group’s cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term borrowings, accounts payable, other payables, long-term borrowings and guarantee deposits received are approximate to their fair values. The transaction value information is provided in Note 12(2)A.

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• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

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December 31, 2021 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair
value through profit or loss
- -
-Forward exchange contract $ $ 40,175 $ $ 40,175
- -
-Foreign exchange swap 58,638 58,638
Financial assets at fair value through
other comprehensive income
-Equity securities - - 104,847 104,847
Total $ - $ 98,813 $ 104,847 $ 203,660
Liabilities:
Recurring fair value measurements
Financial liabilities at fair
value through profit or loss
-Forward exchange contract $ - $ 15,708 $ - $ 15,708
December 31, 2020 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value measurements
Financial assets at fair
value through profit or loss
- -
-Equity security $ 124,440 $ $ $ 124,440
-Forward exchange contract - 37 - 37
- -
-Foreign exchange swap 79,260 79,260
Financial assets at fair value through
other comprehensive income
-Equity securities - - 124,338 124,338
Total
$ 124,440 $ 79,297 $ 124,338 $ 328,075
Liabilities:
Recurring fair value measurements
Financial liabilities at fair
value through profit or loss
-Forward exchange contract $ - $ 103,885 $ - $ 103,885
----- End of picture text -----

• E. The methods and assumptions the Group used to measure fair value are as follows:

• (a) The level 1 financial instruments-equity security held by the Group are listed shares, and the market quoted price is determined by the closing price of the security.

• (b) Except for financial instruments with active markets, the fair value of other financial

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instruments is measured by using valuation techniques or by reference to counterparty quotes.

• (c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• (d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.

• F. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• G. For the years ended December 31, 2021 and 2020, there was no transfer in or out from Level 3.

• H. The Group entrusts an external evaluation agency to evaluate the fair value classified as Level 3.

(4) Other

In response to the impact of Covid-19, the Group cooperated with the various anti-epidemic measures promoted by the governments of various countries, implemented measures such as diversion to work, remote backup, and strengthening of employee health management. Based on the Group's assessment, Covid-19 had no significant impact on the Group’s operation and ability to continue as a going concern.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 2.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 3.

• I. Derivative financial instruments transactions: Please refer to Note 6(2).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland

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China): Please refer to table 5.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 6.

• B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: Please refer to table 7.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. SEGMENT INFORMATION

(1) General information and measurement of segment information

The Group operates business only in the manufacture and sale of motherboards and computer hardware and peripherals. The chief operating decision-maker is the Board of Directors, who considers the whole business as a single performance entity, and assesses performance, makes decisions and allocates resources based on financial information. It has identified that the Group has only one reportable operating segment.

(2) Information about segment profit or loss, assets and liabilities:

The Group's Board of Directors mainly evaluates the performance of the operating segments based on the Group's quarterly financial statements.

(3) Reconciliation for segment income

The Group is a single reportable segment. The profit and loss, assets and liabilities of the segment are consistent with the profit and loss, assets and liabilities shown in the financial statements, so there is no reconciliation required.

(4) Information on products and services

Revenue from external customers is mainly from the sales of computer and peripherals and related components. Details of revenue are as follows:

Computer and peripherals sale revenue

2021 2020 $ 201,810,152 $ 146,502,789

(5) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

Asia Europe America Others	Revenue Non-current assets 80,693,591 $ 5,892,867 $ 57,410,825 274,388 59,459,519 187,787 4,246,217 5,470 201,810,152 $ 6,360,512 $ 2021	2020	2020
	Revenue 80,693,591 $ 57,410,825 59,459,519 4,246,217 201,810,152 $	Revenue 53,798,428 $ 43,454,599 45,972,863 3,276,899 146,502,789 $	Non-current assets
			5,443,118 $ 262,533 191,987 12,274
			5,909,912 $

(6) Major customer information

The Group had no individual customer whose sales amount accounts for more than 10% of net

~63~

operating revenue in the consolidated statement of comprehensive income.

