SDI — Audit Report / Information 2021

Nov 10, 2021

Parent Company Only Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors' Report

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and parent company only financial statements shall prevail.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

ASSETS NOTES Amount Amount % % CURRENT ASSETS Cash and cash equivalents 6(1) \$ 414,502 4 \$ 485,608 5 Notes receivable, net 6(2) 24,050 - 14,629 - Accounts receivable, net 6(3) 1,606,606 15 1,149,234 13 Accounts receivable - related parties 7 143,633 1 54,001 1 Other receivables 23,601 - 46,933 1 Other receivables - related parties 7 9,481 - 17,496 - Inventories, net 6(4) 2,834,928 26 1,808,085 20 Prepayments 5、6(5) 73,333 1 56,955 1 Other financial assets - current 6(6) 6,600 - 6,800 - Other current assets - - 616 - Total current assets 5,136,734 47 3,640,357 41 NONCURRENT ASSETS Financial assets at fair value through other comprehensive income - noncurrent - - 6(7) 20,222 16,898 Investments accounted for using equity method 6(8) 2,361,882 21 2,280,015 26 Property, plant and equipment 6(9) 3,091,157 28 2,563,326 29 Right-of-use assets 180,460 2 193,070 2 6(10)、7 Investment properties 6(11) 39,931 - 42,725 - Intangible assets 5、6(12) 41,405 - 50,843 1 Deferred income tax assets 6(28) 90,192 1 80,100 1 Other noncurrent assets 6(13) 82,608 1 35,203 - Total noncurrent assets 5,907,857 53 5,262,180 59 TOTAL \$ 11,044,591 100 \$ 8,902,537 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Contract liabilities 6(23) 93,512 1 76,746 1 Notes payable 6(14) 6,288 - 4,686 - Accounts payable 1,025,809 9 653,529 8 Accounts payable - related parties 7 161,606 1 113,434 1 Other payables 6(15) 553,297 5 341,976 4 Other payables - related parties 7 2,663 - 12,537 - Current income tax liabilities 6(28) 171,759 2 59,888 1 Lease liabilities - current 5、6(10)、7 11,994 - 12,751 - Long-term liabilities - current portion 6(16) 80,833 1 23,333 - Other current liabilities 19,891 - 11,599 - Total current liabilities 2,127,652 19 1,310,479 15 NONCURRENT LIABILITIES Long term loans 6(16) 2,159,256 20 1,344,537 15 Deferred income tax liabilities 5、6(28) 287,065 3 274,568 3 Lease liabilities - noncurrent 5、6(10)、7 127,231 1 135,073 2 Net defined benefit liability - noncurrent 5、6(18) 132,736 1 128,340 1 Other noncurrent liabilities 6(17) 23,843 - 29,754 - Total noncurrent liabilities 2,730,131 25 1,912,272 21 Total liabilities 4,857,783 44 3,222,751 36 EQUITIES Common stocks 6(19) 1,821,403 16 1,821,403 20 Capital surplus 6(20) 485,598 4 485,403 5 Retained earnings 6(21) Legal capital reserve 899,980 8 865,445 10 Special capital reserve 134,642 1 155,570 2 Unappropriated earnings 2,984,948 28 2,486,607 29 Others 6(22) (139,763) (1) (134,642) (2) Total equity 6,186,808 56 5,679,786 64 TOTAL \$ 11,044,591 100 \$ 8,902,537 100		December 31, 2021		December 31, 2020

The accompanying notes are an integral part of the parent company only financial statements.

FOR YEARS ENDED DECEMBER 31, 2021 AND 2020 PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earning Per Share)

% % NOTES Amount Amount NET REVENUE 6(23)、7 \$ 8,247,659 100 \$ 6,227,222 100 5、6(24)、7 COST OF REVENUE (6,743,958) (82) (5,350,875) (86) GROSS PROFIT BEFORE UNREALIZED GROSS PROFIT 1,503,701 18 876,347 14 Unrealized gross profit on sales (34,044) - (33,145) (1) Realized gross profit on sales 33,145 - 36,370 1 GROSS PROFIT 1,502,802 18 879,572 14 OPERATING EXPENSES 6(24)、7 Marketing (211,496) (3) (188,388) (2) General and administrative (221,062) (3) (163,357) (3) Research and development (204,434) (2) (175,817) (3) Total operating expenses (636,992) (8) (527,562) (8) OPERATING PROFIT 865,810 10 352,010 6 NONOPERATING INCOME AND EXPENSES Interest income 166 - 390 - Other income 6(25)、7 65,992 1 54,328 1 Other gains and losses 6(26) (23,504) - (64,377) (1) 6(27)、7 Finance costs (12,643) - (15,120) - Share of profits of subsidiaries and associates 152,158 1 96,786 1 Total nonoperating income and expenses 182,169 2 72,007 1 INCOME BEFORE INCOME TAX 1,047,979 12 424,017 7 INCOME TAX EXPENSE 5、6(28) (195,735) (2) (74,870) (1) NET INCOME 852,244 10 349,147 6 OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: 6(29) Remeasurement of defined benefit obligation (14,453) - (4,524) - Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income 3,324 - (320) - Share of other comprehensive income (loss) of subsidiaries and associates (882) - (177) - Income tax benefit (expense) related to items that will not be reclassified subsequently 6(28) 2,326 - 975 - Items that may be reclassified subsequently to profit or loss: 6(29) Exchange differences arising on translation of foreign operations (9,850) - 26,472 Income tax benefit (expense) related to items that may be reclassified subsequently 6(28) 1,970 - (5,294) - Other comprehensive income (loss) for the year, net of income tax (17,565) - 17,132 - TOTAL COMPREHENSIVE INCOME FOR THE YEAR \$ 834,679 10 \$ 366,279 6 EARNINGS PER SHARE(IN DOLLARS) Basic earnings per share 6(30) \$ 4.68 \$ 1.92 Diluted earnings per share \$ 4.68 \$ 1.92	2021		2020

The accompanying notes are an integral part of the parent company only financial statements.

(In Thousands of New Taiwan Dollars) PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR YEARS ENDED DECEMBER 31, 2021 AND 2020

	Capital Stocks			Retained Earnings			Others
	Common Stocks	Capital Surplus	Legal Capital Reserve	Special Capital Reserve	Unappropriated Earnings	Foreign Currency Translation Reserve	Unrealized Gain (loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Total	Total Equity
BALANCE, JANUARY 1, 2020	\$ 1,821,403	485,257	815,192	101,183	2,573,748	(168,987)	13,417 \$	(155,570) \$	5,641,213
Appropriations of prior year's earnings
Special capital reserve	-	-	-	54,387	(54,387)	-	-	-	-
Legal capital reserve	-	-	50,253	-	(50,253)	-	-	-	-
Cash dividends to shareholders - NT\$1.8 per share	-	-	-	-	(327,852)	-	-	-	(327,852)
Deemed donation from shareholders-dividends give up	-	146	-	-	-	-	-	-	146
Net income in 2020	-	-	-	-	349,147	-	-	-	349,147
Other comprehensive income (loss) in 2020	-	-	-	-	(3,796)	21,178	(250)	20,928	17,132
BALANCE, DECEMBER 31, 2020	1,821,403	485,403	865,445	155,570	2,486,607	(147,809)	13,167	(134,642)	5,679,786
Appropriations of prior year's earnings
Special capital reserve	-	-	-	(20,928)	20,928	-	-	-	-
Legal capital reserve	-	-	34,535	-	(34,535)	-	-	-	-
Cash dividends to shareholders - NT\$1.8 per share	-	-	-	-	(327,852)	-	-	-	(327,852)
Deemed donation from shareholders-dividends give up	-	195	-	-	-	-	-	-	195
Net income in 2021	-	-	-	-	852,244	-	-	-	852,244
Other comprehensive income (loss) in 2021	-	-	-	-	(12,444)	(7,880)	2,759	(5,121)	(17,565)
BALANCE, DECEMBER 31, 2021	\$ 1,821,403 \$	485,598 \$	899,980 \$	134,642 \$	2,984,948 \$	(155,689) \$	15,926 \$	(139,763) \$	6,186,808

The accompanying notes are an integral part of the parent company only financial statements.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

	2021	2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income before income tax	\$ 1,047,979	\$ 424,017
Adjustments to reconcile profit (loss)
Depreciation	410,935	426,010
Amortization	15,195	18,221
Gain on financial assets at fair value through profit or loss	-	(190)
Unrealized gross profit on subsidiaries	(291)	(4,667)
Interest expense	12,643	15,120
Interest income	(166)	(390)
Dividend income	(392)	(475)
Share of profits of subsidiaries accounted for under equity method	(152,158)	(96,786)
Gain on disposal of property, plant and equipment	(1,504)	(7,661)
Reversal of impairment loss on non-financial assets	-	(4,000)
Net changes in operating assets and liabilities
Financial assets at fair value through profit or loss, mandatorily
measured at fair value	-	3,006
Notes receivable	(9,421)	4,528
Accounts receivable	(457,372)	(131,736)
Accounts receivable - related parties	(89,632)	33,045
Other receivables	28,249	15,104
Other receivables - related parties	8,015	7,191
Inventories	(1,026,843)	(4,839)
Prepayments	(16,378)	(16,424)
Other current assets	(4,304)	1,888
Contract liabilities	16,766	10,393
Notes payable	1,602	(1,404)
Accounts payable	372,280	265,221
Accounts payable - related parties	48,172	29,726
Other payables	135,413	(7,956)
Other payables - related parties	(9,874)	(14,866)
Other current liabilities	8,168	(1,433)
Net defined benefit liability	(10,057)	(14,492)
Other operating liabilities	(7,314)	2,792
Cash provided from operations	319,711	948,943
Interest received	168	402
Dividends received	60,243	74,666
Interest paid	(10,617)	(15,367)
Income taxes paid	(77,164)	(6,313)
Net cash provided by operating activities	292,341	1,002,331
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment Proceeds from disposal of Property, plant and equipment	(876,774) 2,755	(317,720) 14,902
Decrease (increase) in refundable deposits	450	(3,228)
Acquisition of intangible assets	(5,757)	(8,383)
Decrease in other financial assets	200	3,538
Increase in other noncurrent assets	(15,909)	(15,591)
Net cash used in investing activities	(895,035)	(326,482)

(Continued)

(In Thousands of New Taiwan Dollars) FOR YEARS ENDED DECEMBER 31, 2021 AND 2020 PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

	2021	2020
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term loans	\$ 1,617,080	\$ 330,000
Repayment of long-term loans	(743,333)	(710,000)
Repayments of the principal portion of lease liabilities	(14,307)	(11,251)
Cash dividends paid	(327,852)	(327,852)
Net cash provided by (used in) financing activities	531,588	(719,103)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(71,106)	(43,254)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	485,608	528,862
CASH AND CASH EQUIVALENTS, END OF YEAR	\$ 414,502	\$ 485,608

The accompanying notes are an integral part of the parent company only financial statements. (Concluded)

~ 12 ~

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. ORGANIZATION AND OPERATIONS

SDI Corporation (the" Company") was incorporated on October 17, 1967. The Company manufactures mainly in stationery related products before the Company repetitively expanded to produce and manufacture lead frames and molds.

Since April 25, 1996, the Company's shares have been listed on the Taiwan Stock Exchange (TWSE).

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved and authorized for issue by the Board of Directors on February 24, 2022.

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

3.1 The adoption of the amendments to International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC):

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

New, Revised or Amended Standards and Interpretations	Effective Date Announced by IASB
Amendments to IFRS 4 "Extension of Temporary exemption	June 25, 2020, the
from IFRS 9"	issuance date
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16	January 1, 2021
"Interest Rate Benchmark Reform—Phase 2"
Amendment to IFRS 16 "Covid-19-related rent concessions beyond 30 June 2021"	April 1, 2021(Note)
Note:Earlier application from January 1, 2021 is allowed by	the FSC.

Based on the Company's assessment, the above standards and interpretations have no significant effect on the Group's financial position and financial performance.

3.2 Effect of new issuances and amendments to IFRSs endorsed by the FSC but not yet adopted by the Company:

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

New,	Revised or Amended Standards and Interpretations	Effective Date Announced by IASB (Note 1)
Amendments Proceeds	to IAS 16 "Property, Plant and Equipment: before Intended Use"	January 1, 2022 (Note 2)
Amendments a Contract"	to IAS 37 "Onerous Contracts ─ Cost of Fulfilling	January 1, 2022 (Note 3)
Amendments Framework"	to IFRS 3 "Reference to the Conceptual	January 1, 2022 (Note 4)
Annual	Improvements to IFRS Standards 2018–2020	January 1, 2022 (Note 5)
Note 1:	Unless stated otherwise, the New IFRSs above are beginning on or after their respective effective dates.	effective for annual periods
Note 2:	The Company shall apply those amendments of property, plant and equipment that are brought to necessary for them to be capable of operating in management on or after the beginning of the earliest 1, 2021, in the financial statements in which the amendments.	retrospectively, but only to items the location and condition the manner intended by period presented, January entity first applies the
Note 3:	The Company shall apply these amendments to contracts fulfilled all its obligations on January 1, 2022.	for which it has not yet
Note 4:	These amendments apply to business combinations during the annual reporting periods beginning on or	whose acquisition date occur after January 1, 2022.
Note 5:	The amendments to IFRS 9 apply to financial liabilities exchanged during the annual reporting periods beginning 2022. The amendments to IAS 41 apply to fair value beginning of the first annual reporting periods beginning 2022. The amendments to IFRS 1 apply to the annual on or after January 1, 2022.	that are modified or on or after January 1, measurement on or after the on or after January 1, reporting periods beginning

(1) Amendments to IAS 16 "Property, Plant and Equipment: Proceeds before Intended Use" These amendments set out that proceeds from selling items produced while bringing an item of property, plant and equipment to the location and condition necessary for them to be capable of operating in the manner intended by management shall not be recognized as a deduction of the asset. Instead, the proceeds and the costs of those items, measured in accordance with IAS 2, shall be recognized in profit or loss in accordance with applicable IFRS Standards. In addition, the amendment clarifies that the cost of testing the proper functioning of an asset refers to assessing whether the technical and physical properties of the asset are sufficient to enable it to be used for the production or the provision of goods and services, leased to others or for management purposes.

