Optimax - Annual Report 2021 | FinancialReports.eu

Stock Code: 3051

OPTIMAX TECHNOLOGY CORPORATION

2021 Annual Report

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw Company Website: http://www.optimax.com.tw Printed on May 12, 2022

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Item	Pages
Letter to Shareholders	3~4
CompanyProfile	5
Corporate Governance Report	6~33
Capital Overview	34~39
Operational Highlights	40~59
Financial Information	60~64
Review of Financial Conditions,OperatingResults,and Risk Management	65~70
Special Disclosure	71~72
AppendixⅠ: Consolidated Financial Statements with Independent Auditors’ Report	73~147
AppendixⅡ: Individual Financial Statements with Independent Auditors’ Report	148~231

Company Spokeman

Name: Peter Chao Title: Chairman TEL: +886 3 460 6677 Email: [email protected]

Company Deputy Spokeman

Name: Ren-Qiang Ma Title: Assistant Vice President TEL: +886 3 460 6677 Email: [email protected]

Corporate, Office and Factory

Headquarter and Taoyuan Factory

Address: Address: No. 37, Lane 659, Pingdong Rd., Pingzhen District, Taoyuan City, Taiwan, R.O.C TEL: +886 3 460 6677

Stock transfer agency

Name: Stock Affairs Department of CAPITAL SECURITIES CORP. Address: B1F.-2, No.97, Sec. 2, Dunhua S. Rd., Da'an Dist., Taipei City 10601, Taiwan, R.O.C. Website: http://www.capital.com.tw TEL: +886 2 2705 2888

Auditors

CPAs: Hsin-Liang, Wu & Li-Chen, Peng Accounting firm: BAKERK TILLY CLOCK & CO. Taiwan Address: 14th F1., 111 Sec.2, Nanking E. Rd. Taipei 10485, Taiwan, R.O.C. Website: http://www.clockcpa.com.tw TEL: +886 2 2516 5255 Oversea stock transfer information: None Company Website: http://www.optimax.com.tw

Letter to Shareholders

Shareholders Ms. and Mr.:

I. 2021 Business Report:

(I) The results of implementation of the business plan

In 2021, due to the steady growth of the panel supply, the polarizer industry has also grown synchronously, and the Metaverse and other VR/AR industry themes are fermenting, resulting in a thriving market for polarizers. In addition to stabilizing customers for TFT-LCD polarizers such as TV and Monitor, the company also continues to increase customers for high-margin products such as TN/STN polarizers for industrial computers, automotive dye-based polarizers and iodine-based polarizers to maintain growth. In addition, high-margin products such as polarizers and HUD reflective films for sunglasses and VR/AR products have also been the focus of development in recent years. In 2021, thanks to the efforts of the company's chairman, president and all colleagues, the gross profit reached 24.46%, and the operating profit rate also reached 9.93%, which is really commendable. In terms of non-operating income, rental income decreased from NT$132,336,000 in 2020 to NT$24,452,000 in 2021 due to the disposal of the Plant in Southern Taiwan Science Park. Real estate, plant and equipment impairment reversal benefit of NT$2,869,000, and the Plant in Southern Taiwan Science Park lease contract modification benefit of NT$11,398,000, and exchange benefit of NT$503,000. For non-operating expenses, interest is mostly NT$54,049,000. Losses from disposal of real estate, plant and equipment amounted to NT$7,516,000, and share of losses from subsidiaries, affiliates and joint ventures recognized using the equity method was NT$24,518,000. To sum up, the net profit before tax in 2021 was NT$834,863,000, and the net profit after tax was NT$809,938,000. Looking forward to the future, the company's management team will continue to uphold the management model and the spirit of perseverance and the pursuit of profit maximization, and will continue to expand the market for polarizer products such as sunglasses, vehicle-mounted products and VR/AR to increase profits. In terms of non-operating income and expenditure, the company has signed a lease contract of Pingzhen No. 2 Factory with a domestic logistics company, and actively repaid bank loans to reduce interest costs to improve financial conditions, and to pursue the company's maximum profit as its goal, in order to live up to the expectations of all shareholders.

(II) Analysis of the budget enforcement, receipts and expenditures, and profitability:

II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:	II) Analysis of the budget enforcement, receipts and expenditures, and profitability:
In Thousands of New Taiwan Dollars;%
Item	2021	%	2020	%	Amount of increase/ decrease	%
Operatingrevenue	3,191,831	100.00	2,417,836	100.00	773,995	32.01
Operating grossprofit	780,838	24.46	445,622	18.42	335,216	75.22
Operatingnetprofit	316,831	9.93	118,443	4.90	198,388	167.50
Annual netprofit(loss)	834,863	26.16	31,198	1.29	803,665	2,576.01
Annual netprofit (loss) of tax	809,938	25.38	16,464	0.68	793,474	4,819.45

Turnover in 2021 increased by NT$773,995,000 compared to 2021, and gross profit margin increased from 18.43% in 2020 to 24.46% in 2021, mainly due to a better product mix and new vehicle-mounted product customers. In terms of business expenses, sales expenses increased by NT$56,475,000 compared with 2010, mainly due to the increase of commission expenses by NT$24,233,000, export expenses by NT$19,921,000, and service charge by NT$6,726,000. R&D expenses increased by NT$3,157,000 compared to 2020, mainly due to the increase of NT$1,926,000 in water, electricity and gas costs, and the increase of NT$4,063,000 in commissioned research projects. The expected credit impairment losses increased by NT$76,221,000 compared with 2020, mainly due to the large increase in overdue accounts of some customers. To sum up, the overall sales in 2021 increased by NT$136,828,000 compared with 2020. In terms of non-operating income and expenditure in 2021, the net income increased by NT$629,795,000 compared with 2020, mainly due to the benefits of disposal of the Plant in Southern Taiwan Science Park by NT$522,291,000, lease modification benefits of NT$11,398,000, and other income-others increased NT$53,908,000. Based on the above reasons, the net profit after tax in 2021 increased by NT$793,474,000 compared with 2020.

	Item	2021	2020
Analysis of financial Structure	Debt to asset ratio(%)	57.70	85.86
	Long-term fund to real estate, factory, and Equipment ratio(%)	181.80	332.22
Analysis of debt-paying structure	Current Ratio(%)	232.73	362.58
	Quick Ratio(%)	108.54	296.22
Analysis of profitability	ROA(%)	12.53	1.32
	ROE(%)	49.39	1.32
	Netprofit(loss)ratio(%)	25.37	0.68
	Basic earningsper share (NT$)	4.76	0.10

(III) Status of production and R&D

The development direction is mainly on vehicle-mounted products, VR, sunglasses and cost reduction. Therefore, the part of vehicle-mounted products will focus on improving reliability and viewing angle to meet the increasing reliability requirements of customers; the cost reduction part will target the localization of materials, such as PVA, TAC and PSA materials.

The development direction of each product as follows:

In the development of large-size TV/MNT products, in response to the regular price reduction needs of customers, it is necessary to evaluate cheap materials. In addition, the waterproof materials, such as PET and PMMA will also be aggressively evaluated.
In the application of small and medium-sized, the dye-based polarizers, besides the original industrial control products, such as electricity meters, the automobile instruments and displays have also developed corresponding polarizers. In the vehicle-mounted plarizers, how to improve the reliability (from the original guaranteed 95 degrees to 105 degrees) and how to match the customer panel design to improve the viewing angle to meet the specifications of European OEM5.1 version are the key points of development in the future.
For the sunglasses ploarizers, we will continue to develop new products in response to customer needs.
For the surface self-coated products, mainly made of AG with high unit price and high precision.

II. Future planning

(I) The principle of operation and policy of production and sale
The principle of stable operation, stable quality and rise yield to reduce costs.
Repay long-term and short-term bank loans to reduce interest expenses.
Concentrate resources on the development of high-margin polarizer products, such as high weather resistant vehicle-mounted applications and thinner polarizers, as well as polarizers for VR products.
Revitalize idle assets, lease and dispose of related equipment in Pingzhen No. 2 Plant.
(II) The Company's future strategy of development
Develop important clients to increase the company's revenue, such as LCD panel manufacturers in Chinese Mainland.
Do not compete in the low-margin market, and strive to muscle for the niche market with high gross profit and high cash inflow.
Fully develop polarizers for high weather resistant vehicle-mounted and VR/AR products, in addition to the sunglasses ploarizers.
Continue to develop new clients in Taiwan, Chinese Mainland, Japan and South Korea.

Sincerely,

Chairman ： Peter Chao

Company Profile

(I) Established date ： March 3, 1998

(II) Milestone ：

Company was established, authorized capital was NT$800 million, and paid-in capital was NT
－
1998.03 $291 million.
The Chairman was Dr. Frank Huang, from UMAX Co. and the President was Dr. Larry Lai.
－
1998.04[Signed a technology transfer contract of polarizer for TN/STN-LCD applications with Sanitize ] Corp., Japan.
－
2000.10[Signed a technology transfer contract of polarizer for TFT-LCD applications with Sanitize ] Corp., Japan.
－
2001.01 President Dr. Larry Lai had been promoted to Chairman and President concurrently.
－
2002.10 Listed on Taiwan Stock Exchange Corp.
－
2005.01[Obtained the award of 13th SOE (Symbol of Excellence) and was nominated the 13th NAOE ] (National Award of Excellence).
－
2005.03 The Branch in Tainan Science Park the second intention construction was finished.
－
2005.05 Ping-Chen No. 5 Factory groundbreaking.
－
2006.02 Obtained ISO/TS16949 Certificate. －
2007.01 The Branch office set up in Korea. －
2007.04 Elected Dr. Peter Chao as Chairman. －
2007.12 Suzhou Factory mass production. －
2009.01 Obtained the Best Supplier Award of LGD.
－
2010.02 Signed a lease contract for part of factory building in Tainan Science Park with BenQ Materials. －
2010.03 Obtained ISO9001:2008 International Quality Assurance System Verification Certificate. －
2011.03[The 3rd factory in Pingzhen passed the review of the national perspiration source air juice ] dyeing prevention and exemption.
－
2012.03[Awarded the "Juniper Model Award for Promoting Industrial Carbon Reduction and Water ] Saving Plan" by Taoyuan City Government.
－
2014.09 Completed the "Ultra-thin Polarizer Development Project" of the Ministry of Economic Affairs.
－
2017.11[Obtained IATF16949:2016 and ISO9001:2015 international quality assurance system ] verification certificate.
－
2018.09 Pingzhen plant passed the ISO 14001:2015 environmental management system certification. －
2019.09[Pingzhen plant passed the ISO 45001 occupational safety and health management system ] certification.
－
2020.01 Sold Pingzhen No. 5 Plant. －
2021.01 Sold the Plant in Tainan Science Park and related ancillary equipment.

Corporate Governance Report

Organizational

(1) Organizational Chart

==> picture [436 x 262] intentionally omitted <==

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

Shareholders’ Meeting
Audit Committee
Board of Directors Compensation Committee
Audit Office
President
Technical Research Division
Marketing & Sales Division
Industrial & safety Office Manufacturing Division
Q uality Assurance Department
Financial Department
Human Resource Department
Purchasing Department
----- End of picture text -----

(2) Responsibility

Division	Responsibilities
Audit Office	Be responsible for internal audit, reflect potential control problem or loophole, and adjust to the expected target in order to ensure Company interest and validity. Functions include planning audit, maneuver audit, and follow-up audit.
Industrial & safety Office	Be responsible for setting up and auditing safety process system and safety training. Be responsible for controlling and dealing with wastewater, exhaust gas and waste disposal.
Technical Research Division	Be responsible for searching new raw materials and product technology to develop new product with new materials and make new business opportunities. Be in charge of existing product improvement, technical information collection, setting up product specs and solving filed process problem, sending samples and introducing new products into the market.
Marketing and Sales Division	Responsible for business development of product sales, production and sales analysis, customer management and service.
Manufacturing Division	Be responsible for operation of manufacturing factories, production planning, product quality/delivery controlling, equipment maintenance and repairing.
Quality Assurance Department	Be responsible for the promotion of quality system, controlling of document system, instrument calibration and environment monitoring and measuring of clean room, client auditing, quality service and handling of customer complaint.
Financial Department	Be responsible for raising and planning operating capital effectively, setting up operating accounting system plans and budget controlling. Be responsible for external relations of Juridical persons and company stock affairs.
Human Resources Department	Responsible for human resource management and organizational development related affairs.
Purchasing Department	Be responsible for sourcing new material suppliers, price negotiations of raw materials and production equipments, and production material delivery control.

Director, Supervisor, and Management team

（ 1 ） Directors and Supervisors

1. Personal Profile

2022-04-25 : Unit: share, %

Title	Nationality / Country of Origin	Name	Gender	Date Elected	Term (years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Positions held concurrently in the company and/ or and other company	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman	Republic of China	Peter Chao	Male	2021/8/27	3	2001/5/25	33,480,151	10.29	18,723,484	11.01	1,417,489	0.83	-	-	Chairma~~n,~~Taiwan Regional Association of Adhesive Tape Manufacturers Vice-President, Achem Opto- Electronic Corporation Ph.D. in Dartmouth College	Chairman, Optimax Technology corp. (Suzhou) Co., Ltd Chairman, Art Optronics Corporation Chairman, Cyclone Investment Co., Ltd.	Directo r	Wilson Chao	Father- son	Note 1
Director	Republic of China	Wilson Chao	Male	2021/8/27	3	2012/6/28	4,001,674	1.23	2,589,837	0.53	-	-	-	-	Engineer, Foxconn Technology Group Engineer, Chunghwa Picture Tubes, Ltd Master Degree in Chemistry, University of San Francisco	President, Optimax Technology Corporation	Chairm an	Peter Chao	Father- son	-
Director	Republic of China	Shi-Hong Industrial Co.,Ltd.	-	2021/8/27	3	2021/8/27	624,712	0.19	1,100,753	0.65	-	-	-	-	LL.M. Degree Master in Law Northwestern University Compliance office, JPMorgan Chase Bank	Executive Director, Kong Foods Co., Ltd.	-	-	-	Note 2
		Representative: Shi-Fen,Lin	Female				-	-	-	-	-	-	-	-
Director	Republic of China	Shi-Hong Industrial Co.,Ltd.	-	2021/8/27	3	2015/6/16	624,712	0.19	1,100,753	0.65	-	-	-	-	Bachelor Degree in Business Administration. Ming Chuan University	Financial Manager, Kong Foods Co., Ltd	-	-	-
		Representative: Shu-Ping,Wu	Female				-	-	-	-	-	-	-	-
Director	Republic of China	Jiu-Ru Investment Co.,Ltd.	-	2021/8/27	3	2018/6/8	1,521,828	0.47	896,220	0.53			-	-	Bachelor Degree, National Taipei Institute of Technology	Chairman, Jiu-Ru Investment Co., Ltd.	-	-	-
		Representative: Jin-De,Wang	Male				-	-	-	-	-	-	-	-
Director	Republic of China	Xiao-Nan Xiang	Female	2021/8/27	3	2018/6/8	8,425	-	4,402	-	-	-	-	-	Executive Secretary, TSRAIA Bachelor Degree, National Taipei Institute of Technology	None	-	-	-	-
Director	Republic of China	Qi-Bang, Yu	Male	2021/8/27	3	2018/06/8	-	-	-	-	-	-	-	-	Technical adviser, Taiwan Regional Association of Adhesive Tape Manufacturers Executive Assistant to President, Achem Opto-Electronic Corporation Bachelor Degree, Air Force Institute of Technology	Chairman, Furuto International Corporation	-	-	-	-
Director	Republic of China	Chang-Shu, Jiang	Male	2021/8/27	3	2020/6/9	-	-	-	-	-	-	-	-	Chairman, 9th Board of Directors, Taiwan Professional Electrical Engineers Association R.O.C Bachelor Degree in Electrical Engineering, Tatung University	Chairman, Hong-Da Electric Industrial Technician Office	-	-	-	-
Independent Director	Republic of China	Ted Guo	Male	2021/8/27	3	2018/6/8	-	-	-	-	-	-	-	-	Master Degree in Law, Chinese Culture University	Land Administrator, Pvolyben Attorneys-At-Law	-	-	-	-
Independent Director	Republic of China	Tzeng-Guey Gu	Male	2021/8/27	3	2020/6/9	-	-	-	-	-	-	-	-		None	-	-	-	-
															SHU-JEN High School

Independent Director	Republic of China	Min, Chao	Male	2021/8/27	3	2021/8/27	-	-	-	-	-	-	-	-	Zhong-Li Senior High School	Director, Taicrystal International Technologies Co., Ltd.	-	-	-	Note 2
															Engineer, Sinkong Textile Co., Ltd.
															Engineer, Prosperity Dielectrics Co.,
															Ltd.

Note 1 ： The directors and the general managers or equivalent (executive managers) are the same person, spouses, or relatives, which need to explain the reason, rationality, necessity and related information about the implementation: a.Peter Chao no longer serves as the President of the company on July 1, 2021.
b.Wilson Chao has been honing and solid management experience at all levels of management for many years, and has long been committed to doing his best and performing well in the fields of technology, manufacture and sales. As a President, he will continue to deepen key products and consolidate the advantages of technology, expand the market and business development, and be more committed to the improvement of the company's operational performance.

c.At present, the company has the implementation that more than half of the board members do not concurrently serve as employees or managers of any affiliates. Note 2 ： Director Shi-Fen, Lin was elected on August 27, 2021. Independent Director Min, Chao was elected on August 27, 2021.

2. Other resource

Professional qualifications and independence analysis of directors and supervisors : Board of Directors Diversity and Independence:

Diversification core Name of Directors	Basic component	Basic component	Basic component	Basic component	Basic component	Basic component	Basic component	Basic component	Basic component	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Industry experience	Professional ability	Professional ability	Professional ability
	Nationality	Gender	Employee	Age				Independent Director term		Chemical Engineering and Chemistry	Management and Marketing	Banking and Finance	Import and export and international trade	Investment and business supply	Electric machinery and business consulting services	Legal and Real Estate	Polarizers Manufacturing	Electronic component manufacturing	Architecture and Engineering	Law	Finance and Accounting	Risk Management
				40~50 years old	51~60 years old	61~70 years old	Over 70 years old	under 3 years	4~6 years
Peter Chao	R. O. C	Male										○	○	○								
Wilson Chao	R. O. C	Male										○	○	○								
Shi-Hong Industrial Co., Ltd. Representative: Shi-Fen,Lin	R. O. C	Female																				
Shi-Hong Industrial Co., Ltd. Representative: Shu-Ping,Wu	R. O. C	Female											○									
Jiu-Ru Investment Co., Ltd. Representative: Jin-De,Wang	R. O. C	Male											○									
Xiao-Nan Xiang	R. O. C	Female									○		○								
Qi-Bang, Yu	R. O. C	Male								○		○										
Chang-Shu, Jiang	R. O. C	Male																				
Independent Director Ted Guo	R. O. C	Male																		
Independent Director Tzeng-Guey Gu	R. O. C	Male																				
Independent Director Min, Chao	R. O. C	Male																				

Note： ” ” means with ability, ”○” means with partial ability.

2.1 Board Diversity `：`

(1) State the diversity policy, objectives and achievement of the board of directors: The company advocates and respects the policy of diversity of directors. In order to strengthen corporate governance and promote the sound development of the composition and structure of the board of directors, it is believed that the policy of diversity will help improve the overall performance of the company. The selection and appointment of board members are based on the principle of employing talents based on their abilities, and they possess diverse and complementary capabilities across industries, including basic composition (eg. age, gender, etc.), as well as industry experience and related skills (eg chemical/chemical technology, Polarizing plate manufacturing, engineering, financial management and investment, import and export and international trade, legal and regulatory compliance, electronic component manufacturing), as well as business judgment, business management, leadership decision-making and risk management capabilities.
(2) State the gender, age composition or ratio of the board of directors:

Gender Ratio of Board Members (11 People in Total)

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

Female
3 people
27%
Male
8 people
73%
----- End of picture text -----

==> picture [345 x 216] intentionally omitted <==

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

Age Ratio of Board Members (11 People in Total)
40~50 years
old
2 people
18%
over 70 years
old
5 people
51~60 years 46%
old
3 people
27%
61~70 years
old
1 person
9%
----- End of picture text -----

2.2 Board Independence:

(1) State the number and proportion of independent directors:

The company has 3 independent directors, accounting for 27% of all directors (11 People in total).

(2) Explain that the board of directors is independent:

Except for Chairman Peter Chao and Director Wilson Chao, there is a father-son relationship, accounting for 18% of all directors (11 people in total), so it does not exceed half of the directors; the rest of the directors have no spouse or relative relationship, and the directors and independent directors have no relationship with each other. There is no equivalent or similar relationship, so it complies with Article 26-3, Items 3 and 4 of the Securities and Exchange Act.

（ 2 ） Chairman, General Manager, Assistant General Manager, Deputy Assistant General Manager, and Managers of all divisions and branch units

													2022-04-25;Unit: share %	2022-04-25;Unit: share %	2022-04-25;Unit: share %	2022-04-25;Unit: share %
Title	Nationality	Name	Gender	Date Elected	Shareholding		Spouse & Minor Shareholding		Other persons holding shares in their name		Principle work experience and academic qualifications	Positions held concurrently in the company and/ or and other company	Managers with spouses or relative within second-degree of kinship			Note
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
President	Republic of China	Wilson Chao	Male	2022.7.01	2,589,837	1.52	-	-	-	-	Engineer, Foxconn Technology Group Engineer, Chunghwa Picture Tubes, Ltd Master Degree in Chemistry, University of San Francisco	-	Chairman	Peter Chao	Father- son	Note 1
Assistant Vice- President	Republic of China	Ren-Qiang Ma	Male	2018.02.01	752	-	-	-	-	-	EMBA, Chang Jung Christian University	President, Optimax Technology corp. (Suzhou) Co., Ltd Head of the Department of Affairs, Optimax Technology Corporation	-	-	-	-
Financial Manager	Republic of China	Zong-Ze Chen	Male	2013.11.26	-	-	-	-	-	-	Manager, Zhenda Optoelectronics Manager, Taiwan Jingxing Technology Bachelor Degree in Accounting, Tamkang University	-	-	-	-	-

Note 1 ： The directors and the general managers or equivalent (executive managers) are the same person, spouses, or relatives, which need to explain the reason, rationality, necessity and related information about the implementation:

a.Peter Chao no longer serves as the President of the company on July 1, 2021.

b.Wilson Chao has been honing and solid management experience at all levels of management for many years, and has long been committed to doing his best and performing well in the fields of technology, manufacture and sales.

As a President, he will continue to deepen key products and consolidate the advantages of technology, expand the market and business development, and be more committed to the improvement of the company's operational performance.

c.At present, the company has the implementation that more than half of the board members do not concurrently serve as employees or managers of any affiliates.

（ 3 ） Remuneration paid during the most recent fiscal year to Directors, Supervisors, General Manager, and Assistant General Managers

1. Remuneration paid to Directors and Independent Director

2021-12-31; Unit: NT$ thousands

Title	Name	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Remuneration paid to Directors	Total remuneration (A+B+C+D) as a percentage of net income (%)	Total remuneration (A+B+C+D) as a percentage of net income (%)	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Compensation earned as employee of Optimax subsidiary affiliates	Total compensation (A+B+C+D+E+F+G) as a percentage of net income (%)	Total compensation (A+B+C+D+E+F+G) as a percentage of net income (%)	Compensation paid to Directors from non-subsidiary affiliates
		Salary (A) (Note 1)		Retirement pay(B)		Remuneration (C) (Note 1)		Allowance (D)				Salary, Bonuses, and Allowance (E) (Note 2)		Retirement pay(F)		Employee compensation(G) (Note 1)
		Company	All consolidated entities	Company	All consolidated entities	Company	All consolidated entities	Company	All consolidated entities	Company	All consolidated entities	Company	All consolidated entities	Company	All consolidated entities	Company		All consolidated entities		Company	All consolidated entities
																cash	stock	cash	stock
Chairman	Peter Chao	-	-	-	-	-	-	40	40	0.005	0.005	6,112	6,112	-	-	-	-	-	-	0.760	0.760	None
Director	Wilson Chao	-	-	-	-	-	-	32	32	0.004	0.004	5,815	5,815	108	108	-	-	-	-	0.735	0.735	None
Director	Shi-Hong Industrial Co., Ltd. Representative: Shi-Fen,Lin(Note 3)	-	-	-	-	-	-	8	8	0.001	0.001	-	-	-	-	-	-	-	-	0.001	0.001	None
Director	Shi-Hong Industrial Co., Ltd. Representative: Shu-Ping,Wu	-	-	-	-	-	-	40	40	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Director	Jiu-Ru Investment Co., Ltd. Representative: Jin-De,Wang	-	-	-	-	-	-	38	38	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Director	Xiao-Nan Xiang	-	-	-	-	-	-	40	40	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Director	Qi-Bang, Yu	-	-	-	-	-	-	40	40	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Director	Chang-Shu, Jiang	-	-	-	-	-	-	34	34	0.004	0.004	-	-	-	-	-	-	-	-	0.004	0.004	None
Independent Director	Nai-Tu, Cheng (Note 4)	-	-	-	-	-	-	28	28	0.003	0.003	-	-	-	-	-	-	-	-	0.003	0.003	None
Independent Director	Ted Guo	-	-	-	-	-	-	40	40	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Independent Director	Tzeng-Guey Gu	-	-	-	-	-	-	38	38	0.005	0.005	-	-	-	-	-	-	-	-	0.005	0.005	None
Independent Director	Min, Chao (Note 3)	-	-	-	-	-	-	8	8	0.001	0.001	-	-	-	-	-	-	-	-	0.001	0.001	None
1. Please describe the remuneration policy, system, standard and structure of independent directors, and describe the relationship with the amount of remuneration according to the responsibilities, risks, investment time and other factors: The independent directors of the company uphold the awareness of the company's responsibility for supervision, and review the relevant proposals put forward by the company. Since the pre-tax profit in 2021 should be reserved in advance for the accumulated losses recognized by the ordinary shareholders' meeting, the director's remuneration has not been estimated. Directors only receive travel expenses for attendance. 2. Except for those disclosed in the table above, the remunerations received by the directors of the company for their services in the most recent year (such as serving as a consultant for all non-employees of companies/reinvested enterprises in the parent company's financial report): None.

Note 1: Since the pre-tax profit in 2021 should be reserved in advance for the accumulated losses recognized by the ordinary shareholders' meeting, the director's remuneration has not been estimated. Note 2: The pension is all provisioned.
Note 3: Director Shi-Fen, Lin was elected on August 27, 2021. Independent Director Min, Chao was elected on August 27, 2021.

Note 4: Independent Director Nai-Tu, Cheng passed away on May 21, 2021, and dismissed naturally.

Remuneration paid scale to Directors and Independent Directors

Scale of remunerations to managers of the Company		Na	me
	Tota	l remuneration (A+B+C+D)	Total remun	eration (A+B+C+D+E+F+G)
	Company	All consolidate affiliates	Company	All consolidate affiliates
Under NT$ 1,000,000	Peter Chao, Wilson Chao, Shi-Fen, Lin , Shu-Ping, Wu, Jin-De, Wang, Xiao-Nan Xiang, Qi-Bang, Yu, Chang-Shu,Jiang, Nai-Tu, Cheng. Ted Guo, Tzeng-Guey Gu, Min, Chao	Peter Chao, Wilson Chao, Shi-Fen, Lin , Shu-Ping, Wu, Jin-De, Wang, Xiao-Nan Xiang, Qi-Bang, Yu, Chang-Shu,Jiang, Nai-Tu, Cheng. Ted Guo, Tzeng-Guey Gu, Min, Chao	Shi-Fen, Lin , Shu-Ping, Wu, Jin-De, Wang, Xiao-Nan Xiang, Qi-Bang, Yu, Chang-Shu,Jiang, Nai-Tu, Cheng. Ted Guo, Tzeng-Guey Gu, Min, Chao	Shi-Fen, Lin , Shu-Ping, Wu, Jin-De, Wang, Xiao-Nan Xiang, Qi-Bang, Yu, Chang-Shu,Jiang, Nai-Tu, Cheng. Ted Guo, Tzeng-Guey Gu, Min, Chao
NT$ 1,000,000 (include)~ NT$ 2,000,000 (exclude)	-	-	-	-
2,000,000 (include)~ NT$ 3,500,000 (exclude)	-	-	-	-
3,500,000 (include)~ NT$ 5,000,000 (exclude)	-	-
5,000,000 (include)~ NT$ 10,000,000 (exclude)	-	-	Peter Chao, Wilson Chao	Peter Chao, Wilson Chao
10,000,000(include)~ NT$ 15,000,000 (exclude)	-	-	-	-
15,000,000(include)~ NT$ 30,000,000 (exclude)	-	-	-	-
30,000,000(include)~ NT$ 50,000,000 (exclude)	-	-	-	-
50,000,000(include)~ NT$ 100,000,000 (exclude)	-	-	-	-
Over NT$ 100,000,000	-	-	-	-
Total	12	12	12	12

2. Remuneration paid to Chairman, General Manager and Vice General Manager

												2020-12-31; Unit: NT$ thou	2020-12-31; Unit: NT$ thou	sands
Title	Name	Salary (A)		Retirement (Note	pay(B) 2)	Bonu special allo	s and wance (C)	Remuneration (D) (Note 1)				Total remuneration (A+B+C+D) as a percentage of net income (%)		Compensation paid to Directors from non-subsidiary affiliates
		Company	All consolidated affiliate	Company	All consolidated affiliate	Company	All consolidated affiliate	Company		All cons affi	olidated liate	Company	All consolidated affiliate
								cash	share	cash	share
Ex-President	Peter Chao (Note3)	3,056	3,056	-	-	-	-	-	-	-	-	0.377	0..377	None
President	Wilson Chao (Note3)	5,815	5,815	108	108	-	-	-	-	-	-	0.731	0.731	None

Note 1: Since the pre-tax profit in 2021 should be reserved in advance for the accumulated losses recognized by the ordinary shareholders' meeting, so there is no remuneration for distribution. Note 2: The pension is all provisioned.

Note 3: Peter Chao no longer served as the President of the company on July 1, 2021. President Wilson Chao was appointed on July 1, 2021.

Remuneration paid scale to CEO, General Manager and Vice General Manager

~~S~~cale of remunerations to managers of the Company	Name of Chairman, Genera	l Manager and Vice General Manager
	Company	All consolidate affiliates
Under NT$ 1,000,000	-	-
NT$ 1,000,000 (include) ~ NT$ 2,000,000 (exclude)	-	-
2,000,000 (include) ~ NT$ 3,500,000 (exclude)	Peter Chao-	Peter Chao
3,500,000 (include) ~ NT$ 5,000,000 (exclude)	-	-
5,000,000 (include) ~ NT$ 10,000,000 (exclude)	Wilson Chao	Wilson Chao
10,000,000 (include) ~ NT$ 15,000,000 (exclude)	-	-
15,000,000 (include) ~ NT$ 30,000,000 (exclude)	-	-
30,000,000 (include) ~ NT$ 50,000,000 (exclude)	-	-
50,000,000 (include) ~ NT$ 100,000,000 (exclude)	-	-
Over NT$ 100,000,000	-	-
Total	2	2

3. The remuneration of the top five executives

Title	Name	Salary (A)	Salary (A)	Retirement (Note	pay(B) 2)	Bonu special allo	s and wance (C)	Remuneration (D) (Note 1)	Remuneration (D) (Note 1)	Remuneration (D) (Note 1)		Total remuneration (A+B+C+D) as a percentage of netincome (%)	Total remuneration (A+B+C+D) as a percentage of netincome (%)	Compensation paid to Directors from non-subsidiary affiliates
		Company	All consolidated affiliate	Company	All consolidated affiliate	Company	All consolidated affiliate	Company		All cons affil	olidated iate	Company	All consolidated affiliate
								cash	share	cash	share
Chairman Ex-President	Peter Chao	3,056	3,056	-	-	-	-	-	-	-	-	0.377	0..377	None
President	Wilson Chao	5,815	5,815	108	108	-	-	-	-	-	-	0.731	0.731	None
Assistant vice-president	Ren-Qiang Ma	2,603	2,603	91	91	-	-	-	-	-	-	0.333	0.333	None
IT Manager	Sam Su	1,593	1,593	91	91	-	-	-	-	-	-	0.208	0.208	None
Sales Manager	Oscar Yen	1,430	1,430	73	73	-	-	-	-	-	-	0.186	0.186	None
Sales Manager	Sheng-Chang Peng	1,406	1,406	70	70	-	-	-	-	-	-	0.182	0.182	None

（ 4 ） Total remuneration as a percentage of net income as paid by the company, during the past two fiscal years to its Directors, General Manager, and Vice General Manager

Fiscal year Item	2021	2021	2020	2020
	Company	All consolidated entities	Company	All consolidated entities
After-tax (loss) profit (NT$ thousands)	809,938	809,938	16,464	16,464
Directors remuneration share (%)	0.05	0.05	1.88	1.88
Proportion of remuneration of managers above vicegeneral manager(%)	1.11	1.11	66.47	66.47

Note 1: Since the pre-tax profit in 2021 should be reserved in advance for the accumulated losses recognized by the ordinary shareholders' meeting, so there is no remuneration for distribution.

（ 5 ） The company's remuneration policies, standards and portfolios, procedures for determining remuneration, and its relevance to operating performance and future risks

The remuneration of directors of the company is issued by the board of directors in accordance with the authorization of the company's Articles of Incorporation. If the company has a surplus, the board of directors shall, in accordance with the company's Articles of Incorporation, decide the amount of directors' remuneration.

The State of the Company’s Implementation of Corporate Governance

（ 1 ） The state of operations of the Board of Directors

The 8th Session of the Board of Directors conducted 6 meetings in the most recent year. The Directors’ attendance status is as follows:

				Attendance
		Attendance
Title	Name		By Proxy	Rate in	Note
		in Person
				Person(%)

Chairman	Peter Chao	6	-	100	2021-8-27 dismissed
Director	Wilson Chao	4	-	67	2021-8-27 dismissed
Director	Shi-Hong Industrial Co., Ltd. Representative: Shu-Ping,Wu	6	-	100	2021-8-27 dismissed
Director	Jiu-Ru Investment Co., Ltd. Representative: Jin-De,Wang	5	-	83	2021-8-27 dismissed
Director	Xiao-Nan Xiang	6	-	100	2021-8-27 dismissed
Director	Qi-Bang, Yu	6	-	100	2021-8-27 dismissed
Director	Chang-Shu, Jiang	5		83	2021-8-27 dismissed
Independent Director	Nai-Tu, Cheng	4	-	100	Passed away on May 21, 2021, and dismissed naturally
Independent Director	Ted Guo	6	-	100	2021-8-27 dismissed
Independent Director	Tzeng-Guey Gu	5	-	83	2021-8-27 dismissed

The 9th Session of the Board of Directors conducted 4 meetings in the most recent year. The Directors’ attendance status is as follows:

				Attendance
		Attendance
Title	Name		By Proxy	Rate in	Note
		in Person
				Person(%)

Chairman	Peter Chao	4	-	100	2021-8-27 elected
Director	Wilson Chao	2	-	50	2021-8-27 elected
Director	Shi-Hong Industrial Co., Ltd. Representative: Shi-Fen, Lin	4	-	100	2021-8-27 elected
Director	Shi-Hong Industrial Co., Ltd. Representative: Shu-Ping, Wu	4	-	100	2021-8-27 elected
Director	Jiu-Ru Investment Co., Ltd. Representative: Jin-De, Wang	4	-	100	2021-8-27 elected
Director	Xiao-Nan Xiang	4	-	100	2021-8-27 elected
Director	Qi-Bang, Yu	4	-	100	2021-8-27 elected
Director	Chang-Shu, Jiang	2	-	50	2021-8-27 elected
Independent Director	Ted Guo	4	-	100	2021-8-27 elected
Independent Director	Tzeng-Guey Gu	4	-	100	2021-8-27 elected
Independent Director	Min, Chao	4	-	100	2021-8-27 elected

Other matters to be included:

If any of the following circumstances occur during board meetings, the date of said meeting, session number, proposal content, all independent director opinions, and the Corporation’s responses to said independent director opinions:

(1)According to Article 14-3 of the Securities and Exchange Act: None.

(2) In addition to the pre-opened matters, other directors' meeting resolutions with a record or written statement opposed or reserved by independent directors: None.
The implementation of the director's avoidance of the proposal of interest shall state the name of the director, the content of the proposal, the reason for the avoidance of interest and the voting situation: None.

3. Implementation Status of Board Evaluations:

==> picture [455 x 172] intentionally omitted <==

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

Evaluation Evaluation Evaluation
Scope of evaluation Evaluation items
cycle period method
(1) Individual director and Board performance
evaluation: level of participation in company
operations, the quality of decisions, Board
composition and structure, appointment of
directors and their continued development, and
The board of directors
internal controls.
and functional committees
The year (2) Functional committee performance evaluation:
Every year (including Audit Self-evaluation
of 2021 participation in company operations,
committee and
understanding of the responsibilities of
compensation Committee)
functional committees, improvement of the
decision-making quality of functional
committees, composition of functional
committees, and member selection and internal
control.
----- End of picture text -----

The objectives of strengthening the functions of the board of directors in the current year and the most recent year (such as the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation.

The company chose to establish an independent director and an audit committee on June 8, 2018 by the shareholders' meeting, and set up a salary and compensation committee on December 13, 2011. This plan has helped strengthen the functions of the board of directors and implement corporate governance.
According to the “Evaluation of Board of Directors” passed by Optimax’s BOD on March 19, 2020, the board and directors have to be evaluated at least one time every year. The evaluation of 2021 was done and was reported to the BOD on March 24, 2022.

（ 2 ） The state of operation of the audit committee:

The 1st Session of Audit Committee held 6 times in the most recent year, and the attendance status is as follows:

		Attendance in
Title	Name		By Proxy	Attendance Rate (%)	Remarks
		Person

Independent Director	Nai-Tu, Cheng	4	-	100	Passed away on May 21, 2021, and dismissed naturally
Independent Director	Ted Guo	6	-	100	2021-8-27 dismissed
Independent Director	Tzeng-Guey Gu	5	-	83	2021-8-27 dismissed

The 2nd Session of Audit Committee held 3 times in the most recent year, and the attendance status is as follows:

		Attendance in
Title	Name		By Proxy	Attendance Rate (%)	Remarks
		Person

Independent Director	Ted Guo	3	-	100	2021-8-27 elected
Independent Director	Tzeng-Guey Gu	3	-	100	2021-8-27 elected
Independent Director	Min, Chao	3	-	100	2021-8-27 elected
Other matters to be recorded:

If there is any of the following situations in the operation of the audit committee, the date, period, content of the bill, resolution of the audit committee, and the company's handling of the audit committee's opinions should be stated:
(1)Matters listed in Article 14-5 of the Securities and Exchange Act: None.
(2)Except for the pre-opening matters, other resolutions that have not been approved by the Audit Committee and have been approved by more than two-thirds of all directors: None.
The implementation status of the independent director's avoidance of the proposal of interest shall state the name of the independent director, the content of the proposal, the reason for the avoidance of interest and the voting situation: None.
The communication between independent directors, internal audit supervisors and accountants (such as matters, methods and results of communication on the company's financial and business conditions) :None.

（ 3 ） Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission

Assessment Item			Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
1. Does Company follow “Taiwan Corporate Governance Implementation” to establish and disclose its corporate governance practices?		V	The company has not yet formulated a code of practice for corporate governance.	Same as explanation
2. Shareholding Structure & Shareholders’ Rights (1) Does Company have Internal Operation Procedures for handling shareholders’ suggestions, concerns, disputes and litigation matters. If yes, has these procedures been implemented accordingly? (2) Does Company possess a list of major shareholders and beneficial ownersof these major shareholders? (3) Has the Company built and executed a risk management system and “firewall” between the Company and its affiliates? (4) Has the Company established internal rules prohibiting insider trading on undisclosed information?	V V V V		(1)The spokesperson and stock affairs department of the company handle related matters. (2) The company keeps abreast of the list of major shareholders who actually control the company and the list of ultimate controllers of major shareholders. (3) Assets and financial accounting of affiliated companies are all independent operations. Relevant departments of the company regularly and from time to time audit the affiliated companies that have control rights, so as to prevent your company from creating extravagance and causing company risks. (4) The company has established internal regulations, and from time to time publicizes equity-related laws and regulations and matters to be noted to insiders, and prohibits insiders from using undisclosed information on the market to buy valuable securities.	None
3. Composition and Responsibilities of the Board of Directors (1) Has the Company established a diversification policy for the composition of its Board of Directors and has it been implemented accordingly? (2) Other than the Compensation Committee and the Audit Committee which are required by law, does the Company plan to set up other Board committees? (3) Has the Company established methodology for evaluating the performance of its Board of Directors, on an annual basis? (4) Does the Company regularly evaluate its external auditors’ independence?	V V V V		(1) The board of directors of the company has 11 directors with a term of three years. The selection of directors is based on the overall configuration of the board of directors. Board members generally have the knowledge, experience, skills and accomplishments necessary to perform their duties. The powers of the board of directors shall be handled in accordance with the company's articles of association. (2) In addition to the remuneration committee established in accordance with the law, the company also established an audit committee on June 8, 2018. (3) The company has formulated a plan for the "Board of Directors and Functional Committee Renewal Evaluation Method" and its evaluation method, which was approved by the board of directors on March 19, 2020. (4) The company regularly evaluates the independence of certified accountants.	Same as explanation

Assessment Item			Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
4. Does the Company established a full- (or part-) time corporate governance unit or personnel to be in charge of corporate governance affairs (including but not limited to furnish information required for business execution by directors, handle matters relating to board meetings and shareholders’ meetings according to laws, handle corporate registration and amendment registration, record minutes of board meetings and shareholders meetings, etc.)?	V		The company has a stock affairs and auditing unit responsible for corporate governance- related matters, and provides directors and supervisors with relevant information about the execution of the business on a regular basis without major discrepancies, and handles board of directors and shareholder meetings in accordance with the law, and handles company registration and changes Registration matters, and preparation of minutes of board of directors and shareholders' meetings, etc.	None
5. Has the Company established a means of communicating with its Stakeholders (including but not limited to shareholders, employees, customers, suppliers, etc.) or created a Stakeholders Section on its Company website? Does the Company respond to stakeholders’ questions on corporate responsibilities?	V		The company currently has a special area for interested parties on the company website. Moreover, the company provides sufficient information to the financial institutions and creditors. In addition, the company provides smooth communication channels for employees, and disclose relevant information in accordance with regulations, such as asset acquisition and disposal, endorsement guarantees equal to the exchange website and public information observatory, so that interested parties have enough information to make judgments to protect their rights and interests.	None
6. Has the Company appointed a professional registrar for its Shareholders’ Meetings?	V		The company appoints a professional stock affairs agency to handle the affairs of the shareholders meeting.	None
7. Information Disclosure (1) Has the Company established a corporate website to disclose information regarding its financials, business and corporate governance status? (2) Does the Company use other information disclosure channels (e.g. maintaining an English-language website, designating staff to handle information collection and disclosure, appointing spokespersons, webcasting investors conference etc.)? (3) Does the Company announce and report the annual financial statements within two months after the end of the fiscal year, and announce and report the first, second, and third quarter financial statements as well as the operating status of each month before the prescribed deadline?	V V	V	(1) The company has designated a person to be responsible for the collection and disclosure of company information, and to disclose the company's financial business and other related information on the information disclosure observatory and company website. (2) The company's website:http://www.optimax.com.tw,through the establishment of spokespersons and deputy spokespersons for information collection, disclosure and external communication. (3) The company announces and declares its annual financial report within the time limit on time, and announces the financial report and monthly operating conditions within the specified time limit every quarter.	Same as explanation

Assessment Item	Implementation Status	Implementation Status	Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors)?	V		(1) Employee rights and employee relations: 1. Employees' rights and interests: A labor retirement reserve supervision committee was established in accordance with the law, and labor insurance and national health insurance were applied to protect employees' rights and interests. 2. Employee care: In addition to providing labor and health insurance for employees in accordance with the law, the company also provides group insurance for employees, including accident insurance, medical insurance, and cancer insurance. 3. Regular labor-management meetings are held to coordinate labor-management relations and promote labor-management cooperation. (2) Investor relations: The company maintains the relationship between the company and investors through the establishment of spokespersons, agent spokespersons and stock affairs units. (3) Supplier relationship: through irregular meetings with suppliers, maintain a good relationship with suppliers. (4) Rights of interested parties: The company provides adequate information to financial institutions and creditors, and has smooth communication and management for employees in accordance with regulations, relevant information such as asset acquisition and disposal, endorsement guarantee, etc. shall be disclosed on the exchange website and public information observatory. (5) Implementation of risk management policies and risk measurement standards: The company has formulated various internal regulations in accordance with the law, and conducted various risk management and evaluations. (6) Implementation of customer policy: The company maintains a good relationship with customers department to create company profits. (7) Circumstances in which the company purchases liability insurance for directors and supervisors: The company has insured directors, supervisors and important employees.	None
9. The improvement status for the result of Corporate Governance Evaluation announced by Taiwan Stock Exchange: None.

（ 4 ） Salary and compensation committee composition, responsibilities and operations ：

Qualifications Title Name	Qualifications Title Name	Professional qualification and experience	Independence situation	Number of other public companies at which the person concurrently serves as remuneration committee member
Independent Director Convener	Ted Guo	(1) Expertise： Legal, lands and real estate matters (2) Experience： Listed company director, audit committee, Salary and compensation committee, legal experience	(1) Comply with the provisions of Article 3, Paragraph 1 of the Regulations on the Establishment and Compliance of Independent Directors of Public Offering Companies. (2) None of the items in Article 30 of the Company Law.	None
Independent Director	Tzeng-Guey Gu	(1) Expertise： Chemical/chemical technology field, business management, financial management, risk management (2) Experience： Listed company director, audit committee, Salary and compensation committee, Tape/film material manufacturingexperience	(1) Comply with the provisions of Article 3, Paragraph 1 of the Regulations on the Establishment and Compliance of Independent Directors of Public Offering Companies. (2) None of the items in Article 30 of the Company Law.	None
Other	Tong-Chi Xu	(1) Expertise: Chemical/chemical technology field (2) Experience： Listed company Salary and compensation committee, Precision coating/tape/film material manufacturingexperience	(1) Comply with the provisions of Article 3, Paragraph 1 of the Regulations on the Establishment and Compliance of Independent Directors of Public Offering Companies. (2) None of the items in Article 30 of the Company Law.	None

The 4th Session of the committee has met 2 times in the most recent year, and the remuneration committee attended as follows:

The4th Session of the c	ommittee has met2 t	imes in the most recen	t year, and the remun	eration committee atte	nded as follows:
Title	Name	Actual attendance	Delegated attendance	Actual attendance ratio (%)	Note
Convener	Nai-Tu, Cheng	1	0	100	Passed away on May 21, 2021, and dismissed naturally
Member	Ted Guo	2	0	100	2021-8-27 dismissed
Member	Tong-Chi Xu	2	0	100	2021-8-27 dismissed

The 5th Session committee has met 1 times in the most recent year, and the remuneration committee attended as follows:

The5th Session commit	tee has met1 times in	the most recent year,	and the remuneration	committee attended a	s follows:
Title	Name	Actual attendance	Delegated attendance	Actual attendance ratio (%)	Note
Convener	Ted Guo	1	0	100	2021-8-27 New appointment
Member	Tzeng-Guey Gu	1	0	100	2021-8-27 New appointment
Member	Tong-Chi Xu	1	0	100	2021-8-27 New appointment

Other matters to be recorded:

(1) If the board of directors does not adopt or amend the recommendations of the salary and compensation committee, it shall state the date, period, content of the proposal, resolution of the board of directors, and the company's handling of the salary and compensation committee's opinions (such as the salary and compensation approved by the board of directors is better than the salary and compensation committee) The proposal should state the difference and the reason): None.

(2) The matters resolved by the Remuneration and Remuneration Committee, if the members have objections or reservations, and have a record or written statement, which should state the date and period of the Remuneration and Remuneration Committee, the content of the proposal, the opinions of all members and the treatment of the opinions of the members: None.

