Patec — Annual Report 2021

Nov 15, 2021

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

---

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

~1~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To The Board of Directors and Shareholders of PATEC PRECISION INDUSTRY CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of Patec Precision Industry Co., Ltd. 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 of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2021 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~2~

Key audit matters

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

Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Recognition of overseas warehouse operating revenue

Description

Refer to Note 4(25) and Note 6(15) for accounting policy on revenue recognition.

The Group’s Mainland China subsidiary, Wuxi Jingxin Precision Machining Co. Ltd. (referred herein as “Wuxi Jingxin”), stored inventories in warehouses which were under the custody of foreign third parties and checked and accepted by custodians in order to meet the requirements of overseas sales customers. The custodians regularly send inventory reports to Wuxi Jingxin to verify the quantities, and Wuxi Jingxin recognises operating revenue based on actual used inventories by customers which are shown in the inventory reports provided by custodians.

As a result of the multi-location of the Company’s warehouses in Europe, which involves manual verification, we considered the recognition of overseas warehouse operating revenue as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Obtained an understanding and evaluated Wuxi Jingxin’s procedures on overseas warehouse operating revenue, and selected samples to check the accuracy of operating revenue recognition.

2. Obtained the inventory reports as at the balance sheet date, and checked whether the timing of revenue recognition was reasonable.

3. Performed confirmation procedures for significant warehouse locations.

~3~

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

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

~4~

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

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

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

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

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

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

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.

~5~

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

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

Chen, Chin-Chang Lin, Yi-Fan For and on behalf of PricewaterhouseCoopers, Taiwan March 31, 2022

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

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

~6~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(1) and 8 6(3) and 8 6(3) 6(4) 6(5) and 8 6(6) and 8 6(7)	December 31, 2021 AMOUNT % $ 633,682 30 41,728 2 66,848 3 4,940 - 372,244 17 14,636 1 423,268 20 51,014 2 1,608,360 75 254,197 12 255,299 12 6,055 - 8,014 - 24,816 1 548,381 25 $ 2,156,741 100	December 31, 2020	December 31, 2020
		AMOUNT $ 633,682 41,728 66,848 4,940 372,244 14,636 423,268 51,014 1,608,360 254,197 255,299 6,055 8,014 24,816 548,381 $ 2,156,741	AMOUNT $ 740,600 - 146,012 - 414,609 13,070 332,254 47,398 1,693,943 266,663 260,831 4,701 23,689 14,035 569,919 $ 2,263,862	%
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1136 Financial assets at amortised cost- current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 11XX Total current assets Non-current assets 1600 Property, plant and equipment, net 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				33 - 6 - 18 1 15 2
				75
				12 11 - 1 1
				25
				100

(Continued)

~7~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(8) and 8 $ 216,166 10 $ 336,069 15 6(15) 16,892 1 3,725 - 27,583 1 - - 161,065 8 154,426 7 6(9) 59,970 3 51,775 2 2,652 - 7,231 - 29,650 1 22,973 1 6(10) and 8 37,882 2 6,846 - 7,095 - 8,193 1 558,955 26 591,238 26 6(10) 128,588 6 112,175 5 6,764 - 22,138 1 176,742 8 187,471 8 6(11) 56,783 3 52,077 3 368,877 17 373,861 17 927,832 43 965,099 43 6(12) 457,597 21 457,597 20 6(13) 358,335 16 342,507 15 6(14) 163,070 8 134,066 6 315,201 15 365,964 16 ( 148,836) ( 7) ( 163,070) ( 7 ) 1,145,367 53 1,137,064 50 83,542 4 161,699 7 1,228,909 57 1,298,763 57 11 $ 2,156,741 100 $ 2,263,862 100

Current liabilities 2100 Short-term borrowings 2130 Contract liabilities-current 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities-current 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred tax liabilities 2580 Lease liabilities-non-current 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of the parent Share capital 3110 Ordinary share Capital surplus 3200 Capital surplus Retained earnings 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Total equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant events after the balance sheet date 3X2X Total liabilities and equity

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

~8~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(15) $ 1,368,325 100 $ 1,181,611 100 6(4)(18) ( 1,011,969) ( 74) ( 888,273) ( 75) 356,356 26 293,338 25 6(18) ( 53,396) ( 4) ( 45,474) ( 4) ( 180,429) ( 13) ( 157,838) ( 14) ( 28,018) ( 2) ( 35,333) ( 3) ( 4,770) - ( 212) - ( 266,613) ( 19) ( 238,857) ( 21) 89,743 7 54,481 4 9,103 1 15,208 1 26,427 2 10,881 1 6(16) ( 4,592) ( 1) ( 18,711) ( 1) 6(17) ( 10,362) ( 1) ( 8,748) ( 1) 20,576 1 ( 1,370) - 110,319 8 53,111 4 6(19) ( 39,898) ( 3) ( 25,823) ( 2) $ 70,421 5 $ 27,288 2 ($ 6,977) - ($ 9,730) ( 1) 6(19) 1,744 - 1,356 - 15,637 1 ( 38,559) ( 3) $ 10,404 1 ($ 46,933) ( 4) $ 80,825 6 ($ 19,645) ( 2) $ 67,300 5 $ 31,528 2 $ 3,121 - ($ 4,240) - $ 77,871 6 ($ 3,338) ( 1) $ 2,954 - ($ 16,307) ( 1) 6(20) $ 1.47 $ 0.69 $ 1.47 $ 0.69

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Loss on remeasurements of defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8300 Other comprehensive income (loss) for the year 8500 Total comprehensive income (loss) Profit attributable to: 8610 Owners of parent 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Owners of parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

~9~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

2020 Balance at January 1, 2020 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriations of 2019 earnings: Special reserve Cash dividends Stock dividends Changes in non-controlling interest-cash dividends Treasury stock retired Balance at December 31, 2020 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income Appropriations of 2020 earnings: Special reserve Cash dividends Appropriations of first half of 2021 earnings: Cash dividends Recognition of changes in ownership equity in subsidiaries Subsidiary capital reduction Disposal of ownership of subsidiary Liquidation of subsidiary Balance at December 31, 2021	Notes								Equity a	ttr	ibutable to owners	o	f the parent						Non-controlling interest		Total
			Ordinary share				Capital Reserves				Retain	ed	Earnings	Exchange difference on translation of financial statements	Treasury shares		Total
					Additional paid-in capital		Changes in ownership interests in subsidiaries		Stock warrants		Special reserve		Unappropriated retained earnings
	6(14) 6(14) 6(14) 6(14)	$ 448,268 - - - - - 15,689 - ( 6,360 ) $ 457,597 $ 457,597 - - - - - - - - - - $ 457,597		$ 363,699 - - - - - - - ( 29,737 ) $ 333,962 $ 333,962 - - - - - - - - - - $ 333,962			$ 208 - - - - - - - - $ 208 $ 208 - - - - - - 15,828 - - - $ 16,036		$ 8,337 - - - - - - - - $ 8,337 $ 8,337 - - - - - - - - - - $ 8,337		$ 81,706 - - - 52,360 - - - - $ 134,066 $ 134,066 - - - 29,004 - - - - - - $ 163,070	$ 411,037 31,528 ( 5,862 ) 25,666 ( 52,360 ) ( 2,690 ) ( 15,689 ) - - $ 365,964 $ 365,964 67,300 ( 3,663 ) 63,637 ( 29,004 ) ( 16,848 ) ( 68,548 ) - - - - $ 315,201		($ 134,066 ) - ( 29,004 ) ( 29,004 ) - - - - - ($ 163,070 ) ($ 163,070 ) - 14,234 14,234 - - - - - - - ($ 148,836 )	($ 36,097 ) - - - - - - - 36,097 $ - $ - - - - - - - - - - - $ -	$ 1,143,092 31,528 ( 34,866 ) ( 3,338 ) - ( 2,690 ) - - - $ 1,137,064 $ 1,137,064 67,300 10,571 77,871 - ( 16,848 ) ( 68,548 ) 15,828 - - - $ 1,145,367		$ 185,715 ( 4,240 ) ( 12,067 ) ( 16,307 ) - - - ( 7,709 ) - $ 161,699 $ 161,699 3,121 ( 167 ) 2,954 - - - ( 15,828 ) ( 64,903 ) ( 374 ) ( 6 ) $ 83,542		$ 1,328,807 27,288 ( 46,933 ) ( 19,645 ) - ( 2,690 ) - ( 7,709 ) - $ 1,298,763 $ 1,298,763 70,421 10,404 80,825 - ( 16,848 ) ( 68,548 ) - ( 64,903 ) ( 374 ) ( 6 ) $ 1,228,909

