TONGTAI - Audit Report / Information 2021

Tongtai Machine & Tool Co., Ltd.

Standalone Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Tongtai Machine & Tool Co., Ltd.

Opinion

We have audited the accompanying standalone financial statements of Tongtai Machine & Tool Co., Ltd. (the “Company”), which comprise the standalone balance sheets as of December 31, 2021 and 2020, the standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the standalone financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the audit reports issued by other independent auditors (refer to Other Matter paragraph below), the accompanying standalone financial statements present fairly, in all material respects, the standalone financial position of the Company as of December 31, 2021 and 2020, and its standalone financial performance and its standalone cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers of the Republic of China.

Basis for Opinion

We conducted our audits of the standalone financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the report of other independent auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Key audit matters identified in the Company’s standalone financial statements for the year ended December 31, 2021 are as follows:

Revenue recognition

Specific machine types have different degree of customization based on the customer requirements, and is greatly affected by changes in market situation. As a result, we identified revenue recognition as one of the key audit matters.

Refer to Note 4 (m) to the standalone financial statements for the related accounting policies and disclosures on revenue recognition.

We performed the understanding and testing the design and implementation and operating effectiveness of internal control of the sales of specific machine types.
We performed test of details of recorded revenue against the supporting documents including contracts, reports on completion of installation, and acceptance receipts signed by customer.
We obtained details of sales returns and allowances in the current year to the report date and examined if there was any abnormal sales return and allowance for adjustment, and confirmed that recorded transactions were properly authorized.

Inventory valuation

Inventory is material to the Company. As of December 31, 2020, inventory amounted to NT$2,701,006 thousand, representing 25% of the Company’s total assets. In addition, inventory valuation involves critical accounting estimates. Therefore, we identified the inventory valuation as one of the key audit matters. Refer to Notes 4 (e), 5 (b) and 9 to the standalone financial statements for the related accounting policies and disclosures on inventory valuation.

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

We participated in the physical count of inventory, and observed the physical condition of inventory and checked against the records for any identified obsolete and slow-moving inventory.
We obtained inventory aging report, tested the accuracy of inventory aging and evaluated compliance with the inventory accounting policies.
We obtained details of inventory valuation and confirmed that inventory items were stated at the lower of cost or net realizable value. We test-checked the cost and market value of inventory against the supporting documents.

Other Matter

Certain investments in subsidiaries accounted for using the equity method were included in the standalone financial statements as of December 31, 2021 and 2020 and for the years then ended based on financial statements audited by other independent auditors. The total of such investments amounted to NT$357,009 thousand and NT$414,776 thousand, representing 3% and 4% of the Company’s total assets as of December 31, 2021 and 2020, respectively, and the total share of loss of subsidiaries and associates amounted to NT$(144,681) thousand and NT$(143,566) thousand, representing 72% and 31% of the Company’s total profit (loss) before income tax for the years ended December 31, 2021 and 2020, respectively.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Standalone Financial Statements

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

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

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company and its subsidiaries’ internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision, and performance of the audit of the Company. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Jui-Hsuan Hsu and Chao-Chun Wang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 17, 2022

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone 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 standalone financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying standalone 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 standalone financial statements shall prevail.

TONGTAI MACHINE & TOOL CO., LTD

STANDALONE BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(In Thousands of New Taiwan Dollars)