（ 5 ） Promotion of Sustainable Development – Implementation Status and Deviations from the Sustainable Development Best Practice Principles for

TWSE/TPEx Listed Companies and the Reasons

TWSE/TPEx Listed Companies and the Reasons
Item			Implementation Status	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary description
1. Has the Company established a governance framework for promoting sustainable development, and established an exclusively (or concurrently) dedicated unit to be in charge of promoting sustainable development? Has the board of directors authorized senior management to handle related matters under the supervision of the board?		V	The company has not yet set up a "sustainable development" full-time unit, but still follows the vision and mission of the ESG policy. The company's internal senior management and key department heads jointly review and communicate the company's core operating capabilities and sustainable development from time to time. plan, and propose and explain it to the board of directors.	None
2. Does the company conduct risk assessments of environmental, social and corporate governance (ESG) issues related to the company's operations in accordance with the materiality principle, and formulate relevant risk management policies or strategies?	V		(1) The company promotes sustainable development, pays attention to the rights and interests of stakeholders, and at the same time pursues sustainable operation and profit, pays attention to the factors of environment, society and corporate governance, and incorporates them into the company's management policy and operating activities. (2) The company conducts risk assessments on environmental, social and corporate governance issues related to company operations in accordance with the principle of materiality, and formulates relevant risk management policies or strategies. (3) The company conducts an environmental impact assessment in accordance with the provisions of ISO 14001. The company's operations, environment, society and other related matters shall be assessed in accordance with the new version of ISO 14001 to find out the significant impact on the company. Impact matters, and formulate environmental-related policies to implement and improve. (4) Arrange relevant personnel to attend RBA (Responsible Business Alliance) related courses, and then incorporate relevant RBA requirements for the five major frameworks of RBA (labor, health and safety, environment, ethics, and management system) to make up for deficiencies.	None
3. Environmental Issues (1) Has the Company set an environmental management system designed to industry characteristics? (2) Does the Company endeavor to use energy more efficiently and to use renewable materials with low environmental impact? (3) Has the Company evaluated the potential risks and opportunities posed by climate change for its business now and in the future and adopted relevant measures to address them?	V V V		(1)Continue to implement the new version of the ISO 14001 environmental management system. (2)Continue to implement energy conservation projects and waste reduction projects. (3)In response to environmental protection, energy conservation and carbon reduction, the company implements it in a way of full participation, and starts with general administrative policies, process management and improvement, so that employees can deeply root energy conservation in the working environment. The target of carbon reduction is to achieve environmental pollution-free:	None

Item			Implementation Status	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary description
(4) Did the company collect data for the past two years on greenhouse gas emissions, volume of water consumption, and the total weight of waste, and establish policies for greenhouse gas reduction, reduction of water consumption, or management of other wastes?	V		1. Switch to energy-saving lamps for some lighting; reduce the use of lamps in administrative areas and maintain basic lighting to save energy. 2. Strengthen the management of air-conditioning: all types of chiller water outlet temperature, factory aisle temperature, office temperature, clean room temperature are all set and controlled and continue reducing the exhaust air volume of each coating equipments to save energy. 3. Aggressively promote electronic and reduce paper usage. 4. Instead of using sanitary chopsticks, use environmentally friendly chopsticks. 5. Promote the upper and lower floors to take the stairs, and the elevator will stop running on the floor. 6. Turn off the computer after get off work and turn off the lights and computer screen power during lunch break. 7. Waste battery recycling, faucet water-saving device, planting and environmental greening. (4) The company continues to implement various energy saving projects and waste reduction projects to reduce greenhouse gas emissions to protect the earth.	None
4. Social Issues (1) Has the company formulated relevant management policies and procedures in accordance with relevant laws and regulations and international human rights conventions?	V		(1) The company abides by relevant laws and regulations, and abides by international human rights conventions, such as gender equality, the right to work and the prohibition of discrimination. (2) In order to fulfill the responsibility of protecting human rights, the company formulates management policies and handling procedures related to protection, and shall disclose the handling procedures for the stakeholders involved when human rights violations are involved. (3) The company shall abide by the internationally recognized labor rights, and confirm that its human resources utilization policy does not discriminate in terms of gender, race, socioeconomic class, age, marital and family status, etc., in order to implement employment, employment conditions, remuneration, benefits, Equal and fair opportunities for training, evaluation and promotion. (4) The operation activities and management system of the company shall not endanger the rights and interests of laborers. For matters that endanger labor rights, the company shall provide efficient and appropriate grievance mechanisms to ensure equality and transparency in the grievance process.	None

Item			Implementation Status	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary description
(2)Has the Company established and implemented reasonable employee welfare measures (include salary/compensation, leave, and other benefits), and are business performance or results appropriately reflected in employee salary/compensation? (3)Does the Company provide employees with a safe and healthy working environment, and implement regular safety and health education for employees? (4)Has the Company established effective career development training programs for employees? (5) Does the company comply with the relevant laws and international standards with regards to customer health and safety, customer privacy, and marketing and labeling of products and services, and implement consumer protection and grievance policies?	V V V V		(2) The company formulates and implements reasonable employee welfare measures (including remuneration, vacation and other benefits, etc.), and appropriately reflects business performance or results in employee remuneration to ensure the recruitment, retention and encouragement of human resources and achieve the goal of sustainable operation. (3) Provide a safe and healthy working environment for employees: 1. The company provides employees with a safe and healthy working environment, including the provision of necessary health and first aid facilities, and is committed to reducing hazards to employee safety and health to prevent occupational disasters. 2. The company regularly implements safety and health education and training for employees. (4) The company creates a good environment for employees' career development and establishes an effective career ability development training program. For example: newcomer training, supervisor training, various professional skills and certificates, etc. (5) The company upholds the ideal concept of a green enterprise, realizes the importance of the earth's green environmental protection, and produces products comply with RoHS, halogen-free, and REACH regulations. The quality management aspect follows the system constructed and maintained by the integrated quality management system of ISO 9001:2015 and IATF 16949:2016. 1. The customer provides basic information, drawings, etc., and the marketing follows the "Contract Review Procedures" for proper storage and management of customer information. 2. When receiving customer requests or international laws and regulations, it will be posted on the "Product Applicable Laws/Regulations List" from time to time for internal compliance and control. 3. Customer service (such as technical consultation, sample testing), customer opinion survey, etc., follow the ``Customer Service Management Procedures'' to quickly cooperate to improve customer satisfaction. 4. When a customer complaint occurs, the dedicated customer service staff will be responsible for contacting and handling, and follow the company's internally planned "Customer Complaint Handling Procedure" for related operations and storage. Regularly track customer satisfaction status to maintain good interaction with customers.	None

Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary description
(6) Has the company formulated supplier management policies requiring suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health, or labor rights, and what is the status of their implementation? 5. Does the company refer to international reporting standards or guidelines when preparing its sustainability report and other reports disclosing non- financial information? Does the company obtain third party assurance or certification for the reports above?	V V		(6) When developing a new third-party manufacturer, the new third-party manufacturer is required to fill in the ``Supplier Evaluation Report''. The content of the questionnaire covers: compliance with EU WEEE, RoHS, ROHS2.0, halogen-free, REACH and other international or regional related regulations ( Such as: do not use conflict minerals policy). For green product management, we regularly obtain from the third-party manufacturers: 1. The third notary public inspection report or controlled substance content and composition questionnaire; validity period is one year. 2. Material Safety Data Sheet (MSDS); valid for three years. Help, the two sides work together to prevent after inspection, if it is confirmed that the controlled substance is out of specification and is caused by a third-party manufacturer, the third-party manufacturer is responsible for handling defective products and related derivative expenses. Based on the basis for cooperation between the two parties, willing to provide the necessary cooperation and requires third-party manufacturers to start reducing projects. 3. Establish a supplier management mechanism: According to the "Supplier Management Procedures" operation, 100% of the cooperative suppliers in 2011 meet the following management requirements. - Supplier development and selection criteria. - Raw material evaluation work. -Supplier daily management: including audit, appraisal, 4M change, quality exception handling...etc. The company's performance of corporate social responsibility is handled in accordance with the "Supervisory Authority" and relevant laws and regulations. Relevant information of the company’s operating conditions will be disclosed on the company's website and Market Observation Post System(“MOPS”).	None
6. If the Company has adopted its own sustainable development best practice principles based on the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, please describe any deviation from the principles in the Company’s operations: At present, the company has not formulated the corporate social responsibility code according to “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies”, but all the business operation comply with the corporate social responsibility code.
7. Other important information to facilitate better understanding of the company’s promotion of sustainable development: The company's Pingzhen factory has passed the ISO 45001 occupational safety and health management system certification and continued to participate river adoption activities in Taoyuan City, and the relevant information is disclosed on the company's website (www.optimax.com.tw).

（ 6 ） Implementation of sincerity managing and the difference with best ethical practice principle of sincerity managing for TWSE/GTSM listed companies and its reason

and its reason
Assessment Item			Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
1. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures (1) Does the company have bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and the commitment regarding implementation of such policy from the Board of Directors and the management team? (2) Does the company establish relevant policies which are duly enforced to prevent unethical conduct and provide implementation procedures, guidelines, consequence of violation and complaint procedures in such policies? (3) Does the company establish appropriate compliance measures for the business activities prescribed in paragraph 2, article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and any other such activities associated with high risk of unethical conduct?	V V V		(1) Through the internal control system, internal audit operating specifications, accounting system, audit authority management methods, employee codes, employee award management, job descriptions, and related employee management regulations and methods, to clarify and implement the due ethics And honest behavior, prevent and punish dishonest behavior. (2) In order to implement the determination to operate with integrity, the relevant policies, prevention plans, confidentiality agreements, your handling of violations of integrity, and the channels for appeals, etc., are clearly set in the employee code and awards. The regulations include that employees must not use their power to seek illegal benefits, and accept entertainment, puppet gifts, receive kickbacks, embezzle public funds, or other illegal benefits; and must not manipulate, conceal, or abuse interested parties such as customers, suppliers, and other external parties. Based on the information learned by their duties, they make misrepresentations on important matters or other unfair trading methods to obtain improper benefits: employees shall bear the duty of confidentiality of business secrets, which is the same after leaving the company. (3) Arrange training for new recruits after reporting, sign a letter of agreement on personal confidentiality and issue manuals, and send out relevant promotional content from time to time to improve employees' awareness of integrity and code of conduct, and publish the regulations on the internal website. In addition, multiple channels such as forums, meetings, and suggestion boxes on internal and external websites are provided for internal and external feedback to be reflected and handled by dedicated personnel. In addition, there are rewards and punishments. The relevant contents are communicated to all colleagues. Through various preventive measures, the concept and behavior of the principle of good faith are effectively strengthened, and good governance and sustainable operation are established.	None

Assessment Item			Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
2. Ethic Management Practice (1) Does the company assess the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts? (2) Does the company set up a unit which is dedicated to or tasked with promoting the company’s ethical standards and reports directly to the Board of Directors with periodical updates on relevant matters? (3) Does the company establish policies to prevent conflict of interests, provide appropriate communication and complaint channels and implement such policies properly? (4) To implement relevant policies on ethical conducts, does the company establish effective accounting and internal control systems that are audited by internal auditors or CPA periodically? (5) Does the company provide internal and external ethical conduct training programs on a regular basis?	V V V V V		(1) The company and its major customers have signed contracts with respect to integrity clauses, so any business activity companies will indeed abide by the content of the contract, and work with customers to establish an honest business environment. (2) At present, there is no full-time unit to promote the integrity of enterprises, but the company firmly believes that only integrity management can achieve sustainable operation and development. In order to implement the principle of honest management, the company has formulated the "employee ethics code of conduct", which regulates the prohibition of bribery and bribery by employees, avoiding conflicts of interest, etc., in order to establish a corporate culture of honest operation and ensure the company's sustainable operation. (3) Relevant policies are clearly set in the employee code, rewards and punishments, and the regulations are published on the internal website. Employees can reflect their opinions through multiple channels, such as every labor-management meeting, or with management and employee suggestion boxes, and appoint a dedicated person Immediately and properly handle. At the same time, there are rewards and punishments, and the relevant content and information are communicated to all colleagues. Employees are also encouraged to report to their immediate supervisor, audit supervisor, top human resources supervisor, or other appropriate personnel if they discover or reasonably suspect any violations, or report it through the suggestion box channels on internal and external websites. (4) The auditing unit checks the financial reporting related information according to the laws and regulations every year, supervises the implementation of the internal control system and prepares an audit report, and tracks the improvement progress of the audit deficiencies quarterly to ensure the effectiveness of the internal control system. In addition, the company has established an accounting system to regulate that employees should abide by accounting principles to ensure that the published information can be properly and correctly reflected. (5) The company has included the "Code of Ethical Conduct for Employees in Employment" and other integrity-related requirements in the recruitment and new personnel education and training to clarify and implement the due ethics and integrity behaviors, and prevent and punish dishonest behaviors.	None

Assessment Item	Implementation Status	Implementation Status	Implementation Status	Non-implementation and Its Reason(s)
	Yes	No	Explanation
3. Implementation of Complaint Procedures (1) Does the company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received? (2) Does the company establish standard operation procedures for investigating the complaints received and ensuring such complaints are handled in a confidential manner? (3) Does the company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?	V V V		(1) The company's employee work rules and employee rewards and punishments management measures clearly define the disciplinary and reporting complaint channels for violations of the integrity regulations, and encourage employees to immediately report to their direct supervisors, audit supervisors, and human resources if they find or reasonably suspect any violations. Report by the top supervisor or other appropriate personnel, or report through the suggestion box channel of internal and external websites, and handle it properly by designated personnel. (2) The company's employee work rules and employee rewards and punishments management measures specify the investigation procedures and confidentiality mechanisms for related matters in the punishment of violations of the integrity regulations and the reporting and appeal channels. (3) The company shall properly handle the reporting matters by designated personnel, and protect and ensure that the reporter will not be improperly or unfairly treated as a result.	None
4. Information Disclosure Does the company disclose its guidelines on business ethics as well as information about implementation of such guidelines on its website and Market Observation Post System (“MOPS”)?	V		From time to time, the company discloses relevant information on the company's website, public information observatory, and shareholders' meeting without major differences. The company's website also sets up an investor area, links to public information observatories, and provides investors with information about the company's responsibilities. Important company information is announced and disclosed in accordance with the regulations of the competent authority. Information inquiry method: 1. Market Observation Post System (http://mpos.tse.com.tw). 2. Company's website (http://www.optimax.com.tw).	None
5. If the company has established corporate governance policies based on TSE Corporate Conduct and Ethics Best Practice Principles, please describe any discrepancy between the policies and their Implementation: The company has not yet established corporate governance policies based on TSE Corporate Conduct and Ethics Best Practice Principles, but the overall operation comply with the corporate governance policies.
6. Other important information to facilitate better understanding of the company’s corporate conduct and ethics compliance practices (e.g., review the company’s corporate conduct and ethics policy). The auditing office regularly reviews financial report-related information and supervises the operating system to ensure the effectiveness of the internal control system.

(7) If the company has formulated a corporate governance regulation and related regulations, it should disclose its inquiry method: None.

(8) Other important information that enhances the state of operation of corporate governance: None.

（ 9 ） The state of implementation of Optimax Technology Corporation internal control system:

1. Statement on Internal Control

Optimax Technology Corporation Internal Control System Statement

Date: 2022-03-24

The company states of the following with regard to its internal control system for 2021, based on the finding of a selfassessment:

The Company is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of its Board of Directors and management. The Company has established such a system aimed at providing reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguardin g of assets security), reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations and bylaws.

An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the effectiveness of an internal control system may chang e along with changes in environment or circumstances. The internal control system of the Company contains self -monitoring mechanisms, however, and the Company takes corrective actions as soon as a deficiency is identified.

The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the“Regulations Governing Establishment of Internal Control Systems by Public

Companies”, promulgated by the Financial Supervisory Commission (hereafter, the “Regulations”). The internal control system judgment criteria adopted by the Regulations divide internal control into five elements based on the process of management control: 1. Control environment 2. Risk assessment 3. Control activities 4. Information and communication 5. Monitoring activities. Each element further contains several items. Please refer to the Regulations for details.

The Company has assessed the designed and operating effectiveness of its internal control system according to the formentioned criteria.

Based on the findings of the assessment mentioned as of December 31, 2021, the Company believes that during the stated time period its internal control system (including its supervision and management of subsidiaries), encompassing internal controls for understanding of the degree of achievement of operational effectiveness and efficiency objectives, reliability, timeliness, transparency, and reg ulatory compliance of treporting, and compliance with applicable laws, regulations and bylaws, was effectively designed and operating, and reasonably assured the achievement of the above -stated objectives.

This Statement will become a major part of the content of the Company’s Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

This Statement has been passed by the Board of Directors Meeting of the Company held on March 24, 2022, in which all of the ten attending directors affirmed the content of this Statement.

Optimax Technology Corporation

Chairman: Peter Chao

President: Wilson Chao

External auditors’ opinion on Optimax Technology Corporation’s internal control: Not applicable.

（ 10 ） During the most recent fiscal year and before printing date of annual report, if the company and its internal personnel have been punished according to law or the company carries out punishment to the internal personnel who violate internal control system and the result might have significant impact towards shareholders’ equity or securities value, the content of the punishment should be specified as well as the main deficiency and improvement implementation: None.
（ 11 ） During the most recent fiscal year and before printing date of annual report, the important resolutions from the Shareholders’ Meeting and the Board of Directors:

Date	Material Resolutions	Implementation Status
2021.08.27	Year 2021 Shareholder’s Meeting	(1) Accept 2020 Business Report and Financial Statements (2) Accept the proposal for 2020 Deficit Compensation (3) Approve the proposal of Capital Reduction (4) Approve the amendment to the Procedures for Election of Directors (5) Elect Directors (including Independent Directors) (6) Proposal of Release the Prohibition on Directors from Participation in Competitive Business
-	Year 2021 Company’s Board Meeting	The major resolutions of the board of directors of the company have declared important information in the Market Observation Post System (“MOPS”) in accordance with the regulations, and there are no other resolutions that have a significant impact on shareholders' equity or securities prices.

（ 12 ） Where, during the most recent fiscal year and current fiscal year up to the date of printing of this annual report, there was no Board of Director or Supervisor expressing a dissenting opinion with respect to a material resolution passed by the Board of Directors and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.
（ 13 ） A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the Company's chairman, president, principal accounting officer, principal financial officer, chief internal auditor and principal research and development officer: None.

Information on CPA Professional Fees

(1) Information on CPA (External Auditor) Professional Fees (Please fill in the amounts)

Unit: NT$ thousand

Name of Accounting Firm	Name of CPAs	Period covered by the CPA audit	Audit Fees	Non-audit fees (Note 1)	Total	Remarks
BAKERK TILLY CLOCK & CO.	Hsin-Liang, Wu Li-Chen, Peng	110/1/1~110/12/31	1,620	430	2,050	None

Note 1: Contents of non-audit public services:

Tax visa, capital reduction to make up for losses and capital amount verification visa public expenses and financial management committee capital reduction declaration public expenses.

(2) If the non-audit public fees paid to the independent auditor, the firm to which the visa accountant belongs, and its affiliated enterprises are more than a quarter of the audit public fees, the amount of the audit and non-audit public fees and the content of the non-audit services shall be disclosed: Not applicable.
(3) If the replacement of the accounting firm and the audit public fees paid in the replacement year are lower than those in the previous year, the amount and reason of the audit public fees before and after the replacement shall be disclosed: Not applicable.
(4) If the audit public expenditure has decreased by more than 10% compared with the previous year, the amount, proportion and reasons for the reduction of audit public expenditure shall be disclosed: Not applicable.

Information of replace it Certificated Public Accountant

None.

The Company’s Chairman, General Manager, or Any Managerial Officer in Charge of Finance or Accounting Matter in the most recent year held a position at the Accounting Firm of its Certified Public Accountant or at an Affiliated Enterprise of Such Accounting Firm

None.

Transfer of Equity Interests and/or Pledge of or Change in Equity Interests by a Director, Supervisor, Managerial Officer, or Shareholder with a Stake of More than 10 Percent during the most recent fiscal year and the current fiscal year up to the date of printing of this annual report

In the most fiscal year and up to the date of publication of the annual report, the transfer of shareholding and changes in shareholding pledges of directors, supervisors, managers and shareholders holding more than 10% of the share:

（ 1 ） Changes in shareholdings of Directors, Supervisors, Mangers, and Major Shareholders:

					Unit: share
Title	Name	2021		For theyear end	2022-04-25
		Change in quantity of shareholding	Change in quantity of pledged shares	Change in quantity of shareholding	Change in quantity of pledged shares
Chairman Over 10% shareholdings	Peter Chao	-16,108,019	-	-	-
President Director	Wilson Chao	-2,119,837	-	40,000	-
Corporate Director	Shi-Hong Industrial Co., Ltd.	-547,959	-	315,000	-
Representative	Shi-Fen, Lin	-	-	-	-
Representative	Shu-Ping, Wu	-	-	-	-
Corporate Director	Jiu-Ru Investment Co., Ltd.	-726,608	-	100,000	-
Representative	Jin-De, Wang	-	-	-	-
Director	Qi-Bang, Yu	-	-	-	-
Director	Xiao-Nan Xiang	-4,023	-	-	-
Director	Chang-Shu Jiang	-	-	-	-
Independent Director	Ted Guo	-	-	-	-
Independent Director	Tzeng-Guey Gu	-	-	-	-
Independent Director	Min, Chao	-	-	-	-
Assistant Vice-President	Ren-Qiang Ma	-20,689	-	-	-
Financial Manager	Zong-Ze Chen	-	-	-	-

Note: The base date for capital reduction is set on October 25, 2021.

（ 2 ） Stock transfer with related party: None.
（ 3 ） Stock Pledge with related party: None.

Related Party Relationship Among the Company’s 10 Largest Shareholders

2022-04-25; Unit: share ； %

							2022-04-25; Unit: sha	2022-04-25; Unit: sha	re；%
Name	Shareholding		Shareholding under spouse and children of minor age		Shareholding under the title of third party		Top 10 shareholders who are related parties to each other		Note
	Shares	%	Shares	%	Shares	%	Title(or name)	Relation
Peter Chao	18,723,484	11.01	1,417,489	0.83	-	-	Wilson Chao	Father-son	-
Long-Shi, Lin	9,614,782	5.66	-	-	-	-	Shi-Hong, Lin	Father-son	-
Yuqi Investment Co., Ltd	3,969,319	2.34	-	-	-	-	Uben Investment Co., Ltd.	Joint Venture	-
Yuqi Investment Co., Ltd Principle: Hong- Yu Lin	-	-	-	-	-	-	-	-	-
Wilson Chao	2,589,837	1.52	-	-	-	-	Peter Chao	Father-son	-
Shi-Hong, Lin	2,217,275	1.30	-	-	-	-	Long-Shi, Lin	Father-son	-
Uben Investment Co., Ltd.	2,084,944	1.23	-	-	-	-	Yuqi Investment Co., Ltd	Joint Venture	-
Uben Investment Co., Ltd. Principle: Hong-Yu Lin	-	-	-	-	-	-	-	-	-
Long-Gen Zhang	1,762,972	1.04	-	-	-	-	-	-	-
Yi-Kai Niu	1,665,361	0.98	-	-	-	-	-	-	-
Yu-Hai Zhang	1,640,000	0.97	-	-	-	-	-	-	-
Su-Zhen Liu	1,567,627	0.92	-	-	-	-	-	-	-

Comprehensive shareholding ratio information

The company’s director, managers, and companies directly or indirectly controlled by the company directly or indirectly control the numbers of shares held by the same reinvested enterprise, and its comprehensive shareholding ratio information is as follow:

			2021-12-31;Unit: thousand share	2021-12-31;Unit: thousand share	2021-12-31;Unit: thousand share	2021-12-31;Unit: thousand share
Long-term investments (Note 1)	Investment by OPTIMAX		Investment directly or indirectly controlled by directors, supervisors, and managers of OPTIMAX		Total Investment
	Shares	%	Shares	%	Shares	%
Optimax Optronics (MAURITIUS) corp.	19,000,000	100	-	-	19,000,000	100
Art Optronics corp.	225,000	100	-	-	225,000	100
Shenzhen Lihuasheng Technology Co., Ltd.	0	0	(Note 2)	32	(Note 2)	32

Note1: Investment accounted for using the equity method.

Note2: It is not a company limited by shares, so there is no number of shares.

Capital Overview

（ 1 ） Capitalization

1. Capitalization

						Unite: NT$ thousand, thousand shares	Unite: NT$ thousand, thousand shares	Unite: NT$ thousand, thousand shares
Year/Month	Price (NT$)	Authorized		Paid-in		Remark
		Shares (thousand share)	Amount (NT$ thousand)	Shares (thousand share)	Amount (NT$ thousand)	Sources of capital	Capital increase by assets other than cash	other
1998/03	10	80,000	800,000	29,100	291,000	Established	None	Note1
1998/11	10	80,000	800,000	58,200	582,000	Rights issue	None	Note2
1999/10	12	80,000	800,000	73,200	732,000	Rights issue	None	Note3
2000/11	18	150,000	1,500,000	109,200	1,092,000	Rights issue	None	Note4
2001/07	10	150,000	1,500,000	118,646	1,186,463	Capitalization of retained earnings (including employee bonuses), Capitalization of capital surplus	None	Note5
2001/10	15	150,000	1,500,000	136,646	1,366,463	Rights issue	None	Note6
2002/05	22	150,000	1,500,000	149,646	1,496,463	Rights issue	None	Note7
2002/06	10	400,000	4,000,000	176,160	1,761,605	Capitalization of retained earnings (including employees’ bonuses), Capitalization of capital surplus	None	Note8
2002/11	40	400,000	4,000,000	209,660	2,096,605	Rights issue	None	Note9
2003/08	10	400,000	4,000,000	246,812	2,468,119	Capitalization of retained earnings (includingemployees’ bonuses)	None	Note10
2004/04	10	400,000	4,000,000	263,573	2,635,724	Bonds converted to common stock	None	Note11
2004/06	107	400,000	4,000,000	288,572	2,885,724	Rights issue	None	Note12
2004/08	10	700,000	7,000,000	291,549	2,915,490	Bonds and Stock option converted to common stock	None	Note13
2004/08	10	700,000	7,000,000	363,614	3,636,141	Capitalization of retained earnings, Bonds and Stock option converted to common stock	None	Note14
2004/10	10	700,000	7,000,000	364,728	3,647,281	Bonds and Stock option converted to common stock	None	Note15
2005/01	10	700,000	7,000,000	365,351	3,653,511	Bonds and Stock option converted to common stock	None	Note16
2005/05	10	700,000	7,000,000	371,668	3,716,678	Bonds and Stock option converted to common stock	None	Note17
2005/07	10 73	700,000	7,000,000	411,653	4,116,534	Bonds converted to common stock and Rights issue	None	Note18
2005/08	10	700,000	7,000,000	411,848	4,118,476	Bonds and Stock option converted to common stock	None	Note19
2005/08	10	700,000	7,000,000	414,194	4,141,936	Bonds and Stock option converted to common stock	None	Note20
2005/09	10	700,000	7,000,000	488,982	4,889,824	Capitalization of retained earnings (includingemployees’ bonuses)	None	Note21
2005/11	10	700,000	7,000,000	489,665	4,896,653	Bonds and Stock option converted to common stock	None	Note22

Year/Month	Price (NT$)	Authorized	Authorized	Paid-in	Paid-in	Remark	Remark
		Shares (thousand share)	Amount (NT$ thousand)	Shares (thousand share)	Amount (NT$ thousand)	Sources of capital	Capital increase by assets other than cash	other
2006/01	10	700,000	7,000,000	493,232	4,932,323	Bonds and Stock option converted to common stock	None	Note23
2006/04	10	700,000	7,000,000	494,999	4,949,990	Bonds and Stock option converted to common stock	None	Note24
2006/07	10	1,000,000	10,000,000	503,718	5,037,178	Bonds and Stock option converted to common stock	None	Note25
2006/10	10	1,000,000	10,000,000	505,367	5,053,671	Bonds and Stock option converted to common stock	None	Note26
2007/03	10	1,000,000	10,000,000	505,941	5,059,412	Bonds and Stock option converted to common stock	None	Note27
2007/05	10	1,000,000	10,000,000	506,629	5,066,293	Bonds and Stock option converted to common stock	None	Note28
2007/09	10	1,000,000	10,000,000	506,776	5,067,764	Bonds and Stock option converted to common stock	None	Note29
2010/06	10	1,000,000	10,000,000	271,366	2,713,661	Capital Reduction	None	Note30
2011/03	10	1,000,000	10,000,000	267,224	2,672,242	Cancels the storehouse stock	None	Note31
2011/11	10	1,000,000	10,000,000	325,332	3,253,323	Private Investment in Public Equity	None	Note32
2021/10	10	1,000,000	10,000,000	170,000	1,700,000	Capital Reduction	None	Note33

Note 1: The Ministry of Economic Affairs approved on 1998/03/03 No. 087103851.

Note 2: The 1998/09/10 Letter No.Taiwan-Finance-Securities-I-75847 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 3: The 1999/05/25 Letter No.Taiwan-Finance-Securities-I-48502 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 4: The 2000/06/20 Letter No.Taiwan-Finance-Securities-I-52557 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 5: The 2001/07/12 Letter No.Taiwan-Finance-Securities-I-142982 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 6: The 2001/07/12 Letter No.Taiwan-Finance-Securities-I-142982 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 7: The 2002/02/22 Letter No.Taiwan-Finance-Securities-I-106950 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 8: The 2002/05/21 Letter No.Taiwan-Finance-Securities-I-123945 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 9: The 2002/06/26 Letter No.Taiwan-Finance-Securities-I-0910134944. The 2002/07/29 Letter No.Taiwan-Finance-Securities-I-0910142819 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 10: The 2003/06/13 Letter No.Taiwan-Finance-Securities-I-0920126201 of the Securities and Futures Commission (SFC), Ministry of Finance. Note 11: The Ministry of Economic Affairs approved No. 09301058210.

Note 12: The Letter No.Taiwan-Finance-Securities-I-0930106816 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 13: The Ministry of Economic Affairs approved No. 09301148610. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 14: The Ministry of Economic Affairs approved No. 09301156070. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 15: The Ministry of Economic Affairs approved No. 09301197400. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 16: The Ministry of Economic Affairs approved No. 09401013970. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 17: The Ministry of Economic Affairs approved No. 094010176290. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 18: The Ministry of Economic Affairs approved No. 09401114040. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 19: The Ministry of Economic Affairs approved No. 09401155540. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 20: The Ministry of Economic Affairs approved No. 09401155530. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 21: The Financial Supervision and Administration Commission of the Executive Yuan approved the letter No. 0940128432 of Jinguanzhengzi on 2005/07/14.

Note 22: The Ministry of Economic Affairs approved No. 09401223000. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 23: The Ministry of Economic Affairs approved No. 09501010290. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 24: The Ministry of Economic Affairs approved No. 09501070530. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 25: The Ministry of Economic Affairs approved No. 09501151360. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 26: The Ministry of Economic Affairs approved No. 09501239450. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 27: The Ministry of Economic Affairs approved No. 09601054920. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 28: The Ministry of Economic Affairs approved No. 09601099510. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 29: The Ministry of Economic Affairs approved No. 09601228040. The Letter No.Taiwan-Finance-Securities-I-123946 of the Securities and Futures Commission (SFC), Ministry of Finance.

Note 30: The Ministry of Economic Affairs approved No. 09901134930. The Financial Supervision and Administration Commission of the Executive Yuan approved the letter No. 0990029643 of Jinguanzhengfazi on 2010/06/15.

Note 31: The Ministry of Economic Affairs approved No. 10001043070. The Taiwan Stock Exchange Corporation Reference No.10000083511 on 2011/03/22.

Note 32: The Ministry of Economic Affairs approved No. 10001274710. The Financial Supervision and Administration Commission of the Executive Yuan approved the letter No. 1000024210 of Jinguanzhengfazi on 2011/05/24.
Note 33: The Ministry of Economic Affairs approved No. 11001203030. The Financial Supervision and Administration Commission of the Executive Yuan approved the letter No. 1100023637 of Jinguanzhengfazi on 2021/11/19.

2. Shares Categories

2022-4-25; Unite: share

Stock Type	Approved share capital	Approved share capital	Approved share capital	Approved share capital		Note
	Outstanding shares			Un-issued shares	Total
	Listed stock	Unlisted stock (Note 1)	Total
Common stock	139,636,042	36,363,958	170,000,000	830,000,000	1,000,000,000	50,000,000 shares including warrants and company bonds with warrants

Note 1: Private Investment in Public Equity.

3.Information on the shelf registration: Not applicable.

（ 2 ） Shareholder structure

					2022-4-25;Unit: share;%	2022-4-25;Unit: share;%
Structure	Government Agencies	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Individual	Total
Number of shareholders	-	-	143	35	35,513	35,691
Shareholding	-	-	10,529,812	915,484	158,554,704	170,000,000
Holding percentage%	0.00	0.00	6.19	0.54	93.27	100.00

（ 3 ） Distribution of ownership

		Each share has aper value of NT$10;2022-4-25	Each share has aper value of NT$10;2022-4-25
Shareholder Ownership (Unit: share)	Number of Shareholders	Ownership (share)	Ownership (%)
1 - 999	20,003	3,403,984	2.00
1,000 - 5,000	11,698	24,327,009	14.31
5,001 - 10,000	2,045	14,611,974	8.60
10,001 - 15,000	651	8,119,755	4.78
15,001 - 20,000	378	6,819,212	4.01
20,001 - 30,000	366	9,085,717	5.35
30,001 - 40,000	156	5,474,630	3.22
40,001 - 50,000	90	4,098,453	2.41
50,001 - 100,000	162	11,336,441	6.67
100,001 - 200,000	73	9,617,278	5.66
200,001 - 400,000	37	9,811,865	5.77
400,001 - 600,000	8	3,778,221	2.22
600,001 - 800,000	3	2,138,720	1.26
800,001 - 1,000,000	6	5,379,290	3.16
Over 1,000,001	15	51,997,451	30.58
Total	35,691	170,000,000	100.00

（ 4 ） List of principal shareholders

2022-4-25; Unit: share; %

		2022-4-25;Unit: share;%
Name of major shareholder	Number of shares held (shares)	Shareholding ratio (%)
Peter Chao	18,723,484	11.01
Long-Shi, Lin	9,614,782	5.66
Yuqi Investment Co., Ltd	3,969,319	2.34
Wilson Chao	2,589,837	1.52
Shi-Hong, Lin	2,217,275	1.30
Uben Investment Co., Ltd.	2,084,944	1.23
Long-Gen Zhang	1,762,972	1.04
Yi-Kai Niu	1,665,361	0.98
Yu-Hai Zhang	1,640,000	0.97
Su-Zhen Liu	1,567,627	0.92

（ 5 ） Share prices for the past two fiscal years, the Company’s net worth per share,

earnings per share, dividends per share, and related information:

Item	Year	Year	2020	2021	Year ended March 31, 2022 (Note 6)
Market price per share (Note 2)	Highest market price		6.60	41.85	36.5
	Lowest market price		2.49	5.55	21.3
	Average market price		4.08	9.67	28.42
Net worth per share	Before distribution		3.79	11.96	12.59
	After distribution		NA	NA	NA
Earnings (loss) per share	Weighted average share (thousand shares) (before retrospective)		170,000	170,000	170,000
	Earnings Per share	Before retrospective adjustment	0.05	4.76	0.65
		After retrospective adjustment	0.10
Dividends per share	Cash dividends		Note 1	Note 1	-
	Stock dividend	Dividends from retained earnings	-	-	-
		Dividends from capital surplus	-	-	-
	Accumulated undistributed dividend		-	-	-
Return on investment	Price/ Earnings ratio (Note 3) (times)		-	-	-
	Price/ Dividend ratio (Note 4) (times)		-	-	-
	Cash dividend yield (Note 5) (%)		-	-	-

Note 1: On March 24, 2022, the company passed the resolution of the board of directors to propose the statutory surplus reserve of NT$35,550,000 and do not plan to allocate in profit and loss appropriation plan in the year 2021. For related information, please check Market Observation Post System (MOPS) for more information.

Note 2: List the highest and lowest market price per share of common stock in each fiscal year. Calculate each fiscal year's average market price based upon each fiscal year's actual trading prices and volume.
Note 3: PE ratio = average closing price per share for the year / earnings per share.
Note 4: PE ratio = average closing price per share for the year / cash dividend per share.
Note 5: Cash dividend yield = cash dividend per share / average closing price per share for the year.
Note 6: Data verified (audited) by the accountant for the most recent quarter as of the publication date of the annual report should be filled in the net worth and earnings per share. The remaining fields should be filled with data of the year as of the publication date of the annual report.

（ 6 ） Dividend policy

1.Dividend policy:

The dividend policy stipulated in the company's current articles of association (to be implemented after the approval of the regular shareholders meeting)

The company's dividend policy is regulated in Articles 20 of the company's articles of association. Its contents are as follows:

The current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ accumulated losses and then set aside 10% as legal reserve. When such legal reserve amounts to the total paid-in capital, the Company shall not be subject to this requirement. The Company may then appropriate or reverse a certain amount as special reserve according to the relevant regulations. The remaining earnings, plus the accumulated undistributed earnings, may be appropriated to shareholders as dividends or bonuses according to the distribution plan proposed by the Board of Directors and approved by the shareholders’ meeting.

After taking into account of the Company's current and future development plan, investment environment, fund requirements, and domestic and international competition and the interests of shareholders, the dividend policy of the Company is to set aside no less than 50% of distributable earnings as shareholders’ dividends and bonuses. However, in case the accumulated distributable earnings is less than 30% of paid-in capital, the Company may choose not to distribute dividends. Dividends to common shareholder may be distributed by way of combination of cash dividend and stock dividend provided that the cash dividends shall not be less than 10% of the total dividends.

2. The situation of the proposed dividend distribution at the shareholders' meeting of this year: None.

（ 7 ） The impact of the proposed free placement of shares this year on the company's business performance and earnings per share: Not applicable.

（ 8 ） Employee dividends and compensation of directors and supervisors

1.The percentage or scope of employee dividends and remuneration of directors and supervisors as stated in the company's articles of association:

When the Company allocates the profit of the current year, if any, 5%~10% of the profit shall be set aside as employees’ compensation, which to be distributed to the qualified employees of the Company or of the subsidiaries of the Company employees in the form of stock or cash. The Board of Directors is hereby authorized to set forth the plan of distribution. The Company may, subject to the resolution adopted by the Board of Director, further allocate no more than 1% of the aforesaid profit as Directors’ compensation. The proposals of the employees’ compensation and the directors’ compensation shall be approved by a majority of total Directors and then reported on the Shareholders’ meeting. Notwithstanding the foregoing, when there are accumulated losses, the profits shall be used to offset accumulated losses first and report on the Shareholders’ meeting.

2.The current basis for estimating the amount of compensation for employees and directors, the basis for calculating the number of shares for employee compensation for stock distribution, and the accounting treatment when the actual distribution amount is different from the estimated number: Not applicable.
3.Proposed distribution of compensation by the board of directors: None.
4.The actual distribution of employees 'and directors' remuneration in the previous year, the number of differences with those who recognize differences between employees 'and directors' remuneration, reasons and handling situations: Not applicable.

（ 9 ） Share repurchases: None.

Insurance of Corporate Bonds

（ 1 ） Corporate bond issuance: None.

（ 2 ） Convertible Bond: None.

（ 3 ） Exchangeable Bond: None.

（ 4 ） Shelf Registration: None.

（ 5 ） Bond with Warrants: None.

Special stock issuance situation: None

Overseas depositary receipt issuance: None.

Employee stock option certificate issuance: None.

Restricted employees' rights to deal with new shares: None.

Mergers or acquisitions or transfer of shares of other companies to issue new shares: None.

Implementation of the fund utilization plan

As of the quarter before the printing date of the annual report, the cash capital increase plans of the previous issuances have been implemented and the benefits have been shown. Therefore, it is not applicable.

Operational Highlights

Business Content

(1) Business Scope

1. The main content of the business and its operating proportion:

The company's business is mainly divided into two parts, one is that the sales proportion of polarizers is 97%. The other part is for the sales of sunglasses, touch controls and related optical materials, accounting for 3% of revenue.

2. The company’s current product (service) projects and planned new products (services): The company currently manufactures and sells important raw material polarizers for LCD/OLED (including TN, STN, TFT, PM-OLED, AM-OLED, etc.), lenses for sunglasses and some touch-related materials. At present, it is planned to cut into the production and sales of more optoelectronic peripheral raw materials products.

(2)Industry Overview

1. Industry status and development

Polarizers are mainly used in liquid crystal displays (Liquid Crystal Display, referred to as LCD), which are upstream components of the LCD industry, and their sales are greatly affected by overall LCD demand.

Comparison table of TN, STN and TFT-LCD

LCD	Theory	Characteristic	Angle of view	Panel size	Application
TN	Liquid crystal molecules ( twisted 90 degrees)	Black and white, monochrome low contrast(20:1)	narrow (Below 30 degrees)	Below 6”	Electronic watches, computers, simple palm-sized game consoles, etc.
STN	Liquid crystal molecules ( twisted 180~270 degrees)	Black and white, color (260,000 colors), low contrast is better than TN (50:1)	narrow (Below 40 degrees)	Below 10”	Electronic dictionary, mobile phone, stock machine, etc.
TFT	Liquid crystal molecules ( twisted 90 degrees)	Color (16.78 million colors), high contrast TN 500:1~1000:1 MVA 1500:1~3000:1 IPS 1000:1~2000:1	Wider TN:80 degrees MVA: 88 degrees IPS: 88 degrees	1.5~65”	Digital cameras, digital frames, personal digital assistants, mobile phones, LCD projectors, notebook computers, liquid crystal monitors, color TVs (Full HD), and car navigation systems, etc.

The above data shows that the applications of liquid crystal displays include business, information, communications, consumer electronics, transportation and entertainment applications, and various types of LCD have different applications under different terminal product specifications. The polarizing plate is the key component of the above three types of LCD. Its function is mainly used to control the polarization direction of specific light waves, so that light can pass or shield, and provide the necessary display characteristics. Because the liquid crystal itself does not have the ability to pass or shield light, and the control function requires the use of a polarizer to achieve related functions, so the polarizer is of great importance to LCD.

Liquid crystal displays (LCDs) take advantage of their small size, light weight, low power consumption, fullplane display and low radiation, from general-purpose electronic products such as watches and computers to high-end electronic product displays such as mobile phones and tablets. Computers, laptops, LCD screens, LCD TVs, etc. are quite high market share.

The investment boom in my country's liquid crystal display industry has continued in recent years. Although the investment in super-twisted liquid crystal displays (STN-LCD) has stopped, a series of eye-catching large-size thin film transistor displays (TFT-LCD) and AM-OLED continues to invest. At present, Taiwan is already the world's TFT-LCD production center, and TN-LCD and STN-LCD are mostly transferred to mainland China due to low prices and profits. In recent years, domestic investment has set off next-generation large-size TFT-LCD and AM-OLED. The upsurge of new technology, and the gradual implementation of independent technology development, coupled with the opening of the panel factory in 2010, the conditional landing of these hundreds of billions of new Taiwan dollars of investment, compared with the semiconductor industry has a tendency to come from behind.

Polarizers are materials required for the production of LCD/OLED, and the LCD industry is divided into TN, STN, OLED industry is divided into two categories: PM-OLED and AM-0LED. Although other flat-panel displays use polarizing plates, their individual application products, production centers, industrial characteristics and production technologies are different. Optimax will position the main marketing markets in Taiwan, mainland China, Japan and South Korea, but it is still regarded as the polarizer supplier with the highest market share in both Taiwan and mainland China is the goal.

2. Industrial connection

			TAC	PET	PET		PE	PE	PE		PSA	PSA		PC

				Liquid Crystal
	Glass Substrate	Conducting Glass	Color Filter	Liquid Crystal						Driver IC			Backlight	Control Circuit
							Plarizer


												Industrial and
LCD Panel Factory					LCM Module Factory



					Home appliance	Consumer products		Computer Information	Communication Products		Commercial Products	Industrial and

3. Industry development trends and competition

(1)Product development trend

Polarizers are classified according to their optical functions, which can be divided into general use, high contrast, ultra-high contrast, ultra-high contrast, high durability, color, whitening, IPS and VA polarizers. Recently, product development is trending towards thinness, high transmittance, high resolution and high brightness. To meet the requirements of panel lightweight and environmental protection and energy saving. Polarizing plates are classified according to the production materials, which can be divided into iodine series and dye series. The difference is that the weather resistance of the dye-based polarizer is better than that of the iodine series. Therefore, dye-based polarizers are often used under high temperature conditions such as automotive, industrial control and LCD projectors, but the iodine series is used for the optical properties of polarization and transmittance. Polarizers are better. Therefore, iodine series polarizers are completely used in products that require high optical properties such as notebook computers, desktop PC monitors and LCD TVs. The company's product classification is as follows:

Optical function	Generalpurpose	High contrast type	Ultra-high contrast type
		STN/PM-OLED
Category	TN Polarizers		TFT /AM-OLED Polarizers
		Polarizers

Iodine series (I2)	Computer, Watch, Sun glasses, Game	PDA`、`Mobile phone	Laptops, Smart phones, Digital photography, Camera, Tablet PC, DesktopPC monitor,LCD TV
Dye series (dye)	For vehicles, ships, Low-level displays	Car navigator	Projector, Car navigator

Since LCD products have special and strict requirements in terms of brightness, visibility, weather resistance, ease of use, and light weight, in order to meet the needs of LCD manufacturers for the quality and characteristics of polarizers, the company should improve and develop the polarizer, each composite film, adhesion, processing, and interact with LCD customers to fully understand customer needs as a product development reference.

The development trend of polarizing plate required by LCD is as follows:

LCD demand for
		Polarizer products
polarizing plate	Demand type		Description
		development direction
characteristics

Visual effect	High brightness High contrast No color shift Anti-reflection Wide viewing angle characteristics	Improved characteristics of polarizer	Transmittance, polarizer performance, surface reflection prevention (AGLR, AGAR, HCLR HCAR)
		Reflection, semi- transmission	Whiteness, reflectivity, semi- transmission, viewing angle characteristics
		Retardation film	Retardation film difference value control, wavelength dispersion characteristics,、temperature dependent film, Liquid crystal coating film
Portable type with high weather resistance, thin and light weight	Thin Durability	Improve durability of Dye and Iodine product Thin product Introduction	Thinner, high durability and medium durability
Ease of processing	Flatness Easy to tear release film an protect film	Process improvement, raw material selection	Correct use of polarizer materials and adhesives
			Prevent static electricity, good cutting performance

(2)Product competition

At present, manufacturers with polarizing plate manufacturing technology, in addition to Japanese, Taiwan and Korean manufacturers, there are Chinese manufacturers. Previously, mainland manufacturers mainly focused on low-end TN/STN/PM-OLED products. Recently, they have accelerated the introduction of TFT/AM-OLED products. , However, the overall market share is still low, and the product quality is still unable to compare with Japanese, Taiwan, and Korean factories. In addition, Taiwan's panel makers continue to invest in nextgeneration panels. Due to the high future growth of the polarizer industry, new players are also attracting new players to actively enter the market, including Taiwanese manufacturers such as BenQ Materials and Chengmei Materials, as well as the establishment of Sumitomo in Tainan. Nitto expands production in Taichung. In addition to the current LCD TV, MNT, NB, Tablet PC. In addition to the development of polarizers for Automobile LCD, Smart Phone, Smart Watch, PM-OLED/AM-OLED and VR/AR, the company also actively expands surface treatment business and products such as precision coating to improve quality stability and reduce costs, and actively expend Japan and Chinese mainland market and improve the service and cooperation with customers, so as to widen the gap with competitors and maintain high competitiveness.

(3) Technology and R&D Overview

1.R&D expenses invested in the most recent year and up to the date of publication of the annual report

		Unit`：`NT$ Thousand
Item	2021	AS of 2022-03-31(Note)
Net Sales	3,191,831	773,882
R&D Expense	54,946	13,515
Percentage of Net Sales(%)	1.72%	1.75%

Note: The information for the year 2022 as of March 31 has been reviewed by an accountant.

2.Research and Development Achievement

Year	Year	Achievement	Application
2021	Q1	Polarizer for VR/AR	VR/AR
	Q2	Polarizing plate for in-vehicle compensation	vehicle
	Q3	Polarizer for ECB	eBooks / eLabels
	Q4	Polarizer for VR/AR	VR/AR
2022	Q1	Ultra-high reliability polarizer	Vehicle

(4) Long-term and short-term business development plans

1. Short-term development plan:

(1) Marketing strategy
A. Market:

The overall demand for LCD panels in the global economic downturn has no longer experienced substantial growth. The overall strategy has been adjusted to operate in 2022 with high-margin products and a reasonable economic scale. It also demonstrates the optimized cost-effectiveness of centralized production management to increase the value of Optimax in the client.

B. Customers:

In addition to continuing to strengthen the relationship with existing customers, it is also actively exploring new customers in the mainland, South Korea, Japan and other regions.

C. Product range:

Expanded from TV, Monitor to NB and a full range of small and medium size products, the company also continued to strengthen the preparation of raw film/semi-finished products and finished products to meet the urgent orders of other customers in the market.

D. Service:

In order to implement Total Solution, the customer group is divided regionally, and the functions of product developers and marketing personnel are combined to provide full-service nearby and deepgrown customers.

(2) Production strategy
- A. Centralized management of personnel, centralized production of production lines, in order to cope with the poor overall environment: people make the best use of their talents, make the best use of materials, in order to achieve the best production utilization rate and the lowest cost.
- B. Due to the current surplus production lines caused by the decline in market demand, depending on the actual situation, temporarily stop production to achieve effective management and improve the effective production yield and utilization rate.
C. Increase the machine speed, inspect the current production equipment, and improve the equipment availability.
(3) Product research and development
- A. The small and medium size products are mainly niche products, and the vehicle is one of the main forces. The development direction is high reliability and wide viewing angle compensation film. Among them, the high reliability has been improved from the original high temperature of 95°C to 105°C or even 110°C, and the high temperature and high humidity conditions have also been raised from the original 60°C/95%RH to 85°C/85%RH. The wide viewing angle compensation film part, originally required to comply with OEM 5.1, that is, 650 in the A area, but the customer hopes to increase it to more than 750, this part needs to be developed in close cooperation with the customer, especially to obtain the customer's panel, in order to achieve the best contrast and perspective. Currently working with many clients.
- B. Small and medium size focuses on VR/AR products. In addition to polarizers, other optical films must be used for this part. The lamination process and requirements are different from those of the original display. Although the product size is small, it has extremely high quality requirements, and it is also a new field for Optimax.
- C. The medium and large size products, such as TV/MNT, have lower profits, so it is necessary to continuously reduce costs. Importing local materials is one of the key points, but there is still a gap between the stability and the Japanese system. Therefore, how to cooperate with suppliers and improve quality is the focus of evaluation. In addition, how to achieve the best utilization rate to enhance competitiveness is also the focus. Therefore, we have introduced a super-wide cutting machine, hoping to increase the utilization rate more flexibly.

2. Long-term plan

(1) Marketing strategy
A. Strengthen the sales of superior products (high durability, optical films, self-made coating) and adjust the product portfolio to ensure increased profitability and increase product differentiation with competitors.
B. Become a professional polarizing plate design and production factory, cooperate with market development, strengthen negotiation with customers, have achieved mutual benefits, profit sharing, and continue to strive for more international cooperation.
C. Actively expand the existing TV, Monitor and small and medium-sized product lines to NB, Tablet PC wearable ( bands, watches, Metaverse-VR/AR) and vehicle/industrial control product lines.

(2) Production strategy
A. Introduce production integration automation and AOI automatic detection system one after another to increase production efficiency.
B. Strengthen the line change speed, concentrate production, and flexibly schedule production capacity in order to properly arrange urgent order production.
C. Strengthen the interaction with suppliers to stabilize the adequate supply of raw materials and reduce production costs.
D. Analyze the amount of production of drugs and consumables, and adjust the frequency reasonably to reduce production costs Use and cost.
E. Actively lay out the mainland market and strive to supply panel factories in mainland China.
(3) Product development
A. In the aspect of vehicle, how to improve the competitiveness is the focus, so it is very important to improve the product power. High reliability and better viewing angle and yield improvement in response to large-scale size are the key points.
B. Driven by the trend of the Metaverse, there are more and more demands for VR/AR, and the requirements for related craftsmanship and quality are different from those of current monitors. For example cut-out parts, laser-cut import helps with more complex dimensions in the future. In terms of affecting quality requirements, customers require MTF (Modulation Transfer Function), and related equipment must also be available to meet customer needs. At present, a lot of manpower is required to meet customer order requirements. How to be more automated in the future to save manpower is also one of the key points.