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

~10~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Expected credit loss Loss on disposal of property, plant and equipment Depreciation Depreciation of right-of-use assets Amortization expense Interest income Interest expense Gain on disposal of subsidiaries Net gain on financial assets at fair value through profit or loss Changes in operating assets and liabilities Changes in operating assets Accounts receivable Notes receivable Other receivables Inventories Prepayments Other non-current assets Changes in operating liabilities Contract liabilities-current Accounts payable Notes payable Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets at fair value through profit or loss-current Decrease in financial assets at amortised cost-current Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of subsidiaries Net cash flows from investing activities

YearendedDecember 31 Notes 2021 2020 $ 110,319 $ 53,111 12(2) 4,770 212 6(16) 2,192 294 6(5) 31,378 50,654 6(6) 30,953 27,612 6(18) 1,206 208 ( 9,103 ) ( 15,208 ) 6(17) 10,362 8,748 6(16) ( 374 ) ( 467 ) 6(2)(16) ( 296 ) - 37,324 93,039 ( 4,940 ) - ( 1,566 ) ( 11,550 ) ( 91,014 ) 24,700 ( 3,616 ) 18,765 ( 10,781 ) 3,216 13,167 ( 4,963 ) 6,639 ( 13,006 ) 27,583 - 15,896 ( 25,037 ) ( 1,098 ) ( 23,406 ) 4,706 39,329 173,707 226,251 9,103 15,208 ( 10,362 ) ( 8,748 ) ( 44,177 ) ( 24,294 ) 128,271 208,417 ( 41,432 ) - 79,164 72,653 ( 30,383 ) ( 7,907 ) 5,490 3,223 - 12,948 12,839 80,917

(Continued)

~11~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayment of short-term borrowings Repayment of lease liability Cash dividends paid Payments for acquisition of equity of non-controlling interest Proceeds from long-term borrowings Repayment of long-term borrowings Cash dividends paid to non-controllong shareholders Return of capital to subsidiary related to non-controlling shareholders Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2021 2020 $ 645,015 $ 685,464 ( 745,610 ) ( 759,287 ) 6(22) ( 25,548 ) ( 28,958 ) 6(22) ( 93,474 ) ( 1,597 ) - ( 17,201 ) 53,397 118,933 ( 4,711 ) - ( 7,806 ) - ( 64,903 ) - ( 243,640 ) ( 2,646 ) ( 4,388 ) ( 18,286 ) ( 106,918 ) 268,402 6(1) 740,600 472,198 6(1) $ 633,682 $ 740,600

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

~12~

PATEC PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

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

1. HISTORY AND ORGANIZATION

Patec Precision Industry Co., Ltd. (the “Company”) was incorporated in the Cayman Islands on June 29, 2011. Starting from June 3, 2015, the Company’s stocks were officially listed on the Taiwan Stock Exchange. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in investment holdings, production and sale of press machines and parts for automobiles and motorcycles.

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

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 30, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS 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:

==> picture [478 x 47] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

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

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

~13~

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

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

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

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

==> picture [469 x 47] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IFRS 17, 'Initial Application of IFRS 17 and IFRS 9-	January 1, 2023
Comparative Information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(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

~14~

Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the defined benefit liabilities that are recognized based on the net amount of pension fund assets less present value of defined benefit obligation and financial assets at fair value, the consolidated financial statements have been prepared under the historical cost convention.

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

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

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

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

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

• B. Subsidiaries included in the consolidated financial statements:

~15~

Name of Name of investor subsidiary The Company PATEC PTE. LTD. (PATEC) PATEC Press Automation Technology Pte Ltd. (PAT) PATEC Wuxi Jingxin Precision Machining Co. Ltd. (Wuxi Jingxin) PATEC Patec Precision Kft (KFT) PATEC Patec Medical Supplies Pte. Ltd. (Patec Medical) PATEC KABAM Pte Ltd (KABAM)(Original name:Bionicxp Pte. Ltd.) PAT PT. PATEC PRESISI ENGINEERING (PT. Patec) Wuxi Jingxin Wuxi Baida Precision Molding Co., Ltd. (Wuxi Baida) Wuxi Jingxin Yancheng Jingxin Precision Machining Co. Ltd. (Yancheng Jingxin) PT. Patec PT. PDF Presisi Engineering (PT. PDF) PT. Patec PT. API Precision (PT. API)	Main business activities Sales of press machines Production and sales of press machines Production and sales of products for automobiles Production and sales of products for automobiles Sales of medical device and equipment Sales and lease of service robot Production and sales of products for automobiles and motorcycles Production and sales of press machines Production and sales of products for automobiles Production and sales of products for automobiles Production and sales of products for automobiles	December December 31,2021 31,2020 100 100 100 100 100 93 100 100 - 58 100 100 70 70 100 100 - - 89 89 89 89 Ownership (%)	Description Note 1 Note 2 Note 3 Note 4
		December 31,2021 100 100 100 100 - 100 70 100 - 89 89

~16~

• Note 1: On September 30, 2020, the Board of Directors of the subsidiary, Wuxi Jingxin, resolved to reduce its capital in the amount of RMB 15,000 thousand and return to non-controlling shareholders. After the capital reduction, the Company’s percentage of ownership increased from 93% to 100%. The capital reduction had been registered in January 2021.

• Note 2: In November 2021, the subsidiary, PATEC MEDICAL, returned the capital and was liquidated. In February 2022, the subsidiary completed the registration for the dissolution.

• Note 3: On December 16, 2020, this company was renamed from BIONICXP to KABAM Pte Ltd. On March 17, 2021, the Group increased its capital in the amount of SGD 200 thousand, and sold 15% equity interest to non-controlling shareholders and recognized gain on disposal in the amount of $374 thousand.

• Note 4: In September 2020, the shareholders of the subsidiary, Wuxi Jingxin, resolved to dispose a 100% equity interest of the subsidiary, Yancheng Jingxin. During the same month, Wuxi Jingxin signed the transfer agreement of shares in the amount of RMB 5,530 thousand and the consideration had been fully collected.

The disposed subsidiary’s carrying amount of assets and liabilities as of August 31, 2020 are shown below:

shown below:
Assets: Cash Accounts receivable Other receivables Fixed assets Total assets Liabilities: Other payables Total liabilities Total net assets	August 31,2020
		10,849 $ 12,128 625 1,327 24,929 $ 1,603 $ 1,603 $ 23,326 $

• 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:

As of December 31, 2021 and 2020, the non-controlling interest amounted to $83,542 and $161,699, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

as follows:
Name of Principal place subsidiary ofbusiness Wuxi Jingxin Group China PT. PATEC Group Indonesia		Non-controllinginterest
	December	Ownership (%) - 30 31,2021	December31,2020
	Amount - $ 83,987		Ownership Amount (%) 80,272 $ 7 79,569 30

~17~

Summarized financial information of the subsidiaries:

Balance sheets

Balance sheets
		Wuxi Jingxin Group
			December 31,
			2020
Current assets		$	1,272,500
Non-current assets			131,135
Current liabilities	(		226,382)
Non-current liabilities	(		30,502)
Total net assets		$	1,146,751

			PT.PATEC Group	PT.PATEC Group
			December 31,
			2021		2020
Current assets		$	278,901	$	176,920
Non-current assets			140,136		170,791
Current liabilities	(		118,866)	(	68,337)
Non-current liabilities	(		33,320)	(	26,654)
Total net assets		$	266,851	$	252,720

Statements of comprehensive income

Statements of comprehensive income
Revenue Profit before income tax Income tax expense Profit for the year Other comprehensive income Total comprehensive income for the year Comprehensive income attributable to non-controlling interest Dividends paid to non-controlling interest		WuxiJingxinGroup Yearended December31,2020
	776,807 $ 155,510 17,348) ( 138,162 $ 9,289 $ 147,451 $ 10,322 $ - $