~64~

Table 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Footnote
				Number of shares	Book value	Ownership (%)	Fair value
MICRO-STAR INTERNATIONAL CO., LTD.	Now.gg, Inc.(Original Name: BLUESTACK SYSTEMS, INC.)	-	Financial assets at fair value through other comprehensive income - non current	516,052	104,847 $	-	104,847 $	-

Table 1 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

For the year ended December 31, 2021

(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2	(Except as otherwise indicated) Expressed in thousands of NTD Table 2
Transaction company (Note 4)	Name of the counter party (Note 4)	Relationship with the counterparty	Description of the transaction				Description and reasons of difference in transaction terms compared to third party transactions		Accounts or notes receivable (payable)		Footnote
			Purchases/(Sales)	Amount (Note 3)	% of total purchase (sale)	Credit terms	Unit price	Credit terms	Balance (Note 3)	% of total accounts or notes receivable/(payable)
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Subsidiary	Sales	(33,939,565) $	(17)	60-100 days	Insignificant difference	Note 1	9,552,534 $	31	-
MICRO-STAR INTERNATIONAL CO., LTD.	MEGA COMPUTER	Second-tier Subsidiary	Sales	(8,379,573)	(4)	40-70 days	Insignificant difference	Note 1	1,851,711	6	-
MICRO-STAR INTERNATIONAL CO., LTD.	MYSTAR	Second-tier Subsidiary	Sales	(3,240,320)	(2)	30-100 days	Insignificant difference	Note 1	306,297	1	-
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (KOREA)	Second-tier Subsidiary	Sales	(6,335,503)	(3)	50-70 days	Insignificant difference	Note 1	-	-	-
MICRO-STAR INTERNATIONAL CO., LTD.	MSI COMPUTER (SHENZHEN)	Second-tier Subsidiary	Processing overhead	3,756,620	2	Note 2	Insignificant difference	Note 2	3,186,474) (	(10)	-
MICRO-STAR INTERNATIONAL CO., LTD.	MSI ELECTRONICS (KUNSHAN)	Second-tier Subsidiary	Processing overhead	1,854,891	1	Note 2	Insignificant difference	Note 2	1,756,025) (	(5)	-
MEGA COMPUTER	MSI (SHANGHAI)	Affiliated company	Sales	(8,715,162)	(100)	40-70 days	Insignificant difference	Note 1	2,946,885	100	-

Note 1: The credit terms to third parties are approximately 30 to 120 days. Note 2: Credit terms depend on the financial condition of the paying firm. Note 3: Balances after elimination in conformity with regulations. Note 4: Corresponding transactions are not disclosed.

Table 2 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2021

Expressed in thousands of NTD

Table 3

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as of December 31, 2021	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Subsidiary	$ 9,552,534	3.68	$ -	-	$ 3,772,571	$ -
MICRO-STAR INTERNATIONAL CO., LTD.	MEGA COMPUTER	Second-tier Subsidiary	1,851,711	5.86	-	-	999,235	-
MICRO-STAR INTERNATIONAL CO., LTD.	MYSTAR	Second-tier Subsidiary	306,297	9.57	-	-	236,312	-
MSI (PACIFIC) (Note)	MICRO-STAR INTERNATIONAL CO., LTD.	Ultimate parent company	5,158,001	-	-	-	820,476	-
MSI COMPUTER (SHENZHEN) (Note)	MSI (PACIFIC)	Parent Company	3,186,474	-	-	-	515,359	-
MSI ELECTRONICS (KUNSHAN) (Note)	MSI (PACIFIC)	Parent Company	1,756,025	-	-	-	305,116	-
MSI (B.V.I.)	MSI (PACIFIC)	Parent Company	129,356	-	-	-	-	-
MEGA COMPUTER	MSI (SHANGHAI)	Affiliated company	2,946,885	3.67	-	-	999,120	-

Note: Processing overhead receivable.

Table 3 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Significant inter-company transactions during the year ended December 31, 2021

Expressed in thousands of NTD

Table 4

(Except as otherwise indicated)