The Company shall apply these amendments retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The cumulative effect of initially applying the amendments shall be recognize as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented with comparative information restated.

(2) Amendments to IAS 37 "Onerous Contracts ─ Cost of Fulfilling a Contract"

The amendments set out that, when determining whether a contract is onerous, the cost of fulfilling a contract comprises an allocation of other costs that relate directly to fulfilling contracts—for example, an allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling that contract among others.

• (3) Amendments to IFRS 3 "Reference to the Conceptual Framework" The amendments update a reference to the Framework in IFRS 3 and require the acquirer shall apply IFRIC 21 for a levy that would be within the scope of IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date.
• (4) Annual Improvement to IFRS Standards 2018-2020

The annual improvements amend several Standards. Among which, the amendment to IFRS 9 clarifies that, in determining whether an exchange or modification of the terms of a financial liability is substantially different from the original one, only fees paid or received between the Company (the borrower) and the lender, including fees paid or received by either the Company or the lender on the other's behalf, shall be included in the '10 per cent' test of discounting present value of the cash flows under the new terms.

Based on the Company's assessment, the application of the New IFRSs above will not have a significant impact on the Company's financial position and financial performance.

3.3 The IFRSs issued by IASB but not yet endorsed and issued into effect by FSC

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

New, Revised or Amended Standards and Interpretations	Effective Date Announced by IASB
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture"	To be determined by IASB
IFRS 17 "Insurance Contracts"	January 1, 2023
Amendments to IRFS 17	January 1, 2023
Amendments to IRFS 17 "Initial Application of IFRS 17 and IFRS 9─Comparative Information	January 1, 2023

New, Revised or Amended Standards and Interpretations	Effective Date Announced by IASB
Amendments to IAS 1 "Classification of Liabilities as Current or Non-current"	January 1, 2023
Amendments to IAS 1 "Disclosures 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 Arising from a Single Transaction"	January 1, 2023

As of the date the accompanying parent company only financial statements are authorized for issue, the Company is still evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are used in the preparation of the accompanying parent company only financial statements. These policies have been consistently applied to all the periods presented, unless otherwise stated.

4.1 Statement of Compliance

The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

4.2 Basis of Preparation

• A. Except for the following significant items, the accompanying parent company only financial statements have been prepared on the historical cost basis:
• (a) Financial assets and liabilities at fair value through profit or loss (including derivative financial instruments).
• (b) Financial assets and liabilities at fair value through other comprehensive income.
• (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
• B. When preparing the parent company only financial statements, the Company accounts for subsidiaries by using the equity method. In order to align with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries and share of other comprehensive income of

subsidiaries in the parent company only financial statements.

C. The preparation of financial statements in conformity with IFRSs endorsed by the FSC requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5.

4.3 Foreign Currencies

• A. Items included in the parent company only financial statements are measured using the functional currency of the Company. The financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.
• B. In preparing the parent company only financial statements, transactions in currencies other than the Company's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing on that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Exchange differences arising in the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising in the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange difference are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are translated using the exchange rate at the date of the transaction and are not retranslated.
• C. When preparing the parent company only financial statements, the assets and liabilities of the Company's foreign operations are translated into NT\$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

4.4 Classification of Current and Noncurrent Assets and Liabilities

• A. Assets that meet one of the following criteria are classified as current assets:
• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
• (b) Assets held mainly for trading purposes;
• (c) Assets that are expected to be realized within twelve months from the end of reporting period.
• (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 end of reporting period.

The Company classifies all assets that do not meet the above criteria as non-current.

• B. Liabilities that meet one of the following criteria are classified as 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 end of reporting period, even if an agreement to refinance, or to reschedule payments on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the end of reporting period. 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.

The Company classifies all liabilities that do not meet the above conditions as noncurrent.

4.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and 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 (including the original maturity of the time deposits within three months).

4.6 Financial Instruments

Financial assets and liabilities shall be recognized when the Company becomes a party of the contractual provisions of the instruments.

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

A. Financial assets

(a) Measurement categories

All regular way purchases or sales of financial assets are recognized and derecognized using trade date accounting.

Financial assets are classified as financial assets at FVTPL, financial assets at amortized cost and investment in equity instruments at FVTOCI.

i. Financial assets at FVTPL

Financial assets at FVTPL include financial assets mandatorily classified as at FVTPL and financial assets designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments that are not designated as at fair value through other comprehensive income (FVTOCI) and debt instruments that do not meet the criteria for being classified as at amortized cost or as at FVTOCI.

Financial assets at FVTPL are stated at fair value, any dividends earned recognized as other income, and interest earned and gains or losses arising from remeasurement recognized in other gains or losses. Fair value is determined in the manner described in Note 12.

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• (i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• (ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset, except for:

• (i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset; and
• (ii) Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.
• iii. Investment in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate equity investments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Equity investments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, it will be transferred to retained earnings.

Dividends on these equity instruments at FVTOCI are recognized in profit or loss when the Company's right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• (b) Impairment of financial assets
• i. The Company recognizes loss allowances for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments at FVTOCI, and contract assets.
• ii. The Company recognizes loss allowances at an amount equal to lifetime expected credit losses (i.e. ECLs) for accounts receivable and contract assets. For all other financial instruments, the Company recognizes lifetime ECLs for which there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.
• iii. Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represents the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
• iv. The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.
• (c) Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

• i. The contractual rights to receive cash flows from the financial asset expired.
• ii. The contractual rights to receive cash flows from the financial asset which have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
• iii. The Company neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the carrying amount of financial asset and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of a debt instrument at FVTOCI, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without being recycled to profit or loss.

B. Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

C. Financial liabilities

(a) Subsequent measurement

Except for the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

• i. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. A financial liability is classified as held for trading if it is incurred principally for the purpose of repurchasing it in the near term. Derivatives are also categorized as financial liabilities held for trading unless they are financial guarantee contracts or designated and effective hedging derivatives. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
• (i) They are hybrid (combined) contracts; or
• (ii) They eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases; or
• (iii) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
• ii. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss.
• iii. For a financial liability designated as at FVTPL, the amount of changes in fair value attributable to changes in the credit risk of the liability is presented in other comprehensive income and will not be subsequently reclassified to profit or loss. The remaining amount of changes in the fair value of that liability is presented in profit or loss. If this accounting treatment related to credit risk would create or enlarge an accounting mismatch, all changes in the fair value of the liability are presented in profit or loss.
• (b) Derecognition of financial liabilities

The Company derecognizes a financial liability when, and only when, it is extinguished—i.e. when the obligation is discharged or cancelled or expires. The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

4.7 Inventories

Inventories include raw materials, work in progress and finished goods. Inventories are recognized at cost. Inventories are recorded at standard cost ordinarily and stated at the lower of cost or net realizable at the end of each reporting period. Any differences at the end of the reporting period are allocated to cost of sales and ending inventory in proportion. If the actual level of production is lower than normal capacity, the unallocated fixed overhead is recognized as cost of sales. The item-by-item approach is used in applying the lower of cost and net realizable value, except for the same category homogeneous inventories. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Loss for market price decline is stated at cost of goods sold.

4.8 Investments Accounted for Using the Equity Method

• A. Investments accounted for using the equity method include investments in subsidiaries.
• B. A subsidiary is an entity that is controlled by the Company (including structured entity). The Company controls an entity when the Company 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.
• C. Unrealized gains and losses on transactions between the Company and subsidiaries have been eliminated. Unrealized losses will also be eliminated if evidence demonstrates that there is no any indication of impairment on assets involved in a transaction. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies applied by the Company.
• D. The Company's share of subsidiaries' profit or loss is recognized in the Company's statement of comprehensive income, and its share of subsidiaries' other comprehensive income is recognized in the Company's other comprehensive income. When the Company's share of losses in a subsidiary equals to or exceeds its interest in the subsidiary, the Company shall recognize the loss proportional to its shares.
• E. Changes in the Company's ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the adjustment amount of non-controlling interests and the fair value of the consideration paid or received is recognized directly in equity.
• F. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initialrecognition as a financial asset orthe cost on initialrecognition of an associate or a joint venture. Any difference between the fair value and the carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously

recognized in other comprehensive income in relation to the subsidiary will be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

4.9 Property, Plant and Equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
• B. Subsequent costs are included in the carrying amount of asset or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. 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. The residual values of assets, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the residual values of assets and useful lives differ from previous estimates or the patterns of consumption of the future economic benefits of assets embodied in the assets which 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:

8~50 years
2~25 years
2~10 years
3~15 years

D. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

4.10 Leases

At the inception of a contract, the Company evaluates a contract to determine whether it is or contains a lease component. For a contract that contains a lease component and one or more additional lease or non-lease components, a lessee shall allocate the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

A.The Company as lessee

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

Right-of-use assets

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, less any lease incentives received, and plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for any remeasurement of the lease liabilities.

Right-of-use assets are presented as a separate line item in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

Lease liabilities

Lease liabilities are measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, amounts expected to be payable by the Company under residual value guarantees, the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and payments of penalties received for terminating the lease if the lease term reflects the lessee exercising an option to terminate the lease, less any lease incentives. The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company shall use the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. If there is a change in the assessment of an option to purchase the underlying asset, amounts expected to be payable by the lessee under residual value guarantees or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company shall remeasure the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-ofuse asset is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. For a lease modification that is not accounted for as a separate lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the leas for lease modifications that decrease the scope of the lease. The lessee shall recognize in profit or loss any gain or loss relating to the partial or full termination of the lease and (b) making a corresponding adjustment to the right-of-use asset for all otherlease modifications. Lease liabilities are presented separately in the balance sheets. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

B. The Company as lessor

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

When a lease includes both land and buildings elements, the Company assesses the classification of each element as a finance lease or an operating lease separately allocating lease payments (including any lump-sum upfront payments) between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and buildings element of the lease at the inception date. If the lease payments cannot be allocated reliably between these two elements, the entire lease is classified as an operating lease.

Under operating leases, lease payments, less any lease incentives payable, are recognized as lease income on a straight-line basis over the lease terms. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized those costs as an expense over the lease term on the same basis as the lease income.

4.11 Investment Property

Investment properties are properties held to earn rentals and/or for capital appreciation and include land held for a currently undetermined future use. Investment properties also included right-of-use assets that meet the definition of investment property.

Investment property is measured at cost on initial recognition. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. The Company depreciates investment property on a straight-line basis over 35 years.

Investment property that is being constructed or developed is measured at cost less accumulated impairment loss. The cost of an investment property includes professional fees, borrowing costs eligible for capitalization. The properties shall start to depreciate as they achieve their expected condition for providing services.

Gains or losses arising from the retirement or disposal of investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognized in profit or loss.

4.12 Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis over the following estimated lives: trademarks and patents - the patent term or the contract term; computer software 2 to 5 years. The estimated useful life and amortization method are reviewed at each financial year-end, with the effect of any changes in estimate being accounted for on a prospective basis.

An item of intangible assets is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of intangible assets is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

4.13 Impairment of non-financial assets

The Company assesses at the end of reporting period the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the carrying amount of asset exceeds its recoverable amount. The recoverable amount is the higher of a fair value of asset less costs to sell or value in use. When the indication of impairment loss recognized in prior years for an asset no longer exist, the impairment loss is reversed to the extent of the loss previously recognized in profit or loss.

4.14 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 recognized as expenses in that period when the employees render service.

B. Pensions

(a)Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized 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 employee will receive on retirement for their services with the Company in current or prior period. The liability recognized 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 defined benefit net obligation is estimated annually by independent actuaries using the projected unit credit method. The discount rate used is determined by using the market yields (at the end of the reporting period) on government bonds denominated in the currency in which the benefits are to be paid. The currency and term of the government bonds are consistent with the currency and estimated term of the obligation.

• ii. Remeasurement arising on defined benefit plans is recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
• iii. Past service costs are recognized immediately in profit or loss.
• C. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and the amount can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

D. Termination benefits

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

4.15 Capital Stock and Treasury Stock

A. Capital stock

Common stock is classified as equity. Incremental costs directly attributable to the issue of new shares or share options are recorded as a deduction in equity.

B. Treasury Stock

The Company's repurchased stocks are recognized as treasury stock (a contra-equity account) based on their repurchase price (including all directly accountable costs). Gains on disposal of treasury stock should be recognized under "capital reserve treasury stock transactions"; losses on disposal of treasury stock should be offset against existing capital reserves arising from similar types of treasury stock. If there is insufficient capital reserve to offset the losses, then such losses should be accounted for under retained earnings. The carrying amount of treasury stock should be calculated using the weighted-average method for the purpose of repurchased stock.

Upon retirement, treasury stock is derecognized against the capital surplus - premium on stocks and capital stock proportionately according to the ratio of shares retired. The carrying value of treasury stock in excess of the sum of the par value and premium on stocks is first offset against capital surplus from the same class of treasury share transactions, and the remainder, if any, is then debited to retained earnings. The sum of the par value and premium on treasury shares in excess of the carrying value is credited to capital surplus from the same class of treasury share transactions.

4.16 Income Tax

• A. The tax expense for the year comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized 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 end of the financial reporting period in the countries where the Company operate and generate taxable income. The 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. According to Income Tax Act of ROC, an additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
• C. Deferred income tax is recognized, 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 otherthan 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 Company 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 end of the financial reporting period and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
• D. Deferred income tax assets are recognized only to the extent, unused tax losses and unused tax credits that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At the end of each reporting period, unrecognized and recognized deferred income tax assets are reassessed.
• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

4.17 Revenue Recognition

The Company recognizes revenue based on the principle of revenue from customer contracts by applying the following steps:

(a)Identify the contract with the customer;

(b)Identify the performance obligations in the contract;

(c)Determine the transaction price;

(d)Allocate the transaction price to the performance obligations in the contracts; and

(e)Recognize revenue when the entity satisfies a performance obligation.