	ASSETS CURRENT ASSETS Cashandcash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Notes receivable, net (Notes 5 and 8) Notes receivable - related parties (Notes 5, 8 and 31) Accounts receivable, net (Notes 4, 5 and 8) Accounts receivable - related parties (Notes 4, 5, 8 and 31) Other receivables Other receivables - related parties (Note 31) Current tax assets`（`Notes 4 and 25`）` Inventories (Notes 4, 5 and 9) Other financial asses - current (Notes 12 and 32) Other current assets (Note 8) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 10) Investments accounted for using the equity method (Notes 4 and 11) Property, plant and equipment (Notes 4, 13 and 32) Right-of-use assets (Notes 4 and 14) Investment properties (Notes 4, 15 and 32) Computer software (Notes 4 and 16) Deferred tax assets (Notes 4 and 25) Refundable deposits Long-term notes and accounts receivable (Note 8) Other financial assets - non-current (Notes 12 and 32) Other non-current assets (Note 8) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES CURRENT LIABILITIES (Note 17) Short-term bills payable (Note 17) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Contract liabilities - current (Notes 4, 23 and 31) Notes payable (Note 18) Accounts payable (Note 18) Accounts payable - related parties (Notes 18 and 31) Other payables (Notes 19 and 31) Current tax liabilities (Notes 4 and 25) Provisions - current (Notes 4 and 20) Lease liabilities - current (Notes 4 and 14) Current portion of long-term bank borrowings (Notes 17 and 32) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term bank borrowings (Notes 17 and 32) Deferred tax liabilities (Notes 4 and 25) Lease liabilities -noncurrent (Notes 4 and 14) Net defined benefit liabilities (Notes 4 and 21) Guarantee deposits received Credit balance for investments accounted for using the equity method (Notes 4 and 11) Total non-current liabilities Total liabilities EQUITY (Notes 22 and 27) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		December 31, 2021	December 31, 2021	`％` 6 - 1 - 11 3 - 5 - 25 - - 51 2 22 12 5 4 - 3 - - 1 - 49 100 11 4 - 4 - 6 1 2 - - - 7 - 35 10 - 4 1 - 3 18 53 24 11 7 1 4 12 - 47 100		December 31, 2020	December 31, 2020
			Amount $ 607,094 26,963 133,664 3,549 1,151,324 331,815 9,061 514,034 323 2,701,006 10,860 42,763 5,532,456 194,531 2,381,480 1,241,595 469,672 383,811 35,272 361,490 5,659 37,020 92,212 18,058 5,220,800 $ 10,753,256 $ 1,191,080 410,000 2,404 399,490 12 677,331 127,624 209,141 - 21,045 14,166 697,333 4,626 3,754,252 1,036,667 61,301 469,240 73,514 1,031 326,017 1,967,770 5,722,022 2,548,265 1,194,096 731,144 89,749 474,550 1,295,443 6,570) 5,031,234 $ 10,753,256				Amount $ 820,591 20,015 53,622 510 1,248,416 312,497 105,714 617,594 - 2,462,707 - 57,555 5,699,221 146,203 2,287,626 1,349,942 484,270 374,340 48,330 383,416 4,852 4,097 53,156 17,374 5,153,606 $ 10,852,827 $ 1,306,240 60,000 11,372 515,062 - 654,962 130,829 212,441 11,916 18,161 14,012 1,548,500 4,429 4,487,924 635,000 61,301 479,567 78,639 - 227,479 1,481,986 5,969,910 2,548,265 1,194,096 731,144 89,749 350,103 1,170,996 30,440) 4,882,917 $ 10,852,827		`％`
		(				(			8 - - - 11 3 1 6 - 23 - 1 53 1 21 12 5 3 - 4 - - 1 - 47 100 12 1 - 5 - 6 1 2 - - - 14 - 41 6 1 4 1 - 2 14 55 23 11 7 1 3 11 - 45 100

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche auditors’ report dated March 17, 2022)

TONGTAI MACHINE & TOOL CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

	For the	For the	Year Ended December 31	Year Ended December 31	Year Ended December 31
	2021		% 100 79 21 - - 21 8 5 3 - 16 5 - 3 1 ) 1 ) 1) - 5 1 4		2020
	Amount $ 4,223,271 3,348,985 874,286 2,790 ) 4,290 875,786 345,866 216,004 100,966 6,657) 656,179 219,607 15,130 110,890 69,219 ) 45,729 ) 28,358) 17,286) 202,321 29,618 172,703				Amount $ 3,470,253 3,200,266 269,987 6,240 ) 2,399 266,146 317,049 187,116 133,314 18,012 655,491 389,345) 19,054 159,174 8,114 ) 55,720 ) 190,292) 75,898) 465,243 ) 118,467) 346,776)		%
( ( ( ( ( (		( ( (		( ( ( ( ( ( ( ( (		( ( ( ( ( ( (	100 92 8 - - 8 9 5 4 1 19 11) 1 5 - 2 ) 6) 2) 13 ) 3) 10)

(Continued)

TONGTAI MACHINE & TOOL CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

	For the	Year Ended December 31	Year Ended December 31	Year Ended December 31
	2021	% - 1 - - - - - 1 5		2020
	Amount $ 1,450 48,328 141 ) 290 ) 20,784 ) 9,788 ) 6,114 24,889 $ 197,592 $ 0.68 0.68			Amount % $ 11,766 ) - 17,072 ) ( 1 ) 1,073 ) - 2,353 - 21,498 1 3,270 - 4,954) - 7,744) - $ 354,520) ( 10) $ 1.36 ) 1.36 ) (Concluded)	%
( ( ( (			( ( ( ( ( ( ( (

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche auditors’ report dated March 17, 2022)

TONGTAI MACHINE & TOOL CO., LTD.