~18~

PT. PATEC Group

			Years ended	December31,	December31,	December31,
			2021			2020
Revenue		$	391,611		$	284,931
Profit (loss) before income tax			25,349	(		25,853)
Income tax expense	(		5,233)	(		4,524)
Profit (loss) for the year		$	20,116	($		30,377)
Other comprehensive income (loss)			453	(		26,114)
Total comprehensive income (loss) for the		$	20,569	($		56,491)
year
Comprehensive income (loss) attributable to non-controlling interest		$	4,495	($		18,495)
Statements of cash flows
						WuxiJingxinGroup
						Yearended
						December 31, 2020
Net cash generated from operating activities				$		303,167
Net cash from investing activities						83,032
Net cash used in financing activities				(		11,796)
Effect of exchange rates on cash and cash
equivalents						2,931
Increase in cash and cash
equivalents						377,334
Cash and cash equivalents, beginning of year						234,192
Cash and cash equivalents, end of year				$		611,526

			PT.PATEC Group	PT.PATEC Group	PT.PATEC Group
			Years ended	December31,
			2021		2020
Net cash generated from (used in) operating		$	11,536	($		1,133)
activities
Net cash used in investing activities	(		429)	(		3,485)
Net cash generated from (used in) financing activities			26,480	(		11,360)
Effect of exchange rates on cash and cash
equivalents	(		502)	(		1,631)
Increase (decrease) in cash and cash equivalents			37,085	(		17,609)
Cash and cash equivalents, beginning of year			20,277			37,886
Cash and cash equivalents, end of year		$	57,362		$	20,277

~19~

(4) Foreign currency translation

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

A. Foreign currency transactions and balances

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

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

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

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

• B. Translation of foreign operations

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

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

• (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

• (c) All resulting exchange differences are recognised in other comprehensive income.

(5) Classification of current and non-current items

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

• (a) Assets arising from operating activities that are expected to be realised, 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 realised 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 pay off liabilities more than twelve months after the balance sheet date.

~20~

• 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 paid off within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

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

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

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

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

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

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

(8) Financial assets at amortised cost

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

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

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

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

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

(9) Accounts and notes receivable

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

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

(10) Impairment of financial assets

For financial assets at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months

~21~

expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

－ (12) Leasing arrangements (lessor) lease receivables

Based on the terms of a lease contract, a lease is classified as a finance lease if the lessee assumes substantially all the risks and rewards incidental to ownership of the leased asset.

• A. At commencement of the lease term, the lessor should record a finance lease in the balance sheet as ‘lease receivables’ at an amount equal to the net investment in the lease (including initial direct costs). The difference between gross lease receivable and the present value of the receivable is recognised as ‘unearned finance income of finance lease’.

• B. The lessor should allocate finance income over the lease term based on a systematic and rational basis reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.

• C. Lease payments (excluding costs for services) during the lease term are applied against the gross investment in the lease to reduce both the principal and the unearned finance income.

(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The item by item approach is used in applying the lower of cost and net realisable value. 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.

(14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost.

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

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

~22~

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

Buildings and structures 27 years Machinery and equipment 5 ～ 10 years Transportation equipment 5 ～ 10 years Office equipment 3 ～ 10 years Other equipment 5 ～ 10 years Leasehold assets 5 ～ 10 years

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

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

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

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

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) The amount of the initial measurement of lease liability; and

• (b) Any lease payments made at or before the commencement date.

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

- (16) Intangible assets goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

(17) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal or value in use. Except for goodwill, when

~23~

the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• B. The recoverable amounts of goodwill shall be evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(18) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(19) Notes and accounts payable

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

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

(20) Derecognition of financial liabilities

Financial liability is derecognised when the obligation under the liability specified in the contract is either discharged or cancelled or expired.

(21) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when

~24~

they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in these corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

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

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

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

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

(22) Income tax

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

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities.

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

~25~

the deferred tax liability is settled.

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

(23) Share capital

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

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(24) Dividends

Shareholders’ dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s Board of Directors. Cash dividends are recorded as liabilities. Stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(25) Revenue recognition

Sales of goods

• A. The Group manufactures and sells press machines and products for automobiles and motorcycles. Sales are recognised when control of the products has transferred, being when the products are delivered to the customers, the customers have full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customers’ acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customers, and either the customers have accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• B. The goods are often sold with volume discounts based on aggregate sales over a 12-month period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated sales returns and allowances. Accumulated experience is used to estimate and provide for the sales returns and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales returns and allowances payable to customers in relation to sales made until the end of the reporting period. The sales usually are made with a credit term of 91 to 180 days, which is consistent with the market practice, so the contract does not contain a significant financing component.

• C. The Group’s obligation to provide a repair or exchange for faulty products under the standard warranty terms is recognised as a provision.

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

~26~

(26) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

(27) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are presented by deducting the grants from the asset’s carrying amount and are amortised to profit or loss over the estimated useful lives of the related assets as reduced depreciation expenses.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

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

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

None.

(2) Critical accounting estimates and assumptions

None.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

None. Critical accounting estimates and assumptions None. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand Demand deposits Time deposits	December31,
	2021 5 $ 431,614 202,063 633,682 $	2020
		32 $ 739,072 1,496
		740,600 $

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

• B. As of December 31, 2021 and 2020, cash and cash equivalents amounting to $66,848 and $59,966 were pledged to others as collateral and were classified to current financial assets at amortised cost. Details are provided in Note 8.

• C. The Group has deposits with maturity over three months amounting to $86,046, and the effective interest rate was 1.95% in 2020. As the time deposits are not highly-liquid investments, they were classified as current financial assets at amortised cost. As of December 31, 2021, there were no such transactions.

~27~

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

December 31, 2021 December 31, 2020 Current items: Financial assets mandatorily measured at fair value through profit or loss Financial products $ 41,728 $ -

Current items:

Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:7

2021 2020 Financial assets mandatorily measured at fair value through profit or loss Financial products $ 296 $ -

(3) Accounts receivable

Accounts receivable
			December31,
			2021			2020
Notes receivable		$	4,940		$	-
Accounts receivable		$	380,516		$	417,840
Less: Allowance for bad debts	(		8,272)	(		3,231)
		$	372,244		$	414,609

• A. The ageing analysis of accounts receivable is as follows:

The ageing analysis of accounts receivable is as	follows:
Not due Up to 30 days 31 to 90 days 91 to 180 days Over 181 days	December 31,
	2021 2020 299,275 $ 350,694 $ 35,000 32,268 30,771 17,159 13,676 13,749 1,794 3,970 380,516 $ 417,840 $

The above ageing analysis was based on due date.

• B. As of December 31, 2021 and 2020, accounts receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $520,221.

• C. For the details of the Group’s notes receivable pledged to banks as collateral for issuance of acceptance bill, refer to Note 8.

• D. Information relating to credit risk is provided in Note 12(2).

~28~

(4) Inventories

nventories
The cost of inventories recognised as expense for the year: Cost Allowance for valuation loss Raw materials 186,311 $ 12,871) ($ Work in process 95,603 63) ( Finished goods 164,848 10,560) ( 446,762 $ 23,494) ($ December31,2021 Cost Allowance for valuation loss Raw materials 163,536 $ 11,419) ($ Work in process 64,720 62) ( Finished goods 137,501 22,022) ( 365,757 $ 33,503) ($ December31,2020 2021 Cost of inventory sold 1,021,482 $ (Gain on reversal) provision for inventory valuation losses 10,009) ( Others 496 1,011,969 $	Bookvalue 173,440 $ 95,540 154,288 423,268 $ Book value 152,117 $ 64,658 115,479 332,254 $ 2020 880,163 $ 8,110 -
	888,273 $

For the year ended December 31, 2021, the Group recognized gain on reversal of inventory valuation loss as certain inventories which were previously provided with allowance were subsequently sold.