The contract where the period between the transfer of goods or services to the customer and the payment by the customer is within one year and the major financial component of the contract shall not be adjusted for the transaction price.

A. Revenue from sale of goods

Revenue from the sale of goods comes from sales of lead frame, stationery and others. Revenue is recognized when control of the products has transferred because it is the time when the customer has full discretion over the manner of distribution and over the price to sell the goods, has primary responsibility for sales to future customers, and bears the risks of obsolescence. Accounts receivable are recognized concurrently. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

The Company does not recognize sales revenue on materials delivered to processing subcontractors due to the delivery does not transfer control of materials.

B. Revenue from rendering of services

Revenue from services is recognized when services are provided by reference to the stage of completion of the services provided.

4.18 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of those assets until substantially all the activities necessary to prepare the qualifying asset forits intended use or sale are complete. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than the stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

4.19 Government Grants

Government grants are recognized at fair value when the Company will comply with the conditions attached to them and will receive the grants. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

The Company takes Covid-19 pandemic impact into consideration in critical accounting estimates and reviewing basic assumptions and estimates continually. The impacts of the change in accounting estimate shall be recognized currently when the impacts are related to the current period only. However, the impact shall be recognized currently and prospectively when the impacts not only effect current period but also the future periods.

The preparation of these parent company only financial statements in applying the Company's accounting policies and making critical assumptions and estimates are consisted of the following:

5.1 Critical judgments in applying accounting policies

A. Business model assessment of financial assets

The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. The Company applies judgement and considers relevant factors such as the measurement of assets performing, the risks affected by the performance and the regulations for related manager's remuneration. The Company monitors the fair value through profit or loss financial assets that are derecognized prior to their maturity to assess whether the purpose of derecognition is consistent with the business model's. If there has been a change in the business model, the Company shall postpone the adjustment of the reclassifications of financial assets in accordance with IFRS 9.

B. Lease terms

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions for the optional periods, significant leasehold improvements undertaken over the contract term, the importance of the underlying asset to the lessee's operations, etc. The lease term is reassessed if a significant change in circumstances that are within the control of the Company occurs.

5.2 Critical accounting estimation and assumption

A. Estimated impairment of financial assets

The provision for impairment of accounts receivable and debt investments is based on assumptions on risk of default and expected loss rates. The Company makes these assumptions and selects inputs for the impairment calculation, based on the Company's historical experience and existing market conditions, as well as forward looking information. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

B. Impairment of tangible and intangible assets

In the course of impairment assessments, the Company determines, based on how assets are utilized and relevant industrial characteristics, the useful lives of assets and the future cash flows of a specific group of the assets. Changes in economic circumstances or the Company's strategy might result in material impairment of assets in the future.

C. Realizability of deferred income tax assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. The Company's management assesses the realizability of deferred tax assets by making critical accounting judgements and significant estimates of expected future revenue growth rate and gross profit rate, the tax exemption period, available tax credits, and tax planning, etc. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

D. Evaluation of inventories

As inventories are stated at the lower of cost or net realizable value, and the Company uses judgements and actuarial assumptions to determine the net realizable value of inventory at the end of each reporting period. The Company estimates the net realizable value of inventory for obsolescence and unmarketable items at the end of reporting period, and then writes down the cost of inventories to net realizable value. Such an evaluation of inventories is mainly based on the demand for the products within a specified period in the future. Therefore, there might be material changes to the evaluation.

E. Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Company uses judgements and actuarial assumptions to determine related estimates, including discount rates and future salary increase rate at the end of reporting period. Any changes in these assumptions may have a significantly impact on the carrying amount of defined pension obligation.

F. The lessee's incremental borrowing rate

In determining a lessee's incremental borrowing rate used in discounting lease payments, a risk-free rate for the same currency and relevant duration is selected as a reference rate, and the lessee's credit spread adjustments and lease specific adjustments (such as asset type, guarantees, etc.) are also taken into account.

6. CONTENTS OF SIGNIFICANT ACCOUNTS 6.1 CASH AND CASH EQUIVALENTS

Items		December 31, 2021	December 31, 2020
Cash on hand and petty cash	\$	556	\$ 501
Checking accounts and demand deposits		413,946	485,107
Total	\$	414,502	\$ 485,608

• (1) Time deposits with original maturities over three months are classified as other financial assets-current as of December 31, 2021 and 2020.
• (2) The cash and cash equivalents of the Company are not pledged to others.

6.2 NOTES RECEIVABLE

Items	December	31, 2021	December	31, 2020
Amortized at cost
Gross carrying amount	\$	24,050	\$	14,629
Less: loss allowance		-		-
Notes receivable, net	\$	24,050	\$	14,629

The notes receivable of the Company is not pledged to others.

6.3 ACOUNTS RECEIVABLE - NONRELATED PARTIES

Items	December 31, 2021	December 31, 2020
Amortized at cost
Gross carrying amount	\$ \$ 1,614,559	1,157,187
Less: loss allowance	(7,953)	(7,953)
Accounts receivable, net	\$ \$ 1,606,606	1,149,234

• (1) The average credit period of sales of goods ranges from 60 to 150 days, which is determined by reference to the credit granting policy based on the counterparties' industrial characteristics, operation scales and profitability.
• (2) The Company applies the simplified approach to providing expected credit losses prescribed under IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses are estimated using an allowance matrix with reference to past default experiences of the debtor, an analysis of the debtor's current financial position, adjusted for general economic conditions of the industry in which the debtors operate. The allowance matrix of different customer segments, the provision for loss allowance is based on the number of past due days. All amounts due from specific customers which have impaired have been recognized impairment loss in full amounts and have been accounted in uncollectible accounts (overdue receivables) under noncurrent assets.

(3) The following table detailed the loss allowance of notes and accounts receivable (include overdue receivables) based on the Company's provision matrix (include related parties).

	Gross carrying	Loss	allowance
Aging terms	amount		(lifetime ECLs)	Amortized cost
Neither past due nor impaired	\$ 1,696,838	\$	(3,077)	\$ 1,693,761
Past due but not impaired
Past due within 30 days	76,536		(3,406)	73,130
Past due 31-90 days	8,531		(1,275)	7,256
Past due 91-180 days	337		(195)	142
Past due 181-365 days	-		-	-
Past due over 365 days	5,847		(5,847)	-
Total	\$ 1,788,089	\$	(13,800)	\$ 1,744,289
December 31, 2020
Aging terms	Gross carrying amount	Loss allowance (lifetime ECLs)		Amortized cost
Neither past due nor impaired	\$ 1,197,569	\$	(4,321)	\$ 1,193,248
Past due but not impaired
Past due within 30 days	15,325		(985)	14,340
Past due 31-90 days	9,809		(2,006)	7,803
Past due 91-180 days	3,114		(641)	2,473
Past due 181-365 days	-		-	-
Past due over 365 days	5,847		(5,847)	-
Total	\$ 1,231,664	\$	(13,800)	\$ 1,217,864

December 31, 2021

(4) Movements of the loss allowance for notes and accounts receivable (including of which overdue and related parties').

Items	2021		2020
Balance, January 1 Add:Provision of) for (Reversal	\$	13,800	\$	13,800
impairment		-		-
Balance, December 31	\$	13,800	\$	13,800

• (5) The Company has not held any collateral or other credit enhancement for these accounts receivable.
• (6) Please refer to Note 12 for information on the Company's management and measurement policies of credit risk.
• (7) Accounts receivable of the Company are not pledged to others.

6.4 INVENTORIES AND COST OF GOOD SOLD

Items	December 31, 2021	December 31, 2020
Work-in-process	\$ 977,917	\$ 598,069
Finished goods	746,090	566,414
Raw materials	964,384	533,064
Merchandise	92,644	37,571
Inventory in transit	53,893	72,967
Total	\$ 2,834,928	\$ 1,808,085

(1) The cost of inventories recognized as expense for the period:

Items	2021	2020
Loss on decline (gain on reversal) in market value of inventories	\$ (6,000)	\$ 5,000
Unallocated fixed FOH	810	7,207
Loss on inventory given up	43,990	39,289
Total	\$ 38,800	\$ 51,496

(2) The inventories of the Company are not pledged to others.

6.5 PREPAYMENTS

Items	December 31, 2021	December 31, 2020
Prepaid expenses	\$ 20,960	\$ 20,333
Prepayment for purchases	36,134	28,182
Input tax	16,039	6,222
Others	200	2,218
Total	\$ 73,333	\$ 56,955

6.6 OTHER FINANCAIL ASSETS – CURRENT

Items	December 31, 2021	December 31, 2020
Pledged time deposits	\$ 6,600	\$ 6,800
Total	\$ 6,600	\$ 6,800

Please refer to Note 8 for information on the amounts pledged.

6.7 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

Items	December 31,	2021	December 31, 2020
Equity instruments
Unlisted stocks	\$	2,203	\$	2,203
Valuation adjustment		18,019		14,695
Total	\$	20,222	\$	16,898

• (1) The Company invests in unlisted stocks for medium and long-term strategic purposes and seeks profit from long-term investments. Management of the Company decided to account the above-mentioned investments in FVTOCI, due to recognizing short term gain orloss with FVTPL would against the medium and long-term investment strategies.
• (2) Financial assets at FVTOCI of the Company are not pledged to others.

6.8 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments accounted for using the equity method consisted of the following:

Items	December 31, 2021			December 31, 2020
Subsidiaries	\$	2,361,882		\$ 2,280,015
	Carrying Amount
Subsidiaries		December 31, 2021		December 31, 2020
CHAO SHIN METAL INDUSTRIAL CORPORATION	\$	250,215	\$	237,029
TEC BRITE TECHNOLOGY CO., LTD		370,307		354,428

	Carrying Amount
Subsidiaries	December	31, 2021		December 31, 2020
DER(B.V.I)CO. SHUEN	\$	1,741,360	\$	1,688,558
	\$	2,361,882	\$	2,280,015
Subsidiaries	% of Ownership and Voting Rights Held by the Company December December
		31, 2021		31, 2020
CHAO SHIN METAL INDUSTRIAL CORPORATION		84.62%		84.62%
TEC BRITE TECHNOLOGY CO., LTD		54.98%		54.98%
DER(B.V.I)CO. SHUEN		100.00%		100.00%

• (1) For the information of the subsidiaries of the Company, please refer to Note 4 (3) B of 2021 consolidated financial statements.
• (2) The shares of profit or loss and other comprehensive profit and loss of the subsidiaries under equity method for the years ended 2021 and 2020 are recognized according to the audited financial statements for the same periods.

6.9 PROPERTY, PLANT AND EQUIPMENT

Items	December 31, 2021	December 31, 2020
Land	\$ 173,412	\$ 173,412
Buildings	1,327,446	1,316,931
Machinery	3,865,408	3,734,729
Molds	1,367,242	1,353,294
Other equipment	872,391	809,376
Equipment to be inspected and construction in progress	973,422	415,610
Total cost	8,579,321	7,803,352
Less: accumulated depreciation and impairment	(5,488,164)	(5,240,026)
Total	\$ 3,091,157	\$ 2,563,326

	Land	Buildings	Machinery	Molds	Other equipment	Equipment to be inspected and construction in progress	Total
Cost
Balance, January 1, 2021	\$ 173,412	\$ 1,316,931	\$ 3,734,729	\$ 1,353,294	\$ 809,376	\$ 415,610	\$ 7,803,352
Additions	-	3,735	49,334	5,523	50,178	811,825	920,595
Disposals	-	-	(91,128)	(42,167)	(11,331)	-	(144,626)
Reclassification	-	6,780	172,473	50,592	24,168	(254,013)	-
Balance, December 31, 2021 \$	173,412	\$ 1,327,446	\$ 3,865,408	\$ 1,367,242	\$ 872,391	\$ 973,422	\$ 8,579,321
Accumulated depreciation and impairment
Balance, January 1, 2021	\$ -	\$ (549,928) \$	(2,923,916) \$	(1,205,976) \$	(560,206) \$	-	\$ (5,240,026)
Depreciation expense	-	(39,432)	(176,346)	(114,097)	(61,638)	-	(391,513)
Disposals	-	-	90,832	42,066	10,477	-	143,375
Balance, December 31, 2021 \$	-	\$ (589,360) \$	(3,009,430) \$	(1,278,007) \$	(611,367) \$	-	\$ (5,488,164)
	Land	Buildings	Machinery	Molds	Other equipment	Equipment under installation and construction in progress	Total
Cost
Balance, January 1, 2020	\$ 173,412	\$ 1,308,990	\$ 3,755,140	\$ 1,268,911	\$ 781,594	\$ 357,159	\$ 7,645,206
Additions	-	7,019	23,644	2,765	16,154	263,330	312,912
Disposals	-	-	(135,938)	(10,972)	(7,856)	-	(154,766)
Reclassification	-	922	91,883	92,590	19,484	(204,879)	-
Balance, December 31, 2020 \$	173,412	\$ 1,316,931	\$ 3,734,729	\$ 1,353,294	\$ 809,376	\$ 415,610	\$ 7,803,352
Accumulated depreciation and impairment
Balance, January 1, 2020	\$ -	\$ (511,199) \$	(2,898,665) \$	(1,073,224) \$	(507,031) \$	-	\$ (4,990,119)
Depreciation expense	-	(38,729)	(163,695)	(143,237)	(61,032)	-	(406,693)
Reversal of impairment	-	-	4,000	-	-	-	4,000
Disposals	-	-	134,444	10,485	7,857	-	152,786
Balance, December 31, 2020 \$	-	\$ (549,928) \$	(2,923,916) \$	(1,205,976) \$	(560,206) \$	-	\$ (5,240,026)

• (1) In order to fulfill operational and productivity expansion strategies, board of directors passed a resolution and authorized chairman to conduct the purchase of land and plants on March 9, 2021. The Group purchased the land and plants in Da-gang Section, Nantou City from KOAN HAO TECHNOLOGY CO., LTD. with an area of approximately 5,880 square meters for land and 3,514 square meters for plants, respectively. On June 22, 2021, the purchasing contract was signed. The purchasing price of the land and plants in total is \$ 323,700 thousand, and the transferring of ownership was completed in October. As of December 31, 2021, full payments have been made and the building is still under construction. Please refer to Table 3 for the payment status.
• (2) Please refer to Note 6(27) for information on interest capitalization.