Marketing and sales overview

(1)Market analysis

1.Sales (provided) area of main products

Sales Amount By Region in the most recent 2 years

Unit：NT$ Thousand、%

			Unit：NT$ Thousand、%	Unit：NT$ Thousand、%
Year Sales Area	2020		2021
	Net Sales	Ratio(%)	Net Sales	Ratio(%)
Domestic	270,827	11.2	331,341	10.4
Export	2,147,009	88.8	2,860,490	89.6
Total	2,417,836	100.0	3,191,831	100.0

2.Market share

LCD Polarizer share by Suppliers in 2022

==> picture [388 x 225] intentionally omitted <==

Source: Omida 2022& Optimax

According to Omida, the company is Taiwan's 3rd largest supplier of polarizers in 2022, with a global production capacity of 2.6%.

3. The market's future supply and demand situation and growth, competitive niche and development of the favorable, unfavorable factors and countermeasures

<2019-2028 Global TFT LCD Market Demand>

==> picture [446 x 338] intentionally omitted <==

Source: Omida 2022

<2019-2028 Global AM-OLED Market Demand>

==> picture [449 x 272] intentionally omitted <==

Source: Omida 2022

<2019-2025 Global Vehicle-mounted TFT LCD Market Demand>

==> picture [397 x 329] intentionally omitted <==

Source: Omida 2022

From the chart of <2019-2028 Global TFT LCD Market Demand>, it can be clearly seen that LCD TV and Tablet PC shipments will decline in 2021 compared to shipments in 2020 due to the impact of the COVID-19 epidemic. As for MNT and Notebook shipments in 2021, due to the impact of the epidemic, work from home will increase. The demand for remote video conferencing and teaching continues to increase compared with 2020. As for 2022, regardless of MNT, Notebook will continue to change the pattern of global work and teaching due to the epidemic, so shipments will still grow compared to 2021. The demand for related products such as Automobile, Public Display, and Head Mount Display ( Metaverse -VR/AR) will continue to grow steadily from 2022 to 2028.

From the chart of <2019-2028 Global AM-OLED Market Demand>, it can be clearly seen that regardless of whether large-size or small-size AM-OLED products, shipments have continued to increase since 2019, and will continue to grow steadily after 2022.

The chart of <2019-2025 Global Vehicle-mounted TFT LCD Market Demand> clearly shows that whether it is Automobile Monitor, Center Stack Display, Instrument Cluster, E-Mirror or HUD, etc., during the period from 2020 to 2025, except for the reduced demand for shipments which are affected by COVID-19 in 2020, it will continue to grow steadily after 2022.

To sum up, according to the relevant data of the above three charts, in addition to the four major products of LCD TV, MNT, Notebook and Samrt Phone, Automobile LCD, Public Display, Smart Watch, Head Mount Display (Metaverse-VR/AR) and other applications and the development of AM-OLED (Rigid & Flexible) related products. In the future, it is bound to continue to be a battleground for major panel manufacturers.

Overview of Global Polarizer Suppliers' Production Capacity

Country	Manufacturer	2020 Capacity	2021 Capacity	2022 Capacity (estimated)	2022 Market share (%) (estimated)	Applications
Japan	Nitto Denko	160,200	160,200	160,200	17.5%	TFT、OLED、STN、TN
	Sanlitsu	Merged by Sumitomo	Merged by Sumitomo	Merged by Sumitomo	0%	TFT、OLED
	Sumitomo Chemical	203,000	203,000	203,000	22.1%	TFT、OLED、STN
	Polatechno	6,000	6,000	6,000	0.6%	TFT、OLED、STN、TN
Taiwan	Optimax	24,000	24,000	24,000	2.6%	TFT、OLED、STN、TN
	BenQ Materials	44,520	44,520	44,520	4.9%	TFT、OLED
	Chengmei Materials	57,600	40,000	40,000	4.4%	TFT、OLED
Korea	Samsung First Woolen	71,000	71,000	71,000	7.7%	TFT、OLED
	LG Chemical	205,800	25,440 Main production line purchased by Sansan	25,440 Main production line purchased by Sansan	2.8%	TFT、OLED
Mainland China	WeiDa Optoelectronics	2,400	2,400	2400	0.3%	TFT、OLED、STN、TN
	Shengbo Optoelectronics	32,600	32,600	647,000	7.0%	TFT、OLED、STN、TN
	Hengmei Optoelectronic Corporation	0	60,000	62,000	6.8%	TFT、OLED
	Shanjin Optoelectronics	0	162,690	162,690	17.7%	TFT、OLED
	Chiao Yeh	750	750	750	0.1%	STN、TN
	Sanli Spectrum	24,600	33,200	33,200	3.6%	TFT、OLED、STN、TN
	Shengbaolai	18,000	18,000	18,000	1.9%	TFT、OLED、STN、TN
	Total	850,470	915,900	917,900	100.0%
Growth rate compared with the previousyear		1.0%	7.7%	0.2%

Source: Omida 2022& Optimax

4. Advantages and disadvantages of competitive niches and development prospects and countermeasures

(1) Advantages of competitive niches and development prospects
A. Utilize the existing staff of Suzhou factory to provide more immediate and comprehensive services to customers in East China/South China.
B. In addition to the existing IPS product development and cooperation with world-class manufacturers, it has also accelerated the development and certification of ultra-thin and high-transmittance, highdurability, high-definition, and high-brightness polarizer to go with the trend of environmental protection and energy saving.
C. Use optical film production and surface coating technology to develop high niche precision coating products.
(2) Unfavorable factors in the development prospects and countermeasures
A. Downstream customers have fierce competition and require strong pressure to reduce prices As new generation lines of TFT-LCD panel manufacturers (such as G8.5/G10) have been launched in 2011~2022, the supply of panels will increase greatly and the selling price will be lowered, and raw materials will inevitably face pressure to reduce prices.
< Countermeasures >
(a) Continuously research and develop, and immediately launch high-energy, high-quality, and highprofit products to slow down the pressure of price, it will develop into high-margin small and medium size, industrial control and automotive products.
(b) Continuously improve the production process, increase machine speed, utilization and cutting utilization, reduce in-plant consumption and accelerate the localization of materials, in order to reduce overall costs.
(c) Develop the existing professional TN/STN and dye-based product production lines to further develop new products and markets expand the market share to create greater profits.

B. There are many potential competitors
Due to the expansion of market demand, major panel manufacturers adopt the In House strategy of polarizers, and competition is becoming increasingly fierce.
< Countermeasures >
(a) Adjust the product mix timely and match differentiated market strategies to get rid of potential crises.
(b) Continuous and rapid research and development of improved products to lead market demand, lengthen the learning curve of potential competitors, and create favorable competitive advantages.

(2) Important uses of major products and production process

The company's main products are polarizers for the production of LCD/OLED. LCD is classified as TN/STN/TFT and OLED is classified as PM-OLED/AM-OLED.

==> picture [416 x 177] intentionally omitted <==

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

Front-end Process Back-end Process
TAC Pre-treatment Cutting
PVA Treating Process Inspection
PSA Coating & Lamination Packing & Logistic
----- End of picture text -----

(3) Supply status of main raw material

At the end of 2019, a virus called severe acute respiratory syndrome coronavirus began to gradually spread to the world in mainland China. It has entered its fourth year, but the situation has not subsided.

The established living habits of human beings have also been greatly changed due to this epidemic. Although the global economy has been greatly affected, it also contains the formation and vigorous development of the housing economy. The company also benefited from this trend, and its revenue grew last year. Compared with the previous year, it has grown by more than 30%. In addition to the clear positioning of the company and the success of the product structure strategy, the purchasing unit can successfully achieve or even exceed the company's operational goals, and another part is from the full assistance of various suppliers. In the past two years, due to the deduction of the epidemic, the implementation of customs/city closures, isolation/load reduction and other measures around the world, cross-border transportation is relatively difficult, so many raw materials are not produced in time, and the cost is not only increasing, but also the supply is not enough. In such a severe environment, thanks to the company's suppliers who fully recognize the responsibility of supply, and under the close interaction between the two parties, the mission is completed together.

In the future, procurement will continue to work hard to develop alternative materials and manufacturers with the assistance of relevant internal and external units, and maintain a good cooperative relationship with existing major suppliers to ensure that all materials are delivered to the factory in quantity and on time.

(4)Parties who deliver more than 10% of the total raw materials or buy more than 10% of goods sold any one of the past two years:

1.Information on the main suppliers the past two years

Unit: In NT$1,000

									Unit: In NT$1,000	Unit: In NT$1,000	Unit: In NT$1,000	Unit: In NT$1,000
Year		2020				2021			2022 up to the previous quarter
Item	Name	Amount	% of the net purchase of the year	Relationship	Name	Amount	% of the net purchase of the year	Relationship	Name	Amount	Percentage of the net purchase as of the end of the Previous quarter in theyear(%)	Relationship
1	Vendor A	159,921	10.82	None	Vendor B	219,914	10.61	None	Vendor B	62,259	12.95	None
2									Vendor C	53,424	11.11	None
3									Vendor D	50,062	10.41	None
4
5	Other	1,317,808	89.18	None	Other	1,853,692	89.39	None	Other	314,955	65.53	None
Net purchase		1,477,729	100.00		Net purchase	2,073,606	100.00		Net purchase	480,700	100.00

Note 1: List the names of suppliers whose deliveries account for more than 10% of the total purchase, and their amounts and percentages. Supplier codes may be used if the names cannot be disclosed as required by the contract or if the transaction counterparty is an individual and is not a related party.

Explanation of reasons for changes in main materials in 2021:

In 20110 and 2011 Q1, the main sources of materials were mainly Japanese and Taiwanese suppliers. Based on cost considerations, the policy of localizing materials in Taiwan continued. The main procurement strategy is based on the adjustment of the use of material combinations and the emphasis on the material-price ratio to receive orders. The product order portfolio is generally dominated by MNT (PID)/TV/vehicle-mounted products, while TN/STN products are still struggling to maintain although they have no obvious growth, and the purchase items of major raw materials have not changed drastically.

2.Information on the main customers the past two years

Unit: In NT$1,000

									Unit: In NT$1,000	Unit: In NT$1,000	Unit: In NT$1,000	Unit: In NT$1,000
Year		2020				2021			2022 up to the previous quarter
Item	Name	Amount	% of the Net sales of the year	Relationship	Name	Amount	% of the Net sales of the year	Relationship	Name	Amount	Percentage of the net sales as of the end of the previous quarter in the year(%)	Relationship
1	Customer A	451,777	18.69	None	Customer B	688,289	21.56	None	Customer B	239,850	30.99	None
2	Customer B	614,689	25.42	None	Customer C	656,038	20.55	None	Customer C	161,990	20.93	None
3
	Other	1,351,370	55.89	None	Other	1,847,504	57.89	None	Other	372,042	48.08	None
Net sales		2,417,836	100.00		Net sales	3,191,831	100.00		Net sales	773,882	100.00

Note 1: List the names of customers whose sales amount for more than 10% of the total sales, and their amounts and percentages. Customers’ codes may be used if the names cannot be disclosed as required by the contract or if the transaction counterparty is an individual and is not a related party.

The reasons for the change in revenue of major sales customers in 2021 are explained as follows:

The demand for TV, MNT and Vehicle polarizers of customers in 2021 has increased compared with that in 2020.

(5) Production value table in the past two year

Unit: M[2] thousand ; NT$ thousand

Year Main items		2020			2021
	Capacity	Yield	Value	Capacity	Yield	Value
TN/STN	906	488	219,425	904	662	256,863
TFT	6,850	4,361	1,780,198	8,438	5,884	2,269,541
Total	7,756	4,849	1,996,623	9,342	6,546	2,526,404

(6) Sales value table in the past two year:

Unit: M[2] thousand ; NT$ thousand

					Unit: M2thousand;NT$thousand	Unit: M2thousand;NT$thousand	Unit: M2thousand;NT$thousand	Unit: M2thousand;NT$thousand
Year Main items	2020				2021
	Domestic		Export		Domestic		Export
	Qty	Value	Qty	Value	Qty	Value	Qty	Value
TN/STN	55	70,613	475	391,298	55	75,489	556	453,961
TFT	152	200,214	4,072	1,755,711	155	255,853	5,546	2,406,528
Total	207	270,827	4,547	2,147,009	210	331,342	6,102	2,860,489

Employee information

(1)Employee information for the most recent two years and up to the date of publication of the annual report:

eport:
	Year	2020	2021	2022-3-31
Employee Amount (person)	Administrant employees	177	175	175
	R&D employees	35	35	34
	Direct employees	377	389	375
	Total	589	599	584
Average age (age)		41.4	41.0	41.5
Average years of service (years)		11.6	11.6	12.0
Education distribution ratio (%)	PhD	0.2	0.2	0.2
	Postgraduate	3.5	3.5	3.7
	Undergraduate	46.4	46.4	46.5
	High school	43.8	43.9	44.0
	Under high school	6.1	6.0	5.6

Note: The above information includes the number of contract workers.

Environmental protection expenditure information

(1) Demonstrate the total amount of losses (including compensation) and punishment suffered by the company for the pollution of the environment in the last two years. As of the date of publication of the annual report, and explain the future countermeasures (including improvement measures) and possible expenditures (including the possible loss if the countermeasures are not taken) , The estimated amount of punishment and compensation, if it cannot be reasonably estimated, the fact that it cannot be reasonably estimated shall be stated)

Item	Punish day/			Penalty fee
		County	Penalty Content
	Violated day			Unit: NT$

1			1.Subject:
			A fine of NT$90,000 will be imposed. The environment
			workshop is 2 hours.
			2.Regulations:Article 14, Item 1 of the Water Pollution
			Prevention and Control Law
			3.Document number:30-110-050009
			4. Reason:
		Taoyuan City	Wastewater treatment facility iodine-based wastewater is used
	2021/5/5	Government	for concentration equipment to recover high-concentration
	(2021-03-12)	Environmental	potassium iodide and produce borate solid waste; high-	90,000
		Protection	concentration dye wastewater is used for steam evaporation of
		Bureau	wastewater, and low-concentration oxidation tank is used for
			decolorization treatment; high-concentration water glue
			wastewater is used for steam evaporation , Document num
			Quantitative discharge of low concentration to the mixing tank
			and other treatment equipment and units, the above does not
			conform to the content of the water pollution prevention and
			control license.

2			1.Subject:
			A fine of NT$60,000 will be imposed. Restricted change date:
			August 31, 2021. The environment workshop is 2 hours.
			2.Regulations:
			Article 31, Item 1, Paragraph 1 of the Waste Disposal Act
			3.Document number:40-110-070058
		Taoyuan City
	2021/7/19	Government	4.Reason:
	(2021-04-26)	Environmental	The Industrial waste C-0301 produced by the use of acrylic	60,000
		Protection	glue, ethyl acetate, isopropanol and butanone in the

		Bureau	manufacture of polarizers in the PSA process was found. Since
			October 2020, the solvent recovery machine has been used.
			The solvent from the distillation recovery machine is returned
			to the original process for use. The waste glue residue
			produced is not included in the content of the waste disposal
			plan.

3			1.Subject:
			A fine of NT$60,000 will be imposed. Restricted change date:
			August 31, 2021. The environment workshop is 2 hours.
			2.Regulations:
			Article 31, Item 1, paragraph 2 of the Waste Disposal Act,
			Article 7 of the Standard for the Storage, Disposal, and
		Taoyuan City
			Disposal of Industrial Waste, and Article 7 of the Standard for
		Government
	2021/7/19		the Method and Facility of the Storage, Disposal, and Disposal
		Environmental
	(2021-04-26)		of Industrial Waste	60,000
		Protection
			3.DocumentNumber:40-110-070059
		Bureau
			4.Reason:

			The waste glue residue, C-0301, produced during the
			manufacture of polarizers in the PSA process was found to
			have not been reported for self-treatment or reuse in the
			factory.

	Punish day/			Penalty fee
Item		County	Penalty Content
	Violated day			Unit: NT$

4			1.Subject:
			A fine of NT$60,000 will be imposed. Restricted change date:
			August 31, 2021. The environment workshop is 2 hours.
			2.Regulations:
			Article 7 of Industrial Waste Storage, Removal and Disposal
			Methods and Facilities Standards, Article 36, Paragraph 1 of
			the Waste Disposal Act
		Taoyuan City	3.Document Number:40-110-070060
		Government
	2021/7/19	Environmental	4.Reason:
	(2021-04-26)	Protection	About 100 meters from the parking lot opposite the gate of	NT$60,000

		Bureau	your factory, two piles of 50-gallon iron barrels were found.
			According to the factory, there are currently 200 barrels (about
			10 tons), which are C-0301 solid waste glue produced by the
			PSA process. After investigation, the name, storage date,
			quantity, composition and the mark for distinguishing the
			characteristics of hazardous industrial waste are not marked
			according to the regulations.

5			1.Subject:
			A fine of NT$60,000 will be imposed. Restricted change date:
			August 31, 2021. The environment workshop is 2 hours.
			2.Regulations:
			Article 36, Item 1 of the Waste Disposal Act, Article 11 of
		Taoyuan City	Industrial Waste Storage, Removal, and Disposal Methods and
	2021/7/19	Government	Facility Standards
	(2021-04-26)	Environmental	3.Document Number:40-110-070061	NT$60,000
		Protection
		Bureau	4.Reason:
			It was checked that the C-0301 cured waste glue produced by
			the PSA process was not placed in a conspicuous place in the
			storage facility, and a warning sign with a white background, a
			red letter and a black frame was not set up.

6			1.Subject:
			A fine of NT$9,000 will be imposed. The environment
			workshop is 3 hours.
			2.Regulations:
			Article 28, Item 2 of the Waste Disposal Act
			3.Document Number:40-110-090061

			4.Reason:
			After checking the environmental protection licensing
			management information system of the Environmental
			Protection Administration of the Executive Yuan and your
		Taoyuan City	company's Pingzhen No. 3 Plant (control number: H5109428),
		Government	the business waste disposal plan was approved on July 30,
	2021/9/17	Environmental	2012. Your company registered capital is more than NTD$2
	(2021-08-17)	Protection	billion and the manufacturing process of other optoelectronic	NT$9,000

		Bureau	materials and components (process code: 260039) of the
			company's No.3 Plant in Pingzhen produces waste liquid with
			a flash point of less than 60°C (excluding alcohol volume
			concentration less than 24% alcohol waste) (Waste code: C-
			0301), with a maximum monthly output of more than 60
			metric tons, which is a business designated to announce that
			waste professional technicians should be placed. However, on
			August 30, 2021, the manager of the No.3 Plant in Pingzhen
			completed the establishment of Class B waste professional
			technicians, which violated Article 28, item 2 of the Waste
			Disposal Law.

	Punish day/			Penalty fee
Item		County	Penalty Content
	Violated day			Unit: NT$

7			1.Subject:
			A fine of NT$198,000 will be imposed. The environment
			workshop is 2 hours.
			2.Regulations:
			Article 28, Item 1 of the Water Pollution Prevention and
			Control Law
		Taoyuan City
			3.Document Number:30-111-020009

	2022/2/9	Government
		Environmental	4.Reason:
	(2021-11-23)			NT$198,000
		Protection	The regenerated waste liquid WM03 produced by the pure
		Bureau	water system of your company's process was due to a motor
			failure, causing waste (sewage) water to flow into the
			rainwater ditch. Your company failed to report within the
			prescribed time limit and did not take maintenance and
			preventive measures.

8			1.Subject:
			A fine of NT$32,500 will be imposed. The environment
			workshop is 2 hours.
			2.Regulations:
			Article 18 of the Water Pollution Prevention and Control Law,
		Taoyuan City
			Article 7 of the Measures for the Administration of Water
		Government
	2022/2/9		Pollution Prevention and Control Measures and Testing
		Environmental
	(2021-11-23)		3.Document Number:30-111-020010	NT$32,500
		Protection

		Bureau	4.Reason:
			The waste water generated by the water glue slicer of your
			company was collected together with the rainwater, and the
			rainwater and sewage were not diverted on site.

9			1.Subject:
			A fine of NT$100,000 will be imposed. The environment
			workshop is 2 hours.
			2.Regulations:
			Article 3 of the Measures for the Administration of Self- or
			Entrusted Testing and Declaration of Fixed Pollution Sources,
			Article 22, Item 3 of the Air Pollution Control Law
			3.Document Number:20-111-020013

			4.Reason:
		Taoyuan City	Your company's manufacturing process is subject to the
		Government	control of "Air Pollution Control and Emission Standards for
	2022/2/15	Environmental	Photoelectric Materials and Component Manufacturing", the
	(2022-01-07)			NT$100,000
		Protection	emission pipeline P105 of its pollution source, the detection

		Bureau	frequency is level 2, and the concentration of particulate
			pollutants needs to be tested every six months. The inspection
			and declaration for the first half of 2011 were carried out on
			May 19, 2010, but the inspection and declaration for the
			second half of 2011 (July to December) were not completed
			before December 31, 2010 which violated Item 3 of Article 2
			and Article 3 of "Administrative Measures for Self- or
			Entrusted Testing and Reporting of Stationary Pollution
			Sources".

(2) Countermeasures:

Part of the proposed improvement measures.

(1) Improvement plan:

A. Items 1, 2, and 3:
- 1.Revise the content of the water pollution prevention and control permit and waste disposal plan, and apply for revision of the water pollution prevention permit and waste clearance document, so that the operation content conforms to the content of the permit and waste clearance document.
B. Item 4:
1. Bring the plastic barrels placed outside the factory back to the factory for reuse, and recycle the solvent through the production line process (distillation).
2. For wastes generated by distillation operations, revise the waste list to comply with the published content and avoid the inconsistency between the work and the waste clearing book, it was billed again.
C. Item 5:
Re-examine the placement of the production line, and update all the places that are unclear or unclear.

D. Item 6:

Re-examine the statutory designated personnel to ensure compliance with the requirements of the law.

E. Item 7and 8:

  1. Close the joint pipe of the plant and the water ditches and sewage ditches to avoid the situation that rainwater and sewage are not shunted again.

  2. Revise the water pollution prevention and control permit, and clearly mark the sewage ditch and rainwater ditch to avoid the recurrence of abnormality.

F. Item 9:
1. Discuss with the testing manufacturer and adjust the testing date to avoid this situation from happening again.
(2) Estimated environmental capital expenditures in the next three years:

Year Item	2022	2023	2024
The proposed purchase of pollution prevention equipment for scenery or expenditure content	1.Renew MBR 2. No pipeline modification 3. License changes	1.Renew MBR 2. License changes 3. Revise the Waste License	1.Renew MBR 2. License changes 3. Revise the Waste License
The situation is expected to improve	1. Reduce the COD of flowing water 2. Can produce sludge 3. Eliminate abnormal circumfluence discharge 4.Waste water operation conforms to the permit	1. Reduce the COD of flowing water 2. Can produce sludge 3.Waste water operation conforms to the permit 4.Waste clearance document conforms to the permit	1. Reduce the COD of flowing water 2. Can produce sludge 3.Waste water operation conforms to the permit 4.Waste clearance document conforms to the permit
Amount	NT$ 3,000,000	NT$ 100,000	NT$ 100,000

(3) Impact after improvement: Reduce the risk of COD exceeding the Regulation’s standard.
Reduce the risk that the COD of the discharged water exceeds the legal standard.
The domestication of biological strains is successful, and the sludge can be produced normally.
Remove useless pipelines to effectively eliminate the risk of bypass discharge and unshunted rain and sewage.
The wastewater operation conforms to the content of the license to reduce the risk of non-compliance with laws and regulations.
Disposal/labeling of waste meets the requirements of waste clearance documents/regulations to reduce the risk of non-compliance with laws and regulations.
Review various statutory designated personnel to reduce the risk of non-compliance with laws and regulations.
The part that has not adopted national countermeasures: Strengthen education and training.

Labor Relations

(1) Present the availability and execution of employee welfare, continue education, training and retirement policies, the agreements between employers and employees, and protection measures of employees’ rights:

1.Employee welfare

(1) In addition to handling labor insurance and health insurance in accordance with the law, the Company provides employees with group insurance, including life insurance, accident insurance, medical insurance, cancer insurance, etc.
(2) In order to fully take care of employees, in addition to providing basic protection in accordance with the law, the company established an employee welfare committee organization in May 1989 to allocate welfare funds in accordance with the law. The committee coordinates the promotion of various employee welfare plans and is responsible for each The planning and implementation of the employee welfare matters.

2.Employee training and development and performance management

(1) In response to the needs of colleagues, organize new personnel training, professional technical training and management training, etc., to provide employees with complete professional skills development and selfgrowth inspiration.
(2) Establish a professional certification system to regularly inspect the knowledge and skills of employees to ensure the stability and improvement of quality.
(3) Regularly send relevant industry development and technology e-news to expand employees' horizons and horizons and keep abreast of industry trends.
(4) In order to effectively improve personal and organizational performance, establish an employee performance appraisal platform to strengthen supervisors and departments. It is a two-way communication, jointly setting goals and development plans, reviewing differences and formulating improvement plans and effectively implementing performance management.
(5) Grasp the functions and potential of employees, combine the performance management system, plan the development of employee management and professional positions, and rotate with cross-functions, so as to enhance the abilities and advantages of employees and cultivate outstanding talents.

3. Employee rewards and care

(1) Promote and reward outstanding colleagues, and establish positive work attitudes and values.
(2) Through the proposal to improve the system and reward and punishment system, reward outstanding performance and achievements to enhance the creativity and problem-solving ability of employees, and regulate employee behavior to maintain good discipline.
(3) The company has a health center, combined with medical institutions, provides health consultation, handles health promotion activities, and organizes various employee party activities so that employees can receive proper care and assistance in terms of physical and mental health and quality of life.

4. Employee communication

(1)The company has set up online and written employee suggestion boxes to provide immediate complaints and response channels, and regularly hold labor-management meetings to correctly convey company messages, maintain smooth communication and interaction with employees, and establish harmonious labormanagement relations. In addition, it regulates sexual harassment prevention measures, complaints and punishment methods to effectively promote and prevent.

5. Retirement system

(1) The company has a labor retirement method for officially hired employees. According to the provisions of the method, the payment of employee retirement pensions is calculated based on the years of service at retirement and the average monthly salary.
(2) The Labor Retirement Reserve Fund Supervision Committee was established in August of 1999, and two percent of the employees' salary is transferred to the Labor Retirement Reserve Fund Supervision Committee for safekeeping and deposited in the Bank of Taiwan in the name of the committee.
(3) Since July 1994, in response to the new labor retirement system, the pension funds will be transferred to the personal accounts of the employees of the Labor Insurance Bureau in accordance with the law.

6. Other important agreements

The company has written and online employee suggestion boxes, and regular labor-management meetings are held to maintain smooth communication and positive interaction, so no major labor disputes occurred.

(2) Losses due to labor disputes in the most recent year as of the date of publication of the annual report:

1. If the labor inspection results violate the Labor Standards Act, the date of punishment, the name of the punishment, the provisions of the violation, the content of the violation, and the content of the punishment shall be listed:

		Violation of the
		provisions of the
	Person in		Content that violates		Document	Punishment
Business unit		Occupational Safety		Agency
	Charge		laws and regulations		Number:	date
		and Health Act

		principal
Optimax Technology Corporation	Peter Chao	Occupational Safety and Health Facility Rules Section 278 Articles and Occupational Safety Article 6 of the Health Act, item 1	Employers on the following matters should comply with the regulations necessary safety and health equipment preparations and measures... Fourth, to prevent quarrying, mining, loading and unloading, moving, transporting, stack or harvest caused by the work harm.	Taoyuan City Government	Fu Lao Jian Zi No. 1100110772	2021-05-06

2. Estimated amounts that may occur at present and in the future:

(1) Amount of punishment: NT$60,000.

(2) The amount of compensation for occupational accident wages and hospitalization expenses is NTD$40,031.

3. Response measures:

(1) The operator's (steel head) safety shoes are replaced with (steel cast + anti-puncture) safety shoes.

(2) Operators need to do pre-work education and training before working.

(3) If the operator is unwell (injured), he needs to report it immediately.

Cyber security management:

(1) Describe the cyber security risk management framework, cyber security policies, concrete management programs, and investments in resources for cyber security management.

1. Cyber security risk management framework:

(1) The information center is the responsible unit of Information Communication Security, responsible for formulating the company's information communication security policy, planning and implementing the information communication safety operation and the promotion and implementation of the information communication security policy, and reporting the information communication security management overview to the company.
(2) The auditing room is the supervisory unit of the information communication safety supervision and is responsible for supervising the company's information communication safety implementation status. If there is any defect found in the inspection, it will immediately request the inspected unit to put forward relevant improvement plans and specific actions, and regularly track the improvement results to ensure Reduce internal security risks.
(3) Organizational functions
- Information center - Supervisor: Promotion and review of additional revisions of the rules and regulations for the safety operation of Cyber security risk management.
- Information Security Standing Committee - Audit Supervisor Cyber security risk management operation control measures audit operation promotion.
- Information Communication Center - Operation Execution Formulation and operation, implementation, maintenance and information security of information seeds education training.
- Auditing room - System Monitoring Audit the deficiencies in the safety operation control measures of Cyber security risk management and ensure the continuous improvement of the system.
- Information Seed Member - Information Seeds Continue to cooperate with the detailed rules and regulations of Cyber security risk management to promote and accept relevant education and training on the safety concept of Cyber security risk management.

2. Information Security Policy:

Establish a safe, reliable and continuous operation of information security environment, strengthen various information security management, ensure system security, equipment security, network security, protect the rights and interests of the company's colleagues and related internal and external personnel, reduce new information technology This policy is specified for the unknown information security threat risks brought by applications and environmental changes.

3. Specific management plan:

(1) Endpoint security: strengthen computer/NB rights management.
(2) WEB security: strengthen Internet security management.
(3) Network security: strengthen the internal network compliance access and ensure the stability of the network.
(4) Data security protection: monitor whether a large number of file changes occur in the public disk drive at any time.
(5) Off-site backup mechanism: regular backup host OS / FILE SERVER / DATA BASE,
(6) Disaster recovery drills: timed drills and optimized disaster recovery processes and operations.
(7) System safety inspection: regularly inspect and evaluate whether the information communication safety management operation is appropriate,
(8) Information communication security notification mechanism: formulate and implement the information communication security incident notification mechanism.
(9) Virus protection: Antivirus software should be installed on each computer, and the latest virus information can be obtained at any time.

4. Invest resources in the Cyber security risk management

(1) Start a social engineering exercise
(2) Regularly observe the abnormal situation of network traffic every week
(3) The public disk drive is a large-scale file change monitoring system (MIS self-developed)
(2) List any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to significant cyber security incidents, the possible impacts therefrom, and measures being or to be taken. If a reasonable estimate cannot be made, an explanation of the facts of why it cannot be made shall be provided.

1. Losses suffered from major information security incidents: None.

On March 3, 2011, the company was affected by the power outage in Taiwan (referred to as the 303 power outage), and the office computers were shut down. Fortunately, in the past, Optimax built a hyper-converged architecture on the mainframe equipment, virtualized the mainframe and centralized the equipment, effectively reducing power consumption, coupled with a complete UPS to provide more than 3 hours of power supply. Although the power outage is 2 hours, the data communication system necessary to support the continuous operation of the core business can still operate, allowing the company to upload the tax refund information immediately before exporting customs declaration, so as to avoid loss of tax refund amount.

Although there was no loss in export business this time, Optimax is still preparing to prepare a budget to extend the use time of the UPS, and at the same time, it can provide partial network disconnection to support the use of more notebook computers. Avoid affecting shipments or delaying payments to manufacturers, affecting the company's credit, and causing fluctuations in stock prices.

2. Possible impacts and countermeasures. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated should be explained. Specific management plan: Not applicable.

Important contract

(1)The important contract signed by the company as of the date of printing of the annual report

Contract type	Party	Date of contract	Main content	Restrictions
Lease contract	Sixing (Suzhou) Integrated Circuit TechnologyCo.,Ltd.	2019/10/1~2031/9/30	The Plant in Suzhou	None
Lease contract	Humor CORP.	2021/10/1~2026/9/30	The R&D Building 5th and 6th Floor in Pingzhen	Three-year lease
Lease contract	momo.com Inc.	2022/3/1~2027/2/28	The whole building of the #2 Factory in Pingzhen	Three-year lease
Long term loan	Entie Commercial Bank, Ltd.	2021/5/20~2023/5/20	Operating turnover	None

Financial Information

(1)Condensed balance sheet and consolidated income statement for the past five years

1. Condensed balance sheet: International Financial Reporting Standards - Consolidated Financial Statements

Unit: NT$ thousand

		Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Item	Year	Financial information for the current 5years
		2017	2018	2019	2020	2021
Current Assets		2,455,157	2,140,163	2,291,165	5,267,402	2,184,290
Properties		2,574,120	2,457,303	2,331,737	2,213,910	2,128,815
Intangible Assets		─	─	─	─	─
Other Assets		4,118,840	4,031,320	4,343,643	1,326,654	495,801
Total Assets		9,148,117	8,628,786	8,966,545	8,807,966	4,808,906
Current liabilities	Before distribution	1,217,259	1,912,806	2,056,577	1,452,729	938,547
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
Non- current liabilities		6,408,293	5,306,659	5,675,363	6,109,874	1,836,362
Total liabilities	Before distribution	7,625,552	7,219,465	7,731,940	7,562,603	2,774,909
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
The right attributable to the owner of the parent company		1,522,565	1,409,321	1,234,605	1,245,363	2,033,997
Share capital		3,253,324	3,253,324	3,253,324	3,253,324	1,700,000
Capital reserve		─	─	─	─	─
Retained surplus	Before distribution	(1,733,244)	(1,842,660)	(2,017,576)	(2,005,321)	355,003
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
Other rights		2,485	(1,343)	(1,143)	(2,640)	(21,006)
Treasurystocks		─	─	─	─	─
Non-controllingrights		─	─	─	─	─
Total equity	Before distribution	1,522,565	1,409,321	1,234,605	1,245,363	2,033,997
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`

Note 1: All the financial information listed above have been checked and verified by accountants. Note 2: Due to the accumulated deficit from 2017 to 2020, so there is no remuneration for distribution.

2. International Financial Reporting Standards-Individual Financial Statements

		Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Item	Year	Financial information for the current 5years
		2017	2018	2019	2020	2021
Current Assets		2,792,702	2,485,178	2,558,251	5,384,337	2,330,737
Properties		2,536,227	2,435,040	2,326,928	2,210,231	2,124,887
Intangible Assets		─	─	─	─	─
Other Assets		3,883,780	3,782,907	4,142,771	1,156,466	313,353
Total Assets		9,212,709	8,703,125	9,027,950	8,751,034	4,768,977
Current liabilities	Before distribution	1,210,254	1,908,479	2,040,632	1,434,480	934,383
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
Non-current liabilities		6,479,890	5,385,325	5,752,713	6,071,191	1,800,597
Total liabilities	Before distribution	7,690,144	7,293,804	7,793,345	7,505,671	2,734,980
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
The right attributable parent company	to the owner of the	─	─	─	─	─
Share capital		3,253,324	3,253,324	3,253,324	3,253,324	1,700,000
Capital reserve		`（註`2`）`	`（註`2`）`	`（註`2`）`	`（註`2`）`	`（註`2`）`
Retained surplus	Before distribution	(1,733,244)	(1,842,660)	(2,017,576)	(2,005,321)	355,003
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`
Other rights		2,485	(1,343)	(1,143)	(2,640)	(21,006)
Treasurystocks		─	─	─	─	─
Non-controllingrights		─	─	─	─	─
Total equity	Before distribution	1,522,565	1,409,321	1,234,605	1,245,363	2,033,997
	After distribution	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`	`（`Note 2`）`

3.Condensed income statement: International Financial Reporting Standards-Consolidated Financial Statements

Unit: NT$ thousand

Year Item	Financial information for the current 5years	Financial information for the current 5years	Financial information for the current 5years	Financial information for the current 5years
	2017	2018	2019	2020	2021
Operating income	2,332,805	2,453,837	2,514,724	2,417,836	3,191,831
Operating margin	579,529	479,921	488,908	445,622	780,838
Operating net profit (loss)	272,561	155,074	145,686	118,443	316,831
Non-operating income and (expense)	(359,185)	(198,753)	(272,415)	(87,245)	518,032
Net before tax (loss)	(86,624)	(43,679)	(126,729)	31,198	834,863
Business unit Net(loss)in the currentperiod	(213,439)	(104,133)	(169,313)	16,464	809,938
Loss of closed business	─	─	─	─	─
Net (loss) in the current period	(213,439)	(104,133)	(169,313)	16,464	809,938
Other comprehensive (loss) in the current period (Net after tax)	2,825	(9,111)	(5,403)	(5,706)	(21,304)
Comprehensive (loss) total	(210,614)	(113,244)	(174,716)	10,758	788,634
Net belongs to the owner of the parent company	(213,439)	(104,133)	(169,313)	16,464	809,938
Net belongs to non-controlling right	─	─	─	─	─
The total profit and loss is attributed to the owner of the parent company	(210,614)	(113,244)	(174,716)	10,758	788,634
Comprehensive profit and loss total attribution from non-controllingright	─	─	─	─	─
Earning per share (loss) (Note 2)	(1.25)	(0.61)	(0.99)	0.10	4.76

Note 1: All the financial information listed above have been checked and verified by accountants.

Note 2: When calculating earnings per share, the effect of capital reduction to make up for losses has been retrospectively adjusted on October 25, 2021.

4. International Financial Reporting Standards-Individual Financial Statements

Unit: NT$ thousand

	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Item	Financial information for the current 5years
	2017	2018	2019	2020	2021
Operatingincome	2,323,148	2,445,203	2,508,959	2,416,667	3,191,831
Operatingmargin	567,879	470,897	481,332	444,518	780,843
Operatingnetprofit(loss)	275,336	161,926	157,963	131,665	337,362
Non-operatingincome and(expense)	(361,960)	(205,605)	(284,692)	(100,467)	497,501
Net before tax(loss)	(86,624)	(43,679)	(126,729)	31,198	834,863
Business unit Net(loss)in the currentperiod	(213,439)	(104,133)	(169,313)	16,464	809,938
Loss of closed business	─	─	─	─	─
Net(loss)in the currentperiod	(213,439)	(104,133)	(169,313)	16,464	809,938
Other comprehensive(loss)in the currentperiod(Net after tax)	2,825	(9,111)	(5,403)	(5,706)	(21,304)
Comprehensive(loss)total	(210,614)	(113,244)	(174,716)	10,758	788,634
Net belongs to the owner of theparent company	─	─	─	─	─
Net belongs to non-controllingright	─	─	─	─	─
The total profit and loss is attributed to the owner of the parent company	─	─	─	─	─
Comprehensive profit and loss total attribution from non-controllingright	─	─	─	─	─
Earning per share (loss) (Note 2)	(1.25)	(0.61)	(0.99)	0.10	4.76

Note 1: All the financial information listed above have been checked and verified by accountants.

Note 2: When calculating earnings per share, the effect of capital reduction to make up for losses has been retrospectively adjusted on October 25, 2021.

5. Audit name and audit opinions

audit opinions
2017	2018	2019	2020	2021
Yung-Chi, Lai Li-Chen, Peng	Yung-Chi, Lai Li-Chen, Peng	Yung-Chi, Lai Li-Chen, Peng	Yung-Chi, Lai Li-Chen, Peng	Hsin-Liang, Wu Li-Chen, Peng
Baker Tilly	Baker Tilly	Baker Tilly	Baker Tilly	Baker Tilly
No reserve	No reserve	No reserve	No reserve	No reserve

(2)Financial analysis in current five years

International Financial Reporting Standards-Consolidated Financial Statements

	Year	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years


~~A~~nalsis item		2017	2018	2019	2020	2021
y
Financial structure `（％）`	Debt-to-asset ratio	83.35	83.66	86.23	85.86	57.70
	Long-term funds as a percentage of real estate, plant and equipment	308.09	273.30	296.34	332.22	181.80
Solvency `（％）`	Current ratio	201.69	111.88	111.40	362.58	232.73
	Quick ratio	126.50	61.55	63.84	296.22	108.54
	Interest coverage ratio	0.35	0.64	0.06	1.24	16.44
Management capacity	Receivable turnover ratio (times)	3.20	3.73	3.51	3.21	4.17
	Average cash collection days (days)	114.06	97.85	103.98	113.70	87.52
	Inventory turnover rate (times)	1.64	1.65	1.64	1.62	1.87
	Payable turnover ratio (times)	14.55	15.59	14.52	11.35	15.08
	Average sales days	222.56	221.21	222.56	225.30	195.18
	Turnover rate of real estate, plant and equipment(times)	0.88	0.97	1.05	1.06	1.46
	Turnover of total assets (times)	0.24	0.27	0.28	0.27	0.46
Profitability	Return on assets (%)	(1.06)	(0.05)	(0.69)	1.32	12.53
	Return on shareholders' equity (%)	(13.11)	(7.10)	(12.80)	1.32	49.39
	Ratio of net profit before tax to paid-in capital(%)	(2.66)	(1.34)	(3.89)	0.95	49.10
	Net profit rate (%)	(9.14)	(4.24)	(6.73)	0.68	25.37
	Earnings (loss) per share	(1.25)	(0.61)	(0.99)	0.10	4.76
Cash flow	Cash flow ratio (%)	32.77	5.73	10.47	13.92	16.31
	Cash flow allowance ratio (%)	763.00	488.13	826.02	552.59	198.03
	Cash reinvestment ratio (%)	3.66	1.11	2.29	1.67	1.68
Leverage	Operation leverage	2.71	4.06	4.13	4.58	2.28
	Financial leverage	1.96	5.08	14.07	(14.55)	1.20
The reasons for the changes in various financial ratios in the last two years of 20% are explained as follows: (1) Decrease in financial structure ratios: mainly because the decrease in total liabilities exceeded the decrease in total assets, the increase in total equity and the decrease in non-current liabilities. (2) Increase or decrease in solvency ratio: mainly due to the decrease in current assets exceeding the decrease in current liabilities, and the increase in net inventory and pre-tax profits. (3) Increase or decrease in operating capacity ratio: mainly due to the increase in net sales, the shortening of the credit period for customers, the increase in the turnover rate of receivables, and the decrease in the average total assets caused. (4) Increase in profitability ratio: mainly due to increase in pre-tax (post-tax) profits, decrease in average total assets, increase in average total equity, and capital reduction to make up for losses. (5) Decrease in fair cash flow ratio: mainly due to the increase in net inventory. (6) Decrease in operating leverage ratio: mainly because the increase in net operating income less variable operating costs and expenses exceeded the increase in operating profit. (7) Increase in financial leverage ratio: mainly because the increase in operating profit exceeded the decrease in interest expense.

Note: All the financial information listed above have been checked and verified by accountants.

2. International Financial Reporting Standards-Individual Financial Statements

	Year	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years	Financial information for the current 5 years


Analysis item		2017	2018	2019	2020	2021

Financial structure `（％）`	Debt-to-asset ratio	83.47	83.80	86.32	85.76	57.34
	Long-term funds as a percentage of real estate, plant and equipment	315.52	279.03	300.28	331.03	180.46
Solvency `（％）`	Current ratio	230.75	130.21	125.36	375.35	249.44
	Quick ratio	155.13	79.78	77.43	308.18	124.74
	Interest coverage ratio	0.34	0.64	0.06	1.24	16.44
Management capacity	Receivable turnover ratio(times)	3.05	3.47	3.32	3.17	4.17
	Average cash collection days (days)	119.67	105.18	109.93	115.14	87.52
	Inventoryturnover rate(times)	1.64	1.65	1.64	1.62	1.87
	Payable turnover ratio(times)	14.75	15.72	14.76	11.55	15.22
	Average sales days	222.56	221.21	222.56	225.30	195.18
	Turnover rate of real estate, plant and equipment(times)	0.89	0.98	1.05	1.06	1.47
	Turnover of total assets(times)	0.24	0.27	0.28	0.27	0.47
Profitability	Return on assets(%)	(1.06)	(0.05)	(0.68)	1.32	12.62
	Return on shareholders' equity (%)	(13.11)	(7.10)	(12.80)	1.32	49.39
	Ratio of net profit before tax to paid-in capital(%)	(2.66)	(1.34)	(3.89)	0.95	49.10
	Netprofit rate(%)	(9.18)	(4.25)	(6.74)	0.68	25.37
	Earnings(loss) per share	(1.25)	(0.61)	(0.99)	0.10	4.76
Cash flow	Cash flow ratio(%)	34.03	4.93	10.55	12.33	15.67
	Cash flow allowance ratio(%)	769.29	495.08	837.70	551.60	191.95
	Cash reinvestment ratio(%)	3.74	0.95	2.23	1.45	1.59
Leverage	Operation leverage	2.59	3.76	3.72	4.12	2.16
	Financial leverage	1.93	4.33	6.95	25.90	1.19

Note 1: All the financial information listed above have been checked and verified by accountants.

Note 2: The calculation formula of the analysis item is as follow:

Financial structure
(1) Ratio of liabilities to assets = total liabilities / total assets.
(2) The ratio of long-term funds to real estate, plant and equipment = (net shareholders' equity + long-term liabilities) /net real estate, plant and equipment.
Solvency
(1) Current ratio = current assets / current liabilities.
(2) Quick ratio = (current assets-inventory-prepaid expenses) / current liabilities.
(3) Interest protection multiple = net income before income tax and interest expense / interest expense for the current period.
Operating capacity
(1) Receivables (including accounts receivable and notes receivable) turnover ratio = net sales / average receivables (including accounts receivable and notes receivable due to business) in each period .
(2) Average cash collection days = 365 / receivables turnover ratio
(3) Inventory turnover ratio = cost of goods sold / average inventory amount.
(4) Turnover rate of payables (including accounts payable and bills payable) = cost of goods sold / balance of average payables (including accounts payable and bills payable due to business) in each period.
(5) Average sales days = 365 / inventory turnover rate.
(6) Real estate, plant and equipment turnover ratio = net sales / net of real estate, plant and equipment.
(7) Total asset turnover ratio = net sales / total assets.
Profitability
(1) Return on assets = [after-tax profit and loss + interest expense × (1-tax rate)] / average total assets.
(2) Return on shareholders 'equity = profit or loss after tax / average net shareholders' equity.
(3) Net profit margin = after-tax profit / loss / net sales.
(4) Earnings per share = (net profit after tax-dividends on special shares) / weighted average number of issued shares.
Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Net cash flow allowance ratio = net cash flow from operating activities in the last five years / capital expenditure + increase in inventory + cash dividends in the last five years.
(3) Cash reinvestment ratio = (net cash flow from operating activities-cash dividends) / (gross property, plant and equipment gross + long-term investment + other assets + working capital).
Leverage
(1) Operating leverage = (net operating income-variable operating costs and expenses) / operating profit.
(2) Financial leverage = operating profit / (operating profit-interest expense).

(3)Audit Committee's Review Report

The Board of Directors has made and reported the Company's 2021 financial statement, the business report, and the proposal of appropriation of profit and loss. The Audit Committee found no discrepancy between the reported documents and facts after verifying. The Audit Committee hereby produced and sent forth the report according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To: Optimax Technology Corporation 2022 Annual General Meeting.

Chairman of the Audit Committee Ted, Kuo

March 24, 2022

(4) The latest annual consolidated financial report and accountant verification report: please refer to Appendix 1 (pages 87 to 174) for details.
(5) The latest annual individual financial report and accountant verification report: please refer to Appendix 2 (pages 175 ~ 256)
(6) The company and its affiliates have experienced financial difficulties in the most recent year and up to the date of publication of the annual report: None.

Review of Financial Conditions, Operating Results, and Risk Management

Evaluation and analysis of financial position

			Unit: NT$thousand	Unit: NT$thousand
Year Item	2021	2020	Differences
			Amount	%
Current assets	2,184,290	5,267,402	(3,083,112)	(58.5)
Non-current assets	2,624,616	3,540,564	(915,948)	(25.9)
Total assets	4,808,906	8,807,966	(3,999,060)	(45.4)
Current liabilities	938,547	1,452,729	(514,182)	(35.4)
Non-current liabilities	1,836,362	6,109,874	(4,273,512)	(69.9)
Total liabilities	2,774,909	7,562,603	(4,787,694)	(63.3)
Share capital	1,700,000	3,253,324	(1,553,324)	(47.7)
Capital reserve	-	-	-	-
Cumulativeprofit(loss)	355,003	(2,005,321)	2,360,324	117.7

Other components of equity	(21,006)	(2,640)	(18,366)	(695.7)
Equity attributable to owners ofparent	2,033,997	1,245,363	788,634	63.3
Total shareholders’ equity	2,033,997	1,245,363	788,634	63.3

Analysis of changes in the ratio of increase or decrease over 20%:
(1) Current assets: Mainly due to the decrease in non-current assets to be sold.
(2) Non-current assets: mainly due to the decrease in investment real estate and other financial assets.
(3) Total assets: mainly due to the decrease in current and non-current assets.
(4) Current liabilities: mainly due to the decrease in long-term borrowings due within one year.
(5) Non-current liabilities: mainly due to the decrease in long-term borrowings.
(6) Total liabilities: mainly due to the decrease in current and non-current liabilities.
(7) Share capital: mainly due to capital reduction to make up for losses.
(8) Retained surplus: mainly due to the increase in net profit in the current period.
(9) Other equity: mainly due to the impact of the recognition of unrealized gains and losses of subsidiaries adopting the equity method and the impact of translation differences in the translation of financial statements of foreign operating agencies.
(10)Total equity attributable to owners of the parent company: mainly due to capital reduction to make up for losses and increase in net profit for the period.

(11)Total equity: mainly due to capital reduction to make up for losses and increase in net profit for the period.

Impact of changes in financial status in the last two years: No significant impact on financial status.
Future response plan: Not applicable.