~29~

(5) Property, plant and equipment

		Buildings and	Buildings and	Machinery and	Machinery and	Transportation	Transportation			Office			Leasehold					Construction	Construction
			structures		equipment		equipment			equipment		improvements				Others			inprogress			Total
At January 1, 2021
Cost		$	58,395	$	616,279	$	16,537		$	11,302		$	12,782		$	27,789		$	53,087		$	796,171
Accumulated depreciation	(		22,924)	(	456,824)	(	12,924)	(		9,586)	(		7,607)	(		19,643)			-	(		529,508)
		$	35,471	$	159,455	$	3,613		$	1,716		$	5,175		$	8,146		$	53,087		$	266,663
2021
Opening net book amount		$	35,471	$	159,455	$	3,613		$	1,716		$	5,175		$	8,146		$	53,087		$	266,663
Additions			-		3,343		-			453			105			799			25,683			30,383
Disposals			-	(	7,232)	(	233)	(		25)	(		103)	(		89)			-	(		7,682)
Reclassifications			-		55,795		-			28			-			2,384	(		58,219)	(		12)
Depreciation charge	(		2,147)	(	23,768)	(	1,171)	(		573)	(		1,962)	(		1,757)			-	(		31,378)
Net exchange differences	(		458)		580	(	26)	(		23)	(		68)	(		493)	(		3,289)	(		3,777)
Closing net book amount		$	32,866	$	188,173	$	2,183		$	1,576		$	3,147		$	8,990		$	17,262		$	254,197
At December 31, 2021
Cost		$	57,620	$	650,237	$	14,908		$	11,438		$	12,552		$	29,343		$	17,262		$	793,360
Accumulated depreciation	(		24,754)	(	462,064)	(	12,725)	(		9,862)	(		9,405)	(		20,353)			-	(		539,163)
		$	32,866	$	188,173	$	2,183		$	1,576		$	3,147		$	8,990		$	17,262		$	254,197

~30~

		Buildings and	Buildings and	Machinery and	Machinery and	Transportation	Transportation			Office			Leasehold					Construction	Construction
			structures		equipment		equipment			equipment		improvements				Others			inprogress			Total
At January 1, 2020
Cost		$	62,252	$	644,019	$	21,314		$	12,065		$	14,117		$	29,581		$	1,354		$	784,702
Accumulated depreciation	(		22,133)	(	461,421)	(	15,729)	(		10,047)	(		6,641)	(		19,310)			-	(		535,281)
		$	40,119	$	182,598	$	5,585		$	2,018		$	7,476		$	10,271		$	1,354		$	249,421
2020
Opening net book amount		$	40,119	$	182,598	$	5,585		$	2,018		$	7,476		$	10,271		$	1,354		$	249,421
Additions			-		7,182		-			83			6			636			-			7,907
Disposals			-	(	4,521)	(	232)	(		16)			-	(		75)			-	(		4,844)
Reclassifications			-		27,693		-			-			-			-			51,972			79,665
Depreciation charge	(		2,253)	(	42,179)	(	1,707)	(		576)	(		2,002)	(		1,937)			-	(		50,654)
Net exchange differences	(		2,395)	(	11,318)	(	33)			207	(		305)	(		749)	(		239)	(		14,832)
Closing net book amount		$	35,471	$	159,455	$	3,613		$	1,716		$	5,175		$	8,146		$	53,087		$	266,663
At December 31, 2020
Cost		$	58,395	$	616,279	$	16,537		$	11,302		$	12,782		$	27,789		$	53,087		$	796,171
Accumulated depreciation	(		22,924)	(	456,824)	(	12,924)	(		9,586)	(		7,607)	(		19,643)			-	(		529,508)
		$	35,471	$	159,455	$	3,613		$	1,716		$	5,175		$	8,146		$	53,087		$	266,663

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

~31~

－ (6) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery and equipment, business vehicles. Rental contracts are typically made for periods of 1 to 34 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

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

C. The information on profit and loss accounts relating to Land Buildings Machinery and equipment Transportation equipment (Business vehicles) Office equipment (Photocopiers) Land Buildings Machinery and equipment Transportation equipment (Business vehicles) Office equipment (Photocopiers) Items affecting profit or loss Interest expense on lease liabilities $ Expense on short-term lease contracts	C. The information on profit and loss accounts relating to Land Buildings Machinery and equipment Transportation equipment (Business vehicles) Office equipment (Photocopiers) Land Buildings Machinery and equipment Transportation equipment (Business vehicles) Office equipment (Photocopiers) Items affecting profit or loss Interest expense on lease liabilities $ Expense on short-term lease contracts	December31,2021 Carrying amount 40,976 $ 207,154 6,479 684 6 255,299 $ Years ended	December31,2020 Carrying amount 42,861 $ 206,787 7,828 3,269 86 260,831 $ December 31
		lease contracts is as follows: 2021 2020 Depreciation charge Depreciation charge 1,323 $ 1,395 $ 26,636 22,808 1,167 1,218 1,749 2,111 78 80 30,953 $ 27,612 $ 2021 2020 1,381 $ 1,805 8,636 4,137 Years ended December31,	2020 Depreciation charge
		2021 1,381 8,636
	$

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

• D. For the year ended December 31, 2021, the additions to right-of-use assets amounted to $19,964.

• E. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $43,153 and $34,900, respectively.

• (7) Leasing arrangements – lessor

• A. For the year ended December 31, 2021, the Group leased various assets including robots. Rental contracts were typically made for periods of 2 to 5 years. There was no such transaction for the year ended December 31, 2020.

• B. The maturity analysis of the undiscounted lease payments in the finance lease is as follows:

~32~

		December31,2021
2022	$	4,196
2023		4,424
2024		4,360
2025		2,115
	$	15,095

C. Reconciliation of the undiscounted lease payments and the net investment in the finance lease is provided as follows:

provided as follows:
			December		31, 2021
			Current		Non-current
Undiscounted lease
payments	$		4,196	$ 10,899
Unearned finance income	(		351)	(	372)
Net investment in the lease		$	3,845		10,527 $
Aforementioned net lease investments were listed in the “accounts receivable” and “other non-
current assets”.

(8) Short-term borrowings

current assets”. Short-term borrowings
		December31,
Type of borrowings		2021		2020
Bank borrowings
Unsecured borrowings	$	108,016	$	163,832
Secured borrowings		108,150		172,237
	$	216,166	$	336,069
Interest rate range		0.85%~4.50%		0.85%~4.50%
Details of assets pledged as collateral for borrowings	is	provided in Note 8.
Other payables
	December31,2021		December31,2020
Payables for cash dividends - owners of the	$	-	$	1,116
parent
Payables for cash dividends - non-controlling		-		7,199
interest
Expense payable and others		59,970		43,460
	$	59,970	$	51,775

(9) Other payables

~33~

- (10) Long term borrowings

Long-term borrowings
Type ofborrowings Long-term bank borrowings Unsecured borrowings - Resona Unsecured borrowings - HSBC Unsecured borrowings - HSBC Secured borrowings - BUDAPEST Unsecured borrowings - CTBC Less: Current portion	Borrowing period and repayment term	Interest rate range	Collateral None None None Note 8 None	December 31,2021
	Borrowing period is from November 25, 2020 to November 24, 2025; principal is payable quarterly from November 2021. Borrowing period is from November 25, 2020 to November 25, 2025; principal is payable monthly from December 2021. Borrowing period starting from July 15, 2021 to July 15, 2026, principal is payable monthly since July 2022. Borrowing period is from November 19, 2020 to November 18, 2026; principal is payable quarterly from September 2021. Borrowing period starting from December 8, 2021 to December 8, 2026, the interest is payable monthly; principal is payable quarterly from March 2022.	2.50% 3.00% 3.50% 0.19%-1.69% 0.80%		57,801 $ 40,247 20,551 14,764 33,107 166,470 37,882) (
				128,588 $

~34~

Type ofborrowings Borrowing period and repayment term Long-term bank borrowings Unsecured borrowings - Resona Borrowing period is from November 25, 2020 to November 24, 2025; principal is payable quarterly from November 2021 Unsecured borrowings - HSBC Borrowing period is from November 25, 2020 to November 25, 2025; principal is payable monthly from December 2021 Unsecured borrowings - BUDAPEST Borrowing period is from November 19, 2020 to November 18, 2026; principal is payable quarterly from September 2021 Less: Current portion	Interest rate range	Collateral		December 31,2020
	2.50% 3.00% 0.19%-1.69%	None None Note 8	63,754 $ 42,503 12,764 119,021 6,846) (
			112,175 $

(11) Pensions

• A. Consolidated entity, PT. Patec, has a defined benefit pension plan in accordance with the regulations of the Republic of Indonesia. As of December 31, 2021 and 2020, the net amount of liabilities recognised in the balance sheet was $33,502 and $24,866, respectively.

• B. Other consolidated entities make monthly contributions to pension and post-retirement funds administered by the government in accordance with local pension regulations.