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

	Retained Earnings	Unappropriated Earnings $ 775,619 ( 5,895 ) ( 50,965 ) 43,694 ( 13,166) ( 346,776 ) ( 10,486) ( 357,262) - ( 55,088) 350,103 172,703 1,019 173,722 ( 49,275) $ 474,550		Other Equity	Total Other Equity ($ 88,270) - - - - - 2,742 2,742 - 55,088 ( 30,440) - 23,870 23,870 - ($ 6,570)		Total Equity
			Exchange Differences on Translating Foreign Operations ($ 137,912) - - - - - 19,814 19,814 - - ( 118,098) - ( 24,458) ( 24,458) - ($ 142,556)	Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other Comprehensive Income $ 49,642 - - - - - ( 17,072) ( 17,072) - 55,088 87,658 - 48,328 48,328 - $ 135,986
Legal Reserve $ 725,249 5,895 - - 5,895 - - - - - 731,144 - - - - $ 731,144	Special Reserve $ 133,443 - - ( 43,694) ( 43,694) - - - - - 89,749 - - - - $ 89,749
	( (	( ( ( ( ( ( ( (	( ( ( ( (	( (	( ( (	( ( ( ( ( (	$ 5,284,564 - 50,965 ) - 50,965) 346,776 ) 7,744) 354,520) 3,838 - 4,882,917 172,703 24,889 197,592 49,275) $ 5,031,234

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche auditors’ report dated March 17, 2022)

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

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

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss (reversal gain) Net loss on fair value change of financial assets at fair value through profit or loss Finance costs Interest income Dividend income Share of loss (gain) of associates Gain (loss) on disposal of property, plant and equipment Gain on investment properties Impairment loss recognized on nonfinancial assets Unrealized gain Recognition of provisions Others Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable and long-term notes receivable Notes receivable - related parties Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Other current assets Financial liabilities held for trading Contract liabilities Notes payable Notes payable - related parties Accounts payable Accounts payable - related parties Other payables Provisions Other current liabilities Net defined benefit liabilities Cash generated from operations		For the Year Ended December 31
		2021 $ 202,321 141,821 28,399 6,657 ) 2,690 45,729 15,130 ) 3,102 ) 28,358 912 ) - 38,202 1,500 ) 50,613 3,784 ) 2,385 ) 112,369 ) 3,039 ) 103,153 19,318 ) 30,638 865 ) 282,997 ) 14,792 16,221 ) 115,572 ) 12 - 22,369 3,205 ) 3,358 ) 47,729 ) 197 3,675) $ 67,476		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 465,243 ) 148,854 32,737 18,012 6,308 55,720 19,054 ) 9,432 ) 190,292 34,763 ) 9,204 ) 251,930 3,841 61,964 3,784 ) 13,875 ) 25,251 945 293,610 4,465 19,909 ) 1,493 215,298 12,676 9,333 ) 137,371 33,803 ) 38 ) 23,454 23,304 ) 45,259 ) 70,054 ) 21,660 ) 3,387) $ 702,119 (Continued)

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TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

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

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)
Interest received Dividend received Interest paid Income taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) in other receivables - related parties Acquisition of computer software Acquisition of investment properties Proceeds from disposal of financial assets at fair value through other comprehensive income Decrease (increase) in other financial assets Increase in other non-current assets Dividends received from subsidiaries Net cash generated from (used in) financing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Increase in short-term bills payable Proceeds from long-term bank borrowings Repayments of long-term bank borrowings Proceeds from guarantee deposits received Repayment of principle of lease liabilities Dividends paid Acquisition of percentage of ownership interests in subsidiaries Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR		For the Year Ended December 31
		2021 $ 14,999 3,102 46,077 ) 14,107) 25,393 16,989 15,956 ) 53,422 807 ) 87,438 1,559 ) 713 ) 13,494 49,916 ) 14,939 ) 25,255 112,708 228,880 344,040 ) 350,000 1,350,000 1,799,500 ) 1,031 14,596 ) - 123,373) 351,598) 213,497 ) 820,591 $ 607,094		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( (	$ 16,582 9,432 56,308 ) 239) 671,586 - 215,344 ) 5,096 5,361 221,347 ) 5,964 ) 883 ) - 156,796 5,946 ) 52,233 229,998) 568,217 768,773 ) 60,000 1,050,000 989,500 ) - 15,189 ) 50,965 ) - 146,210) 295,378 525,213 $ 820,591

The accompanying notes are an integral part of the standalone financial statements. (Concluded) (With Deloitte & Touche auditors’ report dated March 17, 2022)

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TONGTAI MACHINE & TOOL CO., LTD.