Evaluation and analysis of operation results

Unit: NT$ thousand

			Unit: NT$thousand	Unit: NT$thousand
Year Item	2021	2020	Difference ratio
			Profit (loss) amount	%
Net operating income	3,191,831	2,417,836	773,995	32.0
Operating cost	2,410,993	1,972,214	438,779	22.2
Operating margin	780,838	445,622	335,216	75.2
Operating expense	464,007	327,179	136,828	41.8
Operating net profit (loss)	316,831	118,443	198,388	167.5
Non-operating income and (expense)	518,032	(87,245)	605,277	693.8
Net profit before tax (loss)	834,863	31,198	803,665	2,576.0
Income tax benefit (fee)	(24,925)	(14,734)	(10,191)	(69.2)
Net profit (loss)	809,938	16,464	793,474	4,819.4
Other comprehensive income,net	(21,304)	(5,706)	(15,598)	(273.4)
Total comprehensive income	788,634	10,758	777,876	7,230.7
Net income attributable to`：` Shareholders of the Company	809,938	16,464	793,474	4,819.4
Total comprehensive income attributable to`：` Shareholders of the Company	788,634	10,758	777,876	7,230.7

Analysis of changes in the increase or decrease ratio exceeding 20%:
- (1) Operating gross profit: mainly due to the good product mix, the increase in revenue from niche products such as automotive, industrial control, and sunglasses, and the decrease in unit manufacturing costs.
- (2) Operating expenses: mainly due to the increase in selling expenses and expected credit impairment losses.
- (3) Operating profit: mainly due to the increase in operating gross profit.
- (4) Non-operating income and expenses: mainly due to the effect of disposal of non-current assets for sale and depreciation of investment real estate. Net profit (loss) before tax: mainly due to the increase in operating profit and non-operating income.
- (5) Income tax (expense) benefits: mainly due to the increase in pre-tax net profit and the impact of temporary differences in finance and taxation.
- (6) Net profit (loss) for the current period: mainly due to the increase in net profit before tax.
- (7) Other comprehensive gains and losses (net of tax): Mainly due to the impact of the recognition of unrealized gains and losses of subsidiaries using the equity method and the impact of translation differences in the translation of financial statements of foreign operating agencies.
- (8) Total comprehensive profit and loss for the current period: mainly due to the increase in net profit for the current period.
- (9) Net (loss) profit attributable to the owner of the parent company: mainly due to the increase in net profit in the current period.
- (10)The total comprehensive profit and loss is attributable to the owner of the parent company: mainly due to the increase in net profit for the current period.
Expected sales volume in the next year and its basis: Please refer to "1. Report to Shareholders".
The impact of changes in financial performance in the last two years: No significant impact on financial performance.
Future response plan: Not applicable.

Evaluation and analysis of cash flow

(1)Changes in consolidated cash flow in the year 2021:

Unit: NT$ thousand

ash -beginning Balance(1)	Projected net cash flow from operating activities for the year(2)	Projected Cash outflow for the year(3)	Projected cash balance (1)+(2)-(3)	Countermeasures against cash insufficiency	Countermeasures against cash insufficiency
				Investment plan	Wealth managementplan
172,404	153,140	255,374	70,170	-	-
Analysis of changes in cash flow in the year 2021: (1) Annual net cash flow from operating activities: mainly because the net loss plus inventory falling prices, impairment loss, depreciation and amortization which did not affect the cash flow of current year. (2) Annual cash outflow: mainly due to cash outflows such as repayment of bank loans.

(2) Liquidity analysis for the coming year (2022)

Unit: NT$ thousand

Cash -beginning Balance(1)	Projected net cash flow from operating activities for the year(2) (estimated)	Projected Cash outflow for the year(3) (estimated)	Projected cash balance (1)+(2)-(3) (estimated)	Countermeasures against cash insufficiency (estimated)	Countermeasures against cash insufficiency (estimated)
				Investment plan	Wealth management plan
70,170	603,000	46,153	627,017	-	-
Analysis of changes in cash flow in the coming year: (1) Estimated annual net cash flow from operating activities: mainly due to estimate cash inflows generated by operations. (2) Estimated annual cash flow: mainlycash outflows such as repayment of bank loans.

Effect upon financial operations of any major capital expenditures during the most recent year: Not applicable.

Annual reinvestment policy, the main reason for its profit or loss, the improvement plan and the investment plan for the coming year:

(1) Investment plans for the coming year:

With the approval of the Investment Review Committee of the Ministry of Economic Affairs, the third-region investment enterprise indirectly invested in the establishment of Optimax Technology (Suzhou) Co., Ltd. in the mainland China to engage in the manufacture and sales of polarizers. As of the year in 2021, the company has invested USD 19,000,000.
On June 29, 2017, the company was approved by the Investment Review Committee of the Ministry of Economic Affairs with the approval letter No. 10620714740 to invest in Hong Kong Yute Optoelectronics Technology Co., Ltd. (hereinafter referred to as Yute) for HKD 1,700 and acquired 17% equity of Yute.
The company's related company, Optimax Technology (Suzhou) Co., Ltd., invested RMB 2 million in Chongqing Yunhe Bafang on December 25, 2017, and obtained 2% of the equity. Increased investment in Chongqing Yunhe Bafang on June 19, 2019 acquired 4% of the equity of RMB 4 million and acquired a total of 6% equity of Chongqing Yunhe Bafang.
On April 27, 2021, the board of directors of the company decided to invest RMB 8 million in Shenzhen Lihuasheng Technology Co., Ltd. through its affiliated company, Optimax Technology (Suzhou) Co., Ltd. to obtain 32% of the company's equity. Optimax Technology (Suzhou) Co., Ltd. has remitted RMB 2 million on May 27, 2021, June 10, 2021, June 17, 2021, and June 29, 2021 respectively; Lihuasheng and in the same year the capital verification report was completed on August 20, 2021.

(2) Main causes of profits or losses incurred on investments in the most recent year (2021):

The company’s investment loss recognized by the equity method of the investee company in the recent year was NT$ 15,757,000.

(3) Investment plans for the coming year: None.

The section on risks shall analyze and assess the following matters in the most recent year and until the date of publication of the annual report:

(1) The effect upon the Company's profits (losses) of interest, foreign exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future:

Exchange rate changes: The company controls foreign currency positions at any time to control exchange rate trends, and appropriately undertakes forward foreign exchange transactions to avoid exchange rate risks in foreign currency positions. The exchange loss in 2021 was NT$503,000.
Inflation: The company's material costs are showing a slight downward trend, and inflation has no significant impact on the company.

(2) The Company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions, the main reasons for the profits/losses generated thereby, and the plan for improving re-investment profitability:

The company's derivative commodity transactions are mainly forward foreign exchange transactions, the purpose of which is to avoid the exchange rate fluctuation risk of the net part denominated in foreign currencies, and is a transaction activity that is not for transaction purposes. In addition to the above transactions, the company has no transactions involving high-risk and high-leverage investments.

(3) Research and development plans to be carried out in the future, and further expenditures expected for research and development work:

Development of automotive polarizers - reliability improvement and evaluation of new compensation films.
VR/AR product development and related equipment introduction.
Cost reduction - evaluation of new material manufacturers and development of different widths.
Process improvement - water resistance improvement.
Sunglasses product development.

(4) Effect on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response:

The company pays close attention to and pragmatically improves important domestic policies and legal changes, and develops synchronously with international systems, technologies, and talents to enhance industrial competitiveness, and seek to integrate with the world, actively engage in economic and trade exchanges with countries, and cooperate with governments Promote economic liberalization, internationalization, and institutionalization policies to effectively increase and improve the company's operating efficiency and systems; in addition, to cooperate with the infectious disease prevention and control law and formulate special regulations for the prevention and control of severe and special infectious pneumonia and the government's epidemic prevention policies. Qualified personnel strictly implement the epidemic prevention procedures to maintain normal operational effectiveness.

(5) Effect on the Company's financial operations of developments in science and technology (including cyber security risks) as well as industrial change, and measures to be taken in response:

The Company is an important member of relevant industry associations, and has a close relationship with the market and technical personnel of upstream and downstream customers. It can truly grasp the dynamics of upstream raw materials in the industry, the development trend of new display technologies, and the needs of end customers. In response to the drastic changes in the LCD market, in addition to continuing to localize materials and reduce costs, the company is also actively developing niche products ultra-thin polarizers, dyebased polarizers for PMVA, and polarizers for TFT vehicles. , Polarizing plates for PMAM-OLED, polarizing plates for wearable products (smart bracelet/watch and Metaverse-VR/AR, etc.), polarizing lenses for sunglasses, materials related to flexible products, optical materials for touch control, and high-hardness protective film products, etc.) Continue to increase revenue and profit. Therefore, although the LCD industry is changing rapidly, the company can adjust with the pulsating flexibility of the industry and continue to create value on the client side.

The Company has established comprehensive data backup and network and computer-related information security protection measures, but cannot guarantee the information system it controls or supports the continuous operation of the core business, and completely avoids the network from any third party paralyzing the system. Road attacks or snooping on confidential information, these network attacks illegally invade Littelfuse's internal network system and damage the company's operations and goodwill. In the case of a serious cyber attack, the company's system may lose important company information, including affecting production and reporting, packaging and shipment may be suspended and delivery may be affected, payment may be suspended, resulting in damage to the company's credit, export tax rebates Data cannot be uploaded before customs declaration, which will affect tax refunds, etc. Through continuous review and evaluation of information security regulations and procedures to ensure their appropriateness and effectiveness, but it cannot guarantee that the company will not be protected from new types of security threats in the everchanging information security. Cyber attacks may also attempt to steal the company's trade secrets and other confidential information, such as proprietary information of customers or other stakeholders, R&D and production technologies, and personal information of employees.

Hackers can also implant computer viruses, destructive software or ransomware into the company's network system, interfere with the company's operations, gain control of the computer system, and then affect the production and reporting operations, package out Due to the suspension of goods, the delivery may be affected, the payment may be suspended and the credit of the company may be damaged, and the export tax refund information cannot be uploaded before customs declaration, which will affect the tax refund, etc.; It is also possible that the company may be involved in legal cases related to the leakage of information of employees, customers, manufacturers or third parties to which the company is obliged to keep confidential, and bear significant legal responsibility.

In order to prevent and reduce the damage caused by attacks, the company will implement relevant improvement measures and continue to update them, such as the establishment of a machine-into-waste antivirus mechanism to prevent machines containing malicious software from entering the company: strengthening network firewalls and network Control to prevent the spread of computer viruses across machines and factories; build endpoint anti-virus measures by computer type; introduce advanced solutions to detect and handle malware; design and develop security-enhanced personal computers for employees to use; design Develop cloud application security policies; introduce new technologies to enhance data protection; strengthen phishing email detection; establish an integrated automated information security maintenance and operation platform, and regularly perform employee alertness tests and entrust external experts to perform information security assessments.

(6) Effect on the Company's crisis management of changes in the Company's corporate image, and measures to be taken in response:

Since the company went public in October 2002, it has established spokespersons and published information operations, and held Institutional Investor Conference in a timely which will improve the transparency of business information.

(7) Expected benefits and possible risks associated with any merger and acquisitions, and measures to be taken in response:

The company did not engage in mergers and acquisitions plans in 2021 and as of the publication date of the annual report, so there is no such possible risk.

(8) Expected benefits and possible risks associated with any plant expansion, and measures to be taken in response:

The company has no plans to expand domestic plants in the short term, and its main goal is to increase the utilization rate of existing capacity and increase production efficiency, and improve production efficiency through the improvement of existing equipment.

(9) Risks associated with any consolidation of sales or purchasing operations, and measures to be taken in response:

The company's main customers are concentrated in domestic and foreign panel manufacturers, in order to diversify the credit risk of customers, the company reviews the customer's credit limit carefully, and it also signs a non-claimed account receivable sales contract with the bank group to reduce the possible impact of the customer's credit risk.
In order to reduce the risk of overdue or debiting of accounts receivable, the company actively diversifies the concentration of customers, and decentralize the source of raw materials to reduce dependence on a few suppliers such as Japan.

(10)Effect upon and risk to the Company in the event a major quantity of shares belonging to a director (including independent director), or a major shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and measures to be taken in response: Not applicable.

The directors, supervisors, or major shareholders holding more than 10% of the company's shares do not have a large number of transfers or exchanges of equity, so they have no significant impact on the company's operations.

(11)Effect upon and risk to Company associated with any change in governance personnel or top management, and measures to be taken in response: None.

The management of the company focuses on company operations, supplemented by coordination with an audit committee composed of independent directors, assistance and support, there is no operational right to change the possible risks to the company.

(12)Litigious and non-litigious matters:

List major litigious, non-litigious or administrative disputes that involve the Company and/or any of the Company’s directors (including independent directors), presidents, any persons with actual responsibility for the Company, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the Company and have been concluded by means of a final and unappealable judgment, or are still pending. Where such a dispute could materially affect shareholders' equity or the prices of the Company's securities, the annual report shall disclose the facts of the dispute, amount of money at stake in the dispute, the date of litigation commencement, the main parties to the dispute, and the status of the dispute as of the date of publication of the annual report: None.

(13)Other important risks, and measures to be taken in response: None.

Other important matters

The creditor's rights and debts negotiation meeting was not held in 2021 because the company had fully repaid all creditor's rights and bank loans on May 20, 2021 and automatically released the creditor's rights and debts negotiation. The company repays the remaining arrears of Mega International Commercial Bank's NT$12 billion joint loan case with the price of disposing the Plant in Southern Taiwan Science Park, and raised NT$2.8 billion from Entie Commercial Bank to repay the Taiwan Cooperative Bank including NT$3.5 billion and NT$2.6 billion joint loan cases and all granted by the self-loan case.

Special Disclosure

Affiliated Company Related Information

(1) Organization chart

==> picture [489 x 268] intentionally omitted <==

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

Optimax Technology Corporation
100% 100%
Optimax Optoelectronic Art Optronics Corporation
(MAURITIUS) Corporation
100%
Optimax Technology corp.
(Suzhou) Co., Ltd
32%
Shenzhen Lihuasheng
Technology Co., Ltd.
----- End of picture text -----

(2) Basic information of related companies

2021-12-31; Unit: NT$ thousand

Company name	Establishment Date	Address	Paid-in Capital	Main business or production project
Optimax Optoelectronic (MAURITIUS) Corporation	2005/09	Republic of Mauritius (MAURITIUS)	614,524	Investment
Optimax Technology corp. (Suzhou) Co., Ltd	2005/10	Suzhou National New & Hi-Tech Industrial Development Zone	614,524	Manufacturing
Art Optronics Corporation	2010/04	Republic of China (Taiwan)	2,250	Trading
Shenzhen Lihuasheng Technology Co., Ltd.	2021/06	Shenzhen City (Mainland China)	92,092	Manufacturing

(3)Presumed to have the same shareholder information as those with control and affiliation: None.

(4)Overall relationship with the industries covered by the company's operations:

The overall business of the affiliated company is the trading of polarizers.

(5) Information of directors, supervisors and general managers of related companies

		2021-12-31;Unit: share;%	2021-12-31;Unit: share;%	2021-12-31;Unit: share;%
Company Name	Title	Name or Representative	Holdingshares
			Shares	Ratio
Optimax Optoelectronic (MAURITIUS) Corporation	Chairman	Optimax (MAURITIUS) CO., LTD Representative: Peter Chao	19,000,000	100%
Optimax Technology corp. (Suzhou) Co., Ltd	Chairman	Optimax Optoelectronic (MAURITIUS) Corporation Representative: Peter Chao	Note	100%
Art Optronics Corporation	Chairman	Optimax Technology Corporation Representative: Peter Chao	225,000	100%
Shenzhen Lihuasheng Technology Co., Ltd.	President	Chao-Qin, You	`─`	`─`

Note: It is not a company limited by shares, so there are no shares.

(6) Financial status and operating results of related companies

				2021-12-31;Unit: NT$thousand	2021-12-31;Unit: NT$thousand
Company Name	Capital	Operating income	Operating profit and loss	Current profit and loss (after tax)	Earning per shares(NT$) (after tax)
Optimax Optoelectronic (MAURITIUS) Corporation	614,524	0	(15,617)	(15,617)	(0.82)
Optimax Technology corp. (Suzhou) Co., Ltd	614,524	0	(25,585)	(15,617)	NA
Art Optronics Corporation	2,250	11,647	(24)	(140)	(0.62)
Shenzhen Lihuasheng Technology Co., Ltd.	92,092	223,435	(34,451)	(34,536)	NA

In the most recent year and as of the date of publication of the annual report, the handling of private equity securities: Not applicable.

In the most recent year and up to the date of publication of the annual report, the situation of subsidiaries holding or disposing of the company's stock:

None.

Other necessary supplementary notes: None.

In the most recent year and up to the date of publication of the annual report, if there is an event that has a significant impact on shareholders' equity or the price of securities specified in Article 36, paragraph 3, of this law, it shall also be stated item by item: None.

【 Appendix I 】

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements Independent Auditors’ Review Report December 31, 2021 and 2020

Address: No. 37 Pingdong Rd., Pingzhen District, Taoyuan, Taiwan Telephone: 886-3-460-6677

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. NOT AUDITED OR REVIEWED BY AUDITORS. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and the consolidated financial statements, the Chinese version shall prevail.

Representation Letter

In connection with the Consolidated Financial Statement of Affiliated Enterprises of OPTIMAX TECHNOLOGY CORPORATION (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, Consolidated Financial Statements of Affiliated Enterprises” are the same as those required to be included in the Consolidated Financial Statements of OPTIMAX TECHNOLOGY CORPORATION 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, OPTIMAX TECHNOLOGY CORPORATION does not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

OPTIMAX TECHNOLOGY CORPORATION By

Peter Chao, Chairman March 24, 2022

I ndependent Auditors’ Report

To the Board of Directors of Optimax Technology Corporation:

Opinion

We have audited the accompanying consolidated balance sheets of Optimax Technology Corporation and its subsidiaries (the “Group”) as at December 31, 2021, and 2020, and the related consolidated statements of comprehensive income, of changes in equity and cash flows for the years, then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and others explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Optimax Technology Corporation and its subsidiaries as at December 31, 2021, and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended by following the “Regulations Governing the Preparation of Financial Reports by Securities issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretation as endorsed by the Financial Supervisory Commission.

Basis for Opinion

We conducted our audits by following 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 Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the audits report of other independent accountants, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2021 Consolidated Financial Statements of Optimax Technology Corporation and its subsidiaries. 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 individually. The accountant's judgment should communicate the key audit matters on the audit report as follows:

1. Inventory Valuation

For the accounting policies of inventories, please refer to Note 4 (6) of the Consolidated Financial Statements; For the accounting estimates of the inventory evaluation and the description of the uncertainty of the assumptions, please refer to Note 5 of the Consolidated Financial Statements; For the description of important accounting items in inventories, please refer to Note 6 (6) of the Consolidated Financial Statements.

The main business item of Optimax Technology Corporation and its subsidiaries are the manufacture and sales of polarizers. Because the inventory is easily affected by the market demand of the products used and the yield rate of the production process, resulting in sluggish or falling prices, so the inventory evaluation is listed as one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

(1) Check the inventory age report and analyze the changes of inventory age in each period.
(2) Evaluate the rationality of accounting policies, such as inventory depreciation or sluggish withdrawal policies.

(3) Assess whether the valuation of inventories has been in accordance with the company's established accounting policies.
(4) Obtain the report of the net realizable value of inventories on the end of the financial reporting period, the selling price of goods or the purchase price used to check the net realizable value, and other data sources, and recalculate the accrued inventory allowance to offset the loss in value to confirm such data. The performance of accounting estimates is consistent with its policies.
(5) Understand the process of inventory management, review its annual inventory plan and participate in annual inventory, and check inventory details to evaluate the effectiveness of management in distinguishing and controlling obsolete inventory.

2. Impairment assessment of Property, plant and equipment

For the accounting policy of asset impairment, please refer to Note 4 (11) of the Consolidated Financial Statements; For the uncertainty of the accounting estimates and assumptions of the asset impairment assessment, please refer to Note 5 of the Consolidated Financial Statements; For the description of important accounting items in Property, plant and equipment, please refer to Note 6 (9) of the Consolidated Financial Statements.

Optimax Technology Corporation is a highly capitalized industry and is facing the interference of various factors such as the economic environment and industry competition; due to the assessment of impairment of Property, plant and equipment, it is necessary to estimate and discount the future cash flow to estimate the recoverable amount and other processes, which are inherently highly uncertain, so the assessment of impairment of Property, plant and equipment is one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

(1) Understand the relevant policies and procedures for impairment assessment, and assess the rationality of the management to identify the cash-generating units that may be impaired.
(2) Regarding the recoverable amount of the independent assessment report issued by a third party appointed by Optimax Technology Corporation and its subsidiaries, examine the reasonableness of the relevant assumptions, and assess the qualification and independence of the appraiser.

─ Other Matters Individual Financial Reports

Optimax Technology Corporation has edited the Individual Financial Report in year 2021 and 2020, and the accountant and issued by this audit report expressed an unqualified opinion and an opinion of emphasis on matters paragraph on file for reference.

The Management's Responsibility and Governing Body of the Consolidated Financial Statements

It is the management's responsibility to fairly present the Consolidated Financial Statements in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and to maintain internal controls which are necessary for the preparation of the Consolidated Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing for the consolidated financial statement, responsibilities of the management also included assessment of the capacity to continue operation, disclosure of related matters and the accounting approaches to be adopted when the

Company continues to operate unless the management intends to liquidate or suspend the business of Optimax Technology Corporation and its subsidiaries if there was not any other option except liquidation or suspension of the Company's business.

The governing bodies of Optimax Technology Corporation and its subsidiaries (including the Audit Committee) have the responsibility to oversee the process by which the financial statements are prepared.

The Accountants' Responsibilities in Auditing the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance on whether the Consolidated Financial Statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. "Reasonable assurance" refers to high level of assurance. Nevertheless, our audit, which was carried out in accordance with the generally accepted auditing standards, does not guarantee that a material misstatement(s) will be detected in the Consolidated Financial Statements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements.

We have utilized our professional judgment and maintained professional skepticism when exercising auditing work in accordance with the generally accepted auditing standards. We also:

Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Consolidated Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. The risk of not detecting a significant 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.
Acquired necessary understanding of internal controls pertaining to the audit in order to develop audit procedures appropriate under the circumstances. Nevertheless, the purpose of such understanding is not to provide any opinion on the effectiveness of the internal controls of Optimax Technology Corporation and its subsidiaries.
Assess the appropriateness of the accounting policies adopted by the management level, as well as the reasonableness of their accounting estimates and relevant disclosures.
Concluded, based on the audit evidence acquired, on the appropriateness of the management's use of the going-concern basis of accounting, and determined whether a material uncertainty exists where events or conditions that might cast significant doubt on the ability of Optimax Technology Corporation and its subsidiaries to continue as going concerns. If we believe there are events or conditions indicating the existence of a material uncertainty, we are required to remind the users of the Consolidated Financial Statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure was found. Our conclusion is based on the audit evidence acquired as of the date of the audit report. However, future events or conditions may cause Optimax Technology Corporation and its subsidiaries to cease to continue as a going concern. However, future events or conditions may cause Optimax Technology Corporation and its subsidiaries to cease to continue as a going concern.
Evaluated the overall presentation, structure, and content of the Consolidated Financial Statements (including the related notes), and determined whether the Consolidated Financial Statements present related transactions and events fairly.

Acquire sufficient and appropriate audit evidence for the financial information of the investee company that adopts the equity method to express opinions on Consolidated Financial Statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion on Optimax Technology Corporation and its subsidiaries.

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 provided governing bodies with a declaration that we had complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that might possibly be deemed to impair our independence (including relevant preventive measures).

From the matters communicated with those charged with governance, we determined the key audit matters of the Consolidated Financial Statements of Optimax Technology Corporation and its subsidiaries of 2021. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

BAKER TILLY CLOCK & CO. Taiwan (Republic of China) March 24, 2022

The accompanying financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to review such financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ review report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English version and Chinese version, the Chineselanguage independent auditors’ review report and financial statements shall prevail.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets December 31, 2021 and 2020

Consolidated Balance Sheets December 31, 2021 and 2020	Consolidated Balance Sheets December 31, 2021 and 2020
(Expressed in Thousands of New Taiwan Dollars)
	December 31, 2021	December 31, 2020
	Amount %	Amount %
Assets Current assets Cash Current financial assets at amortized cost Accounts receivable, net Accounts receivable – related parties Other receivables Current inventories Prepayments Non-current assets or disposal groups classified as held for sale, net Other current financial assets Other current assets	$ 70,170 1 172,404 2 54,803 1 64,577 1 722,760 15 770,909 9 35,444 1 `－` `－` 36,177 1 148,586 2 1,164,761 24 957,134 11 31,659 1 45,674 `－` `－` `－` 3,106,341 35 66,289 1 79 `－` 2,227 `－` 1,698 `－`
Total current assets	2,184,290 45 5,267,402 60
Non-current assets Non-current financial assets at fair value through other comprehensive income Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Other non-current financial assets Other non-current assets	29,847 1 26,262 `－` 9,531 `－` `－` `－` 2,128,815 44 2,213,910 25 4,428 `－` 6,586 `－` 267,004 6 943,994 11 137,040 3 161,976 2 18,737 `－` 180,393 2 29,214 1 7,443 `－`
Total non-current assets	2,624,616 55 3,540,564 40
Total Assets	$ 4,808,906 100 8,807,966 100
Liabilities and equity Current liabilities Short-term loans Accounts payable Other payables Current provisions Current lease liabilities Current Portion of Long-term Debt Current refund liabilities Other current liabilities	602,478 13 711,044 8 138,112 3 181,170 2 151,771 4 282,448 3 15,436 `－` 13,906 `－` 3,235 `－` 18,753 `－` `－` `－` 111,957 1 12,257 `－` 7,775 `－` 15,258 `－` 125,676 2
Total current liabilities	938,547 20 1,452,729 16
Non-current liabilities Long-term borrowings Deferred tax liabilities Non-current lease liabilities Non-current net defined benefit liability Other non-current liabilities	1,790,000 37 5,366,681 61 795 `－` 147 `－` 1,277 `－` 693,008 8 8,525 `－` 11,355 `－` 35,765 1 38,683 1
Total non-current liabilities	1,836,362 38 6,109,874 70
Total liabilities	$ 2,774,909 58 7,562,603 86
Equity Common stock Retained earnings Unappropriated retained earnings (accumulated deficit) Other components of equity	1,700,000 35 3,253,324 37 355,003 7 (2,005,321) (23) (21,006) `－` (2,640) `－`
Equityattributable to owners ofparent	2,033,997 42 1,245,363 14
Total equity	2,033,997 42 1,245,363 14
Total liabilities and equity	$ 4,808,906 100 8,807,966 100

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

Total operating revenue Total operatingcosts	2021 Amount %	2020 Amount %
	$ 3,191,831 100 (2,410,993) (75)	$ 2,417,836 100 (1,972,214) (82)
Grossprofit from operations	780,838 25	445,622 18
Operating expenses Selling expenses Administrative expenses Research and development expenses Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS9	(175,780) (5) (148,344) (5) (54,946) (2) (84,937) (3)	(119,305) (5) (147,370) (6) (51,788) (2) (8,716) `－`
Total operatingexpenses	(464,007) (15)	(327,179) (13)
Net operatingincome	316,831 10	118,443 5
Non-operating income and loss Interest income 436 `－` Other income 78,360 3 Other gains and losses 502,136 16 Finance costs (54,049) (2) Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 15,667 `－` Share of profit (loss) of Associates & Joint Ventures accounted for usingequitymethod (24,518) (1)		557 `－` 117,536 5 (57,548) (2) (126,583) (5) (21,207) (1) `－` `－`
Total non-operatingincome and expenses 518,032 16		(87,245) (3)
Profit (loss) from continuing operations before tax 834,863 26 Total tax expense (income) (24,925) (1)		31,198 2 (14,734) (1)
Net Income 809,938 25		16,464 1
Other comprehensive income Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plan (2,938) `－` Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (16,206) (1) Unrealised gains (losses) from Associates & Joint Ventures accounted for using equity method in equity instruments measured at fair value through other comprehensive income (685) `－` Items that may be reclassified subsequently to profit or loss Exchange differences on translating the financial statements of foreign operations (816) `－` Income tax related to components of other comprehensive income that will be reclassified toprofit or loss (659) `－`		(4,209) `－` `－` `－` `－` `－` (1,872) `－` 375 `－`
Other comprehensive income,net of tax (21,304) (1)		(5,706) `－`
Total comprehensive income $ 788,634 24		$ 10,758 1
Profit (loss), attributable to: Profit(loss),attributable to owners ofparent $ 809,938 25		$ 16,464 1
Total comprehensive income attributable to： Profit(loss),attributable to owners ofparent $ 788,634 24		$ 10,758 1
Earnings per share Basic earningsper share $ 4.76		$ 0.10

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of the parent

Accounting Title Common stock	Undistributed surplus (Accumulated deficit)	Other components of equity	Total equity
		Foreign Currency Translation differences Unrealized gains(losses) from financial assets at fair value through other comprehensive income
For the year ended January 1, 2020 $ 3,253,324	$ (2,017,576)	$ (1,136) $ (7)	$ 1,234,605
Consolidated net price (loss)) `－` Other comprehensive income (loss) `－` Total comprehensive income (loss) `－`	16,464 (4,209) 12,255	`－` `－` (1,497) `－` (1,497) `－`	16,464 (5,706) 10,758
For the year ended December 31,2020$ 3,253,324	$ (2,005,321)	$ (2,633) $ (7)	$ 1,245,363
For the year ended January 1, 2021 $ 3,253,324	$ (2,005,321)	$ (2,633) $ (7)	$ 1,245,363
Net Income `－` Other comprehensive income(loss) `－` Total comprehensive income (loss) `－` Capital reduction for cover accumulated deficits (1,553,324)	809,938 (2,938) 807,000 1,553,324	`－` `－` (1,475) (16,891) (1,475) (16,891) `－` `－`	809,938 (21,304) 788,634 `－`
Balance at December 31, 2021 $ 1,700,000	$ 355,003	$ (4,108) $ (16,898)	$ 2,033,997

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities`：` Income before income tax	2021	2020
	$ 834,863	31,198
Adjustments to reconcile profit (loss)： Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Loss (gain) on disposal of property, plan and equipment Share of profit (loss) of Associates & Joint Ventures accounted for using equity method Loss on disposal of investment properties Loss on disposal of non-current assets classified as held for sale Reversal of impairment loss on non-financial assets Unrealized foreign exchange loss (gain) Deferred income transferred to income Lease liabilities transferred to other income Accumulated exchange differences classified to exchange loss (gain) on disposal of foreign operation Lease modification benefit Changes in operating assets and liabilities`：` Decrease (increase) in accounts receivable Decrease (increase) in other receivable Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase (decrease) in accounts payable Increase (decrease) in other payable Increase (decrease) in Provisions Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liability Cash generated from operation Cash received from interest income Cash paid for interest Income taxes refunded	89,064 173 69,270 54,049 (436) 24,518 7,516 － (522,291) (2,869) (440) (2,625) －－ (11,398) (68,247) 128,644 (207,627) 14,086 (590) (40,885) (128,465) 1,530 (22,170) (5,768) 209,902 433 (57,278) 83	248,438 989 29,923 126,583 (557) － 15,180 94 (50,607) (153,385) 15,435 (2,589) (2,806) (2,735) － (39,426) (136,100) 19,048 (33,984) 6,133 39,595 139,237 － 83,379 (4,282) 328,761 566 (127,099) 18
Net cashprovided by operating activities	$ 153,140	202,246
Cash flows from investing activities`：` Acquisition of financial assets at fair value through other comprehensive income (20,000) Acquisition of financial assets at amortised cost (74,096) Proceeds from disposal of financial assets at amortised cost 83,653 Acquisition of Investments accounted for using equity method (34,752) Acquisition of disposal of non-current assets classified as held for sale (1,677) Proceeds from disposal of non-current assets classified as held for sale 3,553,610 Acquisition of property, plant and equipment (17,647) Proceeds from disposal of property, plant and equipment 1,962 Acquisition of investment properties － Decrease (Increase) in other financial assets 95,446 Increaseinother non-current assets (27,044)		－ (39,592) 17,324 －－ 55,905 (7,556) 5,061 (5,185) (50,644) (3,142)
Net cashusedin investing activities $ 3,559,455		(27,829)
Cash flows from financing activities`：` Increase in short-term loans (102,335) Payments of long-term debt 1,790,000 Repayments of long-term debt (5,478,638) Increase in guarantee deposits received 3,000 Decrease in guarantee deposits received (11,729) Payments of leaseliabilities (3,949)		46,725 － (350,434) 192 (438) (15,753)
Net cash flowsfrom(usedin)financing activities $ (3,803,651)		(319,708)
Effect of change rate changes on cash and cash equivalents (11,178) Net decrease (increase) in cash and cash equivalents (102,234) Cashand cashequivalents at beginning ofperiod 172,404		(19,453) (164,744) 337,148
Cashand cashequivalents at end ofperiod $ 70,170		$ 172,404

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the year ended December 31, 2021 and 2020

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

1. Organization and business

(1) Optimax Technology Corporation was incorporated In March 1998 and registered under the Ministry of Economic Affairs, R.O.C. The registered address is No. 37 Pingdong Rd., Pingzhen District, Taoyuan, Taiwan. The company and subsidiaries (collectively as “the Company”) are primarily engaged in the manufacturing and selling of polarizers.
(2) In October 2002, Optimax Technology Corporation’s shares were listed on the Taiwan Stock Exchange (TWSE).

2. Approval of financial statements

These consolidated financial statements were approved and authorized for issue by the Board of Directors of Optimax Technology Corporation on March 24, 2022.

3. Application of New, Amended and Revised Standards, and Interpretations

(1) Effect of the adoption of new issuances of or 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:

New, Amended and Revised Standards, and Interpretations 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’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond June 30, 2021’	Effective date by International Accounting Standards Board
	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.

(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:

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

as endorsed by the FSC are as follows:

New, Amended and Revised Standards, and Interpretations

Effective date by
International
Accounting Standards
Board

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'
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 -
comparative information
Amendments to IAS 1, ‘Classification of liabilities as current or noncurrent’
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’

To be determined by
International
Accounting
January 1, 2023
January 1, 2023
January 1, 2023
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.

(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

Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
A. Financial instruments at fair value through profit or loss.
B. Net defined benefit liability at defined benefit obligation deducted plan assets through fair value.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the consolidated company’s accounting policies. The areas involving a higher degree of judgment 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:
This consolidated financial report includes the company and the entities (subsidiaries) controlled by the company.

The consolidated comprehensive income statement has been included the operating profit and

loss from the acquired or executed subsidiary company in the current period since the acquisition date or to the date of disposition.

The financial report of the subsidiary has been adjusted so that its accounting policy is consistent with the consolidated company’s accounting policy.

When preparing the consolidated financial report, the transactions, account balances, income and expenses and losses have been completely eliminated.

Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are accounted for as equity transactions. The book amount of the consolidated company and non-controlling interests has been adjusted to reflect changes in its relative equity in subsidiaries. Adjustment of non-controlling interests of the difference between the amount and the fair value of the consideration paid or received is directly recognized as a right and the benefits belong to the owners of the company.

When the consolidated company loses control of the subsidiary, the disposition profit and loss is one of the following two difference: (1) the fair value of the consideration received and the remaining investment in the former subsidiary are counted at the fair value at the date of loss of control, and (2) the assets of the former subsidiary (including goodwill), together with liabilities and non-controlling interests, they are counted based on the book amount on the day when control is lost. For all the amounts recognized in other comprehensive income and losses related to the subsidiary, the consolidated company accounting treatment must be followed by the direct disposal of related assets or liabilities with the consolidated company and the basis is the same.

B. Subsidiaries included in the consolidated financial statements:

Percentage of Ownership (%)

Investor Optimax Optimax OOMC	The name of subsidiaries ART OPTRONICS CORP.. Optimax Optoelectronic (MAURITIUS) CORP. (OOMC) Optimax Technology (Suzhou) CO., LTD. (OPTIMAX SUZHOU)	Business activities Trading Business Investment Company Polarizers manufacturing and selling	December 31, 2021 December 31, 2020 100.00 100.00 100.00 100.00 100.00 100.00	Description - - -

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) 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 settled 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.

(5) Foreign currency

When each entity prepares financial reports, transactions in currencies other than the individual's functional currency (foreign currency) are converted into functional currency records based on the exchange rate on the transaction day.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. The exchange difference arising from the currency items of delivery or the conversion of currency items is recognized in the current period profit and loss.

The fair value of foreign currency non-monetary items is used to determine the exchange rate on the

day of fair value rate conversion, the resulting exchange difference is listed in the current profit and

loss, but if the change in fair value is recognized in other comprehensive gains and losses, the resulting conversion difference is listed in other comprehensive gains and losses.

Non-monetary items in foreign currencies as measured by historical cost are converted at the exchange rate on the transaction date and will not be converted again.

When preparing the consolidated financial report, the assets and liabilities of foreign operating organizations (including subsidiaries in the country where they operate or whose currency is different from that of the company) are converted into New Taiwan dollars at the exchange rate on each balance sheet date. The income and expense items are converted at the average exchange rate of the current period. The resulting exchange difference is listed in other comprehensive profit and loss, and accumulated under the equity of the conversion difference of the foreign operation’s financial statements.

If the consolidated company disposes of all the rights and interests of the foreign operation, the accumulated exchange difference related to the foreign operations will be reclassified to profit or loss. If the partial disposal of the subsidiaries of the foreign operation does not result in the loss of control, the accumulated exchange difference is re-attributed to the subsidiary’s non-controlling interests and is not recognized as a profit or loss.

(6) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(7) Non-current assets classified as held for sale

The carrying amount of non-current assets is expected to be mainly through sales transactions rather than continued use. When closed, it is classified as pending sale. Non-current assets that meet this classification must be available for immediate sale in their current state, and their sale must be highly probable. When the appropriate level of management commits to the plan to sell the asset, and the sale transaction is expected to start from the classification date when completed within one year, it will meet the sale as highly likely.

Non-current assets classified as pending for sale are measured at the lower of the book value and fair value less the cost of sale, and depreciation is stopped for such assets.

(8) Investments accounted for using equity method affiliated companies
Investments using the equity method are investments in affiliated companies.

Affiliate is an enterprise that has significant influence on the consolidated company but is not a subsidiary or a joint venture Industry.

The consolidated company adopts the equity method for investing in affiliated enterprises. Under the equity method, the investment in affiliated enterprises is initially recognized at cost, and the carrying amount in the future is based on the acquisition. Profits and losses of affiliated companies and other comprehensive profit and loss share and profit share enjoyed by the consolidated company match and increase or decrease. In addition, the changes in the equity of the affiliated company that the consolidated company can enjoy are based on the shareholding ratio is recognized.

When the affiliated company issues new shares, if the consolidated company does not subscribe according to the shareholding ratio, resulting in a change in the shareholding ratio and thus an increase or decrease in the net equity value of the investment, the increase or decrease will adjust the

capital reserve - the equity method is used to recognize the related party. Changes in the net equity value of enterprises and investments using the equity method. However, if the shareholding ratio is not subscribed or acquired, resulting in a decrease in the ownership interest of the affiliated company, the amount related to the affiliated company recognized in other comprehensive profit and loss shall be reclassified according to the proportion of decrease, and the accounting treatment shall be based on the affiliated company. If the relevant assets or liabilities are directly disposed of on the same basis; if the adjustment in the preceding paragraph should be debited to the capital reserve, and the capital reserve balance generated by the investment using the equity method is insufficient, the difference is debited to retained earnings.

When the merging company's share of losses in an affiliated company equals or exceeds its equity in the associated company (including the carrying amount of investments in the affiliated company under the equity method and other long-term interests that are substantially part of the merging company's net investment in the affiliated company) , that is, stop recognizing further losses. The consolidated company recognizes additional losses and liabilities only to the extent that legal obligations, constructive obligations or payments have been made on behalf of related companies.

When assessing impairment, the consolidated company treats the overall carrying amount of the investment (including goodwill) as a single asset, compares the recoverable amount with the carrying amount, and conducts impairment tests. The recognized impairment losses are not allocated to constitute the component of the carrying amount of the investment any assets, including goodwill. Any reversal of impairment losses is recognized to the extent of a subsequent increase in the recoverable amount of the investment.

The consolidated company ceases to use the equity method from the date when its investment ceases to be an affiliated company, and its retained interest in the original affiliated company is measured at fair value, included in the current year's profit and loss. In addition, all the amounts recognized in other comprehensive profit or loss related to the affiliated enterprise shall be accounted for in the same way as if the affiliated enterprise directly disposes of the relevant assets or liabilities. The basis that must be followed is the same.

Profits and losses arising from countercurrent, downstream and sidestream transactions between the consolidated company and its affiliates are recognized in the consolidated financial report.

(9) Property, plant and equipment

Real estate, plant and equipment are recognized at cost, and subsequently cost minus accumulated depreciation and the amount after the accumulated impairment loss is measured.

The real property, plant and equipment under construction are the cost minus the accumulated impairment loss and the amount is recognized. Cost includes professional service fees and borrowing costs that meet the capitalization conditions. When these assets are completed and reach the expected state of use, they are classified into real estate, plant and equipment of the appropriate categories of equipment and start depreciation.

Except for self-owned land, which is not depreciated, the rest of the real estate, plant and equipment will be depreciated on a straight-line basis within the service life of each significant part. The consolidated company is at least to review the estimated service life, residual value and depreciation method at the end of each year, and postpone the impact of changes in applicable accounting estimates.

When real estate, plant and equipment are delisted, the difference between the net disposal price and the book value of the asset is recognized in profit and loss.

(10) Investment real estate

Investment real estate refers to real estate held for the purpose of earning rent or capital appreciation or both (including right-of-use assets that meet the definition of investment real estate). Investment real estate also includes land that has not yet been determined for future use.

Self-owned investment real estate is initially measured at cost (including transaction costs), and subsequently measured at the amount of cost minus accumulated depreciation and accumulated impairment losses.

The investment real estate acquired by the lease is initially measured at cost (including the original measurement amount of the lease liability and the lease payment paid before the lease start date), and subsequently measured at the amount after the cost minus the accumulated depreciation and accumulated impairment losses, and the lease liability is adjusted again. All investment real estate is depreciated on a straight-line basis. Real estate, plant and equipment are transferred to investment real estate on the book amount at the end of self-use.

When investment real estate is delisted, the difference between the net disposal price and the asset's book value is recognized in profit and loss.

(11) Impairment of non-financial assets

The consolidated company assesses on each balance sheet date whether there are any indications that real property, plant and equipment, right-of-use assets, and intangible assets may have been impaired. If there is any sign of impairment, estimate the recoverable amount of the asset. If the recoverable amount of an individual asset cannot be estimated, the consolidated company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of the fair value less the cost of sale and its use value. If the recoverable amount of an individual asset or cash-generating unit is lower than its book value, the book value of the asset or cash-generating unit is reduced to its recoverable amount, and the impairment loss is recognized in profit and loss.

When the impairment loss is subsequently reversed, the carrying amount of the asset or cashgenerating unit is adjusted to the revised recoverable amount, but the increased carrying amount does not exceed the asset or cash-generating unit if the impairment is not recognized in the previous year which the book value determined at the time of the loss (minus amortization or depreciation). The reversal of the impairment loss is recognized in the profit and loss.

(12) Financial instruments

Financial assets and financial liabilities are recognized on the consolidated balance sheet of the consolidated company which becomes one of the contractual terms of the instrument.

When financial assets and financial liabilities are initially recognized, if financial assets or financial liabilities are not measured at fair value through profit and loss, they are directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value plus the transaction cost measurement. Directly attributable to the acquisition or issuance of financial assets or financial liabilities measured at fair value through profit and loss is immediately recognized as profit and loss.

Financial assets
Conventional transactions of financial assets are recognized and delisted by accounting on the transaction date.
(1) Type of measurement

The types of financial assets held by the consolidated company are financial assets measured at amortized cost and equity instruments measured at fair value through other comprehensive gains and losses.

A. Financial assets measured at amortized cost
If the financial assets invested by the consolidated company meet the following two conditions, they are classified as financial assets measured at amortized cost:
(a) It is held under a certain business model, the purpose of which is to hold financial assets
(b) The contract terms generate cash flows on a specific date, and these cash flows are completely to collect contractual cash flows; and to pay the principal and interest on the amount of principal in circulation.

Financial assets measured at amortized cost (including cash and cash equivalents, accounts receivable at amortized cost, other receivables and other financial assets) are determined by the effective interest method after initial recognition The total book value is measured after deducting any impairment loss after amortization, and any foreign currency exchange gains and losses are recognized in profit and loss.

Except for the following two cases, interest income is the effective interest rate multiplied by the financial asset of total book amount:

(a) For purchased or created credit-impaired financial assets, interest income is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial asset.
(b) For financial assets that are not purchased or original credit impairment, but
- subsequently become credit impairment, you should be confident to calculate interest income by multiplying the effective interest rate by the amortized cost of the financial asset from the next reporting period after the impairment.
- Equivalent cash includes fixed deposits that are highly liquid and can be converted into fixed cash at any time within 3 months from the date of acquisition, and are used to meet short-term cash commitments.
B. Through other comprehensive profit and loss equity instruments measured at fair value to invest in a merged company, at the time of initial recognition, an irrevocable choice may be made, which is not to hold for trading and is not recognized by the purchaser of the business merger or has the consideration. Instrument investment is designated to be measured at fair value through other comprehensive gains and losses.

Equity instrument investments measured at fair value through other comprehensive gains and losses are measured at fair value, and subsequent changes in fair value are reported in other comprehensive gains and losses and accumulated in other equity. At the time of investment disposal, the accumulated profits and losses are directly transferred to retained earnings and are not reclassified as profits and losses.

The dividends of equity instrument investments measured at fair value through other comprehensive gains and losses are recognized in the profit and loss when the rights of the consolidated company to receive payments are established, unless the dividend clearly represents the recovery of part of the investment cost.

(2) Impairment of financial assets
A. The consolidated company assesses the impairment losses of financial assets (including accounts receivable) measured at amortized cost based on expected credit losses on each balance sheet date.
B. Accounts receivable shall be recognized as an allowance loss based on the expected credit loss during the duration. For other financial assets, first assess whether the credit risk has increased significantly since the initial recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss, and if it has increased significantly, it is recognized based on the lifetime expected credit loss Allowance for losses.
C. Expected credit loss is the weighted average credit loss based on the risk of default. The 12month expected credit loss refers to the expected credit loss caused by the possible default event of the financial instrument within 12 months after the reporting date, and the lifetime

expected credit loss represents the expected credit loss caused by all possible default events during the expected lifetime of the financial instrument. The impairment loss of all financial assets is reduced by the allowance account.

(3) Delisting of financial assets

The consolidated company only lapses in the contractual rights from the cash flow of financial assets. It has transferred the financial assets and almost all risks and reports of the ownership of the assets.

When transferring to other enterprises, the financial assets are only delisted. When the financial assets measured at the amortized cost are delisted as a whole, their book amount is the difference between the consideration received is recognized in profit and loss. When the equity instrument investment measured at fair value through other comprehensive gains and losses is declassified as a whole, the accumulated gains and losses are directly transferred to the retained earnings are not reclassified as profit or loss.

Financial liabilities and equity instruments
(1) Classification of liabilities or equity

The debt and equity instruments issued by the amalgamating company are classified as financial liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

An equity instrument refers to any contract that recognizes the remaining equity of the consolidated company after deducting all its liabilities from its assets. The equity instruments issued are recognized by the consolidated company after the acquired price deducting the cost of direct issuance.

(2) Financial liabilities

Financial liabilities are not held for trading and are not designated as those measured at fair value through profit or loss (including payables). The initial recognition is based on fair value plus direct attributable transaction cost measurement; follow-up evaluation adopts effective interest rate method to amortize this measure.

(3) Delisting of financial liabilities

The consolidated company delists financial liabilities when contractual obligations have been fulfilled, cancelled, or expired debt.

When excluding financial liabilities, the difference between its book value and the total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) is recognized as profit and loss.

(13) Liability provision

When the consolidated company has current obligations (statutory or constructive obligations) due to past events, and is likely to be required to pay off the obligations, and the amount of the obligations can be reliably estimated, the liability provision shall be recognized. The amount recognized as a liability reserve is based on the risk and uncertainty of the obligation, and is the best estimate of the expenditure required to settle the obligation on the balance sheet date. The liability reserve is measured by discounting the estimated cash flow of the settlement obligation.

(14) Income recognition

After the consolidated company recognizes the performance obligations in the customer contract, it allocates the transaction price to each performance

obligations, and recognize income when each performance obligation is met. Commodity sales revenue

Commodity sales revenue comes from the manufacture and sale of polarizers. Sales revenue is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the customer and the combined company has no outstanding performance obligations that may affect the customer's acceptance of the product. Because when the goods arrive at the customer's designated location, the customer has the right to set the price and use of the goods and bears the main responsibility for resale, and bears the risk of obsolescence and obsolescence of the goods, the merged company recognizes revenue and receivables at that point in time Accounts. The advance receipts received before the arrival of the goods are recognized as contract liabilities.
Commodity sales revenue is measured by the fair value of the consideration received or receivable, and deducted estimated customer returns, discounts and other similar discounts. The combined company estimates possible sales returns and discounts based on historical experience and other known reasons, and recognizes them accordingly refund liabilities and related rights to return products.

(15) Rent

The consolidated company assesses whether the contract belongs to (or contains) a lease on the date of contract establishment.

The merged company is the lessor
When the lease term is to transfer almost all the risks and rewards attached to the ownership of the asset to the lessee classifies it as a finance lease. All other leases are classified as operating lease. When the consolidated company subleases the right-of-use asset, the right-of-use asset (not the underlying asset) is used to determine the classification of the sublease. However, if the main lease is a short-term when leasing, the sublease is classified as an operating lease.

Under operating leases, lease payments after deduction of lease incentives are recognized as income on a straight-line basis during the relevant lease period. The lease negotiation with the lessee is related to lease repair from the effective date of the change, it will be treated as a new lease.

The consolidated company is the lessee
Except for the lease payments of low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses during the lease period on a straight-line basis, and all other leases are opened in the lease. The right-of-use assets and lease liabilities are recognized on the inception date.

The right-of-use asset is initially measured at cost, which comprises the initial measurement of the lease liabilities, adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of costs needed to dismantle, remove and restore the underlying assets and the subsequent measures are measured at the cost after deducting the accumulated depreciation and accumulated impairment losses, and the remeasurement amount of the lease liability is adjusted.

Except for those that meet the definition of investment real estate, right-of-use assets are separately expressed in the consolidated balance sheet, and the recognition and balance of right-ofuse assets that meet the definition of investment real estate, please refer to Note 4 (9) Accounting Policy for Investment Real Estate.

The right-of-use asset adopts a straight-line basis from the lease start date to the end of its useful life or the lease period expires, the earlier of the two shall be depreciated.