(3) The property, plants, and equipment of the Company are not pledged to others.

6.10 LEASE AGREEMENT

(1) Right-of-use assets

Items			December 31, 2021			December 31, 2020
Land		\$		141,816	\$		137,798
Buildings				80,460			80,460
Total cost				222,276			218,258
Less: Accumulated depreciation	and
impairment				(41,816)			(25,188)
Total		\$		180,460	\$		193,070
		Land		Buildings			Total
Cost
Balance, January 1, 2021	\$	137,798	\$		80,460	\$	218,258
Additions		4,018			-		4,018
Balance, December 31, 2021	\$	141,816	\$		80,460	\$	222,276
Accumulated depreciation and impairment
Balance, January 1, 2021	\$	(17,792)	\$		(7,396)	\$	(25,188)
Depreciation expense		(10,785)			(5,843)		(16,628)
Balance, December 31, 2021	\$	(28,577)	\$		(13,239)	\$	(41,816)
		Land		Buildings			Total
Cost
Balance, January 1, 2020	\$	131,199	\$		74,824	\$	206,023
Additions		10,174			7,760		17,934
Derecognition		(3,575)			(2,124)		(5,699)
Balance, December 31, 2020	\$	137,798	\$		80,460	\$	218,258
Accumulated depreciation and impairment
Balance, January 1, 2020	\$	(10,701)	\$		(3,664)	\$	(14,365)
Depreciation expense		(10,666)			(5,856)		(16,522)
Derecognition		3,575			2,124		5,699

			Buildings	Total
Balance, December 31, 2020	\$	(17,792) \$	(7,396)	\$ (25,188)
(2) Lease liabilities
Items		December	31, 2021	December 31, 2020

Current	\$ 11,994	\$ 12,751
Non-current	\$ 127,231	\$ 135,073

Range of discounts rate for lease liabilities was as follow:

	December 31, 2021	December 31, 2020
Land	0.90%~1.20%	1.20%
Buildings	1.20%	1.20%

Please refer to Note 12 for information regarding maturity analysis for lease liabilities.

(3) Material lease-in activities and terms

A. Land and Buildings

The Company leases land and plants with lease terms between 2015 and 2037, and paid \$4,123 thousand as guaranteed deposit for the lease. The Company and the lessor agreed that a plant may be built on the leased land by the Company. However, title deed of the plant should be registered by the lessor. The Company has the right to use the plant within the lease terms.

• (4) Other lease information
• A. Please refer to Note 6.11 for information of investment property under operating leases.
• B. Cash outflow relating to leases for short-term leases and low-value asset leases is as follows:

Items	2021	2020
Expenses relating to short-term leases	\$ 3,414	\$ 3,192
Total cash outflow for leases	\$ 19,411	\$ 16,204

The Company elected to apply the recognition exemption for short-term leases and

low-value asset leases and, thus, did not recognize right-of-use assets and lease liabilities for these leases.

6.11 INVESTMENT PROPERTIES

Items	December 31, 2021	December 31, 2020
Buildings	\$ 99,629	\$ 99,629
Less: Accumulated depreciation	(59,698)	(56,904)
Total	\$ 39,931	\$ 42,725
Items	2021	2020
Cost
Balance, January 1	\$ 99,629	\$ 99,629
Balance, December 31	\$ 99,629	\$ 99,629
Accumulated depreciation and impairment
Balance, January 1	\$ 56,904	\$ 54,109
Additions	2,794	2,795
Balance, December 31	\$ 59,698	\$ 56,904

A. Rent revenue and direct operation expenses from investment property:

Items		2021	2020
Rent revenue from investment property	\$	18,144	\$ 18,144
Direct operating expenses from the investment of property that generated rental income during the period	\$	3,216	\$ 3,240

B. The lease term for buildings under operating leases is 3 years. The lessees do not have an option to acquire the assets at the expiry of the lease periods. Rental income for 2021 was the same as 2020 and amounted to 18,144 thousand. As of December 31, 2021 and 2020, the maturity analysis of minimum rental receivable for the operating lease is as follows:

Items	December	31, 2021	December 31, 2020
Not later than 1 year	\$	18,144	\$	18,144
Later than 1 year and not later than 5
years		36,288		-
Total	\$	54,432	\$	18,144

C. The fair value of investment property was both \$72,000 thousand dollars on December 31, 2021 and 2020, and did not assess by any independent appraiser, only refer to the trading price of similar properties on open market by management of the company.

D. The investment property of the Company is not pledged to others.

6.12 INTANGIBLE ASSETS

Items	December	31, 2021	December 31, 2020
Patents	\$	\$ 55,416	62,226
Trademarks		2,432	2,674
Computer software		21,843	31,965
Total		79,691	96,865
Less: Accumulated amortization		(38,286)	(46,022)
Intangible assets, net	\$	\$ 41,405	50,843

		2021
Items		Patent		Trademarks		Computer software	Total
Cost
Balance, January 1	\$	62,226	\$	2,674	\$	31,965	\$	96,865
Additions		2,950		208		2,599		5,757
Disposals		(9,760)		(450)		(12,721)		(22,931)
Balance, December 31	\$	55,416	\$	2,432	\$	21,843	\$	79,691
Accumulated amortization
Balance, January 1	\$	(24,394)	\$	(1,700)	\$	(19,928)	\$	(46,022)
Amortization expense		(8,874)		(317)		(6,004)		(15,195)
Disposals		9,760		450		12,721		22,931
Balance, December 31	\$	(23,508)	\$	(1,567)	\$	(13,211)	\$	(38,286)

	2020
Items		Patent		Trademarks		Computer software	Total
Cost
Balance, January 1	\$	69,193	\$	2,501	\$	33,902	\$	105,596
Additions		3,843		318		4,222		8,383
Disposals		(10,810)		(145)		(8,099)		(19,054)
Reclassified		-		-		1,940		1,940
Balance, December 31	\$	62,226	\$	2,674	\$	31,965	\$	96,865
Accumulated amortization
Balance, January 1	\$	(25,045)	\$	(1,518)	\$	(20,292)	\$	(46,855)
Amortization expense		(10,159)		(327)		(7,735)		(18,221)
Disposals		10,810		145		8,099		19,054
Balance, December 31	\$	(24,394)	\$	(1,700)	\$	(19,928)	\$	(46,022)

The intangible assets of the Company are not pledged to others.

6.13 OTHER NON-CURRENT ASSETS

Items	December 31, 2021	December 31, 2020
Prepayments for equipment	\$ 40,727	\$ 8,781
Refundable deposits	10,381	10,831
Overdue receivables	5,847	5,847
Less: allowance for bad debts	(5,847)	(5,847)
Prepayments for software	31,500	15,591
Total	\$ 82,608	\$ 35,203

Please refer to Note 8 for information on the refundable deposits that were pledged to others.

6.14 NOTES PAYABLE

Items	December 31, 2021			December 31, 2020
Notes payable - operating activities	\$	6,288	\$	4,686
Total	\$	6,288	\$	4,686

6.15 OTHER PAYABLES

Items	December 31, 2021	December 31, 2020
Salaries and bonuses payable	\$ 276,594	\$ 170,947
Payable for equipment and construction	98,198	22,431
Accrued supplies expense	39,048	30,668
Compensation payable to employees, directors, and supervisors	29,081	11,766
Payable for repairs and maintenance expense	21,015	18,866
Payable for insurance	15,189	12,933
Payable for utilities expense	13,523	14,336
Others	60,649	60,029
Total	\$ 553,297	\$ 341,976

6.16 LONG-TERM LOANS AND CURRENT PORTION

The nature of loans	December 31, 2021	December 31, 2020
Unsecured loans	\$ 2,248,746	\$ 1,375,000
Less: current portion	(80,833)	(23,333)
Discount of government grants (Note 6.17)	(8,657)	(7,130)
Total	\$ 2,159,256	\$ 1,344,537
Interest rates range	0.45%~0.98%	0.45%~0.98%
Year to maturity	2022~2027	2021~2027

• (1) The loans from Bank of Taiwan, Mega Bank, E.SUN Bank, Chang Hwa Bank and Bangkok Bank are repaid in installments, the rest of the loans will be repaid in full on the maturity date.
• (2) Under the Company's loan agreement with certain banks, the Company should meet several financial ratios and criteria. The Company had no violation of the aforementioned financial ratio regulations as of December 31, 2021 and 2020.

6.17 GOVERNMENT GRANTS

(1) The Company has obtained a \$1,088,747 thousand preferential interest rate loan from a government under the "Action Plan Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan" for capital expenditure and operating turnover. The difference between transaction price and fair value is regarded as the government grants. As of December 31, 2021, the fair value of loan is estimated to be \$1,080,090 thousand. The difference \$8,657 between transaction price and fair value is recognized as deferred income (under other non-current liabilities). The deferred revenue is recognized as other income during the loan period. The Company has recognized \$2,825 thousand in other income, \$7,547 thousand in interest expense for the loan, and paid \$4,722 thousand interests to the bank.

(2) The National Development Fund would cease providing the Company related interest subsidies if the Company violated requirements of the project loan due to not using for the construction of plants and relevant facilities, purchasing equipment or using as midterm working capital. Therefore, the loan interests of the Company will adopt the original agreed interest rate.

6.18 RETIREMENT BENEFIT PLANS

• (1) Defined contribution plans
• A. The employee pension plan under the Labor Pension Act of the R.O.C. (the Act) is a defined contribution plan. Pursuant to the plan, the Company make monthly contributions of 6% of each individual employee's salary or wage to employees' pension accounts.
• B. The Company recognized expenses in the statement of comprehensive income were \$40,113 thousand and \$31,344 thousand under the contributions rates specified in the plans for years ended December 31, 2021 and 2020, respectively.
• (2) Defined benefit plans
• A. The Company has a defined benefit pension plan in accordance with the Labor Standards Law of the R.O.C. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 6% of the employees' monthly salaries and wages to the retirement fund deposited in Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of each year. If the amount of the balance in the pension fund is not enough to pay the pension to the labors expected to be qualified for retirement in the following year, the Company will make contribution for the deficit by next March. The Fund is managed by the Government's designated authorities and the Company have no right to influence their investment strategies.
• B. Amounts recognized in the balance sheet are as follows:

Items	December 31, 2021		December 31, 2020
Present value of defined benefit obligations	\$	257,918 (125,182)	\$ 265,117 (136,777)
Fair value of plan assets
Net defined benefit liability	\$	132,736	\$ 128,340

C. Movements in net defined benefit liability are as follows:

	2021
Items	of	Present value defined benefit obligations	Fair	value of plan assets	Net defined benefit liability
Balance, January 1	\$	265,117	\$	(136,777)	\$	128,340
Service costs
Current service cost		1,390		-		1,390
Interest expense(revenue)		928		(509)		419
Amounts recognized in profit and loss		2,318		(509)		1,809
Remeasurements:
Return on plan assets (Amounts included in interest income or expense are excluded) Actuarial (gains) losses -		-		(1,839)		(1,839)
Effect of changes in demographic assumptions Effect of changes in financial assumptions		13,561 11,895		- -		13,561 11,895
Experience adjustments		(9,164)		-		(9,164)
Amounts recognized in other comprehensive income (losses) Pension fund contributions		16,292 -		(1,839) (11,866)		14,453 (11,866)
Paid pension		(25,809)		25,809		-
Balance, December 31	\$	257,918	\$	(125,182)	\$	132,736

	2020
Items	Present value of defined benefit obligations		Fair value of plan assets		Net defined benefit liability
Balance, January 1	\$	261,834	\$ (123,526)		\$ 138,308
Service costs
Current service cost		1,494	-		1,494
Interest expense(revenue)		2,094	(1,035)		1,059
Amounts recognized in profit and loss		3,588	(1,035)		2,553
Remeasurements:
Return on plan assets (Amounts included in interest income or expense are excluded)		-	(4,146)		(4,146)
Actuarial (gains) losses -
Effect of changes in demographic assumptions Effect of changes in financial		1,064	-		1,064
assumptions		5,322	-		5,322
Experience adjustments		2,284	-		2,284
Amounts recognized in other comprehensive income (losses)		8,670	(4,146)		4,524
Pension fund contributions		-	(17,045)		(17,045)
Paid pension		(8,975)	8,975		-
Balance, December 31	\$	265,117	\$ (136,777)		\$ 128,340

The pension costs of the aforementioned defined benefit plans are recognized in profit or loss by the following categories:

Items		2021	2020
Cost of revenue	\$	1,192	\$	1,648
Marketing expenses		98		128
General and administrative expenses		304		474
Research and development expenses		215		303
Total	\$	1,809	\$	2,553

D. Information about Fair value of plan assets are as follows:

Item	December 31, 2021		December 31, 2020
Cash and cash equivalents	\$	\$ 125,182		136,777

• E. Because of the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:
• i. Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. at the discretion of the Bureau of Labor Funds of Ministry of Labor, or under the mandated management. However, under the Labor Standards Law, the rate of return on plan assets shall not be less than the average interest rate on a twoyear time deposit published by the local banks.

ii. Interest risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

iii. Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

F. The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions on measurement date were as follows:

	Measurement date
Items	December 31, 2021	December 31, 2020
Discount rate	0.75%	0.35%
Expected salary increase rate	2.00%	2.00%

Reasonably possible changes to the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Items	December 31, 2021		December 31, 2020
Discount rate
0.25% increase	\$	\$ (5,820)	(6,193)
0.25% decrease		6,029	6,422

Items	December 31, 2021	December 31, 2020
Expected salary increase rate
0.25% increase	\$ \$ 5,792		6,145
0.25% decrease	(5,621)		(5,958)

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

G. The contribution that the Company expects to make to its defined benefit pension plans in next year is \$11,866 thousand. The weighted average maturity period of the defined benefit obligation is 11 years.