NOTES TO STANDALONE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Tongtai Machine & Tool Co., Ltd. (the “Company”) was incorporated in January 1969. It is mainly engaged in the manufacturing and selling of machine tools, computer components, computer numerical control lathes and cutting centers.

The Company’s shares have been listed on the Taiwan Stock Exchange since September 15, 2003.

The standalone financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The standalone financial statements were approved by the Company’s board of directors and authorized for issue on March 17, 2022.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company and its subsidiaries’ accounting policies:

Amendment to IFRS 16 “Covid-19-Related Rent Concessions beyond 30 June 2021”

The Company and its subsidiaries elected to apply the amendment that extends the availability of the practical expedient to lease payments due on or before June 30, 2022. Refer to the Summary of Significant Accounting are stated in Note 4.

b. The IFRSs endorsed by the FSC for application starting from 2022

Effective Date New IFRSs Announced by IASB “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual January 1, 2022 (Note 2) Framework” Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 3) Proceeds before Intended Use”

Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 4) Contract”

Note 1: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
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Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.
Note 3: The amendments are applicable to 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 January 1, 2021.
Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the standalone financial statements were reported to the board of directors for issue, the Company is in the process of assessing the impact of the impending initial application of the aforementioned and other standards and the amendments to interpretations on its financial position and results of operations. Disclosures will be provided after a detailed review of the impact has been completed.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by IASB(Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS
9 - Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”

Effective Date
Announced by IASB(Note 1)

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
January 1, 2023 (Note 4)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the standalone financial statements were approved by the Company’s board of directors and authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

The standalone financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of Preparation

The standalone financial statements have been prepared on the historical cost basis except for the financial instruments which are measured at fair value and net defined benefit assets and liabilities which are measured at the present value of the defined benefit obligation less the fair value of the plan assets.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

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

When preparing its standalone financial statements, the Company used equity method to account for its investment in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the standalone financial statements to be the same with the amounts attributable to the owner of the Company in its standalone financial statements, adjustments arising from the differences in accounting treatment between standalone basis and consolidated basis were made to investments accounted for using equity method, share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates and related equity items, as appropriate, in the standalone financial statements.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets are realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being used for an exchange or used to settle a liability for more than 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities expected to be settled within twelve months after the reporting period; and
3) Liabilities without an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Foreign currencies

In preparing the financial statements of the Company, 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.

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At balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation 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 at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are stated at the historical translated amount.

For the purpose of presenting standalone financial statements, the functional currencies of the entities associated with the Company (including subsidiaries in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: assets and liabilities are translated at the exchange rates prevailing at the end of the balance sheet date; income and expense items are translated at the average exchange rates for the year. The resulting currency translation differences are recognized in other comprehensive income attributed to the owners of the Company and non-controlling interests as appropriate.

Goodwill and fair value adjustments on identifiable assets and liabilities recognized on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of balance sheet date. Exchange differences arising are recognized in other comprehensive income.

e. Inventories

Inventories consisting of raw materials, supplies, work-in-progress and finished goods are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Raw materials and supplies are recorded at the moving-average cost, and the work-in-progress and finished goods are recorded at cost by the specific identification method.

f. Investments accounted for equity method

The Company uses the equity method to account for its investments in subsidiaries and associates.

1) Investments in subsidiaries

Subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the share of other equity of subsidiaries.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control over the subsidiary are accounted for as equity transaction. Any difference between the carrying amount of the investment and the fair value of consideration paid or received is directly recognized in equity.

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Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from investment and the carrying amount is net of impairment loss. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

Unrealized profits or losses on downstream transactions with subsidiaries are eliminated in the standalone financial statements. Profits and losses on transactions with subsidiaries other than downstream are recognized in standalone financial statements only to the extent of interests in the subsidiary that are not related to the Company

2) Investments in associates

An associate is an entity over which the Company has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Company uses the equity method to account for its investments in associates. Under the equity method, investments in an associate is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of the equity of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included in the carrying amount of the investment and is not amortized.

When the Company subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Company’s proportionate interest in the associate. The Company should record such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates accounted for using the equity method. If the Company’s ownership interest is reduced due to non-subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be a deduction to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is deducted from retained earnings.