(12) Share capital

• A. As of December 31, 2021, the Company has 45,760 thousand shares of ordinary stock outstanding, and the paid-in capital was $457,597 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:

ollows:
At January 1 Stock dividends At December 31	Years ended December31,
	2021 45,760 - 45,760	2020
		44,191 1,569
		45,760

~35~

B. Treasury shares

• (a) On August 17, 2017, the Board of Directors at their meeting resolved to purchase treasury shares during the estimated period from August 18, 2017 to October 17, 2017, and the estimated price ranged between NT$50 and NT$65. As of December 31, 2017, the Company had purchased a total of 636 thousand shares in the amount of $36,097. The treasury shares have been retired as agreed by the Board of Directors on November 13, 2020.

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(13) Capital surplus

The Company’s capital surplus arose from the paid-in capital in excess of par. Subject to the Cayman Company Rules, so long as the shares are listed on any securities exchange, the Company may use capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations to issue new shares to stockholders, provided that the Company has no accumulated deficit, as approved by the shareholders by way of a special resolution, in accordance with the Company’s Articles of Incorporation.

(14) Retained earnings

• A. At the end of the accounting year, the profit (including the unappropriated earnings of prior years), shall first be used to pay all taxes and offset prior years’ operating losses (including the deficit of prior years) and then set aside special reserve (if any). The residual should be distributed based on the majority vote of the shareholders during their meeting. The ratio of appropriation of retained earnings proposed by the Board of Directors should not be less than 5% of distributable retained earnings. The dividends should be distributed to shareholders in accordance with their shareholding ratio. The amount of cash dividends should not be less than 3% of total dividend distribution.

• B. As the Company is in the growth stage, the dividend policy is adopted taking into consideration the Company’s capital expenditure, future expansion plans, financial plan and other plans for continuous development.

• C. Dividends, bonus or other benefits to shareholders should be distributed in New Taiwan dollars.

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

• E. On August 26, 2021 and June 22, 2020, the shareholders resolved the distribution of earnings for 2020 and 2019 as follows:

~36~

Years ended December 31,

Cash dividends Stock dividends Special reserve		2020	2020	2019	2019
		Amount $ 16,848 - 29,004	Dividends per share (indollars) $ 0.37 - -	Amount $ 2,690 15,689 52,360	Dividends per share (indollars) $ 0.06 0.35 -

• F. On August 26, 2021 and March 30, 2022, the Board of Directors resolved the distribution of earnings for First half of 2021 and Second half of 2021 as follows:

Cash dividends		Years ended December31, First half of 2021 Second half of 2021	Years ended December31, First half of 2021 Second half of 2021	Years ended December31, First half of 2021 Second half of 2021	Years ended December31, First half of 2021 Second half of 2021
		First half of 2021
		Amount $ 68,546	Dividends per share(in dollars) $ 1.50	Amount $ 137,279	Dividends per share(in dollars) $ 3.00

(15) Operating revenue

• A. The Group derives revenue from the sales and maintenance of machinery and parts of automobiles and motorcycles, processing goods and services. Refer to Note 14 for related disclosure.

• B. As of December 31, 2021, December 31, 2020, and January 1, 2020, the Group recognised contract liabilities in relation to contract revenue amounting to $16,892, $3,725 and $8,688, respectively.

• C. For the years ended December 31, 2021 and 2020, revenue recognized that was included in the contract liability balance at the beginning of the year was $2,447 and $8,269, respectively.

(16) Other gains and losses

Other gains and losses
		Years ended	December	31,
		2021		2020
Loss on disposal of property, plant and
equipment	($	2,192)	($		294)
Gain on disposal of subsidiaries		374			467
Net currency exchange loss	(	6)	(		13,734)
Net gain on financial assets at fair value
through profit or loss		296			-
Miscellaneous disbursements	(	3,064)	(		5,150)
	($	4,592)	($		18,711)

~37~

(17) Finance costs

Interest expenses: Bank borrowings Others Finance costs

	Years ended	December	31,
	2021		2020
$	8,981	$	6,943
	1,381		1,805
$	10,362	$	8,748

(18) Employee benefit expense

Employee benefit expense Wages and salaries Insurance expense Pension costs Other personnel expenses Depreciation Amortization	2021 2020 255,598 $ 274,509 $ 12,559 2,871 19,858 5,147) ( 26,548 12,878 314,563 $ 285,111 $ 62,331 $ 78,266 $ 1,206 $ 208 $ Years endedDecember31,

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 0.1% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.

• B. The employees’ compensation and directors’ and supervisors’ remuneration for the years ended December 31, 2021 and 2020 were estimated and accrued based on a ratio of distributable profit of current year as regulated in the Company’s Articles as of the end of the reporting period. For 2021 and 2020, employees’ compensation was accrued at $250 and $250, respectively; directors’ and supervisors’ remuneration was accrued at $288 and $700 respectively. The aforementioned amounts were recognised in salary expenses.

• C. The employees’ compensation of $250 and directors’ remuneration of $700 for 2020 were resolved by the Board of Directors on March 30, 2021 and were in agreement with those amounts recognised in the 2020 financial statements. The distribution of the aforementioned amounts has not been completed.

• D. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(19) Income tax

• A. Components of income tax expense

~38~

		Years ended	December	December	31,
		2021			2020
Current tax:
Current tax on profits for the year	$	37,854		$	26,328
Prior year income tax underestimation		-			-
Total current tax		37,854			26,328
Deferred tax:
Origination and reversal of temporary
differences		2,044	(		505)
Income tax expense	$	39,898		$	25,823

• B. The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
		Years endedDecember		31,
		2021		2020
Remeasurement on defined benefit obligations	($	1,744)	($	1,356)
Reconciliation between income tax expense and accounting profit:
		Years ended December		31,
		2021		2020
Tax calculated based on profit before tax
and statutory tax rate	$	36,687	$	18,067
Effects from items disallowed by tax		(3,343)
regulation				(7,082)
Taxable loss not recognised as deferred tax
assets		469		3,803
Assessment of realisation of deferred tax
assets		6,085		11,035
Income tax expense	$	39,898	$	25,823

• C. Reconciliation between income tax expense and accounting profit:

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

D. Amounts of deferred tax as a result of temporary differences and loss carryforward are as follows:

~39~

						2021	2021
								Recognised
					Recognised			in other
						in profit	comprehensive
			January1			or loss		income		December31
Deferred tax assets
Temporary differences
Unrealised gain on		$	4,455	($		2,930)	$	-
disposal of property,										$	1,525
plant and equipment
Loss carryforward			16,127	(		15,000)		-			1,127
Book-tax difference in the basis of finance lease	(		1,003)			1,185		-			182
Others			5,513	(		2,077)		1,744			5,180
		$	25,092	($		18,822)	$	1,744		$	8,014
Deferred tax liabilities
Temporary differences
Investment income of long-
term equity investments	($		23,541)		$	16,777	$	-	($		6,764)
						2020
								Recognised
					Recognised			in other
						in profit	comprehensive
			January1			or loss		income		December31
Deferred tax assets
Temporary differences
Unrealised gain on			5,317	(		862)		-		$	4,455
disposal of property,
plant and equipment
Loss carryforward			5,487			10,640		-			16,127
Others			13,500	(		11,748)		1,355			3,107
		$	24,304	($		1,970)	$	1,355		$	23,689
Deferred tax liabilities
Temporary differences
Book-tax difference in the	($		2,318)		$	1,315	$	-	($		1,003)
basis of finance lease
Investment income of long-	(		17,897)	(		5,644)		-	(		23,541)
term equity investments
Others	(		4,397)			6,803		-			2,406
	($		24,612)		$	2,474	$	-	($		22,138)

E. Expiration dates of unused loss carryforward and amounts of unrecognised deferred tax assets are as follows:

~40~

December 31, 2021

	December31,2021	December31,2021
Year incurred 2015 2016 2017 2018 2019 2020 2021	Amount filed/ assessed Unused amount 89,747 $ 89,747 $ 93,958 93,958 56,373 56,373 62,640 62,640 109,498 109,498 76,625 58,540 47,696 47,696 December 31, 2020		Unrecognised deferred taxassets 89,747 $ 93,958 56,373 62,640 109,498 51,059 47,696	Usable until
				- - - - - - -
Year incurred 2015 2016 2017 2018 2019 2020	Amount filed/ assessed 89,747 $ 93,958 56,373 62,640 109,498 76,625	Unused amount 89,747 $ 93,958 56,373 62,640 109,498 76,625	Unrecognised deferred taxassets - $ 93,958 56,373 62,640 109,498 27,365	Usable until
				- - - - - -