Table 4				合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)	合併資產 46,184,753 合併營收 24,553,252 (Except as otherwise indicated)
Number	Company name (Note 4)	Counterparty (Note 4)	Relationship	Transaction
				General ledger account	Amount (Note 1)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (KOREA)	Parent company to second-tier subsidiary	Sales	6,335,503 $	Note 2	3.14%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	Parent company to subsidiary	Sales	33,939,565	Note 2	16.82%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Sales	8,379,573	Note 2	4.15%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MYSTAR	Parent company to second-tier subsidiary	Sales	3,240,320	Note 2	1.61%
0	MICRO-STAR INTERNATIONAL CO., LTD.	MSI (LA)	Parent company to subsidiary	Accounts receivable	9,552,534	Note 2	9.42%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Accounts receivable	1,851,711	Note 2	1.83%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MYSTAR	Parent company to second-tier subsidiary	Accounts receivable	306,297	Note 2	0.30%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI ELECTRONICS (KUNSHAN)	Parent company to second-tier subsidiary	Processing overhead	1,854,891	Note 3	0.92%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI COMPUTER (SHENZHEN)	Parent company to second-tier subsidiary	Processing overhead	3,756,620	Note 3	1.86%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI ELECTRONICS (KUNSHAN)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	116,834	Note 2	0.06%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI COMPUTER (SHENZHEN)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	82,517	Note 2	0.04%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MEGA COMPUTER	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	269,740	Note 2	0.13%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (EUROPE)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	291,728	Note 2	0.14%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MYSTAR	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	201,794	Note 2	0.10%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (MHK)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	198,032	Note 2	0.10%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (POLSKA)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	165,393	Note 2	0.08%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (RUSSIA)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	136,493	Note 2	0.07%

Table 4 Page 1

Number	Company name (Note 4)	Counterparty (Note 4)	Relationship	Transaction	Transaction	Transaction	Transaction
				General ledger account	Amount (Note 1)	Transaction terms	Percentage of consolidated total operating revenues or total assets
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	Parent company to subsidiary	Manufacturing and operatingexpense	425,041 $	Note 2	0.21%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (SARL)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	143,167	Note 2	0.07%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (JAPAN)	Parent company to subsidiary	Manufacturing and operatingexpense	184,569	Note 2	0.09%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (KOREA)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	122,504	Note 2	0.06%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (UK)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	99,527	Note 2	0.05%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (HOLDING)	Parent company to subsidiary	Manufacturing and operatingexpense	161,558	Note 2	0.08%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (AUSTRALTA)	Parent company to subsidiary	Manufacturing and operatingexpense	67,583	Note 2	0.03%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (ITALY)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	60,107	Note 2	0.03%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (IBERIA)	Parent company to second-tier subsidiary	Manufacturing and operatingexpense	61,735	Note 2	0.03%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	Parent company to subsidiary	Other payables	54,732	Note 2	0.05%
0	MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (SARL)	Parent company to second-tier subsidiary	Other payables	53,286	Note 2	0.05%
1	MSI (PACIFIC)	MICRO ELECTRONICS	Subsidiary to second-tier subsidiary	Other payables	86,146	Note 3	0.08%
1	MSI (PACIFIC)	MSI (B.V.I.)	Subsidiary to second-tier subsidiary	Other payables	129,356	Note 3	0.13%
1	MSI (PACIFIC)	MSI ELECTRONICS (KUNSHAN)	Subsidiary to second-tier subsidiary	Other payables	1,756,025	Note 3	1.73%
1	MSI (PACIFIC)	MSI COMPUTER (SHENZHEN)	Subsidiary to second-tier subsidiary	Other payables	3,186,474	Note 3	3.14%
1	MSI (PACIFIC)	MICRO-STAR INTERNATIONAL CO., LTD.	Subsidiary to parent	Other receivables	5,158,001	Note 3	5.08%
2	MEGA COMPUTER	MSI (SHANGHAI)	Second-tier subsidiary to second-tier subsidiary	Sales	8,715,162	Note 2	4.32%
2	MEGA COMPUTER	MSI (SHANGHAI)	Second-tier subsidiary to second-tier subsidiary	Accounts receivable	2,946,885	Note 2	2.90%
3	MSI (LA)	RAIDEALS	Subsidiary to second-tier subsidiary	Sales	105,305	Note 2	0.05%

Note 1: Balances after elimination in conformity with regulations.

Note 2: Transaction terms were approximately the same as those to third parties.

Note 3: Processing overhead was determined based on the quantities, contract amount and delivery time.

Note 4: Individual transactions not exceeding $50,000 and their corresponding transactions are not disclosed.