When the Company’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company will discontinue recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

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Investment in associate is tested for impairment by treating the entire carrying amount of the investment (including goodwill) as a single asset and then compare that carrying amount with the estimated recoverable amount. Any impairment loss recognized is deducted from investment and the carrying amount of the investment is net of impairment loss. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment has subsequently increased.

Gains and losses resulting from upstream, downstream and sidestream transactions between and among the Company and its associates are recognized in the standalone financial statements only to the extent of interests in the associate of entities that are not related to the Company.

g. Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are carried at cost. Cost includes professional fees and borrowing costs eligible for capitalization. Such properties are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for the land is not depreciated, other depreciation of property, plant and equipment is recognized using the straight-line method.

Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation. Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

i. Computer Software

Computer software with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

j. Impairment of property, plant and equipment, right-of-use asset, investment properties, intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right - of use assets, investment properties and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of

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the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to the individual cash-generating units; otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss subsequently is reversed, the carrying amount of the asset or cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined for the asset or cash-generating unit (net of amortization and depreciation) had no impairment loss been recognized in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

k. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to 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.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

i Financial asset at FVTPL

Financial asset classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 30.

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.
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Financial assets at amortized cost, including cash and cash equivalents, notes and accounts receivable at amortized cost, other receivables, other financial assets, refundable deposits and long-term notes and accounts receivable, are measured at amortized cost, which equals to gross carrying amount determined using 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 such a financial asset, except for:

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation 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.

Investments in equity instruments 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, they will be transferred to retained earnings.

Dividends on these investments in equity instruments 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

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivables).

The Company always recognizes lifetime Expected Credit Losses (ECLs) for trade receivables. For all other financial instruments, the Company recognizes lifetime ECLs

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when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the 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.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs 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.

For internal credit risk management purposes, the Company determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Company):

i Internal or external information show that the debtor is unlikely to pay its creditors.
ii When a financial asset is more than 90 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

The Company derecognize a financial asset only when the contractual rights to the cash flows from the asset expire or when the financial asset and substantially all the risks and rewards of ownership of the asset are transferred to another party.

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

2) Equity instruments

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

3) Financial liabilities
a) Subsequent measurement

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

Financial liabilities held for trading are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any interest or dividends paid on the financial liability.

b) Derecognition of financial liabilities

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

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recognized in profit or loss.

4) Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage their exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, cross-currency swap contracts and swap contracts.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each balance sheet date. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

l. Provisions

Provisions are measured at the best estimate of the cash flows required to settle the present obligation at the end of the balance sheet date, taking into account the risks and uncertainties surrounding the obligation.

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products at the Company’s best estimate of the expenditure required to settle the obligations.

m. Revenue recognition

The Company identifies contracts with customers, allocate the transaction price to the performance obligations and recognize revenue when performance obligations are satisfied.

Revenue from the sale of goods comes from sales of machine. Revenue from domestic sales is recognized when the installation of machine or tool is completed. Revenue from export sales is recognized according to the trade conditions or the completion date of machine installation. The customer has full discretion over the manner of distribution and price to sell the goods and bears the risks of obsolescence. Transaction price received is recognized as a contract liability until performance obligations are satisfied.

Revenue from maintenance and rebuilding are recognized when services are provided.

n. Leasing

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

For a contract that contains a lease component and non-lease components, the Company allocates the consideration in the contract to each component on the basis of the relative stand-alone price and accounts for each component separately.

1) 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.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

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2) The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

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, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the standalone 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 term.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses 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. When there is a change in a lease term, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the standalone balance sheets.

The Company negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 to change the lease payments originally due by June 30, 2021, that results in the revised consideration for the lease less than the consideration for the lease immediately preceding the change. There is no substantive change to other terms and conditions. The Company elects to apply the practical expedient to rent concessions and, therefore, does not assess whether the rent concessions are lease modifications. Instead, the Company recognizes the reduction in lease payment in profit or loss as a deduction of expenses of variable lease payments, in the period in which the events or conditions that trigger the concession occur, and makes a corresponding adjustment to the lease liability.

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.

o. Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized as a reduction of the related costs on a systematic basis over the periods in which the Company recognizes as expenses the related costs that the grants intend to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related

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costs are recognized in profit or loss in the period in which they are received.

p. Employee benefits
1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the year in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the year in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities represent the actual deficit in the Company’s defined benefit plans.

q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law in the ROC, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.