~41~

(20) Earnings per share

(20)	Earnings per share	Earnings per share	Earnings per share	Earnings per share
(21)	Supplemental cash flow information Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 67,300 $ 45,760 1.47 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 67,300 45,760 Assumed conversion of all dilutive potential ordinary shares Employees' compensation - 10 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 67,300 $ 45,770 1.47 $ Year ended December31,2021 Weighted average number of ordinary shares outstanding Earnings per share Amount aftertax (sharesinthousands) (indollars) Basic (Diluted) earnings per Profit attributable to ordinary shareholders of the parent 31,528 $ 45,760 0.69 $ YearendedDecember31,2020 2021 2020 Financing activities with no cash flow effects: Retained earnings transferred to common stock - $ 15,689 $ Years ended December31,
			2021 -	2020
		$		15,689 $

~42~

(22) Changes in liabilities from financing activities

At January 1 Cash dividends declared Changes in cash flow from financing activities Changes in other non-cash items Impact of changes in foreign exchange rate At December 31 At January 1 Cash dividends declared Changes in cash flow from financing activities Impact of changes in foreign exchange rate At December 31					2021	2021			Total
		Short-term borrowings	Leasepayable		Long-term borrowings (including current portion)		Dividends payable
	336,069 $ - 100,595) ( - 19,308) ( 216,166 $ Short-term borrowings		210,444 $ - 25,548) ( 19,964 1,532 206,392 $		119,021 $ - 48,686 - 1,237) ( 166,470 $ 2020		8,315 $ 85,396 93,474) ( - 237) ( - $		673,849 $ 85,396 $ 170,931) ($ 19,964 $ 19,250) ($ 589,028 $ Total
		Short-term borrowings		Leasepayable		Bonds payable (including current portion)		Dividends payable
	405,857 $ - 73,823) ( 4,035 336,069 $		253,190 $ - 28,958) ( 13,788) ( 210,444 $			- $ - 118,933 88 119,021 $	24 $ 10,399 1,597) ( 511) ( 8,315 $		659,071 $ 10,399 $ 14,555 $ 10,176) ($ 673,849 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Name of related party Relationship with the Company

WEE LIANG KIANG

Chairman of the Board of the Company (Note)

Note: On August 26, 2021, the Board of Directors approved to appoint the general manager, WEE LIANG KIANG, as the chairman.

(2) Significant related party transactions

I. Endorsements and guarantees provided to related parties:

WEE LIANG KIANG

December 31, 2021 December 31, 2020 $ 107,865 $ 222,221

The above pertains to guarantee provided by related party for the Company’s borrowings. (3) Key management compensation

Year ended December 31, 2021Year ended December 31, 2020

Salaries and other short-term employee benefits Post-employment benefits	20,531 $ 619 21,150 $	23,428 $ 1,121
		24,549 $

~43~

8. PLEDGED ASSETS

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

==> picture [501 x 206] intentionally omitted <==

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

Book value
December 31,
Pledged asset 2021 2020 Purpose
Property, plant and
equipment $ 32,814 $ 35,388 Short-term borrowings
Right-of-use asset 48,168 53,957 Short-term borrowings
and lease liabilities
Notes receivable 4,940 - Security and guarantee
of acceptance bill
Long-term and short-
term borrowings,
Financial assets at amortised Security and guarantee
cost 66,848 59,966 of acceptance bill
$ 152,770 $ 149,311
----- End of picture text -----

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

• COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

• (1) PATEC MEDICAL had been liquidated and dissolved in February 2022.

• (2) For the appropriation of earnings, refer to Note 6(14)F.

• (3) In order to attract and retain talented professionals and experienced personnel, and strengthen coherence and belongingness to jointly create the benefit for the Company and shareholders, the Board of Directors approved to issue employee restricted shares on March 30, 2022. The Company expects to issue 593,667 common shares.

• (4) For the operation management of the Group, in January 2022, the Group’s subsidiary, Press Automation Technology Pte Ltd. acquired 30% equity interest from shareholders of the Indonesia subsidiary, PT. PATEC PRESISI ENGINEERING. Accordingly, the Group’s percentage of ownership increased from 70% to 100%, for a consideration of USD 2,050,000 based on the fair value assessment of the equity interest of PT.PATEC PRESISI ENGINEERING by Hongda Innovation Financial Consulting Co., Ltd.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Relevant liability and capital ratios are provided in balance sheets for each period end.

~44~

(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at amortised cost Loans and receivables Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings (including current portion) Lease liability	December31,2021		December31,2020
		41,728 $ 633,682 $ 66,848 4,940 372,244 14,636 11,604 1,103,954 $ 216,166 $ 27,583 161,065 59,970 166,470 631,254 $ 206,392 $		- $ 740,600 $ 146,012 - 414,609 13,070 12,052 1,326,343 $ 336,069 $ - 154,426 51,775 119,021 661,291 $ 210,444 $

• B. Financial risk management policies

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

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

~45~

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

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

• iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: RMB, SGD, EUR and USD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

==> picture [435 x 65] intentionally omitted <==

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

December 31, 2021
Book value Sensitivity analysis
Foreign Effect on other
currency Degree of Effect on comprehensive
(in thousands) Exchange rate (NTD) variation profit or loss income
----- End of picture text -----

(Foreign currency:
functional currency)
Financial assets
Monetary items
EUR:RMB	$	4,454	7.23	$	140,424	1%	$	1,404	$	-
USD:RMB		4,876	6.63		135,146	1%		1,351		-
USD:SGD		1,090	1.35		30,220	1%		302		-
RMB:SGD		56,634	0.21		246,987	1%		2,470		-
IDR:USD		43,731,071	0.00007		85,381	1%		854		-
Financial liabilities
Monetary items
HUF:EUR	$	298,214	0.00271	$	25,477	1%	$	255	$	-
USD:SGD		2,602	1.35		72,111	1%		721		-
IDR:USD		26,806,275	0.00007		52,337	1%		523		-
EUR:SGD		3,421	31.53		107,865	1%		1,079		-

~46~

(Foreign currency: functional currency) Financial assets Monetary items EUR:RMB USD:RMB EUR:HUF USD:SGD RMB:SGD JPY:SGD IDR:USD Financial liabilities Monetary items IDR:USD USD:SGD JPY:SGD EUR:SGD EUR:HUF EUR:NTD	Foreign currency (in thousands) Exchange rate 2,543 $ 7.98 2,718 6.53 871 362.61 673 1.32 495 0.20 4,813 0.01 55,261,885 0.00007 25,677,399 $ 0.00007 459 1.32 26,373 0.01 1,685 1.62 2,040 362.61 6,470 34.35	Bookvalue Degree of (NTD) variation 87,025 $ 1% 76,335 1% 29,926 1% 18,906 1% 2,129 1% 1,310 1% 110,395 1% 51,295 $ 1% 12,888 1% 7,178 1% 57,861 1% 70,050 1% 222,221 1% December31,2020	Effect on Effect on other comprehensive profit or loss income 870 $ - $ 763 - 299 - 189 - 21 - 13 - 1,104 - 513 $ - $ 129 - 72 - 579 - 701 - 2,222 - Sensitivityanalysis

• v. The total exchange gain (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020 is described in Note 6(16).

(b) Credit risk

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

• ii.The Group adopts the following assumption to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

• If the aging of contract payments was over 90 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

iii.The default occurs when the contract payments are past due over 365 days.

• iv.The Group classifies customers’ accounts receivable in accordance with credit risk on trade. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.