Table 4 Page 2

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Expressed in thousands of NTD

Information on investees (not including investees in Mainland China)

For the year ended December 31, 2021

Table 5

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognised by the Company for the year ended December 31, 2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (LA)	U.S.A	Sales and after-sales service of computers and electronic components	258,468 $	258,468 $	575,458	100.00	194,411 $	125,869 $	125,869 $	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (AUSTRALIA)	Australia	Sales support and after-sales service of computers and electronic components	57,420	57,420	221,836	100.00	9,696	1,653	1,653	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (JAPAN)	Japan	Sales support and after-sales service of computers and electronic components	20,411	20,411	1,400	100.00	19,903	3,424	3,424	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (PACIFIC)	Cayman Islands	Holding company	1,511,382	1,511,382	30,204,118	100.00	8,610,283	1,337,592	1,337,592	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (HOLDING)	Netherlands	Holding company	45,724	45,724	424,000	100.00	671,607	58,092	58,092	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI COMPUTER (CAYMAN)	Cayman Islands	Holding company	99,093	99,093	50,000	100.00	114,509	267	267	Direct subsidiary
MICRO-STAR INTERNATIONAL CO.,LTD.	MSI (CANADA)	Canada	Sales support and after-sales service of computers and electronic components	2,150	2,150	100,000	100.00	5,122	1,990	1,990	Direct subsidiary
MSI (PACIFIC)	MSI (KOREA)	South Korea	Sales and after-sales service of computers and electronic components	24,374	24,374	80,000	100.00	363,022	79,078	-	Indirect subsidiary
MSI (PACIFIC)	MSI (B.V.I.)	British Virgin Island	Holding company	1,784,681	1,784,681	47,465,071	100.00	4,994,102	687,901	-	Indirect subsidiary
MSI (PACIFIC)	MICRO ELECTRONICS	British Virgin Island	Holding company	1,168,593	1,168,593	33,315,472	100.00	3,217,214	532,310	-	Indirect subsidiary
MSI (PACIFIC)	STAR INFORMATION	British Virgin Island	Holding company	144,721	144,721	4,502,601	100.00	20,101	(1,705)	-	Indirect subsidiary
MSI (PACIFIC)	MEGA TECHNOLOGY	British Virgin Island	Holding company	92,819	92,819	3,050,000	100.00	5,583	197	-	Indirect subsidiary
MSI (PACIFIC)	MEGA COMPUTER	Hong Kong	Sales support of computers and electronic components	-	-	1	100.00	4,001	(909)	-	Indirect subsidiary
MSI (PACIFIC)	MSI (MHK)	Hong Kong	Sales support of computers and electronic components	-	-	1	100.00	25,124	3,194	-	Indirect subsidiary

Table 5 Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognised by the Company for the year ended December 31, 2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
MSI (HOLDING)	MYSTAR	Netherlands	Sales support of computers and electronic components	71,353 $	71,353 $	-	100.00	181,811 $	32,247 $	- $	Indirect subsidiary
MSI (HOLDING)	MSI (RUSSIA)	Russia	Sales support and after-sales service of computers and electronic components	68,258	68,258	-	99.00	34,773	2,222	-	Indirect subsidiary
MSI (HOLDING)	MSI (POLSKA)	Poland	Sales support and after-sales service of computers and electronic components	46,077	46,077	-	99.00	33,684	2,408	-	Indirect subsidiary
MSI (HOLDING)	MSI (SARL)	France	Sales support of computers and electronic components	26,646	26,646	-	100.00	58,985	5,679	-	Indirect subsidiary
MSI (HOLDING)	MSI (UK)	Britan	Sales support of computers and electronic components	37,226	37,226	-	100.00	22,781	4,388	-	Indirect subsidiary
MSI (HOLDING)	MSI (TURKEY)	Turkey	Sales support of computers and electronic components	3,229	3,229	-	99.00	(47)	-	-	Indirect subsidiary (Note 2)
MSI (HOLDING)	MSI (ITALY)	Italy	Sales support of computers and electronic components	2,153	2,153	-	100.00	5,205	1,344	-	Indirect subsidiary
MSI (HOLDING)	MSI (EUROPE)	Netherlands	Logistics services of computers and electronic components	37,620	37,620	-	100.00	53,020	5,493	-	Indirect subsidiary
MSI (HOLDING)	MSI (IBERIA)	Spain	Sales support of computers and electronic components	5,177	5,177	-	100.00	9,399	2,762	-	Indirect subsidiary
MSI (EUROPE)	MSI (RUSSIA)	Russia	Sales support and after-sales service of computers and electronic components	689	689	-	1.00	501	2,222	-	Indirect subsidiary
MSI (EUROPE)	MSI (POLSKA)	Poland	Sales support and after-sales service of computers and electronic components	467	467	-	1.00	160	2,408	-	Indirect subsidiary
MSI (EUROPE)	MSI (TURKEY)	Turkey	Sales support of computers and electronic components	33	33	-	1.00	24	-	-	Indirect subsidiary (Note 2)
MEGA TECHNOLOGY	RAIDEALS	U.S.A	Sales of computers and electronic components	1,523	1,523	-	100.00	1,991	171	-	Indirect subsidiary

Note 1: The table is presented in New Taiwan dollars. Except for the initial investment amount is valued at historical exchange rate, the others are valued with exchange rate 1USD=27.68 NTD; 1EUR=31.32 NTD on December 31, 2021 and average rate with 1USD=28.0123 NTD; 1EUR=33.1575 NTD for the year ended December 31, 2021.