6.19 COMMON STOCKS

(1) The movements in the number of the Company's ordinary shares outstanding are as follows:

		2021				2020
Items	Shares		Capital	Shares		Capital
Balance, January 1	182,140	\$	1,821,403	182,140	\$	1,821,403
Balance, December 31	182,140	\$	1,821,403	182,140	\$	1,821,403

The par value of common stock is \$10 per share, and every share has one voting right and the right to gain dividends.

(2) The Company's authorized capital was \$2,700,000 thousand, consisting of 270,000 thousand shares as of December 31, 2021.

6.20 CAPITAL SURPLUS

Item	December 31, 2021	December 31, 2020
Additional paid-in capital	\$ 451,220	\$ 451,220
Long-term investments at equity	3,546	3,546
Treasury stock transactions	30,359	30,359
Others	473	278
Total	\$ 485,598	\$ 485,403

• (1) Under the Company Act, the capital surplus generated from the excess of the issuance price over the par value of capital stock and from donations can be used to offset deficit or may be distributed as stock dividends or cash dividends. Under the regulations of the Security Exchange Law, the maximum amount transferred from the foregoing capital surplus to the Company's capital per year shall not be over 10% of the Company's capital surplus. Capital surplus can't be used to offset deficit unless legal reserve is insufficient.
• (2) The capital surplus from shares of changes in equities and stock options may not be used for any purpose.

6.21 RETAINED EARNINGS AND DIVIDEND POLICY

(1) According to the Company's Article of Incorporation, the current year's earnings, if any, shall first pay taxes, offset prior years' operating losses, set aside a legal capital reserve at 10% of the remaining earnings until the accumulated legal capital reserve equals the Company's paid-in capital then reversal or set aside a special capitalreserve in accordance with relevant laws or regulations. Any balance left over shall be allocated with unappropriated earnings submitted by the Board of Directors to be approved at a shareholders' meeting according to the Company's Articles of Incorporation 32 para 1 ad finem .

The Company's dividend policy was established by the Board of Directors according to operating plans, investment plans, capital budgets and the changes in internal and external environment. Due to the Company's steady growth, distribution of earnings will first consider to be allocated by cash dividend before stock dividend. Stock dividends distributed shall not excess be higher than 50% of the gross amount of total dividends.

• (2) Legal reserve may be used to offset a deficit or to distribute as dividend in cash or in stock for the portion in excess of 25% of the Company's paid-in capital.
• (3) Special reserve

Items	December	31, 2021	December 31, 2020
Special reserve	\$	\$ 134,642	155,570

• A. In accordance with the regulation, the Company shall set aside special reserve from the debit balance on other equity item at the end of the year before distributing earnings. When debit balance on other equity is reversed subsequently, the reversed amount could be included in the distributable earnings.
• B. On initial application of IFRSs, the unrealized revaluation increments and cumulative translation adjustment should be reclassified into retained earnings, and was set aside as special reserve \$53,205. When the relevant assets are used, disposal of or reclassified

subsequently, the special reserve set aside previously shall be reversed to distributable earnings proportionately.

(4) The appropriations of 2020 and 2019 earnings have been approved by shareholders' meetings held on August 26, 2021 and June 23, 2020, respectively. The appropriations of earnings and dividends per share were as follows:

		Appropriation	of	Earnings	Dividends Per Share (NT\$)
Items	For Year 2020		For Year 2019		For	Year 2020		Year 2019
Legal reserve	\$	34,535	\$	50,253
Special reserve		(20,928)		54,387
Cash dividends		327,852		327,852	\$	1.80	\$	1.80

(5) The Company's appropriation of earnings for 2021 had been approved in the meeting of the Board of Directors held on February 24, 2022. The appropriations of earnings were as follows:

Items		Appropriation of Earnings	Dividends Per Share (NT\$)
Legal reserve	\$	83,980
Special reserve		5,212
Cash dividends		546,421	\$ 3.00

The appropriations of earnings for 2021 are to be presented for approval in the shareholders' meeting to be held in May, 2022.

(6) Information on the resolution of the Board of Directors' and shareholders' meetings regarding the appropriation of earnings is available from the Market Observation Post System on the website of the TWSE.

6.22 OTHER EQUITY ITEMS

		Unrealized valuation
	Exchange differences	gain (loss) on financial
	on translation of	assets at fair value
	foreign financial	through other
Item	statements	comprehensive income	Total
Balance, January 1, 2021	\$ (147,809) \$	13,167	\$ (134,642)

		Unrealized valuation
	Exchange differences	gain (loss) on financial
	on translation of	assets at fair value
	foreign financial	through other
Item	statements	comprehensive income	Total
Exchange differences on
translation of foreign
financial statements	\$ (7,880) \$	-	\$ (7,880)
Unrealized valuation gain
(loss) on financial assets at
fair value through other
comprehensive income	-	2,759	2,759
Balance, December 31, 2021	\$ (155,689) \$	15,926	\$ (139,763)

Exchange differences gain (loss) on financial on translation of assets at fair value foreign financial through other Item statements comprehensive income Total \$ (168,987) \$ \$ Balance, January 1, 2020 13,417 Exchange differences on translation of foreign financial statements - 21,178 Unrealized valuation gain (loss) on financial assets at fair value through other comprehensive income - (250) \$ (147,809) \$ \$ Balance, December 31, 2020 13,167		Unrealized valuation
			(155,570)
			21,178
			(250)
			(134,642)

6.23 OPERATING REVENUE

Items	2021	2020
Revenue from contracts with customers
Sale of goods	\$ 8,225,981	\$ 6,206,643
Other operating revenues	21,678	20,579

2021	2020
\$ 8,247,659	\$ 6,227,222

(1) Description of customer contract

The Company is mainly engaged in the sale of lead frames and stationery products. The target customers are downstream vendors and agents, etc., and the Company sells at price stipulated in contract. The consideration is classified as short-term receivables, and is therefore measured at invoice price.

• 2021 Major products /Service line China Taiwan Japan Malaysia Others Total Electronic \$ 2,767,316 \$ 891,837 \$ 1,086,036 \$ 722,645 \$ 1,475,019 \$ 6,942,853 Stationery 35,999 518,104 69,128 2,853 533,995 1,160,079 Others 65,033 4,308 5,716 25,801 22,191 123,049 Total \$ 2,868,348 \$ 1,414,249 \$ 1,160,880 \$ 751,299 \$ 2,031,205 \$ 8,225,981 2020 Major products /Service line China Taiwan Japan Malaysia Others Total Electronic \$ 2,064,564 \$ 393,272 \$ 789,188 \$ 655,398 \$ 1,257,973 \$ 5,160,395 Stationery 28,485 491,903 78,601 1,345 361,914 962,248 Others 25,056 58,885 - 59 - 84,000 Total \$ 2,118,105 \$ 944,060 \$ 867,789 \$ 656,802 \$ 1,619,887 \$ 6,206,643
• (2) Disaggregation of revenue from contracts with customers

(3) The Company recognizes contract liabilities related to the revenue from contracts with customers as follows:

Items		December 31, 2021	December 31, 2020
Contract liabilities - current	\$	93,512	\$ 76,746

6.24 PERSONNEL, DEPRECIATION AND AMORTIZATION EXPENSES

The information of employee benefits, depreciation, depletion, and amortization are as follows:

2021								2020
				Total		Cost of sales				Total
										828,193
-		13,630		13,630		-		4,829		4,829
		21,192		90,117		58,091		19,434		77,525
		14,846		41,922		24,328		9,569		33,897
		16,390		80,382		61,295		17,895		79,190
		34,630		410,935		389,444		36,566		426,010
849		14,346		15,195		918		17,303		18,221
\$	\$	435,567	\$	1,723,842	\$	1,132,320	\$	335,545	\$	1,467,865
\$	Cost of sales 751,128 68,925 27,076 63,992 376,305 1,288,275	\$	Operating expense (include not operating) 320,533	\$	1,071,661	\$	598,244	\$	Operating expense (include not operating) 229,949	\$

• (1) The average numbers of employees of the Company of 2021 and 2020 were 1,490 and 1,419, respectively. The numbers of non-employee Directors were 6 and 3 for 2021 and 2020, respectively.
• (2) The average employee benefits expenses were \$865 thousand and \$719 thousand for 2021 and 2020, respectively.
• (3) The average salaries were \$722 thousand and \$585 thousand for 2021 and 2020, respectively. The average salaries of 2021 and 2020 increased by 23%.
• (4) The supervisors' remuneration for 2021 and 2020 are \$40 thousand and \$450 thousand.
• (5) In accordance with the Company's Article of incorporation, the Company shall allocate 1.5% and not higher than 1.5% of annual profits before tax during the period to employees' compensation and directors' and supervisors' remuneration, respectively. If there is a change in the proposed amount after the annual financial statements are authorized for issue, the difference is recorded as a change in accounting estimate.
• (6) The appropriations of employees' compensation and directors' and supervisors' remuneration for 2021 and 2020 have been approved by the board of directors held on February 24, 2022, and March 9, 2021, respectively. The amount of approved and recognized in financial statement is shown as follows.

	For Year 2021				For Year 2020
	Directors' and Employees' supervisors' compensation remuneration			Employees' compensation		Directors' and remuneration	supervisors'
Amounts approved in meeting	\$ 16,156	\$	12,925	\$	6,537	\$	5,229

For Year 2020
Directors' and Employees' remuneration compensation remuneration	Directors' and supervisors'
\$ \$ 6,537 5,229	-
12,925 -	\$ - \$

The employees' compensation of 2021 and 2020 is distributed in cash.

(7) Information on employees' compensation and directors' and supervisors' remuneration of the Company is available from the Market Observation Post System at the website of the TWSE.

6.25 OTHER INCOME

Items	2021	2020
Rental income	\$ 19,480	\$	19,366
Commission income	11,914		10,805
Government subsidies	11,046		3,487
Dividend income	392		475
Others	23,160		20,195
Total	\$ 65,992	\$	54,328

6.26 OTHER GAINS AND LOSSES

Items	2021	2020
Foreign exchange gains (losses), net	\$ (22,357) \$	(74,738)
Gain on disposal of property, plant
and equipment	2,694	9,104
Gain on reversal of impairment loss
of property, plant and equipment	-	4,000
Net gains on financial assets
and liabilities at FVTPL	-	190
Others	(3,841)	(2,933)
Total	\$ (23,504) \$	(64,377)

6.27 FINANCIAL COSTS

Items	2021	2020
Interest expense
Bank loans	\$ 13,767	\$	15,129
Interest on lease liabilities	1,690		1,761
Less: capitalized amount for qualified assets	(2,814)		(1,770)
Financial costs	\$ 12,643	\$	15,120
Interest capitalization rates	0.66%~0.71%		1.44%

6.28 INCOME TAX

• A. Income tax expense recognized in profit or loss
• (1)Components of income tax expense:

Items	2021	2020
Current income tax expense
(benefit) Current tax expense recognized in the current year	\$ 185,729	\$	46,424
Tax on unappropriated earnings	195		3,502
Adjustments for prior years	3,110		(2,579)
Current tax	189,034		47,347
Deferred income tax expense
The origination and reversal of temporary differences	6,701		27,523
Deferred tax	6,701		27,523
Income tax expense recognized in profit or loss	\$ 195,735	\$	74,870
(2)Income tax expenses (benefits) recognized	in other comprehensive		income were as
follows:

Items	2021		2020
Exchange differences on translation
of foreign operations	\$	(1,970) \$	5,294

Items		2021	2020
Unrealized gains (losses) on financial assets at fair value through other comprehensive income Remeasurement of defined	\$	565	\$	(70)
benefit obligation		(2,891)		(905)
Total	\$	(4,296)	\$	4,319

B. Reconciliation between accounting profit and income tax expense recognized in profit or loss:

Items	2021			2020
Income before tax	\$	1,047,979	\$	424,017
Income tax expense at the statutory rate	\$	209,596	\$	84,803
Tax effect of adjusting items:
Deductible items in determining taxable income Income tax on unappropriated		(23,867)		(38,379)
earnings		195		3,502
Income tax adjustments on prior years		3,110		(2,579)
Net changes on deferred income tax		6,701		27,523
Income tax expense recognized in profit or loss	\$	195,735	\$	74,870

The corporate income tax rate for entities subject to the R.O,C, Income Tax Act 20%, and the tax rate for unappropriated earnings 5%.