• v.The Group used the forecastability of Basel Committee on Banking Supervision to adjust historical and timely information to assess the default possibility of accounts receivable. As of December 31, 2021 and 2020, the provision matrix is as follows:

At December 31, 2021 Expected loss rate Total book value	Notpast due	Up to 30 dayspast due	Up to 30 dayspast due		31~90 days past due	91~180 days past due	Over 181 days past due		Total
	0.03%~9.33% 299,275 $		0.03~26.59% 35,000 $		0.03~26.59% 30,771 $				380,516 $

~47~

At December 31, 2020 Expected loss rate Total book value		Notpast due 0.03% 350,694 $	Up to 30 days past due 0.03~4.96% 32,268 $	31~90 days past due	91~180 days past due 0.03%~18.92% 13,749 $	Over 181 days past due 54.14%~100% 3,970 $	Total 417,840 $
				0.03~9.69% 17,159 $

• vi. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable, contract assets and lease payments receivable are as follows:

follows:
		2021			2020
At January 1	$	3,231		$	3,252
Provision for impairment		4,770			212
Effect of foreign exchange		271	(		233)
At December 31	$	8,272		$	3,231

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are invested in time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

• iii. As of December 31, 2021 and 2020, except for non-current liabilities, the Group’s shortterm borrowings, accounts payable and other payables are all due within one year. The balance of cash flow within one year is undiscounted and agrees with each account’s balance under the balance sheets.

• iv. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

~48~

December 31, 2021 Less than 1 year Non-derivative financial liabilities: Short-term borrowings $216,166 Notes payable 27,583 Accounts payable 161,065 Other payables 59,970 Lease liability 28,680 Long-term borrowings (including current portion) 37,882 December 31, 2020 Less than 1 year Non-derivative financial liabilities: Short-term borrowings $336,069 Accounts payable 154,426 Other payables 51,775 Lease liability 26,727 Long-term borrowings (including current portion) 6,846	1 and 2 years $ - - - 28,293 40,452 1 and 2 years $ - - - 22,102 29,836	2 and 5 years Over 5 years $ - $ - - - - - 40,592 114,928 88,137 - 2 and 5 years Over 5 years $ - $ - - - - - 46,993 120,595 89,751 2,999

(3) Fair value information

• A. Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A.

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

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

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

• Level 3: Unobservable inputs for the asset or liability. The fair values of the call and put options issued by the Group are included in Level 3.

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

• (a) The related information on the nature of the assets and liabilities is as follows:

~49~

December31,2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Derivative instruments	Level 1 - $	Level 2 41,728 $	Level3 - $	Total
				41,728 $

D.Other matter

In response to the Covid-19 pandemic, the Group’s subsidiaries implemented the related preventive measures issued by each local Central Epidemic Command Center to strengthen pandemic prevention. The Group’s operations, ability to continue as a going concern and financing risk was not significantly affected by the pandemic. Based on the Group's assessment, the Covid-19 pandemic had no significant effect on the Group’s overall operations and financial status.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period ( not including subsidiaries, associates and joint ventures): Please refer to table 3.

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

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

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

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

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

(2) Information on investees

Names, locations and other information of investee companies ( not including investees in Mainland China): Please refer to table 5.

(3) Information on investments in Mainland China

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

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 7.

~50~

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the Chief Operating Decision-Maker that are used to make strategic decisions.

The Group manufactures and sells customized machinery and equipment and parts of automobiles and motorcycles from a geographic perspective and provides information for the Chief Operating Decision-Maker to review. The areas of sales and order receiving are separated into four major areas which are Singapore, China, Indonesia and Europe. The Company’s Chief Operating DecisionMaker also separates into these four areas when managing finance and reviewing operating performance, therefore, Singapore, China, Indonesia and Europe shall be reportable segments.

(2) Measurement of segment information

The Chief Operating Decision-Maker assesses the performance of operating segments based on segment revenues and profit or loss after tax.

(3) Information about segments and their profit or loss

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

					Year ended December31,	Year ended December31,	Year ended December31,	Year ended December31,	2021	2021
									Reconciliation
											and
	Singapore		Indonesia			China		Europe		elimination			Total
Revenue from
external
customers
Machinery and	$	49,598	$	-	$	88,554	$	-		$	-	$	138,152
maintenance
service
Parts of		-		81,875		-		-			-		81,875
motorcycles
Parts of		-		309,736		729,971		103,201			-		1,142,908
automobiles
Rental revenue		5,390		-		-		-			-		5,390
		54,988		391,611		818,525		103,201			-		1,368,325
Inter-segment
revenue		66,182		-		26,262		-	(		92,444)		-
Total segment	$	121,170	$	391,611	$	844,787	$	103,201	($		92,444)	$	1,368,325
revenue
Total segment profit (loss)	($	59,799)	$	19,871	$	98,336	($	6,273)		$	18,286	$	70,421
Segment income
(loss):
Depreciation	($	7,428)	($	23,576)	($	27,119)	($	20,192)		$	15,984	($	62,331)
Income tax
expense	($	25,400)	($	5,233)	($	19,755)	($	1,061)		$	11,551	($	39,898)

~51~

Year ended December 31, 2020

									Reconciliation	Reconciliation	Reconciliation
											and
	Singapore		Indonesia			China	Europe			elimination			Total
Revenue from
external
customers
Machinery and	$	28,597	$	-	$	7,287	$	-		$	-	$	35,884
maintenance
service
Parts of		-		41,851		-		-			-		41,851
motorcycles
Parts of		-		243,080		743,245		92,719			-		1,079,044
automobiles
Processing		-		-		9,566		-			-		9,566
Medical devices		15,266		-		-		-			-		15,266
		43,863		284,931		760,098		92,719			-		1,181,611
Inter-segment
revenue		131,491		-		16,709		-	(		148,200)		-
Total segment	$	175,354	$	284,931	$	776,807	$	92,719	($		148,200)	$	1,181,611
revenue
Total segment profit (loss)	($	43,599)	($	30,377)	$	138,162	($	11,856)	($		25,042)	$	27,288
Segment income
(loss):
Depreciation	($	8,067)	($	28,728)	($	26,181)	($	17,087)		$	1,797	($	78,266)
Income tax
expense	$	4,028	($	4,524)	($	17,348)	($	1,239)	($		6,740)	($	25,823)

Note: Because the measurement amount of the Group’s assets does not include the measurement amount of segment assets reviewed by the Chief Operating Decision-Maker, therefore, the measurement amount of assets to be disclosed is $0 in accordance with IFRS 8, ‘Operating segments’.

(4) Reconciliation for segment income (loss)

As the Group’s Chief Operating Decision-Maker evaluates segment performance and determines how to allocate resources based on segment revenue and profit or loss, sales between segments are carried out at arm’s length. The revenue from external parties reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 4, therefore, no adjustment to operating profit or loss is needed.

(5) Information on products and services

Please refer to Note 14(3).

~52~

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2021 and 2020 is as follows:

follows:
			Years ended	December 31,
		2021			2020
		Revenue	Segment		Revenue	Segment
Customer A	$	459,117	China	$	410,966	China
Customer B		158,946	Indonesia		109,785	Indonesia
Customer C		150,380	China		158,346	China

~53~

Patec Precision Industry Co., Ltd. and Subsidiaries

Loans to others

Year ended December 31, 2021

Table 1

Expressed in thousands of NTD

(Except as otherwise indicated)

No. (Note 1)	Creditor	Borrower	General ledger account (Note 2)	Is a related party	Maximum outstanding balance during the year ended December 31, 2021 (Note 3)	Balance at December 31, 2021 (Note 8)	Actual amount drawn down	Interest rate	Nature of loan (Note 4)	Amount of transactions with the borrower (Note 5)	Reason for short-term financing (Note 6)	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party (Note 7)	Ceiling on total loans granted (Note 7)	Footnote
													Item	Value
1 1 1	PATEC PTE. LTD. PATEC PTE. LTD. PATEC PTE. LTD.	Patec Precision Kft KABAM Pte. Ltd. PATEC PRECISION INDUSTRY CO., LTD.	Other receivables Other receivables Other receivables	Y Y Y	47,295 $ 4,110 41,103	29,225 $ - 41,103	28,279 $ - 17,927	1.50% 3.50% 1.50%	2 2 2	- $ - -	Capital needs Capital needs Capital needs	- - -	- - -	- - -	126,635 $ 126,635 126,635	506,540 $ 506,540 506,540	Note 8 Note 8 Note 8

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: Fill in the maximum outstanding balance of loans to others for the year ended December 31, 2021.

Note 4: The column of ‘Nature of loan’ shall fill in ‘Business transaction’ or ‘Short-term financing’.

• (1) Business transaction shall fill in 1.

• (2) Short-term financing shall fill in 2.

Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.

Note 6: Fill in purpose of loan when nature of loan is for short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.

Note 7: Fill in limit on loans granted to a single party and ceiling on total loans granted as prescribed in the creditor company’s “Procedures for Provision of Loans”, and state each individual party to which the loans have been provided and the calculation for ceiling on total loans granted in the footnote.