Deferred tax assets are generally recognized for all deductible temporary differences, loss carryforwards and research and development expenditure to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at each balance sheet date and recognized to the extent

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that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current tax and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimations and assumptions that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key sources of estimation uncertainty

a. Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. For details of the key assumptions and inputs used, refer to Note 9. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

b. Valuation of inventory

Inventories are stated at the lower of cost or net realizable value, and the Company uses judgment and estimate to determine the net realizable value of inventory at the end of the reporting period. Since the net realizable value of inventory is mainly determined on the basis of future selling price, it might be adjusted significantly.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits with original maturities of less than three months		December 31
		2021 $ 1,247 530,383 75,464 $ 607,094	2020 $ 663 784,912 35,016 $ 820,591

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL - current Financial assets mandatorily classified as at FVTPL Derivative financial assets Swap contracts Non-derivative financial assets Mutual funds Financial liabilities at FVTPL - current Financial liabilities held for trading Derivative financial assets Cross-currency swap contracts Foreign exchange forward contracts		December 31
		2021 $ - 26,963 $ 26,963 $ 2,404 - $ 2,404	2020 $ 3,332 16,683 $ 20,015 $ 11,280 92 $ 11,372

a. At the balance sheet date, outstanding cross-currency swap contracts not accounted for by hedge accounting were as follows:

Notional Amounts (In Thousands) December 31,2021 USD2,000／NTD56,300 USD4,000／NTD111,960 December 31,2020 USD2,000／NTD60,140 USD2,000／NTD60,000 USD2,000／NTD59,600	Maturity Date 2022.02 2022.05 2021.02 2021.05 2021.05	Range of interest Rates Paid(%) 0.90 0.93 0.92 0.8 0.8	Range of Interest Rates Received
			1M Libor+ 0.55 1M Libor+ 0.55 1M Libor+ 0.48 1M Libor+1 1M Libor+ 0.95

b. At the balance sheet date, outstanding swap contracts and foreign exchange forward contracts not accounted for by hedge accounting were as follows:

December 31,2020	Currency	Maturity Date	Contract Amount (In Thousands)
	NTD/CNY USD/NTD	2021.06 2021.04	NTD80,119`／`CNY19,500 USD4,000`／`NTD113,888
Swap contracts Foreign exchange forward contracts

The Company entered into cross-currency swap contracts, swap contracts and foreign exchange forward contracts to manage exposures to exchange rate and interest rate fluctuations of foreign currency denominated assets and liabilities. For the years ended December 31, 2021 and 2020, the Company recognized gain on cross-currency swap contracts, swap contracts and foreign exchange forward contracts not accounted for by hedge accounting in the amounts of NT$1,111 thousand and NT$8,345 thousand, respectively, included in gain (loss) on financial instruments at fair value through profit or loss.

For the years ended December 31, 2021 and 2020, the Company entered into mutual funds financial products and recognized gain (loss) in the amounts of (NT$3,801) thousand and NT$2,037 thousand.

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8. NOTES AND ACCOUNTS RECEIVABLE, LONG-TERM NOTES AND ACCOUNTS RECEIVABLE, AND OVERDUE RECEIVABLE, NET

AND OVERDUE RECEIVABLE, NET
Notes receivable (operating) Gross carrying amount at amortized cost Less: Unrealized interest revenue Notes receivable- related parties (operating) Gross carrying amount at amortized cost Accounts receivable Gross carrying amount at amortized cost Less: Allowance for impairment loss Accounts receivable - related parties Gross carrying amount at amortized cost Long-term notes and accounts receivable (operating) Gross carrying amount at amortized cost Overdue receivable (included in other noncurrent assets) Gross carrying amount at amortized cost Less: Allowance for impairment loss		December 31
		2021 $ 135,292 1,628 $ 133,664 $ 3,549 $ 1,289,053 137,729 $ 1,151,324 $ 331,815 $ 37,020 $ 27,145 27,145 $ -	2020 $ 58,457 4,835 $ 53,622 $ 510 $ 1,397,301 148,885 $ 1,248,416 $ 312,497 $ 4,097 $ 73,088 73,088 $ -

The credit period of the Company’s receivables depends on customer classification and product category. The Company makes prudent assessment of all their customers. The counterparties are creditworthy companies; as a result, the significant credit risk is unexpected. In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk were significantly reduced.

The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all notes and accounts receivables. The expected credit losses on notes and accounts receivables are estimated by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Company’s historical credit loss experience do not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base.