C. Income tax liabilities

Items	December	31, 2021	December 31, 2020
Income tax liabilities	\$	171,759	\$	59,888

D. Deferred tax assets or liabilities arising from temporary differences, operating loss carryforward, and investment tax credit:

			2021
			Recognized in
		Recognized	other
		in	comprehensive
Items	January 1	(losses) gains	income	December 31
Deferred income tax assets
Temporary differences
Unrealized loss on inventories Net defined benefit	\$ 22,900	\$ (1,200)	\$ -	\$ 21,700
liability	24,621	(1,821)	2,891	25,691
Cutoff	23,635	9,234	-	32,869
Others	8,944	988	-	9,932
Subtotal	80,100	7,201	2,891	90,192
Deferred tax liabilities
Temporary differences
Gain on foreign investments accounted for using the equity method Exchange differences	(184,401)	(13,507)	-	(197,908)
arising on translation of foreign operations Reserve for land revaluation increment	(8,478)	-	1,970	(6,508)
tax	(78,957)	-	-	(78,957)
Others	(2,732)	(395)	(565)	(3,692)
Subtotal	(274,568)	(13,902)	1,405	(287,065)
Total	\$ (194,468)	\$ (6,701)	\$ 4,296	\$ (196,873)

	2020
					Recognized	in
		Recognized			other
				in	comprehensive
Items		January 1		(losses) gains	income			December 31
Deferred income tax assets
Temporary differences
Unrealized loss on
inventories Net defined benefit	\$	21,900	\$	1,000	\$	-	\$	22,900
liability		27,037		(2,705)		289		24,621

	2020
						Recognized in
				Recognized		other
				in		comprehensive
Items		January 1		(losses) gains		income		December 31
Accrued year-end
bonus	\$	22,377	\$	(22,377)	\$	-	\$	-
Cutoff		14,385		9,250		-		23,635
Others		16,875		(7,931)		-		8,944
Subtotal		102,574		(22,763)		289		80,100
Deferred tax liabilities
Temporary differences
Gain on foreign investments accounted for using the equity
method Exchange differences arising on translation		(179,856)		(4,545)		-		(184,401)
of foreign operations Reserve for land revaluation increment		(3,184)		-		(5,294)		(8,478)
tax		(78,957)		-		-		(78,957)
Others		(3,203)		(215)		686		(2,732)
Subtotal		(265,200)		(4,760)		(4,608)		(274,568)
Total	\$	(162,626)	\$	(27,523)	\$	(4,319)	\$	(194,468)

E. The income tax returns of the Company have examined through 2019 by tax authority.

6.29 OTHER COMPREHENSIVE INCOME

		2021
		Income	tax
Items	Before tax	(expense) benefit		After tax
Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation Share of other comprehensive income of investments	\$ (14,453)	\$	2,891	\$ (11,562)
accounted for using the equity method	(882)		-	(882)

		2021
		Income tax
Items	Before tax	(expense) benefit	After tax
Unrealized gains (losses) on valuation of equity investments at fair value through other comprehensive income Subtotal	\$ 3,324 (12,011)	\$ (565) 2,326	\$ 2,759 (9,685)
Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations Subtotal	(9,850) (9,850)	1,970 1,970	(7,880) (7,880)
Total	\$ (21,861)	\$ 4,296	\$ (17,565)
Items	Before tax	2020 Income tax (expense) benefit	After tax
Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation Share of other comprehensive income of investments	\$ (4,524)	\$ 905	\$ (3,619)
accounted for using the equity method Unrealized gains (losses) on valuation of equity investments at fair value through other	(177) (320)	-	(177) (250)
comprehensive income		70
Subtotal Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations	(5,021) 26,472	975 (5,294)	(4,046) 21,178
Subtotal	26,472	(5,294)	21,178
Total	\$ 21,451	\$ (4,319)	\$ 17,132

6.30 EARNINGS PER SHARE

Items	2021	2020
Basic earnings per share Net income attributable to
ordinary shareholders of the
Company	\$ 852,244	\$	349,147
Net income for calculating basic earnings per share	\$ 852,244	\$	349,147
Weighted average number of
shares outstanding (share in thousands)	182,140		182,140
Basic earnings per share (after tax)
(in dollars)	\$ 4.68	\$	1.92
Diluted earnings per share
Net income attributable to ordinary shareholders of the
Company	\$ 852,244	\$	349,147
Net income for calculating diluted earnings per share	\$ 852,244	\$	349,147
Weighted average number of
shares outstanding (share in
thousands) Effect of dilutive potential common	182,140		182,140
shares
Employees' compensation
(share in thousands)	106		95
Weighted average shares outstanding for diluted earnings
per share (thousand shares)	182,246		182,235
Diluted earnings per share (after tax)
(in dollars)	\$ 4.68	\$	1.92

The earnings for earnings per share calculated and weighted average number of ordinary shares are as follows:

If the Company offered to settle the compensation or bonuses paid to employees in shares or cash at the Company's option, the Company assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the calculation of diluted earnings per share if the effect is dilutive. Such dilutive effect of the potential shares is included in the calculation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

7. RELATED PARTY TRANSACTIONS

The transactions between the Company and its related parties, other than those disclosed in

other notes, are summarized as follows:

A. Related party name and categories

Related Party Name Related Party Categories CHAO SHIN METAL INDUSTRIAL CORPORATION (Chao Shin Metal) Subsidiaries TEC BRITE TECHNOLOGY CO., LTD. (TEC Brite Technology) Subsidiaries SHUEN DER INDUSTRY (JIANGSU) CO.,LTD (SDI (JIANGSU) ) Subsidiaries SJD Industries (M) Sdn. Bhd Other related parties SDI JAPAN CO.,LTD. Other related parties

B. Significant transactions between related parties

Significant transactions between the Company and its related parties for the years ended December 31, 2021 and 2020 are as follow:

(a) Revenue

Related Party	2021			2020
Subsidiaries	\$	224,657	\$	153,461
Other related parties		35,548		31,551
Total	\$	260,205	\$	185,012

Sales price with related parties was determined and negotiated referring to related market price. The payment term was T/T 30~240 days.

(b) Purchases

Related Party	2021	2020
Subsidiaries	\$ 233,465	\$ 187,656
SDI (JIANGSU)	769,208	643,572
Other related parties	4,643	5,431
Total	\$ 1,007,316	\$ 836,659

Purchases price with related parties was determined and negotiated referring to related market price. The payment term was T/T 60~90 days.

(c) Receivables due from related parties

Items	Related Party	December 31, 2021	December 31, 2020
Accounts receivable	Subsidiaries	\$ 126,323	\$ 35,322
	Other related
	parties	17,310	18,679
	Total	\$ 143,633	\$ 54,001
Other receivables	Subsidiaries	\$ 792	\$ 4,843
	TEC Brite Technology Other related	8,571	8,079
	parties	118	4,574
	Total	\$ 9,481	\$ 17,496

(d) Payables due to related parties

Items	Related Party	December 31, 2021		December 31, 2020
Accounts payable	Subsidiaries	\$	160,486	\$ 113,434
	Other related parties		1,120	-
	Total	\$	161,606	\$ 113,434
Other payables	Subsidiaries Other related	\$	1,803	\$ 12,097
	parties		860	440
	Total	\$	2,663	\$ 12,537

(e) Property transactions

(1) Acquisition of property, plant and equipment

Related party	2020	2019
Subsidiaries	\$ -	\$ 20,485
Total	\$ -	\$ 20,485

(2) Disposal of property, plant and equipment

		2021			2020
Related Party	Price Profit (Loss)				Price	Profit (Loss)
Subsidiaries	\$ 117	\$	16	\$	639	\$	152
Total	\$ 117	\$	16	\$	639	\$	152

The unrealized gains from selling equipment as mentioned above have been deferred. (f)Selling parts

		2021		2020
Related Party	Price	Profit (Loss)	Price	Profit (Loss)
Subsidiaries	\$ 2,333	\$ 243	\$ 7,089	\$ 722

The stationaries and electric parts the subsidiaries needed for production were purchased by the Company. The unrealized gains as mentioned above have been deferred. (g)Endorsement and Guarantees

Party being guaranteed	Matter being guaranteed	December	31, 2021	December	31, 2020
SDI(JIANGSU)	Banking facilities	\$	1,436,168	\$	1,172,785
	Total	\$	1,436,168	\$	1,172,785

(h)Other transactions

Items	Related Party	2021	2020
Processing fee	Chao Shin Metal	\$ 6,747	\$ 3,775
Other expenses	Subsidiaries	\$ 8,312	\$ 5,411
	Other related parties	-	93
	Total	\$ 8,312	\$ 5,504
Rental income	Subsidiaries	\$ 144	\$ 144
	TEC Brite Technology	18,744	18,744
	Total	\$ 18,888	\$ 18,888
Other income	Subsidiaries	\$ 20,681	\$ 20,437
	Other related parties	317	344
	Total	\$ 20,998	\$ 20,781
Deduction of
expenses	Subsidiaries Other related	\$ 7,281	\$ 3,621
	parties	153	88
	Total	\$ 7,434	\$ 3,709

(i) Lease agreement

Item	Related Party	December 31, 2021	December 31, 2020
liabilities- Lease
current	Chao Shin Metal	\$ 2,571	\$ 2,540
liabilities- Lease non-current	Chao Shin Metal	\$ 34,876	\$ 37,447
Item	Related Party	2021	2020
Depreciation	Subsidiaries	\$ 2,726	\$ 2,726
Interests expense	Subsidiaries	\$ 460	\$ 490

Item	2021	2020
Short-term employee benefits	\$ 58,045	\$ 30,839
Post- employment benefits	474	319
Total	\$ 58,519	\$ 31,158

8. PLEDGED ASSETS

The Company's assets pledged as collateral are as follows:

Item	December 31, 2021	December 31, 2020
Pledge time deposit (recognized as other financial assets - current)	\$ 6,600	\$ 6,800
Refundable deposits (recognized as other non-current assets)	494	644
Total	\$ 7,094	\$ 7,444

9. SIGNIFICANT CONTINGENCIES LIABILITIES AND UNRECOGNIZED COMMITMENTS:

(1) Capital expenditures contracted at the balance sheet date but not yet incurred are as follows:

\$ \$	Item	December 31, 2021	December 31, 2020
	Property, plant, and equipment	190,286	292,772

10. SIGNIFICANT DISASTERS: NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS: NONE.

12. OTHERS:

12.1Capital risk management

The Company requires an adequate capital structure to enable the expansion and enhancement of its plant and equipment. Therefore, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources and operating plan to fund its working capital needs, capital asset purchases, development expenditure, and debt service requirements and other business requirements associated with its existing operations over the next 12 months.

12.2 Financial instruments

(1) Financial risks on financial instruments

Financial risk management policies

The Company's activities expose it to a variety of financial risks. These financial risks included market risk (including foreign currency exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management strategy focuses on the unpredictability of financial markets and seeks to mitigate potential adverse effects on its financial performance.

The Company's material financial activities are approved by the Board of Directors (and Audit Committee) in accordance with relevant requirements and internal control mechanism, which requires the Company to comply with its financial operating policies and procedures that provide guiding principles for the overall financial risk management and accountability and separation of duties.

Significant financial risks and degrees of financial risks

A. Market risk

a.Foreign exchange risk

i.The Company's sales, purchase and borrowing activities denominated in foreign currencies are exposed to foreign currency risk. The Company's functional currency is New Taiwan dollars. The main foreign currencies of those thousand transactions are US dollars and JPY, etc. To protect against reductions in value and the volatility of future cash flows results from changes in foreign exchange rates, the Company hedges its foreign exchange risk exposure by using foreign currency loans and derivatives, such as forward exchange agreements. The usage of derivative financial instruments can assist the Company to reduce but not completely eliminate the influence of changes in foreign exchange rates.

ii.Sensitivity analysis of foreign currency risk

	December 31, 2021
		Foreign Currency	Exchange Rate	New Taiwan Dollars
Financial Assets
Monetary Items
USD	\$	65,921	27.67	\$ 1,824,041
JPY		140,957	0.24	33,907
Non-monetary Items Investments accounted for using equity method
USD		64,278	27.67	1,778,567
Financial Liabilities
Monetary Items
USD		28,829	27.67	797,706
JPY		219,633	0.24	52,833
			December 31, 2020
		Foreign Currency	Exchange Rate	New Taiwan Dollars
Financial Assets
Monetary Items
USD	\$	44,797	28.48	\$ 1,275,804
JPY		125,756	0.28	34,790
Non-monetary Items Investments accounted for using equity method
USD		60,424	28.48	1,720,883
Financial Liabilities
Monetary Items
USD		14,496	28.48	412,853

The Company is mainly exposed to US dollar and JPY. The sensitivity analysis rate for the Company is 1% increase and decrease in NTD against the relevant foreign currencies 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 1 % change in foreign currency rates. An increase/ decrease in profit before tax would be resulted where the NTD strengthens/ weakens 1% against the relevant currency with all other variables held constant in the amounts of \$10,074 thousand and \$8,641 thousand for the years ended December 31, 2021 and 2020, respectively.

b.Price risk

The Company is exposed to the price risk of funds and unlisted equity securities because these equity investments held by the Company are classified as either financial assets at fair value through profit/loss or financial assets at fair value through other comprehensive income.

The Company mainly invests in equity instrument of unlisted stocks. The prices of equity instrument of unlisted stocks would change due to the uncertainty of the future value.

If the prices of these equity securities had increased/decreased by 1%, the profit before tax and other comprehensive income before tax would have increased/decreased by \$202 thousand and \$169 thousand, respectively, due from increase/decrease in fair value.

The realized and unrealized foreign currency exchange losses for the years ended December 31, 2021 and 2020 are \$22,357 thousand and \$74,738 thousand, respectively. Due to the wide variety of currencies in the foreign currency transactions of Group, the exchange gains and losses is not disclosed in each foreign currencies.

c.Interest rate risk

The carrying amounts of interest – bearing financial instruments held by the Company as of the reporting date are as follows:

	Carrying Amounts
Items	December 31, 2021		December 31, 2020
Fair value interest rate risk
Financial assets	\$ 1,094	\$	1,444
Net	\$ 1,094	\$	1,444
Cash flow interest rate risk
Financial assets	\$ 412,486	\$	488,942

	Carrying	Amounts
Items	December 31, 2021	December 31, 2020
Financial liabilities	\$ (2,240,089) \$	(1,367,870)
Net	\$ (1,827,603) \$	(878,928)

• i.Sensitivity analysis for instruments with fair value interest rate risk : The Company does not classify any fixed-rate instruments as financial assets measured at fair value through profit and loss. In addition, the Company does not designate derivatives as hedge instruments under the fair value hedge accounting model. Therefore, the change in interest rate on the reporting date has no effect on profit or loss and other comprehensive income.
• ii.Sensitivity analysis forinstruments with cash flow interestrate risk:The effective interest rates for the Company's floating interest rate financial instruments are susceptible to the market interest rate. If the market interest rate increases (decreases) 1%, the profit before tax will increase (decrease) \$18,276 thousand and \$8,789 thousand for the years ended December 31, 2021 and 2020, respectively.
• B. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from operation activities, primarily trade receivable, and from investing activities, primarily bank deposits and other financial instruments. Credit risk is managed separately for business related and financial related exposures.

a. Business - related credit risk

In order to maintain the credit quality of the trade receivables, the Company has established procedures to monitor and limit exposure to credit risk on trade receivables. Credit evaluation is performed taking into account relevant factors that may affects a customer's paying ability, such as the customer's financial condition and historical transaction records, internal and external credit rating and economic conditions.