The lease liability was originally measured at the present value of the lease payment. If the implicit interest rate of the lease is easy to determine, the lease payment is discounted using that

interest rate. If the interest rate is not easy to determine, use the lessee to increase the borrowing interest rate.

Subsequently, the lease liability is measured on the amortized cost basis using the effective interest method, and the interest expense is amortized during the lease period. If the lease period or the index or rate used to determine the lease payment changes resulting in a change in the future lease payment, the consolidated company will continue measure the lease liability and relatively adjust the right-of-use asset. However, if the book value of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in the profit and loss. For lease modifications that are not treated as separate leases, the scope of the lease is reduced The remeasurement of the lease liability is to reduce the right-of-use asset and recognize the profit and loss of the partial or full termination of the lease; the remeasurement of the lease liability for other modifications is to adjust the right-of-use asset, and the lease liability is separately expressed in the consolidated balance sheet.

The consolidated company and the lessor negotiated rents directly related to the COVID-19, adjusted the rents due before June 30, 2021, resulting in a decrease in rents. These negotiations did not materially change other lease terms. The consolidated company chooses to adopt practical expedients to handle all rental negotiations that meet the aforementioned conditions, and does not assess whether the negotiation is a lease modification, but recognizes the reduction of lease payments in the profit and loss when the concession event or situation occurs, and relatively reduces the lease debt.

(16) Employee benefits

Short-term employee benefits are measured by the expected non-discounted amount of cash paid, and are recognized as expenses when the relevant services are provided.

For the definite allocation plan, the amount of the retirement fund that should be allocated is recognized as the current pension expense on the basis of accrual. The advance payment is recognized as an asset within the scope of refundable cash or reduced future payments.

The net obligation under the definite benefit plan is calculated by discounting the amount of future benefits earned by the employee for the current or past services, and the current value of the definite benefit obligation on the balance sheet date minus the fair value of the plan assets. The net obligation to determine benefits is calculated by the actuary every year using the projected unit benefit method, and the discount rate is determined by referring to the market yield rate of high-quality corporate bonds that are consistent with the currency and period of the determined benefit plan on the balance sheet date; in high-quality corporate bonds For countries with no deep market, the market yield rate of government bonds (at the balance sheet date) is used. The remeasurement amount generated by the determined benefit plan is recognized in other comprehensive profit and loss in the current period and included in the retained surplus. The related expenses of the previous service cost are immediately recognized as a loss.

Resignation benefits are benefits provided when the employee's employment is terminated before the normal retirement date or when the employee decides to accept the company's welfare invitation in exchange for termination of employment. The consolidated company recognizes expenses when the offer for resignation benefits can no longer be revoked or when the relevant reorganization costs are recognized earlier, and it is not expected that the benefits that are fully paid off within 12 months after the balance sheet date should be granted discount.

(17) Income taxes

1. Current income tax

The consolidated company determines the current income (loss), based on which to calculate the payable (recoverable) income tax.

The undistributed surplus calculated in accordance with the provisions of the Income Tax Law of the Republic of China is subject to additional income tax, recognized by the resolution of the Shareholders’ annual meeting.

The adjustment of income tax payable in previous years is included in current income tax.

2. Deferred income tax

Deferred income tax is calculated based on the temporary difference between the book value of assets and liabilities and the tax basis for calculating taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when there is likely to be taxable income for deduction of temporary differences or loss deductions.

Taxable temporary differences related to investment in subsidiaries are recognized as deferred income tax liabilities, but if the consolidated company can control the timing of the reversal of the temporary difference, and the temporary difference is likely to not revert in the foreseeable future except. The deductible temporary differences related to this type of investment are recognized as deferred income tax only if it is likely to have sufficient taxable income to realize the temporary difference, and within the scope of expected return in the foreseeable future assets.

The carrying amount of deferred income tax assets is reviewed on each balance sheet date, and the carrying amount is reduced for those that are no longer likely to have sufficient taxable income to recover all or part of their assets. Those that were not previously recognized as deferred income tax assets are also reviewed on each balance sheet date and are likely to generate taxable income for the recovery of all or part of their assets in the future, increase the carrying amount. Deferred income tax assets and liabilities are measured by the tax rate for the current period of expected debt settlement or asset realization. The tax rate is based on the tax rate and tax law that has been legislated or substantively legislated on the balance sheet date, and the deferred tax liabilities and assets are measured It reflects the tax consequences arising from the manner in which the consolidated company expects to recover or settle the book value of its assets and liabilities on the balance sheet date.

3.Current and deferred income tax

Current and deferred income taxes are recognized in profit or loss, but current and deferred income taxes related to items recognized in other comprehensive income or directly included in equity are recognized in other comprehensive profit or loss may be directly included in equity.

5. Critical Accounting Judgments and Key Sources of Estimation and Assumption Uncertainty

When the consolidated company adopts the accounting policies described in Note 4, for those who cannot easily obtain information about the carrying amounts of assets and liabilities from other sources, the management must base on historical experience and other relevant factors to make relevant judgments, estimates and assumptions. The estimates and related assumptions are based on historical experience and other factors deemed relevant. Actual results may differ from estimates. Estimates and basic assumptions are continuously reviewed. If the revision of the estimate only affects the current period, it shall be recognized in the current period of the revision of the accounting estimate. If the revision of the accounting estimate affects both the current period and the future period, it shall be recognized in the current period and the future period of the estimate revision. The main sources of uncertainties in major accounting judgments, estimates and assumptions of the consolidated company are as follows:

(1) Evaluation of inventories

Since inventory must be priced at the lower of cost and net realizable value, the merging company must use judgment and estimation to determine the net realizable value of the inventory at the end of the financial reporting period. Due to the rapid changes in the industry, the consolidated company assesses the amount of inventory at the end of the financial reporting period due to normal depletion, obsolescence, or no market sales value, and offsets the inventory cost to the net realizable value. This inventory evaluation is mainly based on the product demand in a specific period in the future, which may cause major changes.

(2) Estimated impairment of financial assets
The estimated impairment of accounts receivable is based on the assumption of default rate and expected loss rate of the consolidated company. The consolidated company considers historical experience, current market conditions and forward-looking information to make assumptions and select input values for impairment assessment. For important assumptions and input values used, please refer to Note 6 (4). If the actual future cash flow is less than expected, it may be incurred significant impairment losses.
(3) Assessment of impairment of non-financial assets
In the process of asset impairment assessment, the consolidated company must rely on subjective judgments and determine the independent cash flow of a specific asset group, the number of years of asset durability, and the possible future income and expenses of a specific asset group based on the use of assets and industrial characteristics. Changes or estimated changes brought about by the company's strategy may cause significant impairment or reversal of recognized impairment losses in the future.
(4) The realizability of deferred income tax assets
Deferred income tax assets are recognized when there is likely to be sufficient taxable income in the future to deduct temporary differences. When assessing the feasibility of deferred income tax assets, significant accounting judgments and estimates of the management must be involved, including the expected future sales revenue growth and profit rate, tax exemption period, applicable income tax deductions and tax regulations and cost-effective assumption. Any changes in the global economic environment, industrial environment and laws and regulations may cause major adjustments to deferred income tax assets.

6. Description of Significant Accounts

(1) Cash

sh
Cash on hand Demand deposits and checking account Total	December 31, 2021 $ 617 69,553 $ 70,170	December 31, 2020
		$ 485 171,919
		$ 172,404

(2) Financial assets measured at fair value through other comprehensive income

Equity instrument investment

Non-current Domestic stock company shares Non- listed stock of company Foreign stock company shares Non-listed stock of company Total	December 31, 2021 $ 20,000 9,847 $ 29,847	December 31, 2020
		$ `─` 26,262
		$ 26,262

The consolidated company’s investment in foreign unlisted companies is for the purpose of medium and long-term holding, and it is expected profit through long-term investment. The management believes that if the fair value fluctuations of these investments are included in the profit and loss, it is inconsistent with the aforementioned investment plan, so they choose to designate the investment through other comprehensive gains and losses measured at fair value.

(3) Financial assets at amortized cost

December 31, 2021 Current Domestic investment Time deposits with original maturity more than three months $ 54,803 Interest rate range 0.120% ~1.55%	December 31, 2020
	$ 64,577
	0.120% ~1.30%

For information on providing guarantees for the current financial assets measured at amortized cost, please refer to Note 8.

(4) Net notes and accounts receivable

Notes receivable (Listed on other current assets) Occurs due to business Less: loss allowance Accounts receivable Measured at amortized cost Total book amount Less: loss allowance	December 31, 2021 $ 3,464 (3,413) $ 51 $ 739,175 (16,415) $ 722,760	December 31, 2020
		$ 3,527 (3,413)
		$ 107
		$ 792,863 (21,954) $ 770,909

In principle, the credit investment period of the consolidated company to customers is 30 to 120 days after the invoice date. In order to reduce credit risk, the management of the consolidated company assigns a dedicated team to credit limit determination, credit approval and other monitoring procedures to ensure overdue accounts receivable appropriate actions have been taken for the recovery. In addition, the consolidated company will gradually review the recoverable amount of accounts receivable to ensure that the accounts receivable that cannot be recovered have been properly deducted.
The consolidated company recognizes the allowance loss of accounts receivable based on the expected credit loss during the duration. The expected credit loss during the existence period takes into account the past default records of customers and the current financial situation, industrial economic situation, and also considers the overall economic and industrial outlook. Separate individual customers into different risk groups and recognize allowance losses based on the expected loss rate of each group lost.
If there is evidence that the counterparty of the transaction is facing serious financial difficulties and the consolidated company cannot reasonably expect the recoverable amount, the consolidated company directly writes off the relevant accounts receivable, but will continue to pursue recourse activities. The amount recovered due to recourse is recognized in profit and loss.
The allowance loss for accounts receivable of the combined company was as follows:

		December 31, 2021	December 31, 2021	December 31, 2021
Not past due	Past due 1~30 days	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
0.83`％～` 1.31`％` $ 604,065 (8,194)	1.02`％～` 1.61`％` $ 86,056 (979)	1.21`％～` 1.91`％` $ 23,160 (442)	1.4`％～` 2.52`％` $ 17,379 (418)	1.79`％～` 100`％` $ 8,515 (6,382)	$ 739,175 (16,415)
$ 595,871	$ 85,077	$ 22,718	$ 16,961	$ 2,133	$ 722,760

		December 31, 2020	December 31, 2020	December 31, 2020
Not past due	Past due 1~30 days 0.59`％～` 0.68`％` $ 127,289 (1,576) $ 125,713	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
0.52`％～` 0.59`％` $ 587,271 (8,518)		0.66`％～` 0.76`％` $ 30,231 (234)	0.73`％～` 0.92`％` $ 6,784 (1,054)	0.87`％～` 100`％` $ 41,288 (10,572)	$ 792,863 (21,954)
$ 578,753		$ 29,997	$ 5,730	$ 30,716	$ 770,909

The movement of the loss allowance for notes and accounts receivable was as follows:

Balance at the beginning of the period Impairment Loss in the current period Actual write-off for the period Reclassified to related party in the current period Balance at the end of the period	2021
	Notes receivable $ 3,413 `－` `－` `－` $ 3,413	Accounts receivable
		$ 21,954 34,440 (1,916) (38,063)
		$ 16,415

Balance at the beginning of the period Impairment Loss in the current period Actual write-off for the period Exchange rate effects Balance at the end of the period	2020
	Notes receivable $ `－` 3,413 `－` `－` $ 3,413	Accounts receivable
		$ 25,825 8,716 (12,590) 3
		$ 21,954

(5) Other accounts receivable

Operating lease receivable Refundable business tax Equipment receivable Other accounts receivable-other Other accounts receivable- related party Sub-total Less: loss allowance Total	December 31, 2021 $ 9,730 19,346 `－` 3,394 5,834 38,304 (2,127) $ 31,677	December 31, 2020
		$ 15,645 `－` 1,150 149,585 `－`
		166,380 (17,794)
		$ 148,586

The movement of the loss allowance for other accounts receivable was as follows:

Balance at the beginning of the period (Reversal of ) Impairment Loss in the current period Balance at the end of the period entories Finished goods Work in process Raw materials Inventory in transit Total	2021 $ 17,794 (15,667) $ 2,127 December 31, 2021 $ 366,258 403,679 369,944 24,880 $ 1,164,761	2020
		$ `－` 17,794
		$ 17,794
		December 31, 2020
		$ 418,556 298,255 232,206 8,117
		$ 957,134

(6) Inventories

The amounts recognized as cost of sales in relation to inventories were as follows:

Inventories sold Gain from price recovery of inventory Unapplied manufacturing expenses Income from Sale of Scrap and Wastes Others Total	2021 $ 2,501,399 (27,984) 26,404 (88,881) 55 $ 2,410,993	2020
		$ 2,015,387 (29,690) 18,108 (31,591) `－`
		$ 1,972,214

The gain from price recovery in the net realizable value of the inventories of the consolidated company in 2021 and 2020, was mainly due to the sale of the inventory that had been assessed for loss in previous years.

(7) Non-current assets to be sold

Houses and Buildings Mechanical Equipment Transportation Equipment Office Equipment Other Devices Less: Accumulated depreciation Less: Accumulated impairment Total	December 31, 2021 $ `－` `－` `－` `－` `－` `－` `－` $ `－`	December 31, 2020
		$ 6,685,469 495,716 17,576 310 4,518 (4,090,394) (6,854)
		$ 3,106,341

In order to revitalize assets and reduce operating expenses, the consolidated company sold the Plant in Southern Taiwan Science Park and related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd. (hereinafter referred to as TSMC). On October 19, 2020, the real estate sales contract was signed. The total price was NT$3,832,500,000 (tax included), and the payment was collected in installments according to the contract and remitted to the designated bank trust account. As of December 31, 2020, the bank trust account has received NT$2,572,500,000 and allocated NT$75,000,000 to the consolidated company (other current liabilities listed on December 31, 2020 were NT$71,429,000), and the remaining amount was NT$1,260,000,000. The bank trust account was fully recovered on January 5, 2021, and after deducting the cost of selling and repaying the bank loan, the remaining amount of NT$168,820,000 was transferred to the consolidated company on January 29, 2021. The transfer of ownership has been completed on January 6, 2021, and the disposal benefit of non-current assets to be sold is recognized as NT$522,291,000. The consolidated company signed a plant and plant equipment leasing contract with Hong-Ju Precision Technology Co., Ltd. (hereinafter referred to as Hong-Ju Company) in August 2018. The lease period is 5 years; because the consolidated company plans to sell the Plant and its related subsidiary in Southern Taiwan Science Park, therefore, on October 15, 2020, the company signed a lease agreement to terminate the plant and plant equipment with Hong-Ju Company. Both parties agreed that the lease contract would be terminated on September 30, 2020. In addition, in order to compensate Hong-Ju Company for the early termination of the contract, the consolidated company agreed to pay Hong-Ju Company NT$75,000,000 in compensation for the damages incurred. The consolidated company has estimated the relevant loss of NT$75,000,000 in the accounts in September 2020, and paid NT$40,000,000 and NT$35,000,000 in November 2020 and January 2021, respectively. Others on December 31, 2020 Payables - Compensation payables are listed as NT$35,000,000. In order to compensate the consolidated company for the losses indicated by the early termination of the contract by the Hong-Ju Company, TSMC signed a supplementary agreement and a compensation agreement with the consolidated company on December 25, 2020. TSMC agrees to pay compensation of NT$5,500,000 to the consolidated company after the completion of the registration of the ownership transfer of the building and the completion of the demolition of the auxiliary equipment by the consolidated company. The auxiliary equipment was dismantled and sold at a price of NT$36,750,000 (tax included) in January 2021, and recognized as other income of NT$35,000,000. The above compensation of NT$5,500,000 was paid by TSMC on February 18, 2021. The Consolidated Company recognized this compensation as other income.

100

In order to revitalize assets and reduce operating costs, the Board of Directors resolved to sell the No.5 Factory in Pingzhen on August 8, 2019, and signed the real estate selling and purchasing contract on November 21, 2019, with a total price of NT$201,523,000 (tax not included). The transfer of the ownership of the land and buildings was completed on January 8, 2020, and the disposal benefit of non-current assets held for sale was N$50,607,000 and the gain of reversal of impairment loss of non-current assets held for sale was NT$1,185,000.
Please refer to Note 8 for information on guarantees for non-current assets held for sale.
(8) Investments accounted for using equity method affiliated companies

Investment in affiliated companies

Individually insignificant December 31, 2021 December 31, 2020 affiliated companies Foreign unlisted (cabinet) companies － Shenzhen Lihuasheng $ 9,531[$ ] Technology Co., Ltd.

The consolidated company's ownership interests and voting rights in affiliated companies on the balance sheet date:

Company Name	December 31, 2021	December 31, 2020 `－`
Shenzhen Lihuasheng Technology Co., Ltd.	32`％`

In order to enhance the competitiveness of production, the management of the consolidated company decided to invest in Shenzhen Lihuasheng Technology Co., Ltd. on April 27, 2021 through the resolution of the Board of Directors. The shareholding ratio is 32%, which has a significant influence on Lihuasheng Technology Co., Ltd. and is evaluated by equity method.

The general information of the individual affiliated companies that are not material is as follows:

Share of the consolidated company Net loss for the period Other comprehensive gains and losses Total comprehensive profit and loss	2021 $ (24,518) (685) $ (25,203)	2020
		$ `－` `－`
		$ `－`

The profits and losses enjoyed by the investment and consolidated companies using the equity method are recognized based on the financial reports of the related companies that have been audited by accountants during the same period.

101

(9) Property, plant and equipment

2021

Item	Effect of exchange rate changes	Balance at December 31, 2021
Cost Land Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated depreciation Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated impairment Buildings Machinery Transportation equipment Office equipment Other Sub-total Total	$ `－` `－` (529) (7) (92) (10)	$ 479,697 3,192,311 3,837,472 105,763 129,194 50,166
	(638)	7,794,603
	`－` (497) (4) (82) (9)	1,675,170 3,705,256 101,073 120,248 46,313
	(592)	5,648,060
	`－` (19) `－` `－` `－`	17 13,362 1,177 2,768 404
	(19)	17,728
	$ (27)	$2,128,815

102

Item			2020	2020
	Balance at January 1, 2020 $ 479,697 3,236,994 4,920,893 157,928 261,016 92,051 9,148,579 1,594,609 4,705,447 147,611 246,177 84,754 6,778,598 30,670 2,427 3,368 1,779 38,244 $2,331,737	Additions $ `－` 1,141 7,549 88 417 330 9,525 57,237 29,768 1,815 2,194 832 91,846 `－` `－` `－` `－` `－` $ (82,321)	Disposals $ `－` (1,440) (424,808) (31,705) (16,824) (33,962) (508,739) (1,308) (408,122) (29,863) (15,849) (31,140) (486,282) (14,683) (1,228) (348) (1,307) (17,566) $ (4,891)	Reclassification $ `－` (173) (413,572) (14,411) (217) (898) (429,271) (170) (383,834) (13,570) (49) (838) (398,461) (117) `－` `－` `－` (117) $ (30,693)	Effect of exchange rate changes	Balance at December 31, 2020
Cost Land Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated depreciation Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated impairment Machinery Transportation equipment Office equipment Other Sub-total Total					$ `－` `－` 1,369 45 204 23	$ 479,697 3,236,522 4,091,431 111,945 244,596 57,544
					1,641	8,221,735
					`－` 1,285 38 181 21	1,650,368 3,944,544 106,031 232,654 53,629
					1,525	5,987,226
					38 `－` `－` `－`	15,908 1,199 3,020 472
					38	20,599
					$ 78	$2,213,910

(a) The real property, plant and equipment of the consolidated company are depreciated based on the following durability years:

Housing and construction Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Mechanical equipment 1 to 24 years Other equipment 2 to 17 years

(b) Details of property, plant and equipment were pledged as collateral of long-term borrowings and loans, please refer to Note 8.

103

(10) Leasing arrangements- lessee

1.Right-of-use assets

(a) The carrying amount of right-of-use assets and the depreciation charge are as follows:

Carrying amount of right-of-use asset Land Transportation equipment Office equipment Total	December 31, 2021 $ 1,668 1,957 803 $ 4,428	December 31, 2020
		$ 3,336 1,988 1,262
		$ 6,586

Carrying amount of right-of-use asset Land Transportation equipment Office equipment Total	2021	2020
	$ 1,668 1,591 459	$ 1,668 1,608 459
	$ 3,718	$ 3,735

The consolidated company leases the land located in the Southern Science Industrial Park and acquires the land use right contract in the Suzhou High-tech Zone of the People's Republic of China is sub-leased in the form of operating leases, and the relevant use right assets are listed as investment real estate. Please refer to Note 6 (12). The above-mentioned amount of right-of-use assets does not include right-of-use assets that meet the definition of investment real estate.

(b) The additions of the right-of-use assets of the consolidated company in 2021 and 2020 were respectively NT$1,560,000 and NT$623,000.
(c) Except for the addition and recognition of depreciation expenses listed above, there was no significant sublease or depreciation of the right-of-use assets of the combined company in 2021 and 2020.

2. Leasing liabilities

Carrying amount of leasing liabilities Current Non-current	December 31, 2021 $ 3,235 $ 1,277	December 31, 2020 $ 18,753 $ 693,008

104

The discount rate ranges for lease liabilities are as follows:

Land Transportation Equipment Office Equipment	December 31, 2021 1.8513`％` 1.8513`％` 1.8513`％`	December 31, 2020
		1.8513`％` 1.8513`％` 1.8513`％`

3. Important rental activities and terms

The assets leased by the consolidated company include land, official vehicles and photocopiers. The contract period usually ranges from 3 to 5.5 years. The lease is based on individual editors, with various terms and conditions, except that the tribute of the leased goods cannot be used for lending and holding. No other restrictions are imposed.

The consolidated company leased land to the Southern Science and Technology Industrial Park Administration Bureau from August 7, 2008 to December 31, 2044, and agreed to adjust the lease payment every 2 years. The lease can be renewed when the lease term ends.

The consolidated company was to activate assets and reduce operating expenses, on August 12, 2020, the board of directors decided to sell the branch in Southern Taiwan Science Park and its related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd., and signed a real estate purchase contract on October 19, 2020. The transfer of ownership was completed on January 6, 2021, and the land use right contract with the Southern Science Industrial Park was terminated ahead of schedule on January 5, 2021. From January 1st to December 31, 2021, due to the early termination of the lease contract, the recognition of lease modification benefits was NT$11,398,000.

In 2020, due to the COVID-19 severely affecting the market economy, the consolidated company applied to the Southern Science Industrial Park Administration for the land lease fee extinction plan, and the Science Industrial Park Administration agreed to reduce the rent amount from January 1 to June 30, 2020. The consolidated company recognized the profit of NT$2,806,000 from the change in lease payment caused by the rent reduction as other income.

The consolidated company signed a land use right contract in the Suzhou High-tech Zone of the People's Republic of China in 2011. The lease term was 50 years, and the lease was paid in full when the lease was signed. Have land use rights, income rights and transfers within the land use period.

4. Other rental information

Short-term rental expenses Low-value asset lease expenses Total cash outflow from lease	2021 $ 6 $ 78 $ 4,308	2020
		$ 74
		$ 166
		$ 29,358

The consolidated company chooses to pay for transportation equipment that meets short-term leases and low-value asset leases. The recognition exemption is applicable to certain office equipment leases under lease, and the recognition of such leases is not relevant. Related right-of-use assets and lease liabilities.

105

(11) Leasing arrangements- lessor

The assets leased by the consolidated company include land, buildings, machinery and equipment, etc., and the contract period ranges from 1 to 12 years. The lease contract is negotiated individually and contains various terms and conditions. In order to preserve the use of leased assets, the lessor shall not sublet or pledge all or part of the leased object and agreed matters.
The benefits recognized by the consolidated company based on the operating lease contract are as follows:

Rental income	2021 $ 37,109	2020
		$ 132,336

The period ranges recognized by the consolidated company based on the operating lease contract are as follows:

The 1styear The 2ndyear The 3thyear The 4thyear The 5thyear Over 5 years Total	December 31, 2021 $ 40,458 40,733 40,761 41,324 40,964 177,761 $ 382,001	December 31, 2020
		$ 34,510 34,137 35,285 35,241 35,592 215,852
		$ 390,617

(12) Investment property

Item			2021	2021
	Balance at January 1, 2021	Additions	Disposals	Reclassification	Effect of exchange rate changes	Balance at December 31, 2021
Cost Buildings Right-of-use assets Sub-total Accumulated depreciation Buildings Right-of-use assets Sub-total Accumulated impairment Buildings Total	$ 415,526 753,138	$ `－` `－`	$ `－` (733,905)	$ 50,492 `－`	$ (3,125) (145)	$ 462,893 19,088
	1,168,664	`－`	(733,905)	50,492	(3,270)	481,981
	183,429 41,198	12,146 787	`－` (40,443)	19,208 `－`	(1,366) (8)	213,417 1,534
	224,627	12,933	(40,443)	19,208	(1,374)	214,951
	43	`－`	`－`	(17)	`－`	26
	$ 943,994	$ (12,933)	$(693,462)	$ 31,301	$ (1,896)	$ 267,004

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2020

				2020
Item	Balance at January 1, 2020	Lease liabilities remeasurem ent	Additions	Disposals	Reclassifica tion	Effect of exchange rate changes	Balance at December 31, 2020
Cost Buildings Right-of-use assets Sub-total Accumulated depreciation Buildings Accumulated impairment Sub-total Accumulated impairment Buildings Total	$ 7,087,230 723,499	$ `－` 29,323	$ 5,410 `－`	$ (315) `－`	$ (6,683,619) `－`	$ 6,820 316	$ 415,526 753,138
	7,810,729	29,323	5,410	(315)	(6,683,619)	7,136	1,168,664
	3,658,148 20,169	`－` `－`	131,848 21,009	(219) `－`	(3,609,412) `－`	3,064 20	183,429 41,198
	3,678,317	`－`	152,857	(219)	(3,609,412)	3,084	224,627
	136,037	`－`	`－`	(135,994)	`－`	`－`	43
	$ 3,996,375	$ 29,323	$ (147,447)	$ 135,898	$ (3,074,207)	$ 4,052	$ 943,994

The investment real property is depreciated based on the following durability years:

Buildings Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Right-of-use assets 35.8 years

The fair value of investment real estate held by the consolidated company is evaluated by independent experts on the date of each balance sheet using the third-level input value. The aforementioned evaluation of the main building of the plant and the auxiliary facilities of the building were evaluated using the cost method and the fixed rate method (declining balance method) as of December 31, 2021 and 2020. The evaluation of the land use right assets in the Southern Science Industrial Park on December 31, 2021 and 2020, was based on the bonus period and the rent of each contract, and considering the rent range adjusted according to the announced land price, the discount rate obtained by the risk premium method is used as the implicit interest rate of the lease, and finally discounted appraisal of the value of the right to use assets. The evaluation of the land use right assets in the Suzhou High-tech Zone of the People's Republic of China adopted the comparative method on December 31, 2021 and 2020 for the consolidated company.

The fair value of investment real estate of the consolidated company on December 31, 2021 and 2020 was as follows:

Fair value	December 31, 2021 $ 340,356	December 31, 2020
		$ 1,007,119

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Rental income and direct operating expenses of the investment real estate of the consolidated company:

Rental income from investment real estate Direct operating expenses incurred by investment real estate that generates rental income in the current period Direct operating expenses incurred by investment real estate that does not generate rental income during the current period	2021 $ 36,245 $ 12,657 $ 276	2020
		$ 131,470
		$ 32,085
		$ 149,514

In order to activate assets and reduce operating expenses, the Board of directors resolved to sell the branch in Southern Science Industrial Park and related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd., and signed a real estate purchase agreement on October 19, 2020, and the total price is NT$3,832,500,000 (tax included). Since the sale price deducted the disposal cost is higher than the book value, the real estate plant and equipment impaired the reversal benefits and investment real estate impaired the reversal benefits of NT$10,980,000 and NT$135,987,000 has been included in the other profit and loss in the consolidated income statement. The consolidated company determines the recoverable amount based on the selling price of the plant deducted the cost of disposal, and the relevant fair value belongs to the first level of fair value measurement.
Please refer to Note 8 for information on guarantees provided by investment real estate.

(13) Short-term borrowings

Borrowings without collateral Collateral borrowings Non-financial institution borrowing Total Interest rate	December 31, 2021 $ `－` 602,478 `－` $ 602,478 1.5`％～`2.357`％`	December 31, 2020
		$ 529,453 172,837 8,754
		$ 711,044
		0.6612`％～`1.84`％`

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The company signed a loan contract with Entie Commercial Bank on May 3, 2021, which is a shortterm credit line contract with a short-term guaranteed loan amount of NT$2,800,000,000. The first allocation of the credit line is limited to repayment of the bank line under the creditor's rights and debt negotiation mechanism. The company should send a letter to notify the main creditor's rights and debts negotiating banks before the allocation, and obtain the creditor's rights and debts negotiating bank group to send a letter or creditor's rights meeting to reply to agree.

The company has sent a letter on April 28, 2021 to notify the main credit and debt negotiation banks, and obtained the written consent of the credit and debt negotiation bank group on May 18, 2021. After obtaining the written consent of the credit and debt negotiation bank group, the company allocated the loan amount on May 20, 2021 to fully repay the bank loans under the credit and debt negotiation mechanism, and at the same time, the credit and debt negotiation mechanism was terminated.

Considering the overall operation and capital planning, the company signed a supplementary contract with Entie Commercial Bank on December 27, 2021, changing the short-term guarantee loan amount of NT$1,790,000,000 to the medium-term loan guarantee amount, and re-signed a short-term loan amount of NT$800,000,000. As for the guaranteed loan amount, the Company classifies short-term loans of NT$1,790,000,000 as long-term loans from the date of signing.

In accordance with the ”Key Points for the Ministry of Economic Affairs to Assist Enterprises in Handling Bank Credit and Debt Negotiations'', Optimax Technology Corporation applied to the Industrial Bureau of the Ministry of Economic Affairs on April 10, 2020, to assist in the negotiation of bank claims and debts, requesting that short-term credit extension periods be extended to December 7, 2021, and medium and long-term loans extended for one year. The bank was held a delegation meeting on June 19, 2020, and on November 17, 2020, the majority of creditor banks agreed through written consent.
(1) Short-term credit extension (including account receivable undertaking): Renew or extend the contract according to the original conditions (until December 7, 2021) based on the current credit limit approved by the banks.
(2) Short-term credit application method: until December 7, 2021, within the application period using this quota cyclically.
Non-financial institution borrowing is borrowing from the main management.
Please refer to Note 8 for the provision of assets as guarantees for short-term loans.

(14) Accounts payable

Account payable	December 31, 2021 $ 138,112	December 31, 2020
		$ 181,170

The average de-account period of payables is 30 to 180 days. The consolidated company has a financial risk management policy to ensure that all payables are repaid within the pre-agreed credit period.
The accounts payable and other accounts payable of the consolidated company exposed to exchange rate and liquidity risks for disclosure, please refer to Note 6 (29).

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(15) Other payables

Payable salary and bonus Rent payable Payable labor fees Payable insurance premium Pension payable Interest payable Equipment payment payable Commission payable Business tax payable Compensation payable Others Total	December 31, 2021 $ 55,627 154 2,146 6,585 2,786 1,296 4,655 18,062 `－` `－` 60,460 $ 151,771	December 31, 2020
		$ 52,391 156 840 5,665 2,479 4,525 3,749 18,132 100,051 35,000 59,460
		$ 282,448

Other main accounts payable are consist of house tax, water, electricity and gas, freight, import fees, export fees and repair fees.

(16) Liability reserve-current

Employee benefit liability provision	December 31, 2021 $ 15,436	December 31, 2020
		$ 13,906

Employee benefit liability provision is an assessment of employees’ vested leave rights. It is reversed at the time of international vacation or cash payment.
The aforesaid reserves are not discounted because they are short-term or have little impact on discounting.

- (17) Long term borrowings

Long-term bank loan Medium and long-term bank mortgage loans Bank mid-term working capital loan Sub-total Less: part due within one year Long-term borrowings Interest rate	December 31,2021 $ `－` 1,790,000 `－` 1,790,000 `－` $ 1,790,000 2.093`％`	December 31,2020
		$ 5,285,480 112,957 80,201
		5,478,638 (111,957)
		$ 5,366,681
		1.8182%~1.8337%

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The company signed a loan contract with Entie Commercial Bank on May 3, 2021, which is a shortterm credit line contract with a short-term guaranteed loan amount of NT$2,800,000,000. The first allocation of the credit line is limited to repayment of the bank line under the creditor's rights and debt negotiation mechanism. The company should send a letter to notify the main creditor's rights and debts negotiating banks before the allocation, and obtain the creditor's rights and debts negotiating bank group to send a letter or creditor's rights meeting to reply to agree.

Due to the overall operation and capital planning, the consolidated company signed a 2-year mortgage loan with a total amount of 1,790,000 thousand with Entie Commercial Bank on December 27, 2021. The repaid principal once due, and the balance of the loan on December 31, 2021 was NT$ 1,790,000,000.
In December 31, 2020, the financial ratios, important restrictions, defaults and delays in the payment of principal and interest, extensions and reductions in the amount of principal repayment in each period are explained as follows:
(1) The company promises to maintain the following financial ratios during the credit extension period:

Financing project Taiwan Cooperative Bank 3.5 billion joint loans Mega International Commercial Bank Co., Ltd. 12 billion joint loan Taiwan Cooperative Bank 2.6 billion joint loan	Minimum current ratio 100`％` 100`％` 100`％`	Minimum interest guarantee multiple 2.5 2.5 2.5	Highest debt ratio 200`％` 150`％` 200`％`	Minimum tangible net worth
				$ 3,000,000 7,000,000 11,000,000

(2) In accordance with the ”Key Points for the Ministry of Economic Affairs to Assist Enterprises in Handling Bank Credit and Debt Negotiations'', Optimax Technology Corporation applied to the Industrial Bureau of the Ministry of Economic Affairs on April 10, 2020, to assist in the negotiation of bank claims and debts, requesting that short-term credit extension periods be extended to December 7, 2021, and medium and long-term loans extended for one year. The bank was held a delegation meeting on June 19, 2020, and on November 17, 2020, the majority of creditor banks agreed through written consent that the mid- and long-term loan repayment

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period was extended for one year. In addition, until December 31, 2021, the financial ratio will not be calculated and the overweight penalty for non-compliance with the promised financial ratio will be cancelled. The company has completed the process with banks in accordance with the conclusions of the debt and debt negotiation meeting and the principal extension of the credit extension for one year.

On June 10, 2003, the company signed a five-year joint credit contract with five financial institutions including Taiwan Cooperative Bank, with a total amount of NT$3.5billion.

(Taiwan Cooperative Bank NT$3.5billion joint loan Case) The balance of loans on December 31, 2020 was NT$26,563,000.

In response to the expansion needs of the branch in Tainan Science Park, the company signed a five-year joint credit contract with thirteen financial institutions including Mega International Commercial Bank Co., Ltd. and Taiwan Cooperative Bank on July 20, 2004, with a total amount of NT$12 billion. (Mega International Commercial Bank Co., Ltd. NT$12 billion joint loan Case) The balance of loans on December 31, 2020 was NT$3,530,681,000.
In response to turnover needs, the company signed a five-year joint credit agreement with five financial institutions including Taiwan Cooperative Bank on September 20, 2006, with a total amount of NT$2,600,000,000. (Taiwan Cooperative Bank NT$2.6 billion joint loan Case) The balance of loans on December 31, 2020 was NT$1,728,236,000.
Due to the needs of operating turnover, the company submitted a payment to Taiwan Cooperative Bank on August 10, 1999. The bank applied for 18-year mortgage loans with a total amount of NT$300,000,000. The balance of loans on December 31, 2020 was NT$106,790,000.
Due to the needs of operating turnover, the company submitted a payment to Taiwan Cooperative Bank on April 20, 2001. The bank applied for 13-year mortgage loans with a total amount of NT$250,000,000. The balance of loans on December 31, 2020 was NT$6,167,000.
Due to the needs of operating turnover, the company submitted a payment to Shin Kong Commercial Bank Co., Ltd. on July 19, 2005. The bank applied for 3-year mortgage loans with a total amount of NT$500,000,000. The balance of loans on December 31, 2020 was NT$80,201,000.
Please refer to Note 8 for the provision of assets as guarantees for long-term loans.

(18) Pension

Defined contribution plan

Since July 1, 2005, the company has established Retirement method with defined contribution plan which is applicable to employees of this nationality. Our company and domestic Subsidiaries choose to apply the labor pensions stipulated in the "Labor Pensions Ordinance" for employees. In the system, labor pension is paid to employees of the Labor Insurance Bureau at 6% of the salary monthly. The payment of the employee’s pension is based on the employee’s individual pension account and the amount of accumulated income. The labor pension in Optimax Suzhou is according to the endowment insurance system stipulated by the government of the People’s Republic of China, contributing a certain percentage of the pension insurance fund monthly. The pension of each employee is contributed monthly by the local government without further obligations. The pensions recognized in the consolidated income statement on December 31, 2021 and December 31, 2020 were NT$16,103,000 and NT$15,472,000, respectively.

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2. Defined benefit plan

In accordance with the regulation of the Labor Standards Law, the company has established a retirement method that defined benefits plan which is applicable of service years to all regular employees before the implementation of the Labor Pension Regulations on July 1, 2005, and the employees who choice to continue after the implementation of the Labor Pension Regulations. Employees who meet the retirement conditions, the pension payment is calculated based on the years of service and the average salary in the 6 months before retirement. The service years within 15 years (inclusive) will be given 2 bases for every full year, more than 15 years of service will be given 1 base for each full year, but the cumulative maximum is 45 bases limited. The company allocates a retirement fund of 2% of the total salary on a monthly basis, and deposits it in a special account in the Bank of Taiwan in the name of the Labor Retirement Reserve Supervision Committee. In addition, the company estimates the balance of the labor retirement reserve in the preceding paragraph before the end of each year. If the balance is not enough to pay the next year, the estimated amount of retirement pension for the employees who meet the retirement conditions in the next year will be calculated based on the foregoing calculation. This special account is managed by the Labor Fund Utilization Bureau of the Ministry of Labor, and the company has no right to influence investment management strategies.

The confirmed benefit plan amounts recognized in the consolidated balance sheet were as follows:

Present value of defined benefit obligation Fair value of planned assets Net defined benefit liabilities	December 31, 2021 $ (68,700) 60,175 $ (8,525)	December 31, 2020
		$ (66,397) 55,042
		$ (11,355)

The changes in net defined benefit liabilities were as follows:

Present value of defined benefit obligation	Fair value of planned assets	Net defined benefit liabilities
$ (66,397)	$ 55,042	$ (11,355)
(106) (332)	`－` 288	(106) (44)
(438)	288	(150)
`－` (3,055) 2,190 (2,766)	693 `－` `－` `－`	693 (3,055) 2,190 (2,766)
(3,631)	693	(2,938)
`－`	5,918	5,918
1,766	(1,766)	`－`
$ (68,700)	$ 60,175	$ (8,525)

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Present value of defined benefit obligation	Fair value of planned assets	Net defined benefit liabilities
$ (64,145)	$ 52,717	$ (11,428)
(173) (561)	`－` 474	(173) (87)
(734)	474	(260)
`－` (2,020) (3,223) (576)	1,610 `－` `－` `－`	1,610 (2,020) (3,223) (576)
(5,819)	1,610	(4,209)
`－`	4,542	4,542
4,301	(4,301)	`－`
$ (66,397)	$ 55,042	$ (11,355)

The consolidated company is exposed to the following risks due to the pension system of the Labor Standards Law:

(1) Investment risk: The Labor Fund Utilization Bureau of the Ministry of Labor invests labor retirement funds in domestic (foreign) equity securities through its own use and entrusted operations. Subject to debt securities and bank deposits, but in accordance with the provisions of the Labor Standards Law, the overall return on assets shall not be lower than the local bank’s 2-year fixed deposit interest rate: if the interest rate is lower than that, the state treasury shall make up for it.
(2) Interest rate risk: The decline in the interest rate of government bonds will increase the present
value of the determined welfare obligation, but the debt investment return of the planned asset will also increase. The two are in conflict and the impact of fixed benefit liabilities has a partial offset effect.
(3) Salary risk: The calculation of the present value of the defined benefit obligation is based on the future salary of the plan members. Therefore, the increase in the salary of the plan members will increase the present value of the defined benefit obligation.

The main assumptions of actuarial evaluation are listed as follows:

Discount Rate Expected salary increase rate	December 31, 2021 0.750`％` 2.0000`％`	December 31, 2020
		0.500`％` 2.0000`％`

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The changes in the main actuarial assumptions that were adopted on December 31, 2021 and 2020, will increase (decrease) the present value of defined benefit obligations by the following amounts:

December 31,2021 Discount Rate Expected salary increase rate	Actuarial assumptions increased by0.25% $ (2,171) $ 2,201	Actuarial assumptions reduced by0.25%
		$ 2,266
		$ (2,120)

December 31,2020 Discount Rate Expected salary increase rate	Actuarial assumptions increased by0.25% $ (2,209) $ 2,239	Actuarial assumptions reduced by0.25%
		$ 2,310
		$ (2,154)

The sensitivity analysis above is based on the analysis of a single hypothesis while other assumptions remain unchanged the impact of changes. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities of the balance sheet. The methods and assumptions used in the preparation of the sensitivity analysis in this period are the same as those in the previous period.

The planned provision amount and the weighted average duration of the retirement plan are as follows:

as follows:
Expected amount to be withdrawn within 1 year Determining the average maturity of benefit obligations period	December 31, 2020 $ 6,002 12.8`年`	December 31, 2019
		$ 5,294 13.5`年`

(19) Equity

Common stock

mon stock
Rated equity Issued share capital	December 31, 2021 $ 10,000,000 $ 1,700,000	December 31, 2020
		$ 10,000,000
		$ 3,253,324

In order to improve the financial structure and make up for the accumulated losses, the company's issued share capital was approved by the general meeting of shareholders on August 27, 2021 to reduce the capital by NT$1,553,324,000 and cancel 155,332,000 issued shares. The capital reduction ratio was 47.74575%, and the paid-in capital amount reduced to NT$1,700,000,000, the number of shares is 170,000,000 shares, each with a par value of NT$10. The aforesaid capital reduction plan was approved by Taiwan Stock Exchange Co., Ltd. on October 19, 2021, and the Board of Directors decided that October 25, 2021 was the base date for making up for losses and capital reduction. The approval of the

115

capital reduction change is completed on the day. As of December 31, 2021 and December 31, 2020, the Company's nominal number of shares was 1,000,000,000 shares, each with a par value of NT$10, and the issued shares were 170,000,000 shares and 325,332,000 shares respectively.

Retained earnings and Dividend policy
(1) According to the regulation of the company's articles of incorporation, if there is a surplus in the annual final accounts, tax should be paid first to make up for the accumulated losses, and 10% of the second allocation is the statutory surplus reserve, but the accumulated amount has reached the paid-in capital, it may no longer be listed, and the rest may be approved by shareholders when necessary. The board of directors plans to allocate or revert the special surplus reserve according to the resolution of the meeting or according to the law; if there is a surplus and the undistributed surplus accumulated in the previous year, the board of directors plans to allocate the surplus, the proposal is submitted to the shareholders meeting for a
resolution to distribute dividends to shareholders.
(2) The company’s earnings distribution depends on the company’s current and future development plan, investment environment, fund requirements, and domestic and international competition and the interests of shareholders, the dividend policy of the Company is to set aside no less than 50% of distributable earnings as shareholders’ dividends and bonuses. However, in case the accumulated distributable earnings is less than 30% of paid-in capital, the Company may choose not to distribute dividends. The board of directors drafts the surplus based on the operating results and capital planning situation. At the time, dividends to common shareholder may be distributed by way of combination of cash dividend and stock dividend provided that the cash dividends shall not be less than 10% of the total dividends.
(3) The legal reserve shall not be used except for making up the company’s losses and issuing new shares or cash in proportion to the shareholders’ original shares. The public reserve is limited to 25% of the paid-in capital.
(4) When the company distributes surplus, it must be based on the balance sheet date of the current year. The debit balance of other equity items is drawn to the special surplus reserve before the distribution is distributed, and thereafter the debit balance of other equity items is reverted, the reverted amount may be included in the distributable surplus.
(5) On March 24, 2022, the company passed the resolution of the board of directors to propose the statutory surplus reserve of NT$35,550,000 and do not plan to allocate in profit and loss appropriation plan in the year 2021. For related information, please check Market Observation Post System (MOPS) for more information.
(6) On August 27, 2020, the company passed a resolution of the general meeting of shareholders and passed the profit and loss proposal for the year of 2020. Regarding the resolutions of the regular shareholders' meeting, please check Market Observation Post System (MOPS) for more information.
(7) On June 6, 2020, the company passed a resolution of the general meeting of shareholders and passed the loss proposal for the year of 2019. Regarding the resolutions of the regular shareholders' meeting, please check Market Observation Post System (MOPS) for more information.

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3. Other equity

Exchange Differences on Translation of Foreign Financial Statements $ (2,633) (816) `－` (659) $ (4,108) Exchange Differences on Translation of Foreign Financial Statements $ (1,136) 863 (2,735) 375 $ (2,633) 2021	Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income Total $ (7) $ (2,640) `－` (816) (16,891) (16,891) `－` (659) $ (16,898) $ (21,006) Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income Total $ (7) $ (1,143) `－` 863 `－` (2,735) `－` 375 $ (7) $ (2,640) 2020 $ 0.10	Total
		$ (2,640) (816) (16,891) (659)
		$ (21,006)
		Total
	$	$ (1,143) 863 (2,735) 375
	$	$ (2,640)

$ 4.76

(20) Earnings (loss) per share

When calculating earnings per share, the effect of capital reduction to make up for losses has been adjusted retrospectively on October 25, 2021. The basic earnings per share as following:

Net profit attributable to owners of the parent company (thousand yuan) The weighted average number of ordinary shares to calculate the basic earnings per share (thousand shares) Basic earnings per share (yuan)	2021 $ 809,938 170,000 $ 4.76	2020
		$ 16,464
		170,000
		$ 0.10

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(21) Operating income

ating income
Customer contract revenue Commodity sales revenue	2021 $ 3,191,831	2020
		$ 2,417,836

Please refer to Note 4(14) for the explanation of the income of the consolidated company.
Please refer to Note 14 for income breakdown information.
Contract balance

Accounts receivable (Note 6 (4)`、`7) Contract liabilities-current (list other current liabilities) Commodity sales	December 31,2021 $ 758,204 $ 1,422	December 31,2020
		$ 770,909
		$ 300

Funds from contract liabilities at the beginning of the period recognized as operating income were NT$300,000 and NT$8,772,000 in 2021 and 2020.

4. Refund liabilities

The consolidated company is based on historical experience and other known reasons, it is estimated that the possible refund liabilities for sales returns and discounts are NT$14,833,000 and NT$10,231,000 in 2021 and 2020, respectively. The balance of refund liabilities were NT$12,257,000 and NT$7,775,000 on December 31, 2020 and 2019, respectively.

(22) Other income

r income
Rental income Less: depreciation other Total	2021 $ 37,109 (12,657) 53,908 $ 78,360	2020
		$ 132,336 (32,662) 17,862
		$ 117,536

(23) Other gains and losses

Other gains and losses
Losses on disposal of real estate, plant and equipment Losses on disposal of investment real estate Lease modification benefit Gains (losses) on disposal of interest in non- current assets held for sell Foreign exchange losses Reversal of Impairment loses in non-current assets held for sell Reversal of Impairment profit -real estate, plant and equipment Reversal of Impairment profit -investment real estate Depreciation expense Miscellaneous Disbursements Total	2021 $ (7,516) `－` 11,398 522,291 503 `－` 2,869 `－` (2,329) (25,080) $ 502,136	2020
		$ (15,180) (94) `－` 50,607 (37,372) (175) 17,566 135,994 (127,747) (81,147)
		$ (57,548)

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(24) Financial costs

cial costs
Interest expense Bank loan Lease liability Others Total	2021 $ 53,768 275 6 $ 54,049	2020
		$ 113,179 13,365 39
		$ 126,583

(25) Income Tax

The income tax expenses of the consolidated company in 2021 and 2020 were as follows:

me Tax e income tax expenses of the consolidated company in 2021	and 2020 were as fol
2021 Tax calculated based on profit before tax and statutory tax rate $ 163,667 Expenses disallowed by tax regulation 28,309 Sale of land profit exempt from income tax `－` Income tax impact of loss deduction (187,271) Temporary differences in the current period 20,220 Land appreciation tax `－` Income tax expense $ 24,925	2020
	$ 7,159 (28,107) (10,852) 206,592 (161,608) 1,550
	$ 14,734

The main components of income tax expense recognized in profit and loss were as follows:

Current tax: Current tax on profit in current period Deferred tax: Origination and reversal of temporary differences Income tax expense recognized in profit and loss	2021 $ `－` 24,925 $ 24,925	2020
		$ 1,550 13,184
		$ 14,734

The income tax details recognized in other comprehensive profits and losses of the consolidated company on December 31, 2021 and 2020 were as follows:

Deferred income tax benefits (expense) Exchange differences on translation of foreign operations	2021 $ 659	2020
		$ (375)

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3. Current income tax assets (listed other current assets)

Tax refund receivable	December 31, 2021 $ 25	December 31, 2020
		$ 108

Deferred income tax assets and liabilities
(1) The analysis of deferred income tax assets was as follows:

	2021	2021
Balance at January 1, 2021	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2021
$ 28,235 47,216 7,046 `－` 72,181 2,781 123 1,574 `－` 2,161 659	$ 837 (5,597) 13,331 5,951 (39,766) 306 1,070 625 119 (1,153) `－`	$ `－` `－` `－` `－` `－` `－` `－` `－` `－` (659)	$ 29,072 41,619 20,377 5,951 32,415 3,087 1,193 2,199 119 1,008 `－`
$ 161,976	$ (24,277)	$ (659)	$ 137,040

	2020	2020
Balance at January 1, 2020	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2020
$ `－` `－` `－` `－` `－` `－` `－` `－` 284 174,792	$ 28,235 47,216 7,046 72,181 2,781 123 1,574 2,161 `－` (174,792)	$ `－` `－` `－` `－` `－` `－` `－` `－` 375 `－`	$ 28,235 47,216 7,046 72,181 2,781 123 1,574 2,161 659 `－`
$ 175,076	$ (13,475)	$ 375	$ 161,976

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(2) The analysis of deferred income tax liabilities was as follows:

	2021	2021
Balance at January 1, 2021	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2021
$ 147	$ 648	$ `－`	$ 795
	2020
Balance at January 1, 2020	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2020
$ 19 419	$ 128 (419)	$ `－` `－`	$ 147 `－`
$ 438	$ (291)	$ `－`	$ 147

5. Items not recognized as deferred income tax assets

Loss deduction amount Temporary difference amount	December 31, 2021 $ 1,067,314 $ 462,606	December 31, 2020
		$ 2,292,013
		$ 263,301

The loss of the consolidated company is deducted, and the final deduction year is 2030.