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery after the recourse procedures. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

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The following table details the loss allowance of notes and accounts receivables based on the Company and its subsidiaries’ provision matrix:

December 31, 2021

Not Past Due	1 to 90 Days	9	1 to 180 Days	181 to 270 Days	366 to 545 Days	366 to 545 Days	546 to 720 Days	Over 721 Days	Individual Identification	Total
$1,486,760 ( 11,086) $1,475,674 Not Past Due	$ 108,130 ( 16,220) $ 91,910 1 to 90 Days	9	$ 35,424 ( 5,314) $ 30,110 1 to 180 Days	$ 30,103 ( 4,515) $ 25,588 181 to 270 Days	$ 20,394 ( 7,138) $ 13,256 366 to 545 Days		$ 24,222 ( 12,111) $ 12,111 546 to 720 Days	$ 79,806 ( 79,806) ( $ - Over 721 Days	$ 27,145 27,145) $ - Individual Identification	$1,822,246 ( 164,874) $1,657,372 Total

$1,386,053 ( 10,304) $1,375,749	$ 119,435 ( 17,915) $ 101,520		$ 51,020 ( 7,653) $ 43,367	$ 36,343 ( 5,451) $ 30,892		$ 31,938 ( 11,178) $ 20,760	$ 45,632 ( 22,816) $ 22,816	$ 69,326 ( 69,326) $ -	$ 73,088 ( 73,088) $ -	$ 73,088 ( 73,088) $ -

The movements of the loss allowance of notes and accounts receivable were as follows:

Balance, beginning of period Recognition (reversed) Written off Balance, end of period	Balance, beginning of period Recognition (reversed) Written off Balance, end of period	Balance, beginning of period Recognition (reversed) Written off Balance, end of period
	( (	2021 $ 221,973 6,657 ) 50,442) $ 164,874

9. INVENTORIES

INVENTORIES
Raw materials Supplies Work-in-progress Finished goods
		2021 $ 1,284,669 147,768 716,524 552,045 $ 2,701,006

The cost of inventories recognized as operating costs for the years ended December 31, 2021 and 2020 was NT$3,348,985 thousand and NT$3,200,266 thousand, respectively, which included write-downs of inventories and unallocated manufacturing overhead as follows.

Inventory write-downs
		2021 $ 38,202

10. FINANCIAL ASSETS AT FAIR VALUE THOUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

NON-CURRENT
Investment in equityinstruments Domestic investments Listed shares Unlisted shares		December 31
		2021 $ 159,196 35,335 $ 194,531	2020 $ 113,838 32,365 $ 146,203

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11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	December 31
	2021	2020
Investments in subsidiaries	$ 2,047,566	$ 2,052,376
Investments in associates	7,897	7,771
	2,055,463	2,060,147
Add:Credit balance for investments accounted for
using the equity method	326,017	227,479
	$ 2,381,480	$ 2,287,626
a. Investments in subsidiaries - unlisted companies

Investments in subsidiaries Investments in associates Add:Credit balance for investments accounted for using the equity method a. Investments in subsidiaries - unlisted companies	Investments in subsidiaries Investments in associates Add:Credit balance for investments accounted for using the equity method a. Investments in subsidiaries - unlisted companies	December 31	December 31	December 31	December 31	December 31
		2021 $ 2,047,566 7,897 2,055,463 326,017 $ 2,381,480			2020 $ 2,052,376 7,771 2,060,147 227,479 $ 2,287,626
Union Top Industrial (Samoa) Limited (Union Top) Honor Seiki Co., Ltd. (Honor Seiki) Process Conception Ingenierie-Societe de Construction D’equipments, De Mecanisations Et De Machines (PCI-SCEMM) Quick-Tech Machinery Co., Ltd. (Quick-Tech) Chin-Jig Technology Co., Ltd. (Chin-Jig) Asia Pacific Elite Corp. (APEC) Tongfong Auto Tech Co., Ltd. (Tongfong) Tongan GmbH (Tongan) Tongtai Machine Tool (MFG) Sdn. Bhd. (TMM) Tong-Yeh Precision Co., Ltd. (Tong-Yeh) Tong Tai Machinery Co., Ltd. (TTM) Tongtai Machine & Tool Japan Co., Ltd. (TTJP) Tongtai Seiki Vietnam Co., Ltd. (TTVN) Tong-Tai Seiki USA, Inc. Tongtai Machine Tool ( SEA) Sdn. Bhd. (TTS) Tongtai Europe B.V. (TTE) Tongtai Mexico, S.A.DE C.V. (TTGMx)			December 31
	2021 Amount $ 1,065,244 562,948 357,009 13,378 44,040 142,234 45,617 ( 287,291 ) 34,890 27,093 20,531 19,834 20,118 4,818 9,288 ( 38,726 ) 6,541 $ 2,047,566		% of Owner - ship 100 54 100 99 70 100 100 100 100 60 100 100 100 100 52 100 100	2020 Amount $ 989,528 530,328 414,776 ( 3,203 ) 52,034 94,715 46,336 ( 196,835 ) 38,216 29,851 26,378 22,901 16,509 5,099 9,261 ( 30,644 ) 7,126 $ 2,052,376		% of Owner - ship
						100 54 100 52 70 99 99 100 100 60 100 100 100 100 52 100 100