The Company does not hold any collateral or other credit enhancement to hedge against the credit risk of financial assets.

b. Financial credit risk

The Company's exposure to financial credit risk which pertaining to bank deposits and other financial instruments was evaluated and monitored by the Company's treasury function. The Company only transacts with creditworthy counterparties and banks; therefore, no significant financial credit risk was identified.

i.Credit concentration risk

As of December 31, 2021 and 2020, the proportion of the accounts receivable exceeds 10% of the total accounts receivable, representing 37% and 42%, respectively. The credit concentration risk associated with other accounts receivable is relatively insignificant.

ii.Measurement of expected credit losses

• (i) Accounts receivable: The Company applies simplified approach to its accounts receivable. Please refer to Note 6(3) for more information.
• (ii) The criteria used to determine whether credit risk has increased significantly: The Company considered credit factors and reviewed relevant information associated with debtors to assess whether credit risks on financial instruments have increased significantly since initial recognition.
• iii.Holding collateral and other credit enhancement to hedge against credit risk of financial assets: None.
• iv.Credit risk of financial assets measured at amortized cost:

Please refer to Note 6(3) for information on the Company's credit exposures associated with accounts receivable. Otherfinancial instruments amortized at cost, such as cash and cash equivalents and other receivables, have low credit losses; therefore, the loss allowance for those instruments is measured at an amount equal to 12-month expected credit losses. After assessment, the Company determined that no material impairment occurred.

• C. Liquidity risk
• a.Liquidity risk management

The objective of the Company's management of liquidity risk is to maintain sufficient cash and cash equivalents, highly liquid securities, and banking facilities to ensure that the Company has sufficient financial flexibility for its operations.

b.Maturity analysis for financial liabilities

The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities:

	December 31, 2021
Non-derivative Financial Liabilities	Within 1 year		1-5 years		Over 5 years		Contract cash flows		Carrying amounts
Notes payable	\$ 6,288	\$	-	\$	-	\$	6,288	\$	6,288
Accounts payable	1,187,415		-		-		1,187,415		1,187,415
Other payables	532,217		-		-		532,217		532,217
Lease liabilities	13,300		44,597		92,784		150,681		139,225
Long-term loan (include current
portion)	99,998		2,140,733		50,769		2,291,500		2,240,089
Guarantee deposits	-		-		87		87		87
Total	\$ 1,839,218	\$	2,185,330	\$	143,640	\$	4,168,188	\$	4,105,321

Further information of the maturity analysis for lease liabilities are as follows:

				December 31, 2021
	Within 1 year	1-5 years	5-10 years	10-15 years	15-20 years	Total undiscounted lease payment
Lease liabilities \$	13,300	\$ 44,597	\$ 47,460	\$ 42,589	\$ 2,735	\$ 150,681

					December 31, 2020
Non-derivative Financial Liabilities	Within 1 year	1-5 years		Over 5 years		Contract cash flows		Carrying amounts
Notes payable	\$ 4,686	\$	-	\$	-	\$ 4,686	\$	4,686
Accounts payable	766,963		-		-	766,963		766,963
Other payables	333,772		-		-	333,772		333,772
Lease liabilities	14,167		46,863		99,758	160,788		147,824
Long-term loan (include current
portion)	35,448		1,285,981		85,545	1,406,974		1,367,870
Guarantee deposits	-		-		87	87		87
Total	\$ 1,155,036	\$	1,332,844	\$	185,390	\$ 2,673,270	\$	2,621,202

Further information of the maturity analysis for lease liabilities are as follows:

			December 31, 2020
	Within 1 year	1-5 years	5-10 years	10-15 years	15-20 years	Total undiscounted lease payment
Lease liabilities \$	14,167	\$ 46,863	\$ 45,247	\$ 45,212	\$ 9,299	\$ 160,788

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

12.3 Category of financial instruments

	December 31, 2021		December 31, 2020
Financial assets
Financial assets measured at
amortized cost (Note 1)	\$	2,225,504	\$ 1,776,652
Financial assets at fair value
through other comprehensive
income		20,222	16,898

Financial liability

Financial liabilities measured at

amortized cost (Note 2) \$ 3,966,096 \$ 2,473,378

• Note 1: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, other receivable and refundable deposits.
• Note 2: The balances included financial liabilities measured at amortized cost, which comprise notes payable, accounts payable, other payables, long-term loan (include current portion) and guarantee deposits received.

12.4 Fair value information of financial instruments

• (1) Definition of fair value measurements are grouped into Level 1 to 3 as follows:
• Level 1: Relevant inputs are quoted prices in active markets for identical assets or liabilities that the entity can access on the measurement date
• Level 2: Inputs other than quoted prices included within Level 1 are observable for the asset or liability, either directly or indirectly.
• Level 3:Inputs are unobservable inputs that used to measure fair value to the extent when relevant observable inputs are not available.
• (2) Financial instruments that are not measured at fair value

The fair value of the Company's financial instruments not measured at fair value including cash and cash equivalents, accounts receivable, other financial assets, refundable deposits, short-term loan, accounts payables, long-term loan (including current portion) and other financial liabilities approximate their fair value.

(3) Financial instruments that are measured at fair value:

The financial instruments that are measured at fair value on a recurring basis, the information of fair value is as follow:

			December		31,	2021
Items	Level	1	Level	2		Level 3	Total
Assets
Recurring fair value
measurements Financial assets at FVTOCI - noncurrent
Equity instruments
Unlisted stocks	\$	-	\$	-	\$	20,222	\$ 20,222

		December	31,	2021
Items	Level 1	Level 2		Level 3	Total
Total	\$ -	\$ -	\$	20,222	\$ 20,222
		December	31,	2020
Items	Level 1	Level 2		Level 3	Total
Assets Recurring fair value measurements Financial assets at FVTPL Financial assets at FVTOCI - noncurrent Equity instruments Unlisted stocks	\$ -	\$ -	\$	16,898	\$ 16,898
Total	\$ -	\$ -	\$	16,898	\$ 16,898

• (4) The methods and assumptions the Company used to measure fair value are as follows:
• A. The Company measures the fair values of its financial instruments with an active market using their quoted prices in the active market.
• B. Fair value of equity investment of unlisted stocks without active market was estimated through the market approach that is mainly referenced to the same type of companies' evaluation, quotes from third parties, net assets and state of operation. The significant and unobservable input parameter for assessing the unlisted stocks mainly relates to liquidly discount rate. Since the possible changes of liquidity discount rate may not cause significant influence on financial standing, the quantitative information will not be disclosed.
• C. Fair value of other financial assets and financial liabilities (except for aforementioned) are determined in accordance with generally accepted pricing model based on the discounted cash flow analysis.
• (5) Transfer between Level 1 and Level 2 of the fair value hierarchy: none.
• (6) Changes in level 3 instruments:

Items	2021	2020
Financial assets at FVTOCI
Beginning Balance	\$ 16,898	\$	17,218
Unrealized valuation gains or losses on equity investments
at FVTOCI	3,324		(320)

	Items	2021	2020
\$ \$ Ending Balance 20,222			16,898

13. SUPPLEMENTARY DISCLOSURES

• 13.1 Significant transactions information
• (1) Financings provided to others: None;
• (2) Endorsement and guarantee provided to others: Please see Table 1 attached;
• (3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures at the end of the period) : Please see Table 2 attached;
• (4) Marketable securities acquired and disposed of at costs or prices of at least NT\$300 million or 20% of the paid-in capital: None;
• (5) Acquisition of individual real estate properties at costs of at least NT\$300 million or 20% of the paid-in capital: Please see Table 3 attached;
• (6) Disposal of individual real estate properties at prices of at least NT\$300 million or 20% of the paid-in capital: None;
• (7) Total purchases from or sales to related parties of at least NT\$100 million or 20% of the paid-in capital: Please see Table 4 attached;
• (8) Receivables from related parties amounting to at least NT\$100 million or 20% of the paid- in capital: Please see Table 5 attached;
• (9) Information on the derivative instrument transactions: None;
• (10) The business relationship between the parent and the subsidiaries and significant transaction between then: Please see Table 6 attached;
• 13.2 Information on investees : Please see Table 7 attached;
• 13.3 Information on investment in Mainland China
• (1) The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 8 attached;
• (2) Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in Mainland China on financial reports: Please see Table 6 attached.
• 13.4 Information of major shareholder (Names, number of shares and ownership of shareholders whose equity interest is greater than 5%): None.

14. SEGMENT INFORMATION

The company has provided the segment information disclosure in the consolidated financial statements for the year ended December 31, 2021.

ENDORSEMENTS / GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 1 Amounts in Thousands of New Taiwan Dollars

NO.	Endorsement/ Guarantee Provider	Guaranteed Party	Nature of	Limits on Endorsement/ Guarantee Amount Provided to Each	Maximum Balance for the Period		Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest	Maximum Endorsement/ Guarantee Amount	Guarantee Provided by Parent	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland	Remark
		Name	Relationship	Guaranteed Party					Properties	Financial	Allowable	Company		China
										Statements
		SDI			NTD 1,436,168	NTD	1,436,168
0	SDI	(JIANGSU)	(3)	NTD 2,784,064	USD 19,750	USD	19,750	NTD 956,675	- NTD		23.21% NTD 3,093,404	Y	N	Y
					RMB 205,000	RMB	205,000

~ 74

~

Note 1:The numbers filled in for the financing company represent the following:

(1) The Company is '0'.

Note 2:Relationships between the endorser/guarantor and the party being endorsed/guaranteed:

(1) Trading parties.

(2) The Company direct and indirect owns over 50% ownership of subsidiaries.

(3) The Company and its subsidiaries own over 50% ownership of the investee company.

Note 3:The total amount of the guarantee provided by SDI to any individual entity shall not exceed forty-five percent (45%) of Company's net worth.

Note 4:The total amount of guarantee shall not exceed fifty percent (50%) of Company's net worth.

Note 5:"Y" represents the endorsement and guarantee provide by listed parent company to subsidiaries, subsidiaries to listed parent company, or take place in Mainland China.

MARKETABLE SECURITIES HELD

DECEMBER 31, 2021

TABLE 2 Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

Held Company	Marketable	Relationship			DECEMBER 31, 2021
Name	Securities Type and Name	with the Company	Financial Statement Account	Shares/Units (In Thousands)	Carrying Value	Percentage of Ownership	Fair Value	Remarks
SDI	Chang Hwa Golf Club	-	Financial Assets at Fair Value through Other Comprehensive Income- Noncurrent	90	\$ 8,124	0.24% \$	8,124
	SDI ELECTRONICS JAPAN CO., LTD	-	Financial Assets at Fair Value through Other Comprehensive Income- Noncurrent	30	9,020	15.00%	9,020
	SDI JAPAN CO., LTD	-	Financial Assets at Fair Value through Other Comprehensive Income- Noncurrent	200	3,078	19.61%	3,078

ACQUISITION OF INDIVIDUL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT\$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 3 Amounts in Thousands of New Taiwan Dollars

Company	Types of	Date of	Transaction	Payment		Nature of		Prior Transaction of Related Counter-party				Purpose of
Name	Property	Occurrence (Note 1)	Amount	Term	Counter-party	Relationships	Owner	Relationships	Transfer Date	Amount	Price Reference	Acquisition	Remarks
SDI	Building H	November	\$ 314,500	\$ 267,325	HSING YA	-	-	-	-	\$ -	Price	Plant	-
	construction	8, 2019			CONSTRUCTION						comparison	Expansion
	(Nantou)				ENGINEERING						and price
					CO., LTD.						negotiation
SDI	Land and	March 30,	323,700	323,700	Koan Hao	-	-	-	-	-	Price	Capacity	-
	plant	2021			Technology Co.,						negotiation	expansion
	(Note 2)				Ltd.						with the	and
											seller upon	warehousing
											an appraisal	purpose
											report

Note 1: Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of. boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier.

Note 2: SDI purchased land and plants from Koan Hao Technology Co., Ltd. Please refer to Note 6(9) for further information.