As of December 31, 2021, the consolidated company's undeducted loss and the deduction exclusion period was as follows:

Year incurred 2012 2017 2018 2019 2020 2017 2018 2021	Amount filed/ assessed	Expiry year 2022 2027 2028 2029 2030 2022 2023 2026	Loss deduction
	Amount assessed Amount assessed Amount assessed Amount assessed Amount estimated Expected filed amount Expected filed amount Expected filed amount		$ 583,123 172,271 9,171 69,643 185,211 28,072 18,579 1,244
			$ 1,067,314

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The company's and domestic subsidiaries' profit-making business income tax assessment status was as follows:

Company name Optimax Technology Corporation ART Optronics Corporation	Assessed year
	2019 2019

(26) Expense by nature

Functional aggregation of employee benefits, depreciation, depletion and amortization:

Function Nature		2021	2021
	Recognized in cost of sales	Recognized in operating expenses	Recognized in non- operating expenses	Total
Employee benefits expenses: Salaries and wages Labor and health insurances Pension Other employee benefits Depreciation Amortization	$ 264,742 28,874 15,579 18,609	$ 118,321 10,762 674 5,592	$ `－` `－` `－` `－`	$ 383,063 39,636 16,253 24,201
	61,955	12,123	14,986	89,064
	7	166	`－`	173

Function Nature		2020
	Recognized in cost of sales	Recognized in operating expenses	Recognized in non- operating expenses	Total
Employee benefits expenses: Salaries and wages Labor and health insurances Pension Other employee benefits Depreciation Amortization	$ 233,333 25,496 14,000 14,653	$ 112,895 9,479 1,732 4,359	$ `－` `－` `－` `－`	$ 346,228 34,975 15,732 19,012
	73,619	14,410	160,409	248,438
	743	246	`－`	989

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2. Employee benefits expenses

(1) According to the regulation of the company's articles of incorporation, when the Company allocates the profit of the current year, if any, 5%~10% of the profit shall be set aside as employees’ compensation, which to be distributed to the qualified employees of the Company or of the subsidiaries of the Company employees in the form of stock or cash. The Board of Directors is hereby authorized to set forth the plan of distribution. The Company may, subject to the resolution adopted by the Board of Director, further allocate no more than 1% of the aforesaid profit as Directors’ compensation. The proposals of the employees’ compensation and the directors’ compensation shall be approved by a majority of total Directors and then reported on the Shareholders’ meeting.

The current year's profit and accumulated losses referred to in the preceding paragraph refer to the current year's pre-tax profits before the distribution of employee remuneration and director's remuneration, respectively, and according to the Ministry of Economic Affairs on April 15, 2016, Jingshangzi No. 10502409260, accumulated losses that are acknowledged by shareholders.

(2) The pre-tax profits of the company in the year of accumulated losses, so no employee remuneration and director remuneration are estimated.
The company still has accumulated losses as of December 31, 2020, so the remuneration of employees and directors' remuneration is not estimated in the year of 2020.
(3) Please check Market Observation Post System (MOPS) for more information of employee remuneration and director remuneration approved by the board of directors.

(27) Cash flow information

Investing activities with cash and non-cash flow effects
(1) Non-current assets held for sell

(1) Non-current assets held for sell
Current increase Plus: Equipment payment due at the beginning of the period Less: Equipment payment due at the end of the period Cash paid in this period Current Disposal Less: Advanced payment due at the beginning of the period Cash payback in this period (2) Real estate, plant and equipment Current increase Plus: Equipment payment due at the beginning of the period Less: Equipment payment due at the end of the period Less: the number of prepaid equipment transfers Cash paid in this period	2021 $ `－` 1,677 `－` 1,677 2021 $ (3,628,610) 75,000 $ (3,553,610) 2021 $ 25,255 2,072 (4,655) (5,025) $ 17,647	2020
		$ 1,677 `－` (1,677)
		`－`
		2020
		$ (55,905) `－`
		$ (55,905)
		2020
		$ 9,525 1,385 (2,072) (1,282)
		$ 7,556

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(3) Investment real estate

Investment real estate
2021 Current increase $ `－` Plus: Equipment payment due at the beginning of the period `－` Less: the number of prepaid equipment transfers `－` Cash paid in this period $ `－`	2020
	$ 5,410 `－` (225)
	$ 5,185

2. Changes in liabilities from financing activities

At January 1, 2021 Changes in cash flow from financing activities Changes in lease liabilities Changes in other non-cash items Effect of foreign exchange At December 31, 2021 At January 1, 2020 Changes in cash flow from financing activities Changes in lease liabilities Changes in other non-cash items Effect of foreign exchange At December 31, 2020	Short-term borrowings $ 711,044 (102,335) `－` (6,165) (66) $ 602,478 Short-term borrowings $ 750,200 46,725 `－` (86,025) 144 $ 711,044	Long-term borrowings $ 5,478,638 (3,688,638) `－` `－` $ 1,790,000 Long-term borrowings $ 5,857,574 (350,434) `－` (28,502) `－` $ 5,478,638	Guarantee deposits received $ 15,125 (8,729) `－` `－` (39) $ 6,357 Guarantee deposits received $ 15,285 (246) `－` `－` 86 $ 15,125	Lease liabilities $ 711,761 (3,949) (703,300) `－` `－` $ 4,512 Lease liabilities $ 700,374 (15,753) 29,946 (2,806) `－` $ 711,761	Liabilities from financing activities-gross
					$ 6,916,568 (3,803,651) (703,300) (6,165) (105)
					$ 2,403,347
					Liabilities from financing activities-gross
					$ 7,323,433 (319,708) 29,946 (117,333) 230
					$ 6,916,568

(28) Capital management

Based on the characteristics of the current operating industry and the future development of the company, the consolidated company plans the need for working capital (including research and development expenses and debt repayment, etc.) required by the consolidated company in the future, taking into account changes in the external environment, to ensure the sustainability of the consolidated company operation can give back to shareholders while taking into account the interests of other stakeholders, and maintain the best capital structure to enhance shareholder value. On the whole, the consolidated company adopts a prudent risk management strategy.

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(29) Financial instruments

1. Categories of financial instruments

Financial assets Cash Financial assets measured at amortized cost-current Notes receivable Accounts receivable Other receivable Other financial assets Financial assets at fair value through other comprehensive income-non-current Refundable Deposits Financial liabilities Short-term borrowings Notes payable Accounts payable Other payable Long-term debt (including current portion) Guarantee deposit received	December 31, 2021 $ 70,170 54,803 51 758,204 36,177 85,026 29,847 7,978 602,478 172 138,112 151,771 1,790,000 6,357	December 31, 2020
		$ 172,404 64,577 114 770,909 148,586 180,472 26,262 2,008 711,044 237 181,170 282,448 5,478,638 15,125

2. Financial risk management

The financial risk management objective of the consolidated company is to manage exchange rates related to operating activities risk, interest rate risk, credit risk and liquidity risk. In order to reduce related financial risks, the consolidated company is committed to identifying, evaluating and avoiding market uncertainty in order to reduce market potential adverse impact on the company’s financial performance. Important financial matters of the consolidated company are reviewed by the board of directors in accordance with relevant regulations and internal control systems. During the execution of the financial plan, the consolidated company must strictly comply with the overall financial risk management and related financial operation procedures for the division of authority and responsibilities.

3. Market risk

The consolidated company is mainly exposed to market risks such as changes in foreign currency exchange rates and changes in interest rates.

(1) Foreign currency exchange rate risk

The operating activities of the consolidated company and the net investment of foreign operating institutions are mainly in foreign currencies transaction, therefore, foreign currency exchange rate risk arises. To avoid foreign currency caused by exchange rate changes as asset value decreases and future cash flows fluctuate, the consolidated company uses currency conversion of short-term borrowings to avoid exchange rate risk. Since the net investment of foreign operating organizations is a strategic investment, it has not been hedged.

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A. Information about the consolidated company's significant foreign currency financial assets and liabilities is as follows:

Unit: Foreign currency yuan /NT$ thousand December 31, 2021

Foreign currency	Exchange rate	NTD		Sensitivityanalysis	Sensitivityanalysis
			Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
364,356,264 31,358,676 1,300 40,000 4,130,147 99,951,866 226,796 542,318,175 2,689,583 989,010 482,695 70,550	0.2405 27.68 31.32 0.0235 4.344 0.246 27.77 0.2405 27.68 4.344 27.7 4.351	87,628 868,015 40 1 17,941 24,584 6,297 130,427 74,447 4,296 13,371 307	+10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％`	8,763 86,801 4 `－` 1,794 (13,043) (7,445) (430)	7,010 69,441 3 `－` 1,435 (10,434) (5,956) (344)

		December 31,2020	December 31,2020	December 31,2020	December 31,2020
Foreign currency	Exchange rate	NTD		Sensitivityanalysis
			Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
89,614,352 32,110,365 14,954 40,000 2,237,452 125,817,497 2,239,024,090 1,156,255 103,071 276,492 1,930,825	0.2763 28.48 35.02 0.0264 4.377 0.2742 0.2763 28.48 4.377 28.48 4.2216	24,760 914,469 524 1 9,793 34,497 618,644 32,930 451 7,874 8,151	+10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％`	2,476 91,447 52 `－` 979 (61,864) (3,293) (45)	1,981 73,157 42 `－` 783 (49,492) (2,634) (36)

B.Monetary items of the consolidated company have a significant impact due to exchange rate fluctuations and all exchange loss recognized was NT$503,000 and NT$(37,372,000) (including realized and unrealized) on December 31, 2021 and 2020, respectively.

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(2) Interest rate risk

Interest rate risk refers to the risk of changes in the fair value of financial instruments due to changes in market interest rates. The interest rate risk of the consolidated company is mainly income investment and fixed and floating interest rate of borrowings, and the current market interest rate is low, it is expected that there is no major interest rate change risk, so the consolidated company did not hedge against it. The sensitivity analysis of interest rate risk is fixed based on the end of the financial reporting period and changes in the fair value of floating-rate borrowings are the calculation basis. If the interest rate rises by ten basis points, the net profit after tax of the consolidated company will decrease by NT$2,616,000 and NT$6,322,000 on December 31, 2021 and 2020, respectively.

4. Credit risk management

Credit risk refers to the risk of a counterparty breaching contractual obligations and causing financial loss to the consolidated company. The credit risk of the consolidated company mainly comes from the accounts receivable of operating activities. Operation-related credit risks and financial credit risks are managed separately.

(1) Credit risk related to operations

In order to maintain the quality of accounts receivable, the consolidated company has established operating-related credit risks management procedures.

The risk assessment of an individual customer is based on the consideration of the customer’s financial status, credit rating factors that may affect customers’ ability to make payments, such as structural ratings, internal credit ratings of the consolidated company, historical transaction records and current economic conditions. The consolidated company will also use certain credit enhancement tools at the right time, such as advance payment and credit insurance, etc., to reduce the credit risk of specific customers.

As of December 31, 2021 and 2020, the balance of accounts receivable of the top ten customers accounted for the balance of accounts receivable of the consolidated company, the percentages are 80% and 82%, respectively. The credit risk of the remaining accounts receivable is insignificant.

(2) Financial credit risk

The credit risks of bank deposits, fixed income investments and other financial instruments are measured and monitored by the financial department of the consolidated company. The performing parties are all creditworthy banks and financial institutions with investment grade and above Institutions, company organizations and government agencies, there are no major performance concerns, so there is no major credit risk.

5. Liquidity risk management

The objective of the liquidity risk management of the consolidated company is to maintain the cash and equivalent cash and ensure that the consolidated company has sufficient and flexible financial resources.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

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	December 31, 2021	December 31, 2021	December 31, 2021
Within 1year	2~3 years	4~5 years	More than 5years	Total
$ 138,284 151,771 3,289 607,142 144	$ `－` `－` 1,296 1,841,732 `－`	$ `－` `－` `－` `－` 1,000	$ `－` `－` `－` `－` 5,213	$ 138,284 151,771 4,585 2,448,874 6,357
$ 900,630	$ 1,843,028	$ 1,000	$ 5,213	$ 2,749,871

	December 31, 2020	December 31, 2020	December 31, 2020
Within 1year	2~3 years	4~5 years	More than 5years	Total
$ 181,407 282,448 31,773 830,110 9,873	$ `－` `－` 59,233 5,485,769 `－`	$ `－` `－` 56,119 38,291 `－`	$ `－` `－` 809,045 33,723 5,252	$ 181,407 282,448 956,170 6,387,893 15,125
$ 1,335,611	$ 5,545,002	$ 94,410	$ 848,020	$ 7,823,043

Fair value of financial instruments
(1) Financial instruments measured by amortized cost (including cash and cash equivalents, financial assets measured by amortized cost, notes receivable, accounts receivable, other accounts receivable, other financial assets, guarantee deposit receivable, short-term loans, notes payable, accounts payable, other payables, long-term loans and deposit deposits) is a reasonable approximation of the fair value.
(2) When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
- a. Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.
- b. Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- c. Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(3) For financial instruments measured at fair value on December 31, 2021, and 2020, the consolidated company depends on the nature, characteristics, risks and fair value levels of assets and liabilities. The relevant information is as follows:

128

	December 31, 2021	December 31, 2021
Level 1	Level 2	Level 3	Total
$ `－`	$ `－`	$ 29,847	$ 29,847

Level 1	Level 2	Level 3	Total
$ `－`	$ `－`	$ 26,262	$ 26,262

(4) Valuation techniques and assumptions applied in fair value measurement The fair value of financial assets is determined in the following way: Since the investee company’s original investment date, the performance and operation of the investee company has not undergone any major changes, so the consolidated company uses the investment cost as the fair value estimated value.
(5) There was no change in the fair value of financial assets in 2021 and 2020.
(6) The following chart is the movement of Level 3:

Financial assets measured at fair value through other comprehensive gains and losses		January1 ~ December 31, 2021	January1 ~ December 31, 2021	January1 ~ December 31, 2021	January1 ~ December 31, 2021
	At January 1	Additions in the period	Recognized in other comprehen sive income	Disposals in the period	Effect of exchange rate changes	At December 31
	$ 26,262	$ 20,000	$ (16,206)	$ `－`	$ (209)	$ 29,847

Financial assets measured at fair value through other comprehensive gains and losses		January1 ~ December 31, 2020	January1 ~ December 31, 2020	January1 ~ December 31, 2020	January1 ~ December 31, 2020
	At January 1	Additions in the period	Recognized in other comprehen sive income	Disposals in the period	Effect of exchange rate changes	At December 31
	$ 25,830	$ `－`	$ `－`	$ `－`	$ 432	$ 26,262

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(7) Quantitative information of fair value measurement of significant unobservable input value (level 3). The fair value measurement of the consolidated company is classified as level 3 mainly including financial assets measured at fair value through other comprehensive profit and loss - equity securities investment.

The list of quantitative information with significant unobservable inputs is as follows:

Item	Evaluation technology	Significant unobservable input value	Significant unobservable input value and fair value relationship
Measured at fair value through other comprehensive profit and loss－ Investments accounted for using equity method with No Active Market	It can be compared to the listed OTC company law	Weighted average P/B multiplier	The higher the multiplier, the higher the fair value

(8) For the fair value measurement of the third level, the fair value is based on the reasonable and possible alternative assumptions sensitivity analysis.

The fair value measurement of financial instruments by the consolidated company is reasonable, unless the same evaluation model or evaluation parameters may lead to different evaluation results. For points Level 3 financial instruments, if the evaluation parameters change, the profit and loss of the current period or other comprehensive profit or loss will be affected as follows:

December 31, 2021 Measured at fair value through other comprehensive profit and loss Investments accounted for using equity method with No Active Market	Input value	Move up or down changes	Changes in fair value reflected in the profit and loss of the current period	Changes in fair value reflected in other comprehensiveprofit or loss
			favorable changes unfavorabl e changes	favorable changes unfavorabl e changes
	P/B multiplier	±5%	`－` `－`	1,492 (1,492)

The favorable and unfavorable changes of the combined company refer to the fluctuation of the fair value, and the fair value is calculated by the evaluation technology based on the unobservable input parameters of different degrees.

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7. Related-party Transactions

The transaction amount and balance between the company and its subsidiary (a related person of the company) shall be compiled in and it has been eliminated at the time of the financial report and has not been disclosed in this note.

(1) Name and relationship of related parties

Name of relatedparty Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd. (Lihuasheng Hong Kong) Shenzhen Lihuasheng Optoelectronics Technology Co., Ltd. (Lihuasheng Optoelectronics) Peter Chao	Relationshipwith the Company
	Other related party (Note) Other related party (Note) Main management

Note: The company's subsidiary – Optimax Technology (Suzhou) Co., Ltd. was established in 2021 and invested in Shenzhen Lihuasheng Technology Co., Ltd., in the second quarter of this year. Shenzhen Lihuashengke Technology Co., Ltd., Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd. and Shenzhen Lihuasheng Optoelectronics Technology Co., Ltd. has been related parties since June 30, 2021.

(2) The Company’s significant related party transactions

1. Sales revenue

Name of related party Lihuasheng Hong Kong	2021 $ 129,985	2020
		$ `－`

The price of the transaction between the consolidated company and related parties, there is no other similar transactions in 2021 can be compared. The credit period for related parties is 90 days per month, and for general customers accounts are about 30 to 120 days per month.

2. Manufacturing cost - processing cost

Name of related party Lihuasheng Hong Kong	2021 $ 29,127	2020
		$ －

3.Deduction of operating costs - income from sales

Name of related party		2021			2020
Lihuasheng Hong Kong	$		9,683	$		`－`

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4. Net Accounts Receivable

Accounts Receivable
Name of related party Lihuasheng Hong Kong Less: Allowance for losses	December 31, 2021 $ 124,004 (88,560) $ 35,444	December 31, 2020
		$ `－` `－`
		$ `－`

Information on changes in allowance losses is as follows:

Reclassified by non-related parties in this issue Provision for impairment loss in the current period Ending balance	2021 $ 38,063 50,497 $ 88,560

5. Other receivables

(1) Sale of equipment

Sale of equipment
Name of related party Lihuasheng Hong Kong Less: Allowance for losses Others Name of related party Lihuasheng Hong Kong Less: Allowance for losses	December 31, 2021 $ 1,117 (1,117) $ `－` December 31, 2021 $ 4,717 (1,010) $ 3,707	December 31, 2020
		$ `－` `－`
		$ `－`
		December 31, 2020
		$ `－` `－`
		$ `－`

(2) Others

6. Advance payment

Name of related party Peter Chao	December 31, 2021 $ 240	December 31, 2020 $ `－`

7. Accounts payable

Name of related party Lihuasheng Hong Kong	December 31, 2021 $ 4,437	December 31, 2020 $ `－`

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8. Other payables

Name of related party Lihuasheng Hong Kong	December 31, 2021 $ 4,160	December 31, 2020
		$ `－`

9. Short-term loans

Name of related party Peter Chao	December 31, 2021 $ `－`	December 31, 2020
		$ 8,754

Temporary receipts (listed other current liabilities)

Name of related party Peter Chao Lihuasheng Optoelectronics	December 31, 2021 $ `－` 434 $ 434	December 31, 2020
		$ 15,175 `－`
		$ 15,175

The key management of the Company undertakes to purchase the Chongqing Yunhe Investment held by the Consolidated Company. The capital contribution of Fang Enterprise Management Consulting Co., Ltd., the sale price of which is obtained by the consolidated company investment cost NT$26,046,000 (RMB 6,000,000), as of December 2020. NT$15,175,000 (RMB 4,000,000) received on the December 31, 2020, other current liabilities listed in the table debt. The consolidated company considered the investment strategy in the second quarter of 2021, and was approved by the Board of Directors to hold continuously the capital contribution of Chongqing Yunhe Bafang Enterprise Management Consulting Co., Ltd. and the sale price will be refunded successively.

(3) Rewards for the main management

The remuneration information for directors and other key management members was as follows:

Salary and other short-term benefits Resignation benefits Total	December 31, 2021 $ 10,135 108 $ 10,243	December 31, 2020
		$ 9,320 108
		$ 9,428

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8. Pledged assets

Content	Carry amount	Carry amount
	December 31, 2021	December 31, 2020
Fixed deposits, margins of the customs bureau and financial institutions set up pledges of the branch in Southern Taiwan Science Park Leasing and joint guarantees Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Withdraw bank deposits and repay loans according to loan contract Security deposit of the customs bureau, etc.	$ 50,000 `－` 66,289 1,960,169 31,063 18,737 7,960	$ 35,800 2,909,293 79 2,074,486 `－` 180,393 1,994
	$ 2,134,218	$ 5,202,045

9. Significant commitments and contingencies

Except as mentioned in other notes, the major commitments of the consolidated company at the balance sheet date and contingencies are as follows:

(1) The balance of the unused letter of credit for imported raw materials from the consolidated company is listed below:

Currency JPY USD NTD	December 31, 2021 $ 454,489 $ 269 $ 19,720	December 31, 2020
		$ 771,376
		$ 861
		$ 15,919

(2) List of the amount of deposit guarantee notes issued by the merged company as a result of applying for a loan line from the bank as follows:

December 31, 2021 $ 4,285,960	December 31, 2020
	$ 8,434,741

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10.Significant loss from disaster: None.

11.Significant subsequent events: None.

12.Others: None.

13.Additional disclosures

When preparing the consolidated financial report, all major transactions between parent and subsidiary companies and their balances have been eliminated.

(1) Information on significant transactions:
(a) Financing provided to other parties: Attached Table 1.
(b) Provision of endorsements and guarantees to others: None.
(c) Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 2.
(d) Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more: None.
(e) Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: None.
(f) Disposal of property reaching NT$300 million or 20% of paid-in capital or more: Attached Table 3.
(g) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Attached Table 4.
(h) Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Attached Table 5.
(i) Provision of endorsements and guarantees to others: None.
(j) Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 6.
(2) Information on investees: Attached Table 7.
(3) Information on investments in Mainland China:
(a) The name of the investee company in mainland China, main business items, paid-in capital, investment method, capital remittance, shareholding ratio, investment profit and loss, book value of investment at the end of the period, repatriated investment income and investment quota for mainland China: Attached Table 8.
(b) Significant transactions with mainland investee companies directly or indirectly via a third region transactions, including their prices, payment terms, unrealized gains and losses, and other relevant information that helps to understand the impact of mainland investment on financial reporting: Attached Table 1~8.
(4) Major shareholders information: Attached Table 9.

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14.Segment information

Information provided to main operating decision makers for allocating resources and evaluating department performance, focusing on the types of products or services delivered or provided. The accounting policies between the operating department of the consolidated company and a summary of the important accounting policies described in Note 4 have no major difference. The reporting departments of the consolidated company were as follows: TFT department:

Mainly responsible for the production and sales polarizers of digital cameras, digital photo frames, mobile phones, LCD projectors, notebook computers, LCD monitors, color TVs (Full HD) and car navigation systems, etc.

TN/STN department:

Mainly responsible for the production and sales of polarizres of electronic watches, computers, handheld game consoles, electronic dictionaries, mobile phones, stock cameras, etc.

Other department:

Mainly responsible for the production and sales of polarizres of touch panel, sunglasses, precision coating and related optical materials.

(1) Department revenue and operating results

The income and operating results of the consolidated company’s continuing operations were based on the analysis of the reporting department, such as under:

		Unit: Thousand New Taiwan Dollars 2021	Unit: Thousand New Taiwan Dollars 2021	Unit: Thousand New Taiwan Dollars 2021
TFT	TN/STN	Others	Adjustments and Eliminations	Consolidation
$ 2,588,839 366,738	$ 529,450 219,980	$ 73,542 (109,966) 2020	$ `－` `－`	$ 3,191,831 476,752
TFT	TN/STN	Others	Adjustments and Eliminations	Consolidation
$ 1,913,704 163,340	$ 461,911 166,290	$ 42,221 (27,055)	$ `－` `－`	$ 2,417,836 302,575

(2) Adjustment information of departmental profit and loss
(a) Revenue from external customers provided by the consolidated company to the main operating decision maker. The accounting policy was consistent with the operating income in the consolidated income statement.

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(b) The adjustment of the profit and loss of the operating department and the net profit before tax should be reported as follows:

Reportable department's departmental profit and loss Uncategorized related profit and loss Non-operating income and expenses Net profit (loss) before tax	December 31, 2021 $ 476,752 (159,921) 518,032 $ 834,863	December 31, 2020 $ 302,575 (184,132) (87,245) $ 31,198

(c) Departmental profit and loss refers to the gross profit earned by each department and minus the allocated operating expenses. It does not include headquarters management costs and some operating expenses, interest income, and disposal fixed assets gains and losses, exchange gains and losses, depreciation of idle assets, interest expenses, other non-industry profit and loss and income tax, etc. This measurement amount is provided to the main operating decision. It is used to allocate resources to the department and evaluate its performance.
(3) Departmental assets and liabilities

The measurement of the assets and liabilities of the consolidated company is not the measurement index of the operating decision maker, so the measured amount of assets and liabilities that should be disclosed was zero.

(4) Geographical information

Geographical information of the consolidated company in 2021 and 2020 was as follows:

2021 Revenue Non-current assets $ 331,341 $ 2,189,629 2,767,120 239,832 3,611 `－` 48,435 `－` 41,324 `－` $3,191,831 $2,429,461	2020	2020
Revenue $ 331,341 2,767,120 3,611 48,435 41,324 $3,191,831	Revenue $ 270,827 2,073,505 2,011 53,213 18,280 $2,417,836	Non-current assets
		$ 2,918,029 253,904 `－` `－` `－`
		$3,171,933

(5) Major customer information

Major customers which sales amount reached 10% of the total operating income of the consolidated company in 2021 and 2020 were as follows:

A Customer B Customer C Customer	2021 $ `－` 705,503 662,271 $ 1,367,774	2020
		$ 452,917 625,456 `－`
		$ 1,078,373

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【 Attached Table 1 】

Information on significant transactions

For the year ended December 31, 2021, the Company should disclose relevant information on significant transactions in accordance with preparation of financial reports:

(a) Financing provided to other parties:

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the period	Ending balance	Actual amount drawn down	Interes t rate	Nature of loan (Note 2)	Amounts of transaction with the borrower (Note 3)	Reason for short- term financing	Amounts of allowance	Collateral	Collateral	Limit on loans granted to a single party	Ceiling on total loans granted
													Item	Value
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	Other receivables	Yes	$ 1 64,990	$ 160,019	$ 160,019	`－`	2	$`－`	Business operation	$`－`	None	None	$ 813,599	$ 813,599

(Note 1): The aggregate financing amount to subsidiaries wholly owned by the parent and the individual financing amount of Optimax shall not exceed limited, respectively, of the most recent audited or reviewed net worth of Optimax.

(Note 2): Purpose of fund financing: 1. Business transaction purpose. 2. Short-term financing purpose. (Note 3): The transactions have been eliminated when preparing the consolidated financial statements.

138

【 Attached Table 2 】

Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates)

Investing company	Marketable securities type and name	Relation with the securities issuer	Financial statement account	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021		Footnote
				Shares	Carrying amount	Ownership (%)	Fair value
OPTIMAX	Common Stock: (Hong Kong) Yute Optimax Technology Co., Ltd	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	1,700	$ `－`	17`％`	$`－`	`－`
	Common Stock: PHOENIX BATTERY CORPORATION	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	2,000,000	20,000	5.33`％`	20,000	`－`
Optimax Technology corp. (Suzhou) Co., Ltd	Investment Amount: Chongqing Yunhe Bafang Enterprise Management	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	`－`	9,847	6`％`	9,847	`－`

139

【 Attached Table 3 】

- Disposes of Property and the transaction amount reaching NT$300 million or 20 % of paid in capital or more

(Expressed in thousands of New Taiwan dollars)

Disposal of real estate Company name	Property name	Date of the fact occurred	Original date of Acquisition	Book Value	Transaction Amount	Price collection situation	Profit (loss) of Disposal	Counter party	Relationship with the counterparty	Purpose of Disposal	Reference basis for price determination	Other agreed matters
Optimax Technology Corporation	The Plant in Southern Taiwan Science Park and related ancillary equipment	109.08.12	93.11.15	$ 3,106,319	$ 3,832,500	The payment has been received according to the time set in the contract. On December 31, 2021, all payment has been recovered.	$ 522,291	Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC)	Non-related party	Activate assets and repayment of bank debt	According to the valuation report of Zhonglian and DTRE Real Estate Appraiser, selling by bargaining, and Chairman decision granted by the Board of Directors	None

140

【 Attached Table 4 】

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

(Expressed in thousands of New Taiwan dollars)

Purchaser/seller	Counterparty	Relationship with the counter party		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accoun ts receivable (payable)
Optimax Technology Corporation	Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd.	Other related party	Sales	$ 129,985	4`％`	OA90	No identical situations to compare	Credit on 30~ 120 days	$ 124,004	14`％`	None

141

【 Attached Table 5 】

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

Company name	Counter party	Relationship with the counter party	Receivable- Related Parties Balance as at December 31, 2021	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	Subsidiary	Other Receivable $ 160,109	`－`	$ `－`	`－`	$ `－`	$ `－`
OPTIMAX	Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd.	Other related party	Receivable $ 124,004 Other Receivable $ 5,834	3.01	101,863	Actively dunning	Receivable $ 32,138 Other Receivable $ 2,754	90,687

142

【 Attached Table 6 】

- Significant inter company transactions

For the year ended December 31, 2021

					(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)
No. (Note 1)	Company name	Counter party	Relationship (Note 2)		Transaction
				Account	Amount	Transaction term	Percentage of consolidated total operating revenues or total assets (Note 3)
0	OPTIMAX	ART OPTRONICS CORP.	1	Purchase	11,647	T/T after 7 days	`－`
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	1	Operation expense	5,078		`－`
				Other receivable	160,019		3%

143

【 Attached Table 6-1 】

- Significant inter company transactions

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Company name	Counter party	Relationship (Note 2)		Transaction	Transaction
				Account	Amount	Transaction term	Percentage of consolidated total operating revenues or total assets (Note 3)
0	OPTIMAX	OPTIMAX TECHNOLOGY (B.V.I.)CO.,LTD.	1	Sales	$ 32,286	Credit on 90~ 150 days	1`％`
0	OPTIMAX	ART OPTRONICS CORP.	1	Purchase	9,607	T/T after 7 days	`－`
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	1	Operation expense	2,424		`－`
				Other accounts receivable	164,644		2`％`

(Note 1): The number is filled in as follows:

1) Number 0 represents the parent.

2) Subsidiaries are numbered in order from number 1.

(Note 2): The transaction relationships with the counterparties are as follows:

1) The parent to the subsidiary.

2) The subsidiary to the parent.

3) The subsidiary to another subsidiary.

(Note 3): The calculation of the ratio of the transaction amount to the consolidated total revenue or total assets, if it is an asset-liability account, it is calculated as the ending balance in the consolidated total assets: if it is a profit and loss account, the cumulative amount is calculated by the method of consolidated management.

144

【 Attached Table 7 】

Information on investees

Investor	Investee (Note 1)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2020	Shares held as at December 31, 2020		Net profit (loss) of the investee for the current period	Investment income (loss) recognized for the period	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Owner ship (%)	Carrying amount
OPTIMAX	ART OPTRONICS CORP. OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. (OOMC)	Taiwan MAURITIUS	Manufacture and sales Investment	2,011 614,524 (USD 19,000,000)	2,011 614,524 (USD 19,000,000)	225,000 19,000,000	100`％` 100`％`	888 71,947	(140) (15,617)	(140) (15,617)	Subsidiary Subsidiary

(Note 1): If a public issuing company has a foreign holding company and uses consolidated statements as the main financial report in accordance with local laws and regulations, the disclosure of information about the foreign investment company may only disclose the relevant assets of the holding company.

145

【 Attached Table 8 】

Information on investments in China

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan as of January 1, 2021	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod	Accumulated amount of remittance from Taiwan as of December 31, 2021	Ownership held by Optimax (direct or indirect)	Investment income (loss) recognized for the current period (Note 2)	Carrying amount of investments as of December 31, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Optimax Technology corp. (Suzhou) Co., Ltd	Manufacturing and selling of polarizers	$ 614,524 (USD19,000,000)	(Note 1)	$ 614,524 (USD19,000,000)	$ -	$ -	$ 614,524 (USD19,000,000)	100%	$ (15,617)	$ 71,947	-

Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 (Note 5)			Investment amounts authorized by Investment Commission, MOEA (Note 4)			Upper limit on investment by Investment Commission, MOEA (Note 3)
$ 614,524 (USD19,000,000)			$ 611,728 (USD22,100,000)			$ 1,220,398

(Note 1): Invest and establish a company through OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP to reinvest in mainland companies.
(Note 2): Obtained based on the investee company's own financial report without an accountant's visa during the same period.
(Note 3): According to the ``Principles for the Review of Investment or Technical Cooperation in Mainland China'' by the Investment Review Committee of the Ministry of Economic Affairs, the upper limit of the amount of investment in the mainland is 80,000 New Taiwan dollars, or 60% of the net value or combined net value, whichever is higher.
(Note 4): For foreign currency, it is based on the spot remittance and the average exchange rate on the financial report date.
(Note 5): For foreign currency, it is converted into New Taiwan dollars based on the exchange rate on the actual investment date from Taiwan.

146

【 Attached Table 9 】

Major shareholders information

Major shareholders Name	Shareholding	Shareholding ratio
Peter Chao	18,723,484	11.01%
Long-Shi Lin	9,614,782	5.65%

(Note 1): This table is calculated by Taiwan Depository & Clearing Corporation (TDCC) on the last business day of every season. To compute the shareholding companies’ 5% of total of the ordinary shares and special shares of non-physical securities
(including treasury shares). As for the company’s financial reporting, it has written down that the share and the company’s completed non-physical securities’ shareholding might be discrepancy due to its different ways of factorization.
(Note 2): In the case of the above information, if the shareholder delivers the shares to the trust, it is disclosed by the principal who opened the trust account by the trustee. As for the shareholder, it is handled in accordance with the Securities Exchange Law. For information on insider equity declaration, please refer to the Market Observation Post System ( MOPS ).

147

Stock Code: 3051

OPTIMAX TECHNOLOGY CORPORATION

Individual Financial Statements Independent Auditors’ Review Report December 31, 2021 and 2020

Address: No. 37, Lane 659, Pingdong Rd., Pingzhen District, Taoyuan City, Taiwan, R.O.C Telephone: 886-3-460-6677

The independent auditors’ report and the accompanying Individual financial statements are the English translation of the Chinese version prepared and used in the Republic of China. NOT AUDITED OR REVIEWED BY AUDITORS. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and the Individual financial statements, the Chinese version shall prevail.

148

Independent Auditors’ Report

To the Board of Directors of Optimax Technology Corporation:

Opinion

We have audited the individual financial statements of Optimax Technology Corporation (“the Company”), which comprise the balance sheets as of December 31, 2021 and 2020, the statements of comprehensive income, statements of changes in equity, and statements of cash flows for the years ended December 31, 2021 and 2020, and notes to the individual financial statements including a summary of significant accounting policies.

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

Basis for Opinion

We conducted our audits by following 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 Individual Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the audits report of other independent accountants, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2021 Individual Financial Statements of Optimax Technology Corporation. These matters were addressed in the context of our audit of the Individual Financial Statements as a whole and in forming our opinion thereon. We do not provide a separate opinion on these matters individually. The accountant's judgment should communicate the key audit matters on the audit report as follows:

1. Inventory Valuation

For the accounting policies of inventories, please refer to Note 4 (5) of the Individual Financial Statements; For the accounting estimates of the inventory evaluation and the description of the uncertainty of the assumptions, please refer to Note 5 of the Individual Financial Statements; For the description of important accounting items in inventories, please refer to Note 6 (6) of the Individual Financial Statements.

The main business item of Optimax Technology Corporation is the manufacture and sales of polarizers. Because the inventory is easily affected by the market demand of the products used and the yield rate of the production process, resulting in sluggish or falling prices, so the inventory evaluation is listed as one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

(1) Check the inventory age report and analyze the changes of inventory age in each period.
(2) Evaluate the rationality of accounting policies, such as inventory depreciation or sluggish withdrawal policies.
(3) Assess whether the valuation of inventories has been in accordance with the company's established accounting policies.

149

(4) Obtain the report of the net realizable value of inventories on the end of the financial reporting period, the selling price of goods or the purchase price used to check the net realizable value, and other data sources, and recalculate the accrued inventory allowance to offset the loss in value to confirm such data. The performance of accounting estimates is consistent with its policies.
(5) Understand the process of inventory management, review its annual inventory plan and participate in annual inventory, and check inventory details to evaluate the effectiveness of management in distinguishing and controlling obsolete inventory.

2. Impairment assessment of Property, plant and equipment

For the accounting policy of asset impairment, please refer to Note 4 (10) of the Individual Financial Statements; For the uncertainty of the accounting estimates and assumptions of the asset impairment assessment, please refer to Note 5 of the Individual Financial Statements; For the description of important accounting items in Property, plant and equipment, please refer to Note 6 (9) of the Individual Financial Statements.

Our audit procedures performed in respect of the above area included the following:

(1) Understand the relevant policies and procedures for impairment assessment, and assess the rationality of the management to identify the cash-generating units that may be impaired.
(2) Regarding the recoverable amount of the independent assessment report issued by a third party appointed by Optimax Technology Corporation, examine the reasonableness of the relevant assumptions, and assess the qualification and independence of the appraiser.

The Management's Responsibility and Governing Body of the Individual Financial Statements

It is the management's responsibility to fairly present the Individual Financial Statements in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and to maintain internal controls which are necessary for the preparation of the Individual Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing for the individual financial statement, responsibilities of the management also included assessment of the capacity to continue operation, disclosure of related matters and the accounting approaches to be adopted when the Company continues to operate unless the management intends to liquidate or suspend the business of Optimax Technology Corporation if there was not any other option except liquidation or suspension of the Company's business.

The governing bodies of Optimax Technology Corporation (including the Audit Committee) have the responsibility to oversee the process by which the financial statements are prepared.

The Accountants' Responsibilities in Auditing the Individual Financial Statements

Our objectives are to obtain reasonable assurance on whether the Individual Financial Statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. "Reasonable assurance" refers to high level of assurance. Nevertheless, our audit, which was carried out in accordance with the generally accepted auditing standards, does not guarantee that a material misstatement(s) will be detected in the

150

Individual Financial Statements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Individual Financial Statements.

We have utilized our professional judgment and maintained professional skepticism when exercising auditing work in accordance with the generally accepted auditing standards. We also:

Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Individual Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. The risk of not detecting a significant 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.
Acquired necessary understanding of internal controls pertaining to the audit in order to develop audit procedures appropriate under the circumstances. Nevertheless, the purpose of such understanding is not to provide any opinion on the effectiveness of the internal controls of Optimax Technology Corporation.
Assess the appropriateness of the accounting policies adopted by the management level, as well as the reasonableness of their accounting estimates and relevant disclosures.
Concluded, based on the audit evidence acquired, on the appropriateness of the management's use of the going-concern basis of accounting, and determined whether a material uncertainty exists where events or conditions that might cast significant doubt on the ability of Optimax Technology Corporation to continue as going concerns. If we believe there are events or conditions indicating the existence of a material uncertainty, we are required to remind the users of the Individual Financial Statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure was found. Our conclusion is based on the audit evidence acquired as of the date of the audit report. However, future events or conditions may cause Optimax Technology Corporation to cease to continue as a going concern. However, future events or conditions may cause Optimax Technology Corporation to cease to continue as a going concern.
Evaluated the overall presentation, structure, and content of the Individual Financial Statements (including the related notes), and determined whether the Individual Financial Statements present related transactions and events fairly.
1. Acquire sufficient and appropriate audit evidence for the financial information of the investee company that adopts the equity method to express opinions on Individual Financial Statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion on Optimax Technology Corporation.

151

From the matters communicated with those charged with governance, we determined the key audit matters of the Individual Financial Statements of Optimax Technology Corporation of 2021. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

BAKER TILLY CLOCK & CO. Taiwan (Republic of China) March 24, 2022

The accompanying financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to review such financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ review report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English version and Chinese version, the Chinese-language independent auditors’ review report and financial statements shall prevail.

152

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) OPTIMAX TECHNOLOGY CORPORATION

Individual Balance Sheets December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets	December 31, 2021	December 31, 2020
	Amount %	Amount %
Current assets Cash Current financial assets at amortized cost Accounts receivable, net Accounts receivable – related parties Other receivables Current inventories Prepayments Non-current assets or disposal groups classified as held for sale, net Other current financial assets Other current assets	$ 68,133 1 53,500 1 722,760 15 35,444 1 186,486 4 1,164,761 25 31,137 1 －－ 66,289 1 2,227 －	162,114 2 35,800 － 770,909 9 －－ 305,274 3 957,134 11 44,988 1 3,106,341 36 79 － 1,698 －
Total current assets	2,330,737 49	5,384,337 62
Noncurrent assets Non-current financial assets at fair value through other comprehensive income Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Other non-current financial assets Other non-current assets	20,000 － 72,835 1 2,124,887 45 4,428 － 31,117 1 137,040 3 18,737 － 29,196 1	－－ 106,299 1 2,210,231 25 6,586 － 693,783 8 161,976 2 180,393 2 7,429 －
Total non-current assets	2,438,240 51	3,366,697 38
Total Assets	$ 4,768,977 100	8,751,034 100
Liabilities and Stockholders’ Equity Current liabilities Short-term loans Accounts payable Other payables Current provisions Current lease liabilities Current Portion of Long-term Debt Current refund liabilities Other current liabilities	$ 602,478 13 138,037 3 148,115 3 15,436 － 3,235 －－－ 12,257 － 14,825 －	702,290 8 178,237 2 280,702 3 13,906 － 18,753 － 111,957 1 7,775 － 120,860 2
Total current liabilities	934,383 19	1,434,480 16
Noncurrent liabilities Long-term borrowings Deferred tax liabilities Non-current lease liabilities Non-current net defined benefit liability	1,790,000 38 795 － 1,277 － 8,525 －	5,366,681 62 147 － 693,008 8 11,355 －
Total non-current liabilities	1,800,597 38	6,071,191 70
Total liabilities	2,734,980 57	7,505,671 86
Equity Common stock Retained earnings`：` Unappropriated retained earnings (accumulated deficit) Other components of equity	1,700,000 36 355,003 7 (21,006) －	3,253,324 37 (2,005,321) (23) (2,640) －
Total equity	2,033,997 43	1,245,363 14
Total liabilities and equity	$ 4,768,977 100	8,751,034 100

153

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION

Individual Statements of Comprehensive Income For the years ended December 31, 2022 and 2021

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

Total operating revenue Total operatingcosts	2021 Amount %	2020 Amount %
	$ 3,191,831 100 (2,410,988) (75)	2,416,667 100 (1,972,149) (82)
Gross profit from operations	780,843 25	444,518 18
Operating expenses Selling expenses Administrative expenses Research and development expenses Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS9	(162,677) (5) (140,940) (4) (54,927) (2) (84,937) (3)	(112,470) (5) (139,259) (6) (51,788) (2) (9,336) `－`
Total operating expenses	(443,481) (14)	(312,853) (13)
Net operating income	337,362 11	131,665 5
Non-operating income and loss Interest income 177 `－` Other income 52,851 2 Other gains and losses – net 498,612 16 Finance costs (54,049) (2) Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 15,667 `－` Share of profit (loss) of subsidiaries accounted for usingequitymethod (15,757) (1)		409 `－` 92,727 4 (67,437) (3) (126,583) (5) (21,207) (1) 21,624 1
Total non-operating income and expenses 497,501 15		(100,467) (4)
Profit from continuing operations before tax 834,863 26 Total tax expense (income) (24,925) (1)		31,198 1 (14,734) (1)
Net Income 809,938 25		16,464 `－`
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss Remeasurement of defined benefit obligations (2,938) `－` Unrealised gains (losses) from subsidiaries accounted for using equity method in equity instruments measured at fair value through other comprehensive income (16,891) (1) Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating the financial statements of foreign operations (816) `－` Income tax related to components of other comprehensive income that will be reclassified toprofit or loss (659) `－`		(4,209) `－` `－` `－` (1,872) `－` 375 `－`
Other comprehensive income (loss), net of tax (21,304) (1)		(5,706) `－`
Total comprehensive income $ 788,634 24		10,758 `－`
Earnings per share Basic earnings per share $ 4.76		0.10

154

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION

Individual Statements of Changes in Equity

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Accounting Title Common stock	Undistributed surplus (Accumulated deficit)	Other components of equity	Total equity
		Foreign Currency Translation differences Unrealized gains(losses) from financial assets at fair value through other comprehensive income
For the year ended January 1, 2020 $ 3,253,324 $ (2,017,576)		$ (1,136) $ (7)	$ 1,234,605
Consolidated net price (loss)) `－` Other comprehensive income (loss) `－` Total comprehensive income (loss) `－`	16,464 (4,209) 12,255	`－` `－` (1,497) `－` (1,497) `－`	16,464 (5,706) 10,758
For the year ended December 31,2020 $ 3,253,324 $ (2,005,321)		$ (2,633) $ (7)	$ 1,245,363
For the year ended January 1, 2021 $ 3,253,324 $ (2,005,321)		$ (2,633) $ (7)	$ 1,245,363
Net Income `－` 809,938 Other comprehensive income(loss) `－` (2,938) Total comprehensive income (loss) `－` 807,000 Capital reduction for cover accumulated deficits (1,553,324) 1,553,324		`－` `－` (1,475) (16,891) (1,475) (16,891) `－` `－`	809,938 (21,304) 788,634 `－`
Balance at December 31, 2021 $ 1,700,000 $ 355,003		$ (4,108) $ (16,898)	$ 2,033,997

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

OPTIMAX TECHNOLOGY CORPORATION

Individual Statements of Cash Flows For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities`：` Income before income tax	2020	2019
	$ 834,863	31,198
Adjustments to reconcile profit (loss)： Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Share of loss (profit) of subsidiaries accounted for using equity method Loss on disposal of property, plan and equipment Loss on disposal of investment properties Gain on disposal of non-current assets classified as held for sale Reversal of impairment loss on non-financial assets Unrealized foreign exchange loss Lease liabilities transferred to other income Accumulated exchange differences classified to exchange loss (gain) on disposal of foreign operation Lease modification benefit Changes in operating assets and liabilities`：` Decrease (increase) in accounts receivable Decrease (increase) in other receivable Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase (decrease) in accounts payable Increase (decrease) in other payable Increase (decrease) in Provisions Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liability Cash generated from operation Cash received from interest income Cash paid for interest Income taxes refunded	76,511 173 69,270 54,049 (177) 15,757 7,516 － (522,291) (2,468) 4,186 －－ (11,398) (68,247) 130,457 (207,627) 13,926 (590) (38,027) (130,375) 1,530 (17,824) (5,768) 203,446 174 (57,278) 83	235,369 989 30,543 126,583 (409) (21,624) 14,513 15 (50,607) (153,823) 17,571 (2,806) (2,735) － (143,230) (24,166) 19,048 (33,913) 6,133 39,773 140,950 － 78,563 (4,282) 303,653 418 (127,099) 18
Net cashprovided by operating activities	146,425	176,990
Cash flows from investing activities`：` Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at amortized cost Acquisition of non-current assets as held for sale Proceeds from disposal of non-current assets as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment properties Decrease (increase) in other financial assets Increaseinother non-current assets	(20,000) (50,000) 32,300 (1,677) 3,553,610 (17,647) 1,962 － 95,446 (27,040)	－ (4,000) 10,509 － 55,905 (7,556) 4,655 (5,185) (50,644) (3,142)
Net cash used in investing activities	3,566,954	542
Cash flows from financing activities`：` Increase (decrease) in short-term loans Payments of long-term debt Repayments of long-term debt Increase in guarantee deposits received Decrease in guarantee deposits received Payments of leaseliabilities	(93,647) 1,790,000 (5,478,638) 3,000 (11,729) (3,949)	46,725 － (350,434) 192 (438) (15,753)
Net cash flows from (used in) financing activities	(3,794,963)	(319,708)
Effect ofchangerate changes oncashand cashequivalents	(12,397)	(15,745)
Net decrease (increase) in cash and cash equivalents Cashand cashequivalents at beginning ofperiod	(93,981) 162,114	(157,921) 320,035
Cash and cash equivalents at end ofperiod	$ 68,133	162,114

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OPTIMAX TECHNOLOGY CORPORATION Notes to Individual Financial Statements

For the year ended December 31, 2021 and 2020

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

1. Organization and business

(1) Optimax Technology Corporation was incorporated In March 1998 and registered under the Ministry of Economic Affairs, R.O.C. The registered address is No. 37 Pingdong Rd., Pingzhen District, Taoyuan, Taiwan. The company and subsidiaries (collectively as “the Company”) are primarily engaged in the manufacturing and selling of polarizers.
(2) In October 2002, Optimax Technology Corporation’s shares were listed on the Taiwan Stock Exchange (TWSE).

2. Approval of financial statements

These Individual financial statements were approved and authorized for issue by the Board of Directors of Optimax Technology Corporation on March 24, 2022.

3. Application of New, Amended and Revised Standards, and Interpretations

(1) Effect of the adoption of new issuances of or 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:

New, Amended and Revised Standards, and Interpretations 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’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond June 30, 2021’	Effective date by International Accounting Standards Board
	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 Company’s financial condition and financial performance based on the Company’s assessment.

(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:

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

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’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:

New, Amended and Revised Standards, and Interpretations

Effective date by
International
Accounting Standards
Board

To be determined by
International
Accounting
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

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

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these Individual financial statements are set out below.

(1) Compliance statement

The Individual financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”

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(2) Basis of preparation

Except for the following items, the Individual financial statements have been prepared under the historical cost convention:
A. Financial instruments at fair value through profit or loss.
B. Net defined benefit liability at defined benefit obligation deducted plan assets through fair value.