In November 2021, the Company subscribed for additional new shares at a percentage different from its existing ownership percentage of Quick-Tech. (Refer to Note 27)

In August 2021, the Company acquired a part of shares from non-controlling interest. (Refer to Note 27)

In 2020, the Company recognized impairment loss amounted of NT$11,989 thousand of the subsidiary, Quick-Tech, due to the recoverable amount was lower than the carrying amount.

In March 2020, Honor Seiki purchased treasury shares which resulted in the changes in the Company’s percentage of ownership interests in Honor Seiki. (Refer to Note 27)

The investments accounted for using the equity method and the share of loss and other comprehensive income of those investments for the years ended December 31, 2021 and 2020 were based on the subsidiaries’ financial statements which have been audited for the same years.

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b. Investments in associates

Associates that are not individually material Printin3d DigiTech Co., Ltd. Cyber Laser Taiwan Co., Ltd. The Company’s share of Net profit (loss) for the year Other comprehensive income Total comprehensive income		December 31
		2021 2020 $ 7,897 $ 7,771 - - $ 7,897 $ 7,771 For the Year Ended December 31
		2021 $ 126 ( - $ 126 (	2020 $ 2,885 ) - $ 2,885)

Related information of investees abovementioned please see Table 6 attached.

In 2020, the Company recognized impairment loss amounted of NT$7,841 thousand of the associate, Cyber, due to the recoverable amount was lower than the carrying amount.

The investments accounted for using the equity method and the share of loss and other comprehensive income of those investments for the years ended December 31, 2021 and 2020 were based on the associates’ financial statements which have been audited for the same years.

12. OTHER FINANCIAL ASSETS

OTHER FINANCIAL ASSETS
Current Pledged deposits and time deposits Non-current Pledged deposits and time deposits		December 31
		2021 $ 10,860 $ 92,212	2020 $ - $ 53,156

Refer to Note 32 for information relating to other financial assets pledged as collateral.

13. PROPERTY, PLANT AND EQUIPMENT

For the Year Ended December 31, 2021

Cost	Land	Buildings	Machinery and Equipment	Transportation Equipment	Office Equipment	Other Equipment	Construction in Progress and Equipment to be Inspected	Total
	$ 187,018 - - - 187,018 - - - - - $ 187,018	$ 1,685,776 9,513 - ( 24,589) 1,670,700 760,850 61,377 - ( 6,096) 816,131 $ 854,569	$ 376,440 4,872 ( 13,650 ) 4,919 372,581 213,324 31,306 ( 13,650 ) ( 1,577) 229,403 $ 143,178	$ 110,892 601 ( 486 ) - 111,007 85,854 4,472 ( 486 ) - 89,840 $ 21,167	$ 32,602 - - - 32,602 25,972 3,427 - - 29,399 $ 3,203	$ 149,565 1,729 - - 151,294 106,351 12,483 - - 118,834 $ 32,460	$ - - - - - - - - - - $ -	$ 2,542,293 16,715 ( 14,136 ) ( 19,670) 2,525,202 1,192,351 113,065 ( 14,136 ) ( 7,673) 1,283,607 $ 1,241,595
Balance at January 1, 2021 Additions Disposals Reclassifications Balance at December 31, 2021 Accumulated depreciation and impairment
Balance at January 1, 2021 Depreciation Disposals Reclassifications Balance at December 31, 2021 Carrying amount at December 31, 2021

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For the Year Ended December 31, 2020

Cost	Land	Buildings	Machinery and Equipment	Transportation Equipment	Office Equipment		Other Equipment	Construction in Progress and Equipment to be Inspected	Total
	$ 210,229 175,000 ( 23,211 ) ( 175