~ 76 ~

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 4 Amounts in Thousands of New Taiwan Dollars

		Nature of			Transaction Details			Abnormal Transaction	Notes/Accounts Payable or Receivable
Company Name	Related Party	Relationships	Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total	Remarks
SDI	SDI Jiangsu	Sub-Subsidiary	Sales	\$ 208,955		2.53% As prescribed by the agreement	-	-	\$ 124,830	7.04%
SDI Jiangsu	SDI	The ultimate parent of the Company	Sales	769,208		24.68% As prescribed by the agreement	-	-	72,200	9.83%
CHAO SHIN METAL INDUSTRIAL CORP.	SDI Jiangsu	Associate	Sales	127,331		37.22% As prescribed by the agreement	-	-	38,246	55.18%
TEC BRITE TECHNOLOGY CO., LTD	SDI	Parents Company	Sales	214,776		26.87% As prescribed by the agreement	-	-	87,340	30.94%

RECEIVEALES FROM RELATED PARTIES OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2021

TABLE 5 Amounts in Thousands of New Taiwan Dollars

			General ledger		Turnover		Overdue receivables	Subsequent	Allowance for bad
Creditor	Counterparty	Relationship	account (Note 1)	Balance	rate	Amount	Action taken	collections	doubtful accounts
SDI	SDI Jiangsu	Sub-subsidary	Accounts Receivable	\$ 124,830	1.67	\$ 255	-	\$ 254	\$ -
			Other Receivables	611	-	-	-	-	-

SUBSIDIARIESINTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTION

FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 6 Amounts in Thousands of New Taiwan Dollars

					Intercompany Transactions
	No. Company Name	Counter Party	Nature of Relationship	Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets
0	SDI	SDI (JIANGSU)	1	Sales revenue	\$ 208,955	Note 3	1.87%
		SDI (JIANGSU)	1	Accounts receivable	124,830	Note 3	0.96%
		SDI (JIANGSU)	1	Other receivables	611	-	-
		Chao Shin Metal	1	Sales revenue	15,691	Note 3	0.14%
		Chao Shin Metal	1	Accounts receivable	1,493	Note 3	0.01%
		Chao Shin Metal	1	Other receivables	181	-	-
		TEC Brite	1	Sales revenue	11	Note 3	-
		Technology TEC Brite	1	Other receivables	8,571	-	0.07%
1	SDI (JIANGSU)	Technology SDI	2	Sales revenue	769,208	Note 3	6.90%
		SDI	2	Accounts receivable	72,200	Note 3	0.55%
		SDI	2	Other receivables	399	-	-
2	Chao Shin Metal SDI		2	Sales revenue	6,768	Note 3	0.06%
		SDI	2	Processing revenue	21,947	Note 3	0.20%
		SDI	2	Accounts receivable	2,612	Note 3	0.02%
		SDI (JIANGSU)	3	Sales revenue	127,331	Note 3	1.14%
		SDI (JIANGSU)	3	Accounts receivable	38,246	Note 3	0.29%
3	TEC Brite	SDI	2	Sales revenue	214,776	Note 3	1.93%
	Technology	SDI	2	Accounts receivable	87,340	Note 3	0.67%

Note 1: The numbers filled in for the transaction company represent the follows:

(1) Parent company is '0'.

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

Note 2: Relationships between transaction companies and counterparties are classified into the following three categories as listed below:

'1'represents parent company to subsidiary.

'2' represents subsidiary to parent company.

'3' represents subsidiary to subsidiary.

Note 3: Sale price with related parties were determined and negotiated referring to related market price.

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE DECEMBER 31, 2021

TABLE 7									Amounts in Thousands of New Taiwan Dollars
					Original Investment Amount		Balance as of December 31, 2020		Net Income	Share of
Investor Company	Investee Company	Location	Main Businesses and Products	December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Value	(Losses) of the Investee	Profits/Losses of Investee	Remarks
SDI	CHAO SHIN METAL INDUSTRIAL CORP.	Taiwan	Smelting and rolling of metal strips	\$ 106,953	\$ 106,953	14,810	84.62% \$	250,215	\$ 29,098	\$ 23,309	Note 1
	TEC BRITE TECHNOLOG Y CO., LTD	Taiwan	Manufacturing of electronic components and international trade	98,969	98,969	9,897	54.98%	370,308	123,892	66,489	Note 1
	SHUEN DER (B.V.I.)	BVI	Holding Company	636,410	655,040	8,920	100.00%	1,741,359	67,533	62,360	Note 1,2

Note 1:The difference of the shares of profits/losses of investee is recognized as unrealized gross profit.

Note 2:Please refer to Table 8 for information of investees of China Mainland.

~ 80 ~

SDI CORPORATION INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021

TABLE 8 Amounts in Thousands of New Taiwan Dollars

Investee	Main Businesses	Total Amount	Method of	Accumulated Outflow of	Investment Flows		Accumulated Outflow of Investment	Net Income (Losses) of	Percentage	Shares of	Carrying Amount as of	Accumulated Inward Remittance of
Company	and Products	of Paid-in Capital	Investment	Investment from Taiwan as of January 1,2021	Outflow	Inflow	from Taiwan as of December 31, 2021	the Investee Company	of Ownership	Profits/ Losses	December 31, 2021	Earnings as of December 31, 2021	Remarks
	Manufacture, process and sales of	NTD 968,450		NTD 636,410			NTD 636,410	NTD 67,624
SDI Jiangsu	integrated circuit frame, blades, stationary, etc.	USD 35,000	Note 1	USD 23,000	NTD -	NTD -	USD 23,000	USD 2,415	100.00%	NTD 67,624	NTD 1,776,381	- NTD

Accumulated Investment		Investment Amounts
in Mainland China as of		Authorized by Investment		Upper Limit on Investment
December 31, 2021		Commission, MOEA
	NTD 636,410	NTD	968,450
USD	23,000	USD	35,000		NTD 3,919,916

Note 1:Reinvesting in the Mainland China through third-region companies.

Note 2:Amounts is recognized based on the audited financial statements.

Note 3:Foreign currencies aforementioned are translated into NTD using the exchange rate at the reporting date or average exchange rate for the year ended.

THE CONTENTS OF STATEMENTS OF MAJOR

ACCOUNTING ITEMS

ITEM	STATEMENT INDEX
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF NOTES RECEIVABLE, NET	2
STATEMENT OF ACCOUNTS RECEIVABLE, NET	3
STATEMENT OF INVENTORIES	4
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD	5
STATEMENT OF NOTES PAYABLES	6
STATEMENT OF ACCOUNTS PAYABLES	7
STATEMENT OF LONG-TERM LOANS	8
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF NET REVENUE	9
STATEMENT OF COST OF REVENUE	10
STATEMENT OF MANUFACTURING EXPENSES	11
STATEMENT OF OPERATING EXPENSES	12

SDI Corporation STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Statement 1

Item	Description		Amount
Cash on hand			\$ 556
Cash in banks
New Taiwan Dollars Checking accounts
deposits			7,460
Demand deposits			148,855
Foreign currency
Demand deposits	(US)	8,057,133	222,941
	(¥)	50,670,486	12,189
	(EUR)	715,529	22,418
	(CHF)	2,747	83
Subtotal			413,946
Total			\$ 414,502

Note:USD\$1 = NT\$27.67 JPY \$1 = NT\$0.24055 EUR\$1 = NT\$31.33 CHF\$1 = NT\$30.19

SDI Corporation STATEMENT OF NOTES RECEIVABLE, NET DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 2

Client Name	Description	Amount	Remark
Client A	Payment for goods	\$ 8,416
Client B	Payment for goods	2,438
Client C	Payment for goods	2,142
Client D	Payment for goods	2,084
Others (Note)	Payment for goods	8,970
Subtotal		24,050
Total		\$ 24,050

Note:The amount of individual client included in others does not exceed 5% of the account balance.

SDI Corporation STATEMENT OF ACCOUNTS RECEIVABLE, NET DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 3

Description	Amount		Remark
Payment for goods	\$	216,226
Payment for goods		127,124
Payment
Payment
Payment
		1,614,559
		(7,953)
	\$	1,606,606
	for goods for goods for goods		109,039 94,110 1,068,060

Note:The amount of individual client included in others does not exceed 5% of the account balance.

SDI Corporation STATEMENT OF INVENTORIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars) Statement 4

			Amount
Item	Description	Cost		Net Realizable Value		Remark
Work-in-process		\$	977,917	\$	1,075,258
Raw materials			964,384		971,471
Finished goods			746,090		840,225
Merchandise			92,644		127,314
Inventory in transit			53,893		53,893
Total		\$	2,834,928	\$	3,068,161

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Thousands of Shares)

Statement 5

		Balance, January 1, 2021		Addition(Note1)		Decrease(Note2)			Balance, December 31, 2021		Collateral	Remark
Investees		Shares Amount Shares		Amount	Shares	Amount	Shares	%	Amount	Net Assets Value
Chao Shin Metal	14,810 \$	237,029	- \$	24,809	- \$	(11,623) 14,810		84.62% \$	250,215	\$ 257,483	Nil
TEC Brite Technology	9,897	354,428	-	68,790	-	(52,910)	9,897	54.98%	370,308	371,360	Nil
SHUEN DER(B.V.I) 8,920		1,688,558	-	67,751	-	(14,950)	8,920	100%	1,741,359	1,778,567	Nil
Total		\$ 2,280,015		\$ 161,350		\$ (79,483)			\$ 2,361,882	\$ 2,407,410

Note 1:Information of Addition is as follows:

Share of profit or loss of subsidiaries
accounted for using equity method
(Note 3)	\$ 161,058
Unrealized gain or loss on upstream
transactions	292
Total	\$ 161,350

Note 2:Information of Decrease is as follows:

\$ 59,851
9,850
8,900
882
\$ 79,483

Note 3:Amounts includes \$161,131 thousand from the Company's share of subsidiaries' profits or losses accounted for using the equity method and \$(73) thousand from the deferred income tax of unrealized profit under upstream transactions recognized in parent company only financial statements.

SDI Corporation STATEMENT OF NOTES PAYABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 6

Vendor Name	Description	Amount	Remark
Vendor A	Payment for material	\$ 1,001
Vendor B	Payment for material	849
Vendor C	Expense	547
Vendor D	Payment for material	430
Vendor E	Expense	396
Vendor F	Payment for material	322
Others (Note)		2,743
Total		\$ 6,288

Note:The amount of individual vendor included in others does not exceed 5% of the account balance.

SDI Corporation STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 7

Vendor Name	Description	Amount	Remark
Vendor G	Payment for material	\$ 528,197
Vendor H	Payment for material	99,702
Others (Note)	Payment for material	397,910
Total		\$ 1,025,809

Note:The amount of individual vendor included in others does not exceed 5% of the account balance.

SDI Corporation STATEMENT OF LONG-TERM LOANS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 8

Creditor	Description	Amount	Contract Period	Collateral	Remark
Bangkok Bank	Unsecured loans	\$ 50,000	113.10.14	Nil
Mizuho Bank	Unsecured loans	400,000	112.12.30	Nil
Mega International Commercial Bank	Unsecured loans	190,000	115.09.15	Nil
Taishin International Bank	Unsecured loans	260,000	112.07.31	Nil
HSBC Bank	Unsecured loans	300,000	112.09.14	Nil
Bank of Taiwan	Unsecured loans	150,000	112.09.07	Nil
Bank of Taiwan	Unsecured loans	186,666	115.08.15	Nil
Bank of Taiwan	Unsecured loans	162,580	115.12.15	Nil
E.SUN Bank	Unsecured loans	200,000	114.01.15	Nil
E.SUN Bank	Unsecured loans	200,000	114.02.15	Nil
E.SUN Bank	Unsecured loans	33,500	116.08.15	Nil
Chang Hwa Commercial Bank	Unsecured loans	116,000	115.11.15	Nil
Subtotal		2,248,746
Less:Current portion		(80,833)
Less:Discount on subsidies for project loans		(8,657)
Total		\$ 2,159,256

Note:The range of interest rates is 0.45% ~0.98%

STATEMENT OF NET REVENUE FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 9

Item	QTY (in thousand PCE)	Amount	Remark
Stationery products
Correction tapes	22,453	\$ 343,261
Scissors	88,369	344,963
Staplers	11,163	255,358
Others		232,804
Subtotal		1,176,386
Electronic products
Electronic monomers	69,706 thousand KPC	5,177,691
Electronic integrated circuits	6,583 thousand KPC	1,594,183
Others		214,610
Subtotal		6,986,484
Others		144,728
Total		8,307,598
Sales allowances		(59,939)
Net revenue		\$ 8,247,659

SDI Corporation STATEMENT OF COST OF REVENUE FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 10

	Amount
Item		Subtotal	Total
Cost of purchased goods sold
Balance, beginning of year	\$	37,571
Purchase		995,217
Balance, end of year		(92,296)
Transferred in from outsourcing		37,480
Transferred to raw materials		(199,650)
Scrapped losses		(262)
Transferred to expenses		(45)	\$	778,015
Cost of self-manufactured goods sold
Raw materials:
Balance, beginning of year		592,589
Purchase		5,037,700
Transferred in from outsourcing		199,650
Balance, end of year		(999,833)
Raw materials sold		(45,826)
Scrapped losses		(20,824)
Transferred to expenses		(50,937)		4,712,519
Direct labor				448,207
Manufacturing expenses				1,462,382
Manufacturing cost			\$	6,623,108
Add:Work in process, beginning of year				502,797
Less:Work in process, end of year				(878,082)
Scrapped losses				(21,977)
Others				241
Cost of finished goods				6,226,067
Add:Finished goods, beginning of year				545,968
Less:Finished goods, end of year				(730,879)
Scrapped losses				(45,486)
Transferred to outsourcing				(37,480)
Transferred to assets				(213,952)
Transferred to expenses				(2)
Total cost of goods sold				6,522,251
Other cost of goods sold
Molds and parts sold				119,383
Raw materials sold				45,826
Others				13,000
Unallocated fixed overhead				810
Scrapped losses		88,569
Revenue from sale of obsolete inventories		(44,579)		43,990
Less:Revenue from sale of scraps				(1,302)
Total cost of revenue			\$	6,743,958

SDI Corporation STATEMENT OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Statement 11

Item	Description	Amount		Remark
Indirect labor		\$	317,419
Repair and maintenance expenses			191,922
Utilities expenses			144,256
Insurance expenses			74,896
Depreciation			352,119
Consumable expenses			172,542
Others (Note)			209,228
Total		\$	1,462,382

Note:The amount of each item in others does not exceed 5% of the account balance.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Statement 12

Item	Marketing		Administrative		R&D		Total
Salaries	\$	66,364	\$ 138,639	\$	129,160	\$	334,163
Shipping expenses		39,708	44		429		40,181
Insurance expenses		5,466	7,536		11,196		24,198
Depreciation		1,471	23,774		9,385		34,630
Export charges		35,516	-		-		35,516
R&D outsourcing expenses		-	-		10,488		10,488
Inspection expenses		11,501	-		-		11,501
Others (Note)		51,470	51,069		43,776		146,315
Total	\$	211,496	\$ 221,062	\$	204,434	\$	636,992

Note:The amount of each item in others does not exceed 5% of the account balance.