Note 8: The limit on total financing and financing to individuals shall not be more than 40% and 10% the Company’s net asset, respectively.

Table 1

Patec Precision Industry Co., Ltd. and Subsidiaries

Table 2

Expressed in thousands of NTD

Provision of endorsements and guarantees to others

Year ended December 31, 2021

(Except as otherwise indicated)

Number (Note 1)	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2021 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2021 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/guarantees by parent company to subsidiary (Note 8)	Provision of endorsements/guarantees by subsidiary to parent company (Note 8)	Provision of endorsements/guarantees to the party in Mainland China (Note 8)	Footnote
		Companyname	Relationship with the endorser/ guarantor (Note2)
0 0 0 0 1	PATEC PRECISION INDUSTRY CO., LTD. PATEC PRECISION INDUSTRY CO., LTD. PATEC PRECISION INDUSTRY CO., LTD. PATEC PRECISION INDUSTRY CO., LTD. PATEC PTE. LTD.	PATEC PTE. LTD. PT. PATEC PRESISI ENGINEERING PT. PDF Presisi Engineering PT. API Precision PATEC PRECISION INDUSTRY CO., LTD.	2 3 3 3 2	343,610 $ 229,073 229,073 229,073 253,271	331,172 $ 13,858 13,858 13,858 138,576	331,172 $ 13,858 13,858 13,858 138,576	174,030 $ 13,858 12,777 - 74,758	- $ - - - -	29.48% 1.21% 1.21% 1.21% 10.94%	458,147 $ 458,147 458,147 458,147 506,542	Y Y Y Y N	N N N N Y	N N N N N	Note 3 Note 3 Note 3 Note 3 Note 3

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:

(1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

(5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3: The endorsement amount guaranteed by the Company shall not exceed 40% of the Company’s net assets for the period, and the endorsement for any individual company shall not exceed 20% of the Company’s net assets for the period.

If the endorsement is for business relationship, the limit shall not exceed the total transaction amount for the latest year (purchases or sales, whichever is higher). Entities for which the Company make endorsement or guarantees is directly

and indirectly holds 100% of the voting shares by the Company, the endorsement amount guaranteed by the Company shall not exceed 30% of the Company’s net assets for the latest financial statements. The net assets are based on the latest financial statements audited or reviewed by independent accountants. Note 4: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and Guarantees”

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. All other events involving

endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.

Note 6: Actual amount drawn down shall not exceed Limit on endorsements/guarantees provided for a single party.

Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2

Table 3

Patec Precision Industry Co., Ltd. and Subsidiaries

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

Year ended December 31, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As of December31,2021	As of December31,2021		Footnote （Note 4）
				Number of shares	Book value （Note3）	Ownership (%)	Fairvalue
Wuxi Jingxin Precision Machining Co. Ltd. Wuxi Baida Precision Molding Co., Ltd.	Bank of Communications financial products-Jiou Jiou Rih Ying Industrial And Commercial Bank Of China financial products-Tian Li Bao	- -	Financial assets at fair value through profit or loss-current Financial assets at fair value through profit or loss-current	- -	6,652 $ 35,076	- -	6,652 $ 35,076

• Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IAS 39 'Financial Instruments: Recognition and Measurement'. Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

• Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions. Note 5: Disclosed number of shares was preference shares.

Table 3

Patec Precision Industry Co., Ltd. and Subsidiaries

Table 4

Significant inter-company transactions during the reporting period

Year ended December 31, 2021

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
1 1 1 4 5 7	PATEC PTE.LTD. PATEC PTE.LTD. PATEC PTE.LTD. PT. PDF Presisi Engineering PT. API Precision Wuxi Baida Precision Molding Co., Ltd.	Press Automation Technology Pte Ltd. KABAM Pte Ltd Patec Precision Kft PT. PATEC PRESISI ENGINEERING PT. PATEC PRESISI ENGINEERING PATEC PTE.LTD.	3 3 3 3 3 3	Accounts payable Accounts receivable Sales revenue Sales revenue Sales revenue Sales revenue	29,544 $ 28,555 20,525 19,642 25,593 25,539	90~150 days after monthly billings 90~150 days after monthly billings 90~150 days after monthly billings 90~150 days after monthly billings 90~150 days after monthly billings 90~150 days after monthly billings	1.38% 1.34% 1.52% 1.45% 1.89% 1.89%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 4

Patec Precision Industry Co., Ltd. and Subsidiaries

Table 5

Expressed in thousands of NTD

Information on investees

Year ended December 31, 2021

(Except as otherwise indicated)

Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December31,2021	Shares held as at December31,2021	Shares held as at December31,2021	Net profit (loss) of the investee for the year ended December 31, 2021 (Note 2(2))	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 2(3))	Footnote
				Balance as at December 31,2021	Balance as at December 31,2020	Number of shares	Ownership (%)	Bookvalue
PATEC PRECISION INDUSTRY CO., LTD. PATEC PTE LTD. PATEC PTE LTD. PATEC PTE. LTD. PATEC PTE. LTD. Ptess Automation Techonology Pte Ltd. PT PATEC PRESISI ENGINEERING PT PATEC PRESISI ENGINEERING	PATEC PTE LTD. Ptess Automation Techonology Pte Ltd Patec Precision Kft Patec Medical Supplies Pte.Ltd. KABAM Pte. Ltd. PT PATEC PRESISI ENGINEERING PT.PDF Presisi Engineering PT.API Precision	Singapore Singapore Hungary Singapore Singapore Indonesia Indonesia Indonesia	Holding company Assembly and sale of machinery and equipment Manufacturing and sale of elements of automobiles Sale of medical devices Sales and lease of service robot Manufacturing and sale of elements of motorcycles Manufacturing and sale of elements of automobiles and motorcycles Manufacturing and sale of elements of automobiles and motorcycles	709,809 $ 354,175 210,643 - 6,547 139,483 37,595 34,314	709,809 $ 354,175 210,643 12,996 2,301 139,483 37,595 34,314	31,287 6,247 - - 9,728 4,340 1,210 1,483	100.00% 100.00% 100.00% 0.00% 85.00% 70.00% 88.97% 88.77%	1,266,354 $ 269,476 20,604 - 2,700) ( 202,346 31,719 15,220	59,084 $ 7,242 6,273) ( 6,215) ( 2,359) ( 19,871 750 2,510	59,084 $ 19,470 5,342) ( 3,603) ( 2,163) ( 18,365 667 2,228	On December 30, 2021, the shares were divided into 11,445 thousand shares.

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at December 31, 2021’ should fill orderly in the Company’s (public company’s) information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column. (2) The ‘Net profit (loss) of the investee for the year ended December 31, 2021’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2021’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and

recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Table 5

Patec Precision Industry Co., Ltd. and Subsidiaries

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investments in Mainland China

Year ended December 31, 2021

Table 6

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income of investee for the year ended December 31,2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 2)	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Wuxi Jingxin Precision Machining Co., Ltd. Wuxi Baida Precision Molding Co., Ltd.	Manufacturing and sale of elements of automobiles Production and sale of press machines	168,436 $ 43,611	(2) (2)	- $ -	- $ -	- $ -	- $ -	99,520 $ 31,274	100% 100%	99,326 $ 31,620	845,978 $ 75,383	958,143 $ -

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA

Not applicable

Note 1: Investment methods are classified into the following three categories:

(1) Directly invest in a company in Mainland China..

(2) Through investing in PATEC PTE. LTD., the subsidiary in Singapore.

(3) Others

Note 2: In the ‘Investment income (loss) recognised by the Company for the year ended December 31, 2021’ column, basis for investment income (loss) recognition is the financial statements that were audited by investee companies' CPA for the year ended December 31, 2021.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Table 6

Patec Precision Industry Co., Ltd. and Subsidiaries

Table 7

Major shareholders information

December 31, 2021

Name of major shareholders	Share	Share
	Number of shares held	Ownership (%)
Taiwan Shin Kong Commercial Bank Trust Property Account - YIDA INVESTMENTS PTE.LTD. Taiwan's Shin Kong Commercial Bank, shares held in trust for WEE HONG JIE's investment account Cathay United Commercial Bank, shares held in trust for Phillip Securities (Hong Kong) Limited Investment Account	18,801,904 9,101,591 2,539,195	41.08% 19.88% 5.54%

Table 7