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

When the company prepares the individual financial report, the investment subsidiary adopts the equity method. To make the Individual financial report's current year's profit and loss, other comprehensive gains and losses, and the company's consolidated financial report for the current year attributable to the company's owners, other comprehension benefits and equity being the same, some accounting treatment differences adjusted based on the individual basis and the consolidated basis of "investments using the equity method", "shares of profits and losses of subsidiaries using the equity method", "shares of other comprehensive profits and losses of subsidiaries using the equity method" and related equity items.

(3) 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:
- (1) Assets arising from operating activities that are expected to be realized, or are intended to be
- (2) sold or consumed within the normal operating cycle.
- (3) Assets held mainly for trading purposes.
- (4) Assets that are expected to be realized within twelve months from the balance sheet date.
- (5) 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:
- (1) Liabilities that are expected to be settled within the normal operating cycle.
- (2) Liabilities arising mainly from trading activities.
- (3) Liabilities that are to be settled within twelve months from the balance sheet date.
- (4) 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.
(4) Foreign currency

When each entity prepares financial reports, transactions in currencies other than the functional currency (foreign currency) are converted into functional currency records based on the exchange rate on the transaction day.

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The fair value of foreign currency non-monetary items is used to determine the exchange rate on the day of fair value rate conversion, the resulting exchange difference is listed in the current profit and loss, but if the change in fair value is recognized in other comprehensive gains and losses, the resulting conversion difference is listed in other comprehensive gains and losses.

Non-monetary items in foreign currencies as measured by historical cost are converted at the exchange rate on the transaction date and will not be converted again.

When preparing the Individual financial report, the assets and liabilities of foreign operating organizations (including subsidiaries in the country where they operate or whose currency is different from that of the company) are converted into New Taiwan dollars at the exchange rate on each balance sheet date.

The income and expense items are converted at the average exchange rate of the current period. The resulting exchange difference is listed in other comprehensive profit and loss, and accumulated under the equity of the conversion difference of the foreign operation’s financial statements.

If the company disposes of all the rights and interests of the foreign operation, the accumulated exchange difference related to the foreign operations will be reclassified to profit or loss. If the partial disposal of the subsidiaries of the foreign operation does not result in the loss of control, the accumulated exchange difference is re-attributed to the subsidiary’s non-controlling interests and is not recognized as a profit or loss.

(5) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weightedaverage method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(6) Non-current assets classified as held for sale

The carrying amount of non-current assets is expected to be mainly through sales transactions rather than continued use. When closed, it is classified as pending sale. Non-current assets that meet this classification must be available for immediate sale in their current state, and their sale must be highly probable. When the appropriate level of management commits to the plan to sell the asset, and the sale transaction is expected to start from the classification date when completed within one year, it will meet the sale as highly likely.
Non-current assets classified as pending for sale are measured at the lower of the book value and fair value less the cost of sale, and depreciation is stopped for such assets.

(7) Investments accounted for using equity method- subsidiaries

The company uses the equity method to handle investments in subsidiaries.

A subsidiary refers to an entity that the company has control over. Under the equity method, the investment is initially recognized at cost, and the book amount obtained in the future will increase or decrease according to the company's share of subsidiary profit and loss and other comprehensive profit and loss shares and profit distribution. Moreover, the changes in the company's other rights and interests of subsidiaries are recognized based on the shareholding ratio.

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When the company's change in ownership and equity of the subsidiary does not result in the loss of control, it is regarded as equity transaction processing. Between the book value of the investment and the fair value of the consideration paid or received the difference is directly recognized as equity. When the company’s share of the subsidiary’s loss equals or exceeds its equity in the subsidiary (including the book amount of the subsidiary under the equity method and the other long-term rights and interests as part of the company’s net investment), the system continues to recognize the loss based on the shareholding ratio .

The amount of the acquisition cost exceeding the company’s share of the net fair value of the identifiable assets and liabilities of the subsidiary that constitutes the business on the acquisition date is classified as goodwill, which is included in the book value of the investment and cannot be amortized. The amount by which the net fair value of the identifiable assets and liabilities of the subsidiary’s identifiable assets and liabilities that constitute the business on the day exceeds the cost of acquisition is recorded as current income.

When assessing impairment, the company considers the cash-generating unit as a whole in the financial report and compares its recoverable amount with the book value. If the recoverable amount of the asset increases subsequently, the reversal of the impairment loss is recognized as an interest, but the book value of the asset after the reversal of the impairment loss shall not exceed the asset in the case of unrecognized impairment loss, the deduction should be withdrawn the book amount after amortization. The impairment loss attributable to goodwill shall not be reversed in subsequent periods. When the company loses control of a subsidiary, it measures its remaining investment in the former subsidiary at the fair value on the date of loss of control. The fair value of the remaining investment and the difference between any disposal price and the book value of the investment on the date of loss of control are included in Current profit and loss. In addition, all amounts recognized in other comprehensive profits and losses related to the subsidiary are accounted for on the same basis as the company's direct disposal of related assets or liabilities. The unrealized gains and losses of downstream transactions between the company and its subsidiaries are eliminated in the Individual financial report. The profits and losses arising from the counter-current and side-current transactions between the company and its subsidiaries are only recognized in the Individual financial reports within the scope that has nothing to do with the company’s equity in the subsidiaries.

(8) Property, plant and equipment

Real estate, plant and equipment are recognized at cost, and subsequently cost minus accumulated depreciation and the amount after the accumulated impairment loss is measured.

Except for self-owned land, which is not depreciated, the rest of the real estate, plant and equipment will be depreciated on a straight-line basis within the service life of each significant part. The company is at least to review the estimated service life, residual value and depreciation method at the end of each year, and postpone the impact of changes in applicable accounting estimates.

When real estate, plant and equipment are delisted, the difference between the net disposal price and the book value of the asset is recognized in profit and loss.

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(9) Investment real estate

All investment real estate is depreciated on a straight-line basis. Real estate, plant and equipment are transferred to investment real estate on the book amount at the end of self-use.

When investment real estate is delisted, the difference between the net disposal price and the asset's book value is recognized in profit and loss.

(10) Impairment of non-financial assets

The company assesses on each balance sheet date whether there are any indications that real property, plant and equipment, right-of-use assets, investment real estate and intangible assets may have been impaired. If there is any sign of impairment, estimate the recoverable amount of the asset. If the recoverable amount of an individual asset cannot be estimated, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

When the impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is adjusted to the revised recoverable amount, but the increased carrying amount does not exceed the asset or cash-generating unit if the impairment is not recognized in the previous year which the book value determined at the time of the loss (minus amortization or depreciation). The reversal of the impairment loss is recognized in the profit and loss.

(11) Financial instruments

Financial assets and financial liabilities are recognized on the Individual balance sheet of the company which becomes one of the contractual terms of the instrument.

Financial assets
Conventional transactions of financial assets are recognized and delisted by accounting on the transaction date.
(1) Type of measurement

The types of financial assets held by the company are financial assets

measured at amortized cost and equity instruments measured at fair value through other comprehensive gains and losses.

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A. Financial assets measured at amortized cost
If the financial assets invested by the company meet the following two conditions, they are classified as financial assets measured at amortized cost:
(a) It is held under a certain business model, the purpose of which is to hold financial assets
(b) The contract terms generate cash flows on a specific date, and these cash flows are completely to collect contractual cash flows; and to pay the principal and interest on the amount of principal in circulation.

Except for the following two cases, interest income is the effective interest rate multiplied by the financial asset of total book amount:

(c) For purchased or created credit-impaired financial assets, interest income is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial asset.
(d) For financial assets that are not purchased or original credit impairment, but subsequently become credit impairment, you should be confident to calculate interest income by multiplying the effective interest rate by the amortized cost of the financial asset from the next reporting period after the impairment.
- Equivalent cash includes fixed deposits that are highly liquid and can be converted into fixed cash at any time within 3 months from the date of acquisition, and are used to meet short-term cash commitments.
B. Through other comprehensive profit and loss equity instruments measured at fair value to invest in a merged company, at the time of initial recognition, an irrevocable choice may be made, which is not to hold for trading and is not recognized by the purchaser of the business merger or has the consideration. Instrument investment is designated to be measured at fair value through other comprehensive gains and losses.
Equity instrument investments measured at fair value through other comprehensive gains and losses are measured at fair value, and subsequent changes in fair value are reported in other comprehensive gains and losses and accumulated in other equity. At the time of investment disposal, the accumulated profits and losses are directly transferred to retained earnings and are not reclassified as profits and losses.

The dividends of equity instrument investments measured at fair value through other comprehensive gains and losses are recognized in the profit and loss when the rights of the company to receive payments are established, unless the dividend clearly represents the recovery of part of the investment cost.

(2) Impairment of financial assets
A. The company assesses the impairment losses of financial assets (including accounts receivable) measured at amortized cost based on expected credit losses on each balance sheet date.
B. Accounts receivable shall be recognized as an allowance loss based on the expected credit loss during the duration. For other financial assets, first assess whether the credit risk has increased significantly since the initial recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss, and if it has increased significantly, it is recognized based on the lifetime expected credit loss Allowance for losses.
C. Expected credit loss is the weighted average credit loss based on the risk of default. The 12-

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month expected credit loss refers to the expected credit loss caused by the possible default event of the financial instrument within 12 months after the reporting date, and the lifetime expected credit loss represents the expected credit loss caused by all possible default events during the expected lifetime of the financial instrument. The impairment loss of all financial assets is reduced by the allowance account.

(3) Delisting of financial assets

The company only lapses in the contractual rights from the cash flow of financial assets.

It has transferred the financial assets and almost all risks and reports of the ownership of the assets. When transferring to other enterprises, the financial assets are only delisted. When the financial assets measured at the amortized cost are delisted as a whole, their book amount is the difference between the consideration received is recognized in profit and loss. When the equity instrument investment measured at fair value through other comprehensive gains and losses is declassified as a whole, the accumulated gains and losses are directly transferred to the retained earnings are not reclassified as profit or loss.

Financial liabilities and equity instruments
(1) Classification of liabilities or equity

An equity instrument refers to any contract that recognizes the remaining equity of the company after deducting all its liabilities from its assets. The equity instruments issued are recognized by the company after the acquired price deducting the cost of direct issuance.

(2) Financial liabilities

(3) Delisting of financial liabilities
The company delists financial liabilities when contractual obligations have been fulfilled, cancelled, or expired debt.

(12) Liability provision

When the company has current obligations (statutory or constructive obligations) due to past events, and is likely to be required to pay off the obligations, and the amount of the obligations can be reliably estimated, the liability provision shall be recognized. The amount recognized as a liability reserve is based on the risk and uncertainty of the obligation, and is the best estimate of the expenditure required to settle the obligation on the balance sheet date. The liability reserve is measured by discounting the estimated cash flow of the settlement obligation.

(13) Income recognition

After the company recognizes the performance obligations in the customer contract, it allocates the transaction price to each performance

obligations, and recognize income when each performance obligation is met. Commodity sales revenue

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Commodity sales revenue comes from the manufacture and sale of polarizers. Sales revenue is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the customer and the combined company has no outstanding performance obligations that may affect the customer's acceptance of the product. Because when the goods arrive at the customer's designated location, the customer has the right to set the price and use of the goods and bears the main responsibility for resale, and bears the risk of obsolescence and obsolescence of the goods, the merged company recognizes revenue and receivables at that point in time Accounts. The advance receipts received before the arrival of the goods are recognized as contract liabilities.
Commodity sales revenue is measured by the fair value of the consideration received or receivable, and deducted estimated customer returns, discounts and other similar discounts. The combined company estimates possible sales returns and discounts based on historical experience and other known reasons, and recognizes them accordingly refund liabilities and related rights to return products.

(14) Rent

The company assesses whether the contract belongs to (or contains) a lease on the date of contract establishment.

The merged company is the lessor
When the lease term is to transfer almost all the risks and rewards attached to the ownership of the asset to the lessee classifies it as a finance lease. All other leases are classified as operating lease. When the company subleases the right-of-use asset, the right-of-use asset (not
the underlying asset) is used to determine the classification of the sublease. However, if the main lease is a short-term when leasing, the sublease is classified as an operating lease.

The company is the lessee
Except for the lease payments of low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses during the lease period on a straight-line basis, and all other leases are opened in the lease. The right-of-use assets and lease liabilities are recognized on the inception date.

Except for those that meet the definition of investment real estate, right-of-use assets are separately expressed in the Individual balance sheet, and the recognition and balance of right-of-use assets that meet the definition of investment real estate, please refer to Note 4 (9) Accounting Policy for Investment Real Estate.

The right-of-use asset adopts a straight-line basis from the lease start date to the end of its useful life or the lease period expires, the earlier of the two shall be depreciated.

The lease liability was originally measured at the present value of the lease payment. If the implicit interest rate of the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, use the lessee to increase the borrowing interest rate.

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adjust the right-of-use asset. However, if the book value of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in the profit and loss. For lease modifications that are not treated as separate leases, the scope of the lease is reduced The remeasurement of the lease liability is to reduce the right-of-use asset and recognize the profit and loss of the partial or full termination of the lease; the remeasurement of the lease liability for other modifications is to adjust the right-of-use asset, and the lease liability is separately expressed in the Individual balance sheet.

The company and the lessor negotiated rents directly related to the COVID-19, adjusted the rents due before June 30, 2021, resulting in a decrease in rents. These negotiations did not materially change other lease terms. The company chooses to adopt practical expedients to handle all rental negotiations that meet the aforementioned conditions, and does not assess whether the negotiation is a lease modification, but recognizes the reduction of lease payments in the profit and loss when the concession event or situation occurs, and relatively reduces the lease debt.

(15) Employee benefits

Short-term employee benefits are measured by the expected non-discounted amount of cash paid, and are recognized as expenses when the relevant services are provided.

The net obligation under the definite benefit plan is calculated by discounting the amount of future benefits earned by the employee for the current or past services, and the current value of the definite benefit obligation on the balance sheet date minus the fair value of the plan assets. The net obligation to determine benefits is calculated by the actuary every year using the projected unit benefit method, and the discount rate is determined by referring to the market yield rate of high-quality corporate bonds that are consistent with the currency and period of the determined benefit plan on the balance sheet date; in highquality corporate bonds For countries with no deep market, the market yield rate of government bonds (at the balance sheet date) is used. The remeasurement amount generated by the determined benefit plan is recognized in other comprehensive profit and loss in the current period and included in the retained surplus. The related expenses of the previous service cost are immediately recognized as a loss.

Resignation benefits are benefits provided when the employee's employment is terminated before the normal retirement date or when the employee decides to accept the company's welfare invitation in exchange for termination of employment. The company recognizes expenses when the offer for resignation benefits can no longer be revoked or when the relevant reorganization costs are recognized earlier, and it is not expected that the benefits that are fully paid off within 12 months after the balance sheet date should be granted discount.

(16) Income taxes

1. Current income tax

The company determines the current income (loss), based on which to calculate the payable (recoverable) income tax.

The undistributed surplus calculated in accordance with the provisions of the Income Tax Law of

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the Republic of China is subject to additional income tax, recognized by the resolution of the Shareholders’ annual meeting.

The adjustment of income tax payable in previous years is included in current income tax.

Deferred income tax

Deferred income tax is calculated based on the temporary difference between the book value of assets and liabilities and the tax basis for calculating taxable income.

Taxable temporary differences related to investment in subsidiaries are recognized as deferred income tax liabilities, but if the company can control the timing of the reversal

of the temporary difference, and the temporary difference is likely to not revert in the foreseeable future except. The deductible temporary differences related to this type of investment are recognized as deferred income tax only if it is likely to have sufficient taxable income to realize the temporary difference, and within the scope of expected return in the foreseeable future assets.

Deferred income tax assets and liabilities are measured by the tax rate for the current period of expected debt settlement or asset realization. The tax rate is based on the tax rate and tax law that has been legislated or substantively legislated on the balance sheet date, and the deferred tax liabilities and assets are measured It reflects the tax consequences arising from the manner in which the company expects to recover or settle the book value of its assets and liabilities on the balance sheet date.

3.Current and deferred income tax

5. Critical Accounting Judgments and Key Sources of Estimation and Assumption Uncertainty

When the company adopts the accounting policies described in Note 4, for those

who cannot easily obtain information about the carrying amounts of assets and liabilities from other sources, the management must base on historical experience And other relevant factors to make relevant judgments, estimates and assumptions. The estimates and related assumptions are based on historical experience and other factors deemed relevant. Actual results may differ from estimates. Estimates and basic assumptions are continuously reviewed. If the revision of the estimate only affects the current period, it shall be recognized in the current period of the revision of the accounting estimate. If the revision of the accounting estimate affects both the current period and the future period, it shall be recognized in the current period and the future period of the estimate revision. The main sources of uncertainties in major accounting judgments, estimates and assumptions of the company are as follows:

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(1)Evaluation of inventories
Since inventory must be priced at the lower of cost and net realizable value, the merging company must use judgment and estimation to determine the net realizable value of the inventory at the end of the financial reporting period. Due to the rapid changes in the industry, the company assesses the amount of inventory at the end of the financial reporting period due to normal depletion, obsolescence, or no market sales value, and offsets the inventory cost to the net realizable value. This inventory evaluation is mainly based on the product demand in a specific period in the future, which may cause major changes.
(2)Estimated impairment of financial assets
The estimated impairment of accounts receivable is based on the assumption of default rate and expected loss rate of the company. The company considers historical experience, current market conditions and forward-looking information to make assumptions and select input values for impairment assessment. For important assumptions and input values used, please refer to Note 6 (4). If the actual future cash flow is less than expected, it may be incurred significant impairment losses.
(3)Assessment of impairment of non-financial assets
In the process of asset impairment assessment, the company must rely on subjective judgments and determine the independent cash flow of a specific asset group, the number of years of asset durability, and the possible future income and expenses of a specific asset group based on the use of assets and industrial characteristics. Changes or estimated changes brought about by the company's strategy may cause significant impairment or reversal of recognized impairment losses in the future.
(4)The realized of deferred income tax assets
Deferred income tax assets are recognized when there is likely to be sufficient taxable income in the future to deduct temporary differences. When assessing the feasibility of deferred income tax assets, significant accounting judgments and estimates of the management must be involved, including the expected future sales revenue growth and profit rate, tax exemption period, applicable income tax deductions and tax regulations and cost-effective assumption. Any changes in the global economic environment, industrial environment and laws and regulations may cause major adjustments to deferred income tax assets.

6. Description of Significant Accounts

(1) Cash

ription of Significant Accounts )Cash
Cash on hand Demand deposits and checking account Total	December 31, 2021 $ 611 67,522 $ 68,133	December 31, 2020
		$ 475 161,639
		$ 162,114

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(2) Financial assets measured at fair value through other comprehensive income

Equity instrument investment

ty instrument investment
Non-current Domestic stock company shares Non-listed stock of company	December 31, 2021 $ 20,000	December 31, 2020
		$ `─`

The company’s investment in foreign unlisted companies is for the purpose of medium and long-term holding, and it is expected profit through long-term investment. The management believes that if the fair value fluctuations of these investments are included in the profit and loss, it is inconsistent with the aforementioned investment plan, so they choose to designate the investment through other comprehensive gains and losses measured at fair value.

(3) Financial assets at amortized cost

ancial assets at amortized cost
Current Domestic investment Time deposits with original maturity more than three months Interest rate range	December 31, 2021 $ 53,500 0.120% ~0.815%	December 31, 2020
		$ 35,800
		0.120% ~0.815%

For information on providing guarantees for the current financial assets measured at amortized cost, please refer to Note 8.

(4) Net notes and accounts receivable

t notes and accounts receivable
Notes receivable (Listed on other current assets) Occurs due to business Less: loss allowance Accounts receivable Measured at amortized cost Total book amount Less: loss allowance	December 31, 2021 $ 3,464 (3,413) $ 51 $ 739,175 (16,415) $ 722,760	December 31, 2020
		$ 3,527 (3,413)
		$ 114
		$ 792,863 (21,954)
		$ 770,909

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In principle, the credit investment period of the company to customers is 30 to 120 days after the invoice date. In order to reduce credit risk, the management of the company assigns a dedicated team to credit limit determination, credit approval and other monitoring procedures to ensure overdue accounts receivable appropriate actions have been taken for the recovery. In addition, the company will gradually review the recoverable amount of accounts receivable to ensure that the accounts receivable that cannot be recovered have been properly deducted.
The company recognizes the allowance loss of accounts receivable based on the expected credit loss during the duration. The expected credit loss during the existence period takes into account the past default records of customers and the current financial situation, industrial economic situation, and also considers the overall economic and industrial outlook. Separate individual customers into different risk groups and recognize allowance losses based on the expected loss rate of each group lost.
If there is evidence that the counterparty of the transaction is facing serious financial difficulties and the company cannot reasonably expect the recoverable amount, the company directly writes off the relevant accounts receivable, but will continue to pursue recourse activities. The amount recovered due to recourse is recognized in profit and loss.
The allowance loss for accounts receivable of the company was as follows:

		December 31, 2021	December 31, 2021	December 31, 2021
Not past due	Past due 1~30 days	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
0.83`％～` 1.31`％` $ 604,065 (8,194)	1.02`％～` 1.61`％` $ 86,056 (979)	1.21`％～` 1.91`％` $ 23,160 (442)	1.4 `％～` 2.52`％` $ 17,379 (418)	1.79 `％～` 100`％` $ 8,515 (6,382)	$ 739,175 (16,415)
$ 595,871	$ 85,077	$ 22,718	$ 16,961	$ 2,133	$ 722,760

		December 31, 2020	December 31, 2020	December 31, 2020
Not past due	Past due 1~30 days	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
0.52`％～` 0.59`％` $ 587,271 (8,518)	0.59`％～` 0.68`％` $ 127,289 (1,576)	0.66`％～` 0.76`％` $ 30,231 (234)	0.73`％～` 0.92`％` $ 6,784 (1,054)	0.87`％～` 100`％` $ 41,288 (10,572)	$ 792,863 (21,954)
$ 578,753	$ 125,713	$ 29,997	$ 5,730	$ 30,716	$ 770,909

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5. The movement of the loss allowance for notes and accounts receivable was as follows:

(5)	Balance at the beginning of the period Impairment Loss in the current period Actual write-off for the period Reclassified to related party in the current period Balance at the end of the period Balance at the beginning of the period Impairment Loss in the current period Actual write-off for the period Balance at the end of the period Other accounts receivable Operating lease receivable Refundable business tax Equipment receivable Other accounts receivable-other Other accounts receivable- related party Sub-total Less: loss allowance Total	2021
		Notes receivable $ 3,413 `－` `－` `－` $ 3,413 2020	Accounts receivable
			$ 21,954 34,440 (1,916) (38,063)
			$ 16,415

		Notes receivable $ `－` 3,413 `－` $ 3,413 December 31, 2021 $ 76 19,346 `－` 3,338 165,853 188,613 (2,127) $ 186,486	Accounts receivable
			$ 25,208 9,336 (12,590)
			$ 21,954
			December 31, 2020
			$ 7,746 `－` 1,150 149,528 164,644
			323,068 (17,794)
			$ 305,274

The movement of the loss allowance for other accounts receivable was as follows:

Balance at the beginning of the period (Reversal of ) Impairment Loss in the current period Balance at the end of the period	2020 $ 17,794 (15,667) $ 2,127	2019
		$ `－` 17,794
		$ 17,794

171

(6) Inventories

Inventories
Finished goods Work in process Raw materials Inventory in transit Total	December 31,2021 $ 366,258 403,679 369,944 24,880 $ 1,164,761	December 31,2020
		$ 418,556 298,255 232,206 8,117
		$ 957,134

The amounts recognized as cost of sales in relation to inventories were as follows:

Inventories sold Gain from price recovery of inventory Unapplied manufacturing expenses Income from Sale of Scrap and Wastes Others Total	2021 $ 2,501,394 (27,984) 26,404 (88,881) 55 $ 2,410,988	2020
		$ 2,015,322 (29,690) 18,108 (31,591) `－`
		$ 1,972,149

The gain from price recovery in the net realizable value of the inventories of the company in 2021 and 2020, was mainly due to the sale of the inventory that had been assessed for loss in previous years.

(7) Non-current assets to be sold

Non-current assets to be sold
Houses and Buildings Mechanical Equipment Transportation Equipment Office Equipment Other Devices Less: Accumulated depreciation Less: Accumulated impairment Total	December 31, 2021 $ `－` `－` `－` `－` `－` `－` `－` $ `－`	December 31, 2020
		$ 6,685,469 413,572 14,410 217 898 (4,007,873) (352)
		$ 3,106,341

In order to revitalize assets and reduce operating expenses, the company sold the Plant in Southern Taiwan Science Park and related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd. (hereinafter referred to as TSMC). On October 19, 2020, the real estate sales contract was signed. The total price was NT$3,832,500,000 (tax included), and the payment was collected in installments according to the contract and remitted to the designated bank trust account. As of December 31, 2020, the bank trust account has received NT$2,572,500,000 and allocated NT$75,000,000 to the company (other current liabilities listed on December 31, 2020 were NT$71,429,000), and the remaining amount was NT$1,260,000,000. The bank trust account was fully recovered on January 5, 2021, and after deducting the cost of selling and repaying the bank loan, the remaining amount of NT$168,820,000 was transferred to the company on January 29, 2021. The transfer of ownership has been completed on January 6, 2021,

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and the disposal benefit of non-current assets to be sold is recognized as NT$522,291,000. The company signed a plant and plant equipment leasing contract with Hong-Ju Precision Technology Co., Ltd. (hereinafter referred to as Hong-Ju Company) in August 2018. The lease period is 5 years; because the company plans to sell the Plant and its related subsidiary in Southern Taiwan Science Park, therefore, on October 15, 2020, the company signed a lease agreement to terminate the plant and plant equipment with Hong-Ju Company. Both parties agreed that the lease contract would be terminated on September 30, 2020. In addition, in order to compensate Hong-Ju Company for the early termination of the contract, the company agreed to pay Hong-Ju Company NT$75,000,000 in compensation for the damages incurred. The company has estimated the relevant loss of NT$75,000,000 in the accounts in September 2020, and paid NT$40,000,000 and NT$35,000,000 in November 2020 and January 2021, respectively. Others on December 31, 2020 Payables - Compensation payables are listed as NT$35,000,000. In order to compensate the company for the losses indicated by the early termination of the contract by the Hong-Ju Company, TSMC signed a supplementary agreement and a compensation agreement with the company on December 25, 2020. TSMC agrees to pay compensation of NT$5,500,000 to the company after the completion of the registration of the ownership transfer of the building and the completion of the demolition of the auxiliary equipment by the company. The auxiliary equipment was dismantled and sold at a price of NT$36,750,000 (tax included) in January 2021, and recognized as other income of NT$35,000,000. The above compensation of NT$5,500,000 was paid by TSMC on February 18, 2021. The Company recognized this compensation as other income.

In order to revitalize assets and reduce operating costs, the Board of Directors resolved to sell the No.5 Factory in Pingzhen on August 8, 2019, and signed the real estate selling and purchasing contract on November 21, 2019, with a total price of NT$201,523,000 (tax not included). The transfer of the ownership of the land and buildings was completed on January 8, 2020, and the disposal benefit of non-current assets held for sale was N$50,607,000 and the gain of reversal of impairment loss of non-current assets held for sale was NT$1,185,000.
Please refer to Note 8 for information on guarantees for non-current assets held for sale.

(8) Investments accounted for using equity method

- Investment in subsidiary company

nvestment in subsidiary-company
Non-listed company OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. ART OPTRONICS CORP. Total	December 31, 2021 $ 71,947 888 $ 72,835	December 31, 2020
		$ 105,271 1,028
		$ 106,299

The company's ownership interest and percentage of voting rights in subsidiaries on the balance sheet date as follows:

1. The company's ownership interest balance sheet date as follows:	and percentage of voting rights in subsidiaries	and percentage of voting rights in subsidiaries
Subsidiary name OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. ART OPTRONICS CORP.	The company’s capital and voting rights are divided into %
	December 31, 2021 100`％` 100`％`	December 31, 2020
		100`％` 100`％`

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For the details of the investment subsidiaries indirectly held by the company, please refer to Attached Table 7.

(9) Property, plant and equipment

		2021
Balance at January 1, 2021 $ 479,697 3,236,522 4,021,077 111,066 232,449 56,204 8,137,015 1,650,368 3,878,662 105,402 221,819 52,448 5,908,699 `－` 13,394 1,199 3,020 472 18,085 $ 2,210,231	Additions $ `－` 14,026 9,613 `－` 1,053 563 25,255 51,252 18,336 936 1,425 339 72,288 `－` `－` `－` `－` `－` `－` $ (47,033)	Disposals $ `－` (7,745) (263,043) (6,175) (116,363) (7,931) (401,257) (7,242) (257,127) (5,997) (113,761) (7,652) (391,779) `－` (2,126) (22) (252) (68) (2,468) $ (7,010)	Reclassification $ `－` (50,492) `－` `－` `－` `－` (50,492) (19,208) `－` `－` `－` `－` (19,208) 17 `－` `－` `－` `－` 17 $ (31,301)	Balance at December 31, 2021
				$ 479,697 3,192,311 3,767,647 104,891 117,139 48,836
				7,710,521
				1,675,170 3,639,871 100,341 109,483 45,135
				5,570,000
				17 11,268 1,177 2,768 404
				15,634
				$ 2,124,887

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2020

			2020
Item Cost Land Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated depreciation Buildings Machinery Transportation equipment Office equipment Other Sub-total Accumulated impairment Machinery Transportation equipment Office equipment Other Sub-total Total	Balance at January 1, 2020 $ 479,697 3,236,994 4,838,996 155,268 248,876 90,655 9,050,486 1,594,609 4,629,496 145,481 235,360 83,530 6,688,476 27,508 2,427 3,368 1,779 35,082 $2,326,928	Additions $ `－` 1,141 7,549 88 417 330 9,525 57,237 29,089 1,710 2,180 825 91,041 `－` `－` `－` `－` `－` $ (81,516)	Disposals $ `－` (1,440) (411,896) (29,879) (16,627) (33,883) (493,725) (1,308) (396,089) (28,219) (15,672) (31,069) (472,357) (13,997) (1,228) (348) (1,307) (16,880) $ (4,488)	Reclassification $ `－` (173) (413,572) (14,411) (217) (898) (429,271) (170) (383,834) (13,570) (49) (838) (398,461) (117) `－` `－` `－` (117) $ (30,693)	Balance at December 31, 2020
					$ 479,697 3,236,522 4,021,077 111,066 232,449 56,204
					8,137,015
					1,650,368 3,878,662 105,402 221,819 52,448
					5,908,699
					13,394 1,199 3,020 472
					18,085
					$2,210,231

Housing and construction Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Mechanical equipment 1 to 24 years Other equipment 2 to 17 years

(d) Details of property, plant and equipment were pledged as collateral of long-term borrowings and loans, please refer to Note 8.

175

(10) Leasing arrangements- lessee

1.Right-of-use assets

(d) The carrying amount of right-of-use assets and the depreciation charge are as follows:

Carrying amount of right-of-use asset Land Transportation equipment Office equipment Total Carrying amount of right-of-use asset Land Transportation equipment Office equipment Total	December 31, 2021 $ 1,668 1,957 803 $ 4,428 2021	December 31, 2020
		$ 3,336 1,988 1,262
		$ 6,586
		2020
	$ 1,668 1,591 459	$ 1,668 1,608 459
	$ 3,718	$ 3,735

The company leases the land located in the Southern Science Industrial Park is sub-leased in the form of operating leases, and the relevant use right assets are listed as investment real estate. Please refer to Note 6 (12). The above-mentioned amount of right-of-use assets does not include right-of-use assets that meet the definition of investment real estate.

(e) The additions of the right-of-use assets of the company in 2021 and 2020 were respectively NT$1,560,000 and NT$623,000.
(f) Except for the addition and recognition of depreciation expenses listed above, there was no significant sublease or depreciation of the right-of-use assets of the company in 2021 and 2020.

2. Leasing liabilities

Carrying amount of leasing liabilities Current Non-current	December 31, 2021 $ 3,235 $ 1,277	December 31, 2020 $ 18,753 $ 693,008

The discount rate ranges for lease liabilities are as follows:

Land Transportation Equipment Office Equipment	December 31, 2021 1.8513`％` 1.8513`％` 1.8513`％`	December 31, 2020 1.8513`％` 1.8513`％` 1.8513`％`

176

3. Important rental activities and terms

The assets leased by the company include land, official vehicles and photocopiers. The contract period usually ranges from 3 to 5.5 years. The lease is based on editors, with various terms and conditions, except that the tribute of the leased goods cannot be used for lending and holding. No other restrictions are imposed.

The company leased land to the Southern Science and Technology Industrial Park Administration Bureau from August 7, 2008 to December 31, 2044, and agreed to adjust the lease payment every 2 years. The lease can be renewed when the lease term ends.

The company was to activate assets and reduce operating expenses, on August 12, 2020, the board of directors decided to sell the branch in Southern Taiwan Science Park and its related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd., and signed a real estate purchase contract on October 19, 2020. The transfer of ownership was completed on January 6, 2021, and the land use right contract with the Southern Science Industrial Park was terminated ahead of schedule on January 5, 2021. From January 1st to December 31, 2021, due to the early termination of the lease contract, the recognition of lease modification benefits was NT$11,398,000.

In 2020, due to the COVID-19 severely affecting the market economy, the company applied to the Southern Science Industrial Park Administration for the land lease fee extinction plan, and the Science Industrial Park Administration agreed to reduce the rent amount from January 1 to June 30, 2020. The company recognized the profit of NT$2,806,000 from the change in lease payment caused by the rent reduction as other income.

4. Other rental information

tal information
Short-term rental expenses Low-value asset lease expenses Total cash outflow from lease	2021 $ 6 $ 78 $ 4,308	2020
		$ 74
		$ 166
		$ 29,358

The company chooses to pay for transportation equipment that meets short-term leases and low-value asset leases. The recognition exemption is applicable to certain office equipment leases under lease, and the recognition of such leases is not relevant. Related right-of-use assets and lease liabilities.

(10) Leasing arrangements- lessor

The assets leased by the company include land, buildings, machinery and equipment, etc., and the contract period ranges from 1 to 5 years. The lease contract is negotiated separately and contains various terms and conditions. In order to preserve the use of leased assets, the lessor shall not sublet or pledge all or part of the leased object and agreed matters.
The benefits recognized by the company based on the operating lease contract are as follows:

Rental income	2021 $ 1,819	2020
		$ 97,526

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3. The period ranges recognized by the company based on the operating lease contract are as follows:

The 1styear The 2ndyear The 3thyear The 4thyear The 5thyear Over 5 years Total	December 31, 2021 $ 6,578 5,714 5,786 6,000 4,500 $ 28,578 $ 6,578	December 31, 2020
		$ 756 `－` `－` `－` `－` $ 756
		$ 756

(11) Investment property

Investment property
			2021
Item	Balance at January 1, 2021 $ 1,143 733,905 735,048 1,055 40,167 41,222 43 $ 693,783	Additions	Disposals	Reclassification $ 50,492 `－` 50,492 19,208 `－` 19,208 (17) $ 31,301	Balance at December 31, 2021
Cost Buildings Right-of-use assets Sub-total Accumulated depreciation Buildings Right-of-use assets Sub-total Accumulated impairment Buildings Total		$ `－` `－`	$ `－` (733,905)		$ 51,635 `－`
		`－`	(733,905)		51,635
		229 276	`－` (40,443)		20,492 `－`
		505	(40,443)		20,492
		`－`	`－`		26
		$ (505)	$ (693,462)		$ 31,117

				2020	2020
Balance at January 1, 2020 $ 6,679,492 704,582 7,384,074 3,490,503 19,663 3,510,166		Lease liabilities remeasurement		Additions	Disposals	Reclassifica tion	Balance at December 31, 2020
		$	`－` 29,323	$ 5,410 `－`
			29,323	5,410	(140)	(6,683,619)	735,048
			`－` `－`	120,089 20,504	(125) `－`	(3,609,412) `－`	1,055 40,167
			`－`	140,593	(125)	(3,609,412)	41,222
	136,037		`－` $ 29,323	`－`	(135,994)	`－`	43
	$ 3,737,871

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The investment real property is depreciated based on the following durability years:

Buildings Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Right-of-use assets 35.8 years

The fair value of investment real estate held by the company is evaluated by independent experts on the date of each balance sheet using the third-level input value. The aforementioned evaluation of the main building of the plant and the auxiliary facilities of the building were evaluated using the cost method and the fixed rate method (declining balance method) as of December 31, 2021 and 2020. The evaluation of the land use right assets in the Southern Science Industrial Park on December 31, 2021 and 2020, was based on the bonus period and the rent of each contract, and considering the rent range adjusted according to the announced land price, the discount rate obtained by the risk premium method is used as the implicit interest rate of the lease, and finally discounted appraisal of the value of the right to use assets. The evaluation of the land use right assets in the Suzhou High-tech Zone of the People's Republic of China adopted the comparative method on December 31, 2021 and 2209 for the company.

The fair value of investment real estate of the company on December 31, 2021 and 2020 was as follows:

:
Fair value	December 31, 2021 $ 34,876	December 31, 2020
		$ 693,798

Rental income and direct operating expenses of the investment real estate of the company:

Rental income from investment real estate Direct operating expenses incurred by investment real estate that generates rental income in the current period Direct operating expenses incurred by investment real estate that does not generate rental income during the current period	2021 $ 954 $ 229 $ 276	2020
		$ 96,660
		$ 19,821
		$ 149,514

In order to activate assets and reduce operating expenses, the Board of directors resolved to sell the branch in Southern Science Industrial Park and related ancillary equipment to Taiwan Semiconductor Manufacturing Co., Ltd., and signed a real estate purchase agreement on October 19, 2020, and the total price is NT$3,832,500,000 (tax included). Since the sale price deducted the disposal cost is higher than the book value, the real estate plant and equipment impaired the reversal benefits and investment real estate impaired the reversal benefits of NT$10,980,000 and NT$135,987,000 has been included in the other profit and loss in the income statement. The company determines the recoverable amount based on the selling price of the plant deducted the cost of disposal, and the relevant fair value belongs to the first level of fair value measurement.
Please refer to Note 8 for information on guarantees provided by investment real estate.

179

(13) Short-term borrowings

Borrowings without collateral Collateral borrowings Total Interest rate	December 31, 2021 $ `－` 602,478 $ 602,478 1.5`％～`2.357`％`	December 31, 2020
		$ 529,453 172,837
		$ 702,290
		0.6612`％～`1.84`％`

The company signed a loan contract with Entie Commercial Bank on May 3, 2021, which is a shortterm credit line contract with a short-term guaranteed loan amount of NT$2,800,000,000. The first allocation of the credit line is limited to repayment of the bank line under the creditor's rights and debt negotiation mechanism. The company should send a letter to notify the main creditor's rights and debts negotiating banks before the allocation, and obtain the creditor's rights and debts negotiating bank group to send a letter or creditor's rights meeting to reply to agree.

In accordance with the ”Key Points for the Ministry of Economic Affairs to Assist Enterprises in Handling Bank Credit and Debt Negotiations'', Optimax Technology Corporation applied to the Industrial Bureau of the Ministry of Economic Affairs on April 10, 2020, to assist in the negotiation of bank claims and debts, requesting that short-term credit extension periods be extended to December 7, 2021, and medium and long-term loans extended for one year. The bank was held a delegation meeting on June 19, 2020, and on November 17, 2020, the majority of creditor banks agreed through written consent.
(3) Short-term credit extension (including account receivable undertaking): Renew or extend the contract according to the original conditions (until December 7, 2021) based on the current credit limit approved by the banks.
(4) Short-term credit application method: until December 7, 2021, within the application period using this quota cyclically.
Please refer to Note 8 for the provision of assets as guarantees for short-term loans.

180

(14) Accounts payable

Account payable	December 31, 2021 $ 138,037	December 31, 2020
		$ 178,237

The average de-account period of payables is 30 to 180 days. The company has a financial risk management policy to ensure that all payables are repaid within the pre-agreed credit period.
The accounts payable and other accounts payable of the company exposed to exchange rate and liquidity risks for disclosure, please refer to Note 6 (29).

(15) Other payables

December 31, 2021 December 31, 2020

	December 31, 2021	December 31, 2020
Payable salary and bonus Rent payable Payable labor fees Payable insurance premium Pension payable Interest payable Equipment payment payable Commission payable Business tax payable Compensation payable Others Total	$ 54,772 154 910 6,585 2,786 1,296 4,655 18,062 `－` `－` 58,895 $ 148,115	$ 51,717 156 840 5,665 2,479 4,525 3,749 18,132 100,051 35,000 58,388
		$ 280,702

Other main accounts payable are consist of house tax, water, electricity and gas, freight, import fees, export fees and repair fees.

(16) Liability reserve-current

Employee benefit liability provision	December 31, 2021 $ 15,436	December 31, 2020
		$ 13,906

Employee benefit liability provision is an assessment of employees’ vested leave rights. It is reversed at the time of international vacation or cash payment.
The aforesaid reserves are not discounted because they are short-term or have little impact on discounting.

181

(17) Long term borrowings

erm borrowings
Long-term bank loan Medium and long-term bank mortgage loans Bank mid-term working capital loan Sub-total Less: part due within one year Long-term borrowings Interest rate	December 31, 2021 $ `－` 1,790,000 `－` 1,790,000 `－` $ 1,790,000 2.093%	December 31, 2020
		$ 5,285,480 112,957 80,201
		5,478,638 (111,957)
		$ 5,366,681
		1.8182%`～`1.8337%

The company signed a loan contract with Entie Commercial Bank on May 3, 2021, which is a shortterm credit line contract with a short-term guaranteed loan amount of NT$2,800,000,000. The first allocation of the credit line is limited to repayment of the bank line under the creditor's rights and debt negotiation mechanism. The company should send a letter to notify the main creditor's rights and debts negotiating banks before the allocation, and obtain the creditor's rights and debts negotiating bank group to send a letter or creditor's rights meeting to reply to agree.

Due to the overall operation and capital planning, the consolidated company signed a 2-year mortgage loan with a total amount of 1,790,000 thousand with Entie Commercial Bank on December 27, 2021. The repaid principal once due, and the balance of the loan on December 31, 2021 was NT$ 1,790,000,000.
In December 31, 2020, the financial ratios, important restrictions, defaults and delays in the payment of principal and interest, extensions and reductions in the amount of principal repayment in each period are explained as follows:
(3) The company promises to maintain the following financial ratios during the credit extension period:

period:
Financing project Taiwan Cooperative Bank 3.5 billion joint loans Mega International Commercial Bank Co., Ltd. 12 billion joint loan Taiwan Cooperative Bank 2.6 billion joint loan	Minimum current ratio 100`％` 100`％` 100`％`	Minimum interest guarantee multiple 2.5 2.5 2.5	Highest debt ratio 200`％` 150`％` 200`％`	Minimum tangible net worth
				$ 3,000,000 7,000,000 11,000,000

182

(4) In accordance with the ”Key Points for the Ministry of Economic Affairs to Assist Enterprises in Handling Bank Credit and Debt Negotiations'', Optimax Technology Corporation applied to the Industrial Bureau of the Ministry of Economic Affairs on April 10, 2020, to assist in the negotiation of bank claims and debts, requesting that short-term credit extension periods be extended to December 7, 2021, and medium and long-term loans extended for one year. The bank was held a delegation meeting on June 19, 2020, and on November 17, 2020, the majority of creditor banks agreed through written consent that the mid- and long-term loan repayment period was extended for one year. In addition, until December 31, 2021, the financial ratio will not be calculated and the overweight penalty for non-compliance with the promised financial ratio will be cancelled. The company has completed the process with banks in accordance with the conclusions of the debt and debt negotiation meeting and the principal extension of the credit extension for one year.
On June 10, 2003, the company signed a five-year joint credit contract with five financial institutions including Taiwan Cooperative Bank, with a total amount of NT$3.5billion.

(Taiwan Cooperative Bank NT$3.5billion joint loan Case) The balance of loans on December 31, 2020 was NT$26,563,000.

In response to the expansion needs of the branch in Tainan Science Park, the company signed a five-year joint credit contract with thirteen financial institutions including Mega International Commercial Bank Co., Ltd. and Taiwan Cooperative Bank on July 20, 2004, with a total amount of NT$12 billion. (Mega International Commercial Bank Co., Ltd. NT$12 billion joint loan Case) The balance of loans on December 31, 2020 was NT$3,530,681,000.
In response to turnover needs, the company signed a five-year joint credit agreement with five financial institutions including Taiwan Cooperative Bank on September 20, 2006, with a total amount of NT$2,600,000,000. (Taiwan Cooperative Bank NT$2.6 billion joint loan Case) The balance of loans on December 31, 2020 was NT$1,728,236,000.
Due to the needs of operating turnover, the company submitted a payment to Taiwan Cooperative Bank on August 10, 1999. The bank applied for 18-year mortgage loans with a total amount of NT$300,000,000. The balance of loans on December 31, 2020 was NT$106,790,000.
Due to the needs of operating turnover, the company submitted a payment to Taiwan Cooperative Bank on April 20, 2001. The bank applied for 13-year mortgage loans with a total amount of NT$250,000,000. The balance of loans on December 31, 2020 was NT$6,167,000.
Due to the needs of operating turnover, the company submitted a payment to Shin Kong Commercial Bank Co., Ltd. on July 19, 2005. The bank applied for 3-year mortgage loans with a total amount of NT$500,000,000. The balance of loans on December 31, 2020 was NT$80,201,000.
Please refer to Note 8 for the provision of assets as guarantees for long-term loans.

(18) Pension

1. Defined contribution plan

Since July 1, 2005, the company has established Retirement method with defined contribution plan which is applicable to employees of this nationality. Our company and domestic Subsidiaries choose to apply the labor pensions stipulated in the "Labor Pensions Ordinance" for employees. In the system, labor pension is paid to employees of the Labor Insurance Bureau at 6% of the salary monthly. The payment of the employee’s pension is based on the employee’s pension account and the amount of accumulated income. The labor pension in Optimax Suzhou is according to the endowment insurance system stipulated by the government of the People’s Republic of China, contributing a certain percentage of the pension insurance fund monthly. The pension of each employee is contributed monthly by the local government without further obligations. The pensions recognized in the income statement on December 31, 2021 and December 31, 2020 were NT$16,103,000 and NT$15,472,000, respectively.

183

2. Defined benefit plan

The confirmed benefit plan amounts recognized in the balance sheet were as follows:

Present value of defined benefit obligation Fair value of planned assets Net defined benefit liabilities	December 31, 2021 $ (68,700) 60,175 $ (8,525)	December 31, 2020
		$ (66,397) 55,042
		$ (11,355)

The changes in net defined benefit liabilities were as follows:

Present value of defined benefit obligation	Fair value of planned assets	Net defined benefit liabilities
$ (66,397)	$ 55,042	$ (11,355)
(106) (332)	`－` 288	(106) (44)
(438)	288	(150)
`－` (3,055) 2,190 (2,766)	693 `－` `－` `－`	693 (3,055) 2,190 (2,766)
(3,631)	693	(2,938)
`－`	5,918	5,918
1,766	(1,766)	`－`
$ (68,700)	$ 60,175	$ (8,525)

184

Present value of defined benefit obligation	Fair value of planned assets	Net defined benefit liabilities
$ (64,145)	$ 52,717	$ (11,428)
(173) (561)	`－` 474	(173) (87)
(734)	474	(260)
`－` (2,020) (3,223) (576)	1,610 `－` `－` `－`	1,610 (2,020) (3,223) (576)
(5,819)	1,610	(4,209)
`－`	4,542	4,542
4,301	(4,301)	`－`
$ (66,397)	$ 55,042	$ (11,355)

The company is exposed to the following risks due to the pension system of the Labor Standards Law:

(4) Investment risk: The Labor Fund Utilization Bureau of the Ministry of Labor invests labor retirement funds in domestic (foreign) equity securities through its own use and entrusted operations. Subject to debt securities and bank deposits, but in accordance with the provisions of the Labor Standards Law, the overall return on assets shall not be lower than the local bank’s 2-year fixed deposit interest rate: if the interest rate is lower than that, the state treasury shall make up for it.
(5) Interest rate risk: The decline in the interest rate of government bonds will increase the present
value of the determined welfare obligation, but the debt investment return of the planned asset will also increase. The two are in conflict and the impact of fixed benefit liabilities has a partial offset effect.
(6) Salary risk: The calculation of the present value of the defined benefit obligation is based on the future salary of the plan members. Therefore, the increase in the salary of the plan members will increase the present value of the defined benefit obligation.

The main assumptions of actuarial evaluation are listed as follows:

Discount Rate Expected salary increase rate	December 31, 2021 0.750`％` 2.0000`％`	December 31, 2020
		0.500`％` 2.0000`％`

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The changes in the main actuarial assumptions that were adopted on December 31, 2021 and 2020, will increase (decrease) the present value of defined benefit obligations by the following amounts:

following amounts:
December 31, 2021 Discount Rate Expected salary increase rate December 31, 2020 Discount Rate Expected salary increase rate	Actuarial assumptions increased by0.25% $ (2,171) $ 2,201 Actuarial assumptions increased by0.25% $ (2,209) $ 2,239	Actuarial assumptions reduced by0.25%
		$ 2,266
		$ (2,120)
		Actuarial assumptions reduced by0.25%
		$ 2,310
		$ (2,154)

The planned provision amount and the weighted average duration of the retirement plan are as follows:

Expected amount to be withdrawn within 1 year Determining the average maturity of benefit obligations period	December 31,2021 $ 6,002 12.8 years	December 31,2020
		$ 5,294 13.5 years

(19) Equity 1. Common stock

y mon stock
Rated equity Issued share capital	December 31, 2021 $ 10,000,000 $ 1,700,000	December 31, 2020
		$ 10,000,000
		$ 3,253,324

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2. Retained earnings and Dividend policy

(1) According to the regulation of the company's articles of incorporation, if there is a surplus in the annual final accounts, tax should be paid first to make up for the accumulated losses, and 10% of the second allocation is the statutory surplus reserve, but the accumulated amount has reached the paid-in capital, it may no longer be listed, and the rest may be approved by shareholders when necessary. The board of directors plans to allocate or revert the special surplus reserve according to the resolution of the meeting or according to the law; if there is a surplus and the undistributed surplus accumulated in the previous year, the board of directors plans to allocate the surplus, the proposal is submitted to the shareholders meeting for a
resolution to distribute dividends to shareholders.
(2) The company’s earnings distribution depends on the company’s current and future development plan, investment environment, fund requirements, and domestic and international competition and the interests of shareholders, the dividend policy of the Company is to set aside no less than 50% of distributable earnings as shareholders’ dividends and bonuses. However, in case the accumulated distributable earnings is less than 30% of paid-in capital, the Company may choose not to distribute dividends. The board of directors drafts the surplus based on the operating results and capital planning situation. At the time, dividends to common shareholder may be distributed by way of combination of cash dividend and stock dividend provided that the cash dividends shall not be less than 10% of the total dividends.
(3) The legal reserve shall not be used except for making up the company’s losses and issuing new shares or cash in proportion to the shareholders’ original shares. The public reserve is limited to 25% of the paid-in capital.
(4) When the company distributes surplus, it must be based on the balance sheet date of the current year. The debit balance of other equity items is drawn to the special surplus reserve before the distribution is distributed, and thereafter the debit balance of other equity items is reverted, the reverted amount may be included in the distributable surplus.
(7) On March 24, 2022, the company passed the resolution of the board of directors to propose the statutory surplus reserve of NT$35,550,000 and do not plan to allocate in profit and loss appropriation plan in the year 2021. For related information, please check Market Observation Post System (MOPS) for more information.
(8) On August 27, 2020, the company passed a resolution of the general meeting of shareholders and passed the profit and loss proposal for the year of 2020. Regarding the resolutions of the regular shareholders' meeting, please check Market Observation Post System (MOPS) for more information.
(9) On June 6, 2020, the company passed a resolution of the general meeting of shareholders and passed the loss proposal for the year of 2019. Regarding the resolutions of the regular shareholders' meeting, please check Market Observation Post System (MOPS) for more information.

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3. Other equity

her equity
Balance at January 1, 2021 Generated in the period Exchange Differences on Translation of Foreign Financial Statements Evaluation adjustment Tax effects Balance at December 31, 2021 Balance at January 1, 2020 Generated in the period Exchange Differences on Translation of Foreign Financial Statements Reclassification adjustment Disposal of Foreign Operation Tax effects Balance at December 31, 2020	Exchange Differences on Translation of Foreign Financial Statements $ (2,633) (816) `－` (659) $ (4,108) Exchange Differences on Translation of Foreign Financial Statements $ (1,136) 863 (2,735) 375 $ (2,633)	Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income $ (7) `－` (16,891) `－` $ (16,898) Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income $ (7) `－` `－` `－` $ (7)	Total $ (2,640) (816) (16,891) (659) $ (21,006) Total
			$ (1,143) 863 (2,735) 375
			$ (2,640)

(20) Earnings (loss) per share

The basic earnings per share	2021 $ 4.76	2020
		$ 0.10

When calculating earnings per share, the effect of capital reduction to make up for losses has been adjusted retrospectively on October 25, 2021. The basic earnings per share as following:

Before adjusted The basic earnings per share $ 4.76 The basic earnings per share as following: 2021 Net profit attributable to owners of the parent company (thousand yuan) $ 809,938 The weighted average number of ordinary shares to calculate the basic earnings per share (thousand shares) 170,000 Basic earnings per share (yuan) $ 4.76	After adjusted
	$ 0.10
	2020
	$ 16,464
	170,000
	$ 0.10

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(21) Operating income

Customer contract revenue Commodity sales revenue	2021 $ 3,191,831	2020
		$ 2,416,667

Please refer to Note 4(13) for the explanation of the income of the company.
Contract balance

Accounts receivable (Note 6 (4)`、`7) Contract liabilities-current (list other current liabilities) Commodity sales	December 31, 2021 $ 758,204 $ 1,422	December 31, 2020
		$ 770,909
		$ 300

Funds from contract liabilities at the beginning of the period recognized as operating income were NT$300,000 and NT$8,772,000 in 2021 and 2020.

3. Refund liabilities

The company is based on historical experience and other known reasons, it is estimated that the possible refund liabilities for sales returns and discounts are NT$14,833,000 and NT$10,231,000 in 2021 and 2020, respectively. The balance of refund liabilities were NT$12,257,000 and NT$7,775,000 on December 31, 2021 and 2020, respectively

(22) Other income

Rental income Less: depreciation Other income-other Total	2021 $ 1,819 (229) 51,261 $ 52,851	2020
		$ 97,526 (19,821) 15,022
		$ 92,727

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(23) Other gains and losses

r gains and losses
Losses on disposal of real estate, plant and equipment Gains (losses) on disposal of investment real estate Lease modification benefit Gains on disposal of interest in non- current assets held for sell Foreign exchange losses Reversal of Impairment loses in non- current assets held for sell Reversal of Impairment profit -real estate, plant and equipment Reversal of Impairment profit - investment real estate Depreciation expense Miscellaneous Disbursements Total	2021 $ (7,516) `－` 11,398 522,291 (2,762) `－` 2,468 `－` (2,204) (25,063) $ 498,612	2020
		$ (14,513) (15) `－` 50,607 (48,691) 949 16,880 135,994 (127,519) (81,129)
		$ (67,437)

(24) Financial costs

cial costs
Interest expense Bank loan Lease liability Others Total	2021 $ 53,768 275 6 $ 54,049	2020
		$ 113,179 13,365 39
		$ 126,583

(25) Income Tax

1. The income tax expenses of the company in 2021 and 2020 were as follows:

2021 Tax calculated based on profit (loss) before tax and statutory tax rate (20%) $ 164,931 Expenses disallowed by tax regulation 33,502 Sale of land profit exempt from income tax `－` Income tax impact of loss deduction (193,728) Temporary differences in the current period 20,220 Land appreciation tax `－` Income tax expense $ 24,925	2020
	$ 6,240 (32,432) (10,852) 211,836 (161,608) 1,550
	$ 14,734

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The main components of income tax expense recognized in profit and loss were as follows:

Current tax: Current tax on profit in current period Deferred tax: Origination and reversal of temporary differences Income tax expense recognized in profit and loss	2021 $ `－` 24,925 $ 24,925	2020
		$ 1,550 13,184
		$ 14,734

The income tax details recognized in other comprehensive profits and losses of the company on December 31, 2021 and 2020 were as follows:

mpany on December 31, 2021 and 2020 were as follows:
2021 Deferred income tax benefits (expense) Exchange differences on translation of foreign operations $ 659 rrent income tax assets (listed other current assets) December 31,2021 Tax refund receivable $ 25	2020
	$ (375)
	December 31,2020
	$ 108

Current income tax assets (listed other current assets)
Deferred income tax assets and liabilities
(1) The analysis of deferred income tax assets was as follows:

	2021	2021
Balance at January 1, 2021	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2021
$ 28,235 47,216 7,046 `－` 72,181 2,781 123 1,574 `－` 2,161 659	$ 837 (5,597) 13,331 5,951 (39,766) 306 1,070 625 119 (1,153) `－`	$ `－` `－` `－` `－` `－` `－` `－` `－` `－` (659)	$ 29,072 41,619 20,377 5,951 32,415 3,087 1,193 2,199 119 1,008 `－`
$ 161,976	$ (24,277)	$ (659)	$ 137,040

191

	2020	2020
Balance at January 1, 2020	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2020
$ `－` `－` `－` `－` `－` `－` `－` `－` 284 174,792	$ 28,235 47,216 7,046 72,181 2,781 123 1,574 2,161 `－` (174,792)	$ `－` `－` `－` `－` `－` `－` `－` `－` 375 `－`	$ 28,235 47,216 7,046 72,181 2,781 123 1,574 2,161 659 `－`
$ 175,076	$ (13,475)	$ 375	$ 161,976

(2) The analysis of deferred income tax liabilities was as follows:

	2021	2021
Balance at January 1, 2021	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2021
$ 147	$ 648	$ `－`	$ 795
	2020
Balance at January 1, 2020	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2020
$ 19 419	$ 128 (419)	$ `－` `－`	$ 147 `－`
$ 438	$ (291)	$ `－`	$ 147

5. Items not recognized as deferred income tax assets

Loss deduction amount Temporary difference amount	December 31, 2021 $ 1,019,419 $ 462,606	December 31, 2020
		$ 2,204,555
		$ 263,301

The loss of the company is deducted, and the final deduction year is 2030.

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6. As of December 31, 2021, the company's undeducted loss and the deduction exclusion period was as follows:

Year incurred 2012 2017 2018 2019 2020	Amount filed/ assessed	Expiry year 2022 2027 2028 2029 2030	Loss deduction
	Amount assessed Amount assessed Amount assessed Amount assessed Amount estimated		$ 583,123 172,271 9,171 69,643 185,211
			$ 1,019,419

(25) Expense by nature

Functional aggregation of employee benefits, depreciation, depletion and amortization:

Function Nature		2021	2021
	Recognized in cost of sales	Recognized in operating expenses	Recognized in non- operating expenses	Total
Employee benefits expenses: Salaries and wages Labor and health insurances Pension Director’s Remuneration Other employee benefits Depreciation Amortization	$ 264,742 28,874 15,579 `－` 18,609	$ 110,960 9,930 674 452 5,225	$ `－` `－` `－` `－` `－`	$ 375,702 38,804 16,253 452 23,834
	61,955	12,123	2,433	76,511
	7	166	`－`	173

Function Nature		2020
	Recognized in cost of sales	Recognized in operating expenses	Recognized in non- operating expenses	Total
Employee benefits expenses: Salaries and wages Labor and health insurances Pension Director’s Remuneration Other employee benefits Depreciation Amortization	$ 233,333 25,496 14,000 `－` 14,653	$ 107,620 9,236 1,732 360 4,159	$ `－` `－` `－` `－` `－`	$ 340,953 34,732 15,732 360 18,812
	73,619	14,410	147,340	235,369
	743	246	`－`	989

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(1) The average number of employees of the company in 2021 and 2020 were 615 and 606, respectively, of which the number of directors who were not employees were 9 and 8, respectively.
(2) The company's average employee benefits in 2021 and 2020 were NT$750,000 and NT$686,000, respectively, and the average employee salaries were NT$620,000 and NT$570,000, respectively, and the average employee salary cost adjustment change situation is 9%.
(3) The company adopted an audit committee to replace the supervisory system in 2021 and 2020. Therefore, there is no supervisor's remuneration.
(4) The salary and remuneration policies of the company's directors, managers and employees are as follows:
A. Directors: The remuneration of the directors of the company is handled in accordance with the company's articles of association, and the board of directors is authorized to be based on the degree of participation and contribution of the directors to the company's operations. The value is determined after the domestic and foreign industry standards.
B. Managers: The amount of remuneration assigned to the managers of the company is determined by the remuneration committee and submitted to the board of directors based on their positions, contributions, and the company's operating performance for the year.
C. Employees: The company's employee salary and remuneration policy is to provide employees with average salary and benefits. It is determined based on the company's operating performance and each employee's position, contribution, and performance to determine the year-end bonus and related remuneration. The amount and distribution method are recommended by the remuneration committee to the board of directors for approval.

2. Employee benefits expenses

(1) According to the regulation of the company's articles of incorporation, when the Company allocates the profit of the current year, if any, 5%~10% of the profit shall be set aside as employees’ compensation, which to be distributed to the qualified employees of the Company or of the subsidiaries of the Company employees in the form of stock or cash. The Board of Directors is hereby authorized to set forth the plan of distribution. The Company may, subject to the resolution adopted by the Board of Director, further allocate no more than 1% of the aforesaid profit as Directors’ compensation. The proposals of the employees’ compensation and the directors’ compensation shall be approved by a majority of total Directors and then reported on the Shareholders’ meeting.

(2) The pre-tax profits of the company in the year of accumulated losses, so no employee remuneration and director remuneration are estimated.
The company still has accumulated losses as of December 31, 2020, so the remuneration of employees and directors' remuneration is not estimated in the year of 2020.
(3) Please check Market Observation Post System ( MOPS ) for more information of employee remuneration and director remuneration approved by the board of directors.

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(27) Cash flow information

1. Investing activities with cash and non-cash flow effects

(1) Non-current assets held for sell

2021 Current increase $ `－` Plus: Equipment payment due at the beginning of the period Less: Equipment payment due at the end of the period 1,677 Cash paid in this period `－` 2021 Current Disposal $ (3,628,610) Less: Advanced payment due at the beginning of the period 75,000 Cash payback in this period $ (3,553,610) (2) Real estate, plant and equipment 2021 Current increase $ 25,255 Plus: Equipment payment due at the beginning of the period 2,072 Less: Equipment payment due at the end of the period (4,655) Less: the number of prepaid equipment transfers (5,025) Cash paid in this period $ 17,647 (3) Investment real estate 2021 Current increase $ `－` Less: the number of prepaid equipment transfers `－` Cash paid in this period $ `－`	2020
	$ 1,677 `－`
	(1,677)
	2020
	$ (55,905) `－`
	$ (55,905)
	2020
	$ 9,525 1,385 (2,072) (1,282)
	$ 7,556
	2020
	$ 5,410 (225)
	$ 5,185

2. Changes in liabilities from financing activities

At January 1, 2021 Changes in cash flow from financing activities Changes in lease liabilities Changes in other non-cash items At December 31, 2021	Short-term borrowings $ 702,290 (93,647) `－` (6,165) $ 602,478	Long-term borrowings $ 5,478,638 (3,688,638) `－` `－` $ 1,790,000	Guarantee deposits received $ 9,873 (8,729) `－` `－` $ 1,144	Lease liabilities $ 711,761 (3,949) (703,300) `－` $ 4,512	Liabilities from financing activities-gross
					$ 6,902,562 (3,794,963) (703,300) (6,165)
					$ 2,398,134

195

At January 1, 2020 Changes in cash flow from financing activities Changes in lease liabilities Changes in other non-cash items At December 31, 2020	Short-term borrowings $ 741,590 46,725 `－` (86,025) $ 702,290	Long-term borrowings $ 5,857,574 (350,434) `－` (28,502) $ 5,478,638	Guarantee deposits received $ 10,119 (246) `－` `－` $ 9,873	Lease liabilities $ 700,374 (15,753) 29,946 (2,806) $ 711,761	Liabilities from financing activities-gross
					$ 7,309,657 (319,708) 29,946 (117,333)
					$ 6,902,562

(28) Capital management

Based on the characteristics of the current operating industry and the future development of the company, the company plans the need for working capital (including research and development expenses and debt repayment, etc.) required by the company in the future, taking into account changes in the external environment, to ensure the sustainability of the company operation can give back to shareholders while taking into account the interests of other stakeholders, and maintain the best capital structure to enhance shareholder value. On the whole, the company adopts a prudent risk management strategy.

(29) Financial instruments

1. Categories of financial instruments

ncial instruments tegories of financial instruments
Financial assets Cash Financial assets measured at amortized cost-current Notes receivable Accounts receivable Other receivable Other financial assets- non-current Financial assets at fair value through other comprehensive income-non-current Refundable Deposits (including current) Financial liabilities Short-term borrowings Notes payable Accounts payable Other payable Long-term debt (including current portion) Guarantee deposit received (including current)		December 31,2021 $ 68,133 53,500 51 758,204 186,486 85,026 20,000 7,960 December 31, 2021 $ 602,478 172 138,037 148,115 1,790,000 1,144		December 31,2020
				$ 162,114 35,800 114 770,909 305,274 180,472 `－` 1,994 December 31, 2020 $ 702,290 237 178,237 280,702 5,478,638 9,873

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2. Financial risk management

The financial risk management objective of the company is to manage exchange rates related to operating activities risk, interest rate risk, credit risk and liquidity risk. In order to reduce related financial risks, the company is committed to identifying, evaluating and avoiding market uncertainty in order to reduce market potential adverse impact on the company’s financial performance. Important financial matters of the company are reviewed by the board of directors in accordance with relevant regulations and internal control systems. During the execution of the financial plan, the company must strictly comply with the overall financial risk management and related financial operation procedures for the division of authority and responsibilities.

3. Market risk

The company is mainly exposed to market risks such as changes in foreign currency exchange rates and changes in interest rates.

(1) Foreign currency exchange rate risk

The operating activities of the company and the net investment of foreign

operating institutions are mainly in foreign currencies transaction, therefore, foreign currency exchange rate risk arises. To avoid foreign currency caused by exchange rate changes as asset value decreases and future cash flows fluctuate, the company uses currency conversion of short-term borrowings to avoid exchange rate risk. Since the net investment of foreign operating organizations is a strategic investment, it has not been hedged.

A. Information about the company's significant foreign currency financial assets and liabilities is as follows:

Unit: Foreign currency yuan /NT$ thousand December 31, 2021

Foreign currency	Exchange rate	NTD		Sensitivityanalysis	Sensitivityanalysis
			Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
361,779,521 37,139,697 1,300 4,000 4,130,147 99,951,866 226,796 542,318,175 2,689,583 989,010 482,695 70,550	0.2405 27.68 31.32 0.0235 4.344 0.2460 27.77 0.2405 27.68 4.344 27.7 4.351	87,008 1,028,034 40 1 17,941 24,584 6,297 130,428 74,448 4,296 13,371 307	+10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％`	8,701 102,803 4 `－` 1,794 (13,043) (7,445) (430)	6,961 82,243 3 `－` 1,435 (10,434) (5,956) (344)

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December 31, 2020

Foreign currency	Exchange rate	NTD		Sensitivityanalysis	Sensitivityanalysis
			Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
87,359,148 37,891,387 14,954 40,000 2,237,452 125,817,497 2,239,024,090 1,156,255 103,071 276,492 1,930,825	0.2763 28.48 35.02 0.0264 4.377 0.2742 0.2763 28.48 4.377 28.48 4.2216	24,137 1,079,112 524 1 9,793 34,497 618,644 32,930 451 7,874 8,151	+10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％` +10`％`	2,414 107,911 52 `－` 979 (61,864) (3,293) (45)	1,931 86,329 42 `－` 783 (49,492) (2,634) (36)

B. Monetary items of the company have a significant impact due to exchange rate fluctuations and all exchange loss recognized was NT$2,762,000 and NT$48,691,000 (including realized and unrealized) on December 31, 2021 and 2020, respectively.

(2) Interest rate risk

Interest rate risk refers to the risk of changes in the fair value of financial instruments due to changes in market interest rates. The interest rate risk of the company is mainly income investment and fixed and floating interest rate of borrowings, and the current market interest rate is low, it is expected that there is no major interest rate change risk, so the company did not hedge against it. The sensitivity analysis of interest rate risk is fixed based on the end of the financial reporting period and changes in the fair value of floating-rate borrowings are the calculation basis. If the interest rate rises by ten basis points, the net profit after tax of the company will decrease by NT$2,609,000 and NT$6,313,000 on December 31, 2021 and 2020, respectively.

4. Credit risk management

Credit risk refers to the risk of a counterparty breaching contractual obligations and causing financial loss to the company. The credit risk of the company mainly comes from the accounts receivable of operating activities. Operation-related credit risks and financial credit risks are managed separately.

(1) Credit risk related to operations

In order to maintain the quality of accounts receivable, the company has established operating-related credit risks management procedures.

198

The risk assessment of any customer is based on the consideration of the customer’s financial status, credit rating factors that may affect customers’ ability to make payments, such as structural ratings, internal credit ratings of the company, historical transaction records and current economic conditions. The company will also use certain

credit enhancement tools at the right time, such as advance payment and credit insurance, etc., to reduce the credit risk of specific customers.

As of December 31, 2021 and 2020, the balance of accounts receivable of the top ten customers accounted for the balance of accounts receivable of the company, the percentages are 80% and 82%, respectively. The credit risk of the remaining accounts receivable is insignificant.

(2) Financial credit risk

The credit risks of bank deposits, fixed income investments and other financial instruments are measured and monitored by the financial department of the company. The performing parties are all creditworthy banks and financial institutions with investment grade and above Institutions, company organizations and government agencies, there are no major performance concerns, so there is no major credit risk.

5. Liquidity risk management

The objective of the liquidity risk management of the company is to maintain the cash and equivalent cash and ensure that the company has sufficient and flexible financial resources.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

	December 31, 2021	December 31, 2021	December 31, 2021
Within 1year	2~3 years	4~5 years	More than 5 years	Total
$ 138,209 148,115 3,289 607,142 144	$ `－` `－` 1,296 1,841,732 `－`	$ `－` `－` `－` `－` 1,000	$ `－` `－` `－` `－` `－`	$ 138,209 148,115 4,585 2,448,874 1,144
$ 896,899	$ 1,843,028	$ 1,000	$ `－`	$ 2,740,927

Within 1year	2~3 years	4~5 years	More than 5 years	Total
$ 178,474 280,702 31,773 821,356 9,873	$ `－` `－` 59,233 5,485,769 `－`	$ `－` `－` 56,119 38,291 `－`	$ `－` `－` 809,045 33,723 `－`	$ 178,474 280,702 956,170 6,379,139 9,873
$ 1,322,178	$ 5,545,002	$ 94,410	$ 842,768	$ 7,804,358

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Fair value of financial instruments
(1) Financial instruments measured by amortized cost (including cash and cash equivalents, financial assets measured by amortized cost, notes receivable, accounts receivable, other accounts receivable, other financial assets, guarantee deposit receivable, short-term loans, notes payable, accounts payable, other payables, long-term loans and deposit deposits) is a reasonable approximation of the fair value.
(2) When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
d. Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.
e. Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
f. Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(3) For financial instruments measured at fair value on December 31, 2021, and 2020, the consolidated company depends on the nature, characteristics, risks and fair value levels of assets and liabilities. The relevant information is as follows:

Repeatable fair value: Financial assets measured at fair value through other comprehensive gains and losses		December 31, 2021	December 31, 2021
	Level 1	Level 2	Level 3	Total
	$ `－`	$ `－`	$ 20,000	$ 20,000

(4) Valuation techniques and assumptions applied in fair value measurement The fair value of financial assets is determined in the following way: Since the investee company’s original investment date, the performance and operation of the investee company has not undergone any major changes, so the consolidated company uses the investment cost as the fair value estimated value.
(5) There was no change in the fair value of financial assets in 2021 and 2020.
(6) The following chart is the movement of Level 3:

Financial assets measured at fair value through other comprehensive gains and losses		January1 ~ December 31, 2021 Additions in the period Recognized in other comprehensive income $ 20,000 $ `－`
	At January 1 $ `－`	Additions in the period	At December 31
		$ 20,000	$ 20,000

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(7) Quantitative information of fair value measurement of significant unobservable input value (level 3). The fair value measurement of the consolidated company is classified as level 3 mainly including financial assets measured at fair value through other comprehensive profit and loss - equity securities investment.

The list of quantitative information with significant unobservable inputs is as follows:

Item	Evaluation technology	Significant unobservable input value	Significant unobservable input value and fair value relationship
Measured at fair value through other comprehensive profit and loss－ Investments accounted for using equity method with No Active Market	It can be compared to the listed OTC company law	Weighted average P/B multiplier	The higher the multiplier, the higher the fair value

(8) For the fair value measurement of the third level, the fair value is based on the reasonable and possible alternative assumptions sensitivity analysis.

December 31, 2021 Measured at fair value through other comprehensive profit and loss Investments accounted for using equity method with No Active Market	Input value	Move up or down changes	Changes in fair value reflected in the profit and loss of the current period	Changes in fair value reflected in other comprehensiveprofit or loss
			favorable changes unfavorabl e changes	favorable changes unfavorabl e changes
	P/B multiplier	±5%	`－` `－`	1,000 (1,000)

201

(7) Related-party Transactions

(1) Name and relationship of related parties

Name of related party Relationship with the Company ART OPTRONICS CORP. Subsidiary Optimax Technology corp. (Suzhou) Co., Ltd Subsidiary OPTIMAX TECHNOLOGY (B.V.I.) CO., LTD. Subsidiary (Note1) (OPTIMAX BVI) Lihuasheng (Hong Kong) Optoelectronics Other related party (Note2) Technology Co., Ltd. (Lihuasheng Hong Kong) Peter Chao Main management

Note1: OPTIMAX TECHNOLOGY (BVI) CO., LTD., a subsidiary of the company, completed the dissolution and liquidation procedures on March 24, 2020.

Note2: The company's subsidiary – Optimax Technology (Suzhou) Co., Ltd. was established in 2021 and invested in Shenzhen Lihuasheng Technology Co., Ltd., in the second quarter of this year. Shenzhen Lihuashengke Technology Co., Ltd., Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd. and Shenzhen Lihuasheng Optoelectronics Technology Co., Ltd. has been related parties since June 30, 2021.

(2) The Company’s significant related party transactions

1.Operating revenue

Operating revenue
Name of related party OPTOMAX Lihuasheng Hong Kong	2021 $ `－` 129,985 $ 129,985	2020
		$ 32,286 `－`
		$ 32,286

The prices of transactions between the company and its related parties were not comparable in other transactions under the same circumstances in 2021 and 2020. The credit period for related parties is approximately 90~150 days for monthly settlement, and approximately 30~120 days for general customers.

2. Purchases

Purchases
Name of related party ART OPTRONICS CORP.	2021 $ 11,647	2020
		$ 9,607

The purchase transactions with the above-mentioned related parties are handled on the terms of general customers.

202

3. Manufacturing cost - processing cost

Name of related party Lihuasheng Hong Kong	2021 $ 29,127	2020
		$ －

4.Deduction of operating costs - income from sales

	2021 $ 9,683 2021	2020 $ `－` 2020 $ 2,424
ati

	$ 5,078	$ 2,424

5. Operating expenses

6. Net Accounts receivable

December 31, 2021 $ 124,004 (88,560) $ 35,444	December 31, 2020
	$ `－` `－`
	$ `－`

Information on changes in allowance losses is as follows:

Reclassified by non-related parties in this issue Provision for impairment loss in the current period Ending balance	2021
	$ 38,063 50,497
	$ 88,560

7. Other receivables

(1) Loaning Funds to others

Name of related party		2021
	Actual move amount	Interest Rate Range	Interest income
Optimax Technology corp. (Suzhou) Co., Ltd	$ 160,019	`－`	$ `－`

203

2020

		2020	2020
(2)Sale of equipment Name of related party Lihuasheng Hong Kong Less: Allowance for losses (3)Others Name of related party Lihuasheng Hong Kong Less: Allowance for losses Advance payment Name of related party Peter Chao Accounts payable Name of related party Lihuasheng Hong Kong 0. Other payables Name of related party Lihuasheng Hong Kong Name of related party Optimax Technology corp. (Suzhou) Co., Ltd	Name of related party	December 31, 2021 December 31, 2020 $ 1,117 $ `－` (1,117) `－` $ `－` $ `－` December 31, 2021 December 31, 2020 $ 4,717 $ `－` (1,010) `－` $ 3,707 $ `－` December 31, 2021 December 31, 2020 $ 240 $ `－` December 31, 2021 December 31, 2020 $ 4,437 $ `－` December 31, 2021 December 31, 2020 $ 4,160 $ `－` Actual move amount Interest Rate Range Interest income $ 164,644 `－` $ `－`	Interest Rate Range	Interest income
				$ `－`

8. Advance payment

9. Accounts payable

10. Other payables

Temporary receipts (listed other current liabilities)

Name of related party Peter Chao	December 31, 2021 $ `－`	December 31, 2020
		$ 10,798

204

(3) Rewards for the main management

The remuneration information for directors and other key management members was as follows:

Salary and other short-term benefits Resignation benefits Total	December 31, 2021 $ 10,135 108 $ 10,243	December 31, 2020
		$ 9,320 108
		$ 9,428

(8) Pledged assets

Pledged assets
Item Financial assets measured by cost after allocation-current Non-current assets held for sell Other financial assets- current Real estate, plant and equipment Investment real estate Other financial assets- non-current Deposited Margin- non-current Total	Content	Carry amount
		December 31, 2021	December 31, 2020
	Fixed deposits, margins of the customs bureau and financial institutions set up pledges of the branch in Southern Taiwan Science Park Leasing and joint guarantees Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Provided to financial institutions as collateral for long- and short-term loans Withdraw bank deposits and repay loans according to loan contract Security deposit of the customs bureau, etc.	$ 50,000 `－` 66,289 1,960,169 31,063 18,737 7,960	$ 35,800 2,909,293 79 2,074,486 `－` 180,393 1,994
		$ 2,134,218	$ 5,202,045

(9) Significant commitments and contingencies

Except as mentioned in other notes, the major commitments of the company at the balance sheet date and contingencies are as follows:

(1) The balance of the unused letter of credit for imported raw materials from the company is listed below:

below:
Currency JPY USD NTD	December 31, 2021 $ 454,489 $ 269 $ 19,720	December 31, 2020
		$ 771,376
		$ 861
		$ 15,919

205

(2) List of the amount of deposit guarantee notes issued by the merged company as a result of applying for a loan line from the bank as follows:

December 31, 2021 $ 4,285,960	December 31, 2020
	$ 8,434,741

(10) Significant loss from disaster: None.

(11) Significant subsequent events: None.

(12) Others: None.

(13) Additional disclosures

When preparing the Individual financial report, all major transactions between parent and subsidiary companies and their balances have been eliminated.

(1) Information on significant transactions:
(k) Financing provided to other parties: Attached Table 1.
(l) Provision of endorsements and guarantees to others: None.
(m)Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 2.
(n) Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more: None.
(o) Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: None.
(p) Disposal of property reaching NT$300 million or 20% of paid-in capital or more: Attached Table 3.
(q) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Attached Table 4.
(r) Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Attached Table 5.
(s) Provision of endorsements and guarantees to others: None.
(t) Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 6.

(2) Information on investees:

(a) Names, locations and other information of investee companies ： Please refer to table 7.
(b) Financing provided to other parties: Attached Table 1.
(c) Provision of endorsements and guarantees to others: None.
(d) Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 2.

206

(e) Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more: None.
(f) Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: None.
(g) Disposal of property reaching NT$300 million or 20% of paid-in capital or more: None.
(h) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: None.
(i) Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
(j) Provision of endorsements and guarantees to others: None.

(3) Information on investments in Mainland China:

(c) The name of the investee company in mainland China, main business items, paid-in capital, investment method, capital remittance, shareholding ratio, investment profit and loss, book value of investment at the end of the period, repatriated investment income and investment quota for mainland China: Attached Table 8.
(d) Significant transactions with mainland investee companies directly or indirectly via a third region transactions, including their prices, payment terms, unrealized gains and losses, and other relevant information that helps to understand the impact of mainland investment on financial reporting: Attached Table 1~8.
(4) Major shareholders information: Attached Table 9.

(14) Segment information

Please refer to the Consolidated Financial Statements Independent Auditors’ Review Report of the year in 2021.

207

【 Attached Table 1 】

Information on significant transactions

For the year ended December 31, 2021, the Company should disclose relevant information on significant transactions in accordance with preparation of financial reports:

(b) Financing provided to other parties:

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the period	Ending balance	Actual amount drawn down	Interes t rate	Nature of loan (Note 2)	Amounts of transaction with the borrower (Note 3)	Reason for short- term financing	Amounts of allowance	Collateral	Collateral	Limit on loans granted to a single party	Ceiling on total loans granted
													Item	Value
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	Other receivables	Yes	$ 164,990	$ 160,019	$ 160,019	`－`	2	$`－`	Business operation	$`－`	None	None	$ 813,599	$ 813,599

208

【 Attached Table 2 】

Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates)

Investing company	Marketable securities type and name	Relation with the securities issuer	Financial statement account	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021		Footnote
				Shares	Carrying amount	Ownership (%)	Fair value
OPTIMAX	Common Stock: (Hong Kong) Yute Optimax Technology Co., Ltd	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	1,700	$ `－`	17`％`	$`－`	`－`
	Common Stock: PHOENIX BATTERY CORPORATION	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	2,000,000	20,000	5.33`％`	20,000	`－`
Optimax Technology corp. (Suzhou) Co., Ltd	Investment Amount: Chongqing Yunhe Bafang Enterprise Management	`－`	Financial assets at fair value through other comprehensive profit or loss ─ non-current	`－`	9,847	6`％`	9,847	`－`

209

【 Attached Table 3 】

- Disposes of Property and the transaction amount reaching NT$300 million or 20 % of paid in capital or more

(Expressed in thousands of New Taiwan dollars)

Disposal of real estate Company name	Property name	Date of the fact occurred	Original date of Acquisition	Book Value	Transaction Amount	Price collection situation	Profit (loss) of Disposal	Counter party	Relationship with the counterparty	Purpose of Disposal	Reference basis for price determination	Other agreed matters
Optimax Technology Corporation	The Plant in Southern Taiwan Science Park and related ancillary equipment	109.08.12	93.11.15	$ 3,106,319	$ 3,832,500	The payment has been received according to the time set in the contract. On December 31, 2021, all payment has been recovered.	$ 522,291	Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC)	Non-related party	Activate assets and repayment of bank debt	According to the valuation report of Zhonglian and DTRE Real Estate Appraiser, selling by bargaining, and Chairman decision granted by the Board of Directors	None

210

【 Attached Table 4 】

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

(Expressed in thousands of New Taiwan dollars)

Purchaser/seller	Counterparty	Relationship with the counter party		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accoun ts receivable (payable)
Optimax Technology Corporation	Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd.	Other related party	Sales	$ 129,985	4`％`	OA90	No identical situations to compare	Credit on 30~ 120 days	$ 124,004	14`％`	None

211

【 Attached Table 5 】

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

Company name	Counter party	Relationship with the counter party	Receivable- Related Parties Balance as at December 31, 2021	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	Subsidiary	Other Receivable $ 160,109	`－`	$ `－`	`－`	$ `－`	$ `－`
OPTIMAX	Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd.	Other related party	Receivable $ 124,004 Other Receivable $ 5,834	3.01	101,863	Actively dunning	Receivable $ 32,138 Other Receivable $ 2,754	90,687

212

【 Attached Table 6 】

- Significant inter company transactions

For the year ended December 31, 2021

					(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)
No. (Note 1)	Company name	Counter party	Relationship (Note 2)		Transaction
				Account	Amount	Transaction term	Percentage of consolidated total operating revenues or total assets (Note 3)
0	OPTIMAX	ART OPTRONICS CORP.	1	Purchase	11,647	T/T after 7 days	`－`
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	1	Operation expense	5,078		`－`
				Other receivable	160,019		3%

213

【 Attached Table 6-1 】

- Significant inter company transactions

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Company name	Counter party	Relationship (Note 2)		Transaction	Transaction
				Account	Amount	Transaction term	Percentage of consolidated total operating revenues or total assets (Note 3)
0	OPTIMAX	OPTIMAX TECHNOLOGY (B.V.I.)CO.,LTD.	1	Sales	$ 32,286	Credit on 90~ 150 days	1`％`
0	OPTIMAX	ART OPTRONICS CORP.	1	Purchase	9,607	T/T after 7 days	`－`
0	OPTIMAX	Optimax Technology corp. (Suzhou) Co., Ltd	1	Operation expense	2,424		`－`
				Other accounts receivable	164,644		2`％`

(Note 1): The number is filled in as follows:

3) Number 0 represents the parent.

4) Subsidiaries are numbered in order from number 1.

(Note 2): The transaction relationships with the counterparties are as follows:

4) The parent to the subsidiary.

5) The subsidiary to the parent.

6) The subsidiary to another subsidiary.

214

【 Attached Table 7 】

Information on investees

Investor	Investee (Note 1)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2020	Shares held as at December 31, 2020		Net profit (loss) of the investee for the current period	Investment income (loss) recognized for the period	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Owner ship (%)	Carrying amount
OPTIMAX	ART OPTRONICS CORP. OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. (OOMC)	Taiwan MAURITIUS	Manufacture and sales Investment	2,011 614,524 (USD 19,000,000)	2,011 614,524 (USD 19,000,000)	225,000 19,000,000	100`％` 100`％`	888 71,947	(140) (15,617)	(140) (15,617)	Subsidiary Subsidiary

215

【 Attached Table 8 】

Information on investments in China

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan as of January 1, 2021	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod	Accumulated amount of remittance from Taiwan as of December 31, 2021	Ownership held by Optimax (direct or indirect)	Investment income (loss) recognized for the current period (Note 2)	Carrying amount of investments as of December 31, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Optimax Technology corp. (Suzhou) Co., Ltd	Manufacturing and selling of polarizers	$ 614,524 (USD19,000,000)	(Note 1)	$ 614,524 (USD19,000,000)	$ -	$ -	$ 614,524 (USD19,000,000)	100%	$ (15,617)	$ 71,947	-

Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 (Note 5)			Investment amounts authorized by Investment Commission, MOEA (Note 4)			Upper limit on investment by Investment Commission, MOEA (Note 3)
$ 614,524 (USD19,000,000)			$ 611,728 (USD22,100,000)			$ 1,220,398

(Note 1): Invest and establish a company through OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP to reinvest in mainland companies.

(Note 2): Obtained based on the investee company's own financial report without an accountant's visa during the same period.

(Note 3): According to the ``Principles for the Review of Investment or Technical Cooperation in Mainland China'' by the Investment Review Committee of the Ministry of Economic Affairs, the upper limit of the amount of investment in the mainland is 80,000 New Taiwan dollars, or 60% of the net value or combined net value, whichever is higher.

(Note 4): For foreign currency, it is based on the spot remittance and the average exchange rate on the financial report date.

(Note 5): For foreign currency, it is converted into New Taiwan dollars based on the exchange rate on the actual investment date from Taiwan.

216

【 Attached Table 9 】

Major shareholders information

Major shareholders Name	Shareholding	Shareholding ratio
Peter Chao	18,723,484	11.01%
Long-Shi Lin	9,614,782	5.65%

(Note 1): This table is calculated by Taiwan Depository & Clearing Corporation (TDCC) on the last business day of every season. To compute the shareholding companies’ 5% of total of the ordinary shares and special shares of non-physical securities
(including treasury shares). As for the company’s financial reporting, it has written down that the share and the company’s completed non-physical securities’ shareholding might be discrepancy due to its different ways of factorization.
(Note 2): In the case of the above information, if the shareholder delivers the shares to the trust, it is disclosed by the principal who opened the trust account by the trustee. As for the shareholder, it is handled in accordance with the Securities Exchange Law. For information on insider equity declaration, please refer to the Market Observation Post System ( MOPS ).

217

OPTIMAX TECHNOLOGY CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2021

Expressed in thousands of NTD

Item	Description	Amount
Cash on hand Cash in banks Checking Account NTD demand deposit Foreign currency demand deposits	Foreign currency (included USD & JPY…etc.) JPY 98,421,734 USD 1,197,416 RMB 490,768	$ 611 41 8,534 23,670 33,145 2,132
Total		$ 68,133

Exchange rate `：`

JPY	0.2405
USD	27.68
EUR	31.32
KRW	0.0235
RMB	4.344

218

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2021

	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD
Client Name	Description	Amount	Note
Non-related parties: Company`Ａ` Company B Company C Company D Company E Company F Others	(The amount of individual client does not exceed 5% of the account balance)	$ 162,122 106,521 65,868 57,888 40,503 33,742 272,531
Total Less`：`Allowance for losses		739,175 (16,415)
Total (Net)		722,760
Related Party`：` Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd. Less`：`Allowance for losses		124,004 (88,560)
Total (Net)		$ 35,444

219

STATEMENT OF INVENTORIES

DECEMBER 31, 2021

Expressed in thousands of NTD

Item	Amount	Amount
	Cost	Net realizable value
Finished goods Work in process Raw materials In-transit inventory Subtotal Allowance of valuation loss	$ 441,236 484,527 422,213 24,880	$ 362,250 431,634 369,944 24,880
	1,372,856 (208,095)	$ 1,188,708

Total	$ 1,164,761

STATEMENT OF PREPAYMENTS

DECEMBER 31, 2021

	Expressed in thousands of NTD	Expressed in thousands of NTD
Item	Description	Amount
Prepaid salary Prepaid insurance premiums Other prepaid expenses Payment in advance Input Tax	Property insurance Others	$ 240 44 78 30,773 2
Total		$ 31,137

220

STATEMENT OF OTHER CURRENT FINANCIAL ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2021

	Expressed in thousands of NTD	Expressed in thousands of NTD	Expressed in thousands of NTD
Item	Description	Amount	Note
Other current financial assets	Bank deposit account for loan repayment	$ 66,289
Total		$ 66,289

221

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2021

Expressed in thousands of NTD

											Expressed in	Expressed in	thousands	of NTD
Name	Balance, January 1, 2021		Additions in Investment		Investment gains and losses recognized using the equity method	Conversion difference recognized using the equity method	Others	Balance, December 31, 2021			Market Value or Net Assets Value		Collateral	Note
	Shares	Amounts	Shares	Amounts				Shares	%	Amounts	Unit Price (NT$)	Total Amount
OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. ART OPTRONICS CORP.	19,000,000 225,000	$ 105,271 1,028	`－` `－`	$ `－` `－`	$ (15,617) (140)	$ (816) `－`	$ (16,891) `－`	19,000,000 225,000	100`％` 100`％`	$ 71,947 888	`－` `－`	$ 71,947 888	None None
Total		$ 106,299		$	$ (15,757)	$ (816)	$ (16,891)			$ 72,835		$ 72,835

222

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2021

				Expressed in thousands of NTD	Expressed in thousands of NTD
Item	Balance, January1,2021	Additions	Disposals	Reclassification	Balance, December 31,2021
Cost`：` Land Transportation equipment Office equipment	$ 6,672 4,678 2,180	$ `－` 1,560 `－`	$ `－` (1,632) `－`	$ `－` `－` `－`	$ 6,672 4,606 2,180
Subtotal	13,530	1,560	(1,632)	`－`	13,458
Accumulated depreciation`：` Land Transportation equipment Office equipment	3,336 2,690 918	1,668 1,591 459	`－` (1,632) `－`	`－` `－` `－`	5,004 2,649 1,377
Subtotal	6,944	3,718	(1,632)	`－`	9,030
Total (Net)	$ 6,586	$ (2,158)	$ `－`	$ `－`	$ 4,428

223

STATEMENT OF OTHER NON-CURRENT FINANCIAL ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2021

Expressed in thousands of NTD

Item	Description	Amount	Note
Other non-current financial assets	Bank deposit account for loan repayment	$ 18,737
Total		$ 18,737

STATEMENT OF OTHER NON-CURRENT ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2021

Expressed in thousands of NTD

Item	Description	Amount
Prepaid equipment Refundable deposits Other non-current assets - other		$ 21,074 7,960 162
Total		$ 29,196

224

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2021

Expressed in thousands of NTD

Creditor	Type of loan	Balance, December 31, 2020	Repayment period of the amount moved	Interest rate range	Loan Commitments	Collateral
Mega Bank First Commercial Bank Entie Commercial Bank		$ 5,025 67,453 530,000	111.3.21`～`111.3.29 111.1.3`～`111.3.3 111.5.13	1.723`％` 1.5`％～`1.5856`％` 2.357`％`	NTD 250,000 USD 7,500 NTD 800,000	Note 8 Note 8 Note 8
	Secured loan
	Secured loan Secured loan
Total		$ 602,478

225

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2021

	Expressed in thousands of NT	Expressed in thousands of NT	Expressed in thousands of NT
Vendor Name	Description	Amount	Note
Non-related parties: Company A Company B Company C Company D Others Subtotal	(The amount of individual vendor does not exceed 5% of the account balance)	$ 33,495 21,705 12,254 8,739 57,407
		133,600
Related Party`：` Lihuasheng (Hong Kong) Optoelectronics Technology Co., Ltd.		4,437
Total		$ 138,037

STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2021

Expressed in thousands of NT

Item	Rental period	Discount Rate	Amount
Land Transportation equipment Office equipment	5 years 3 years 5.5years	1.8513`％` 1.8513`％` 1.8513`％`	$ 1,714 1,972 826
Total Less`：`current			4,512 (3,235)
Lease liabilities- non-current			$ 1,277

226

STATEMENT OF OTHER CURRENT LIABILITIES

DECEMBER 31, 2021

	Expressed in thousands of NT	Expressed in thousands of NT
Item	Description	Amount
Contract liabilities Notes payable Prepayments Temporary credits Receipts under custody Other current liabilities-other	Guarantee	$ 1,422 172 487 2,376 9,224 1,144
Total		$ 14,825

227

STATEMENT OF LONG-TERM BORROWINGS

DECEMBER 31, 2021

		DECEMBER 31, 2021
				Expressed in thousands of NT
Creditor	Loan Amount	Contract Period	Interest rate	Collateral	Note
Entie Commercial Bank Mid-term mortgage loan	$1,790,000	The principal is due on May 20, 2023, and the interest is paid monthly	2.093`％`	Real estate, plant and equipment, Investment property

228

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2021

		Expressed in thousands of NT	Expressed in thousands of NT
Item	Description	Amount	Note
Commodity sales revenue	Polarizers for TFT LCD Polarizers for TN/STN LCD	$ 2,662,381 529,450
Total		$ 3,191,831

229

STATEMENT OF COST OF SALES

FOR THE YEAR ENDED DECEMBER 31, 2021

	Expressed in thousands of NT	Expressed in thousands of NT
Item	Amount	Note
Direct consumption of raw materials Raw materials, beginning of year Add: Purchase in the period Less: Raw materials, end of year Transferred to expenses Indirect consumption of raw materials Raw materials, beginning of year Add: Purchase in the period Less: Raw materials, end of year Transferred to expenses Direct Labor Manufacturing expenses Manufacturing cost Add:Work in process, beginning of year Purchase in the period Less:Work in process, end of year Transferred to expenses Cost of finished goods Add:Finished goods, beginning of year Other Less: Finished goods, end of year Inventory loss Transferred to expenses Cost of goods of home-made product Revenue from sale of scraps Reversal of inventory write-down Unamoritized fixed production overheads Inventory loss	$ 291,731 1,983,795 (444,395) (96,749)
	1,734,382
	1,350 31,798 (2,698) (30,450)
	`－` 261,926 457,104
	2,453,412 390,580 74,776 (484,527) 1,262
	2,435,503 509,552 (441,236) (712) (55) (1,658)
	2,501,394
	(88,881) (27,984) 26,404 55
Cost of sales	$ 2,410,988

230

STATEMENT OF MANUFACTURING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

				Expressed in thousands of NT	Expressed in thousands of NT	Expressed in thousands of NT
Item	Description	Selling and marketing expenses	Administrative expenses	Research and development expenses	Expected credit impairment loss	Note
Wages and salaries Utilities expense Insurance expenses Taxes	Accounts receivable Minor amount less than 5%	$ 23,742 19 275 2,924 34 `－` 65,978 56,754 `－` 12,951	$ 64,020 7,491 (241) 5,334 7,653 `－` 453 20 `－` 56,210	$ 23,872 263 5,030 2,850 4,436 14,663 `－` 2,097 `－` 1,716	$ `－` `－` `－` `－` `－` `－` `－` `－` 84,937 `－`
Depreciation
Test and research expense Commission expense Import /Export expenses Expected credit impairment loss Others
Total		$ 162,677	$ 140,940	$ 54,927	$ 84,937

231

AI assistant

Optimax — Annual Report 2021

52283_rns_2022-06-29_51e59c4f-8f47-4341-9c52-f6e9f322bc77.pdf

OPTIMAX TECHNOLOGY CORPORATION

2021 Annual Report

Contents

Company Spokeman

Company Deputy Spokeman

Stock transfer agency

Auditors

Shareholders Ms. and Mr.:

I. 2021 Business Report:

(I) The results of implementation of the business plan

(II) Analysis of the budget enforcement, receipts and expenditures, and profitability:

(III) Status of production and R&D

II. Future planning

Company Profile

(I) Established date ： March 3, 1998

(II) Milestone ：

Organizational

(1) Organizational Chart

(2) Responsibility

Director, Supervisor, and Management team

（ 1 ） Directors and Supervisors

1. Personal Profile

2. Other resource

Professional qualifications and independence analysis of directors and supervisors : Board of Directors Diversity and Independence:

2.1 Board Diversity ：

Gender Ratio of Board Members (11 People in Total)

2.2 Board Independence:

（ 2 ） Chairman, General Manager, Assistant General Manager, Deputy Assistant General Manager, and Managers of all divisions and branch units

（ 3 ） Remuneration paid during the most recent fiscal year to Directors, Supervisors, General Manager, and Assistant General Managers

1. Remuneration paid to Directors and Independent Director

Remuneration paid scale to Directors and Independent Directors

2. Remuneration paid to Chairman, General Manager and Vice General Manager

Remuneration paid scale to CEO, General Manager and Vice General Manager

3. The remuneration of the top five executives

The State of the Company’s Implementation of Corporate Governance

（ 1 ） The state of operations of the Board of Directors

3. Implementation Status of Board Evaluations:

（ 2 ） The state of operation of the audit committee:

（ 3 ） Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission

（ 4 ） Salary and compensation committee composition, responsibilities and operations ：

（ 5 ） Promotion of Sustainable Development – Implementation Status and Deviations from the Sustainable Development Best Practice Principles for

TWSE/TPEx Listed Companies and the Reasons

（ 6 ） Implementation of sincerity managing and the difference with best ethical practice principle of sincerity managing for TWSE/GTSM listed companies and its reason

(7) If the company has formulated a corporate governance regulation and related regulations, it should disclose its inquiry method: None.

（ 9 ） The state of implementation of Optimax Technology Corporation internal control system:

1. Statement on Internal Control

Optimax Technology Corporation Internal Control System Statement

Information on CPA Professional Fees

(1) Information on CPA (External Auditor) Professional Fees (Please fill in the amounts)

Information of replace it Certificated Public Accountant

None.

None.

Transfer of Equity Interests and/or Pledge of or Change in Equity Interests by a Director, Supervisor, Managerial Officer, or Shareholder with a Stake of More than 10 Percent during the most recent fiscal year and the current fiscal year up to the date of printing of this annual report

（ 1 ） Changes in shareholdings of Directors, Supervisors, Mangers, and Major Shareholders:

Related Party Relationship Among the Company’s 10 Largest Shareholders

Comprehensive shareholding ratio information

Capital Overview

Capital Overview

（ 1 ） Capitalization

1. Capitalization

2. Shares Categories

3.Information on the shelf registration: Not applicable.

（ 2 ） Shareholder structure

（ 3 ） Distribution of ownership

（ 4 ） List of principal shareholders

（ 5 ） Share prices for the past two fiscal years, the Company’s net worth per share,

earnings per share, dividends per share, and related information:

（ 6 ） Dividend policy

1.Dividend policy:

2. The situation of the proposed dividend distribution at the shareholders' meeting of this year: None.

（ 8 ） Employee dividends and compensation of directors and supervisors

（ 9 ） Share repurchases: None.

Insurance of Corporate Bonds

Special stock issuance situation: None

Overseas depositary receipt issuance: None.

Employee stock option certificate issuance: None.

Restricted employees' rights to deal with new shares: None.

Optimax Annual Report 2021

2.1 Board Diversity `：`