Note 2: As of December 31, 2021, the liquidation process has not been completed.

Table 5 Page 2

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China - Basic information

For the year ended December 31, 2021

Expressed in thousands of NTD

Table 6

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the yaer ended December 31, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the yaer ended December 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2021	Net income of investee as of December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 2)	Book value of investments in Mainland China as of December 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
MSI COMPUTER (SHENZHEN)	Manufacture and after-sales service of computers, and electronic components	$ 1,726,857	Note 1	1,726,857 $	$ -	$ -	$ 1,726,857	687,957 $	100.00	$ 687,957	$ 4,848,079	$ -	-
MSI ELECTRONICS (KUNSHAN)	Manufacture and after-sales service of computers, and electronic components	1,772,675	Note 1	1,772,675	-	-	1,772,675	532,359	100.00	532,359	3,119,728	-	-
SHENZHEN MEGA INFORMATION	After-sales service of computers, and electronic components	23,940	Note 1	23,940	-	-	23,940	189	100.00	189	22,983	-	-
MSI (SHENZHEN)	Sales and after-sales service of computers and electronic components	-	Note 1	-	-	-	-	(221)	-	(221)	-	-	Note 3
MSI (SHANGHAI)	Sales and after-sales service of computers and electronic components	29,275	Note 1	-	-	-	-	7,797	100.00	7,797	(8,147)	-	Note 4
Companyname		Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021		Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)			Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA 28,248,192 $
MICRO-STAR INTERNATIONAL CO., LTD.		3,602,547 $		3,850,987 $

Note 1: The investments were made indirectly through 100% owned subsidiary of the Company.

Note 2: Evaluated based on financial statement not reviewed by other auditors of the investee companies.

Note 3: The amount of US $1,000 thousand was remitted by the Company's subsidiary, MSI (Pacific), to MSI (SHENZHEN).

Note 4: The amount of US $1,000 thousand was remitted by the Company's subsidiary, MSI (Pacific), to MSI (SHANGHAI).

Note 5: In pursuance of Shen-Zi Letter No.09704604680 from the Ministry of Economic Affairs dated August 29, 2008. The amended "Regulations for examination of investments and technical cooperation in Mainland Area" sets the limitation for investments in Mainland China to be higher of net book value or 60% of consolidated net book value.

Note 6: The table is presented in New Taiwan dollars. Except for the initial investment amount is valued at historical exchange rate, the others are valued with exchange rate 1USD=27.68 NTD on December 31, 2021 and average rate with 1USD=28.0123 NTD for the year ended December 31, 2021.

Table 6 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China - Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in third areas

For the year ended December 31, 2021

Expressed in thousands of NTD

Table 7

(Except as otherwise indicated)

Investee in Mainland China	Sales/(Purchase)	Sales/(Purchase)	Propertytransaction	Propertytransaction	Accounts receivable/(payable)	Accounts receivable/(payable)	Amount of endorsements/guarantees secured with collaterals	Amount of endorsements/guarantees secured with collaterals		Accommodation of funds	Accommodation of funds		Others(Note)
	Amount	%	Amount	%	Balance as of December 31,2021	%	Balance as of December 31,2021	Purpose	Ceiling amount	Balance as of December 31,2021	Interest rate range	Interest expense
MSI COMPUTER (SHENZHEN) MSI ELECTRONICS (KUNSHAN) MSI (SHANGHAI)	$ - - 8,715,162	- - (100)	$ - - -	- - -	(3,186,474) $ (1,756,025) 2,946,885	10) ( 5) ( 100	$ - - -	- - -	$ - - -	$ - - -	- - -	$ - - -	3,756,620 $ 1,854,891 -

Note: Processing overhead.

Table 7 Page 1

MICRO-STAR INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Major shareholders information

December 31, 2021

Table 8 Name of major shareholders	Shares held as at December 31,2021	Shares held as at December 31,2021
	Number of shares	Ownership(%)
Hsu Hsiang	51,983,151	6.15%

Table 8 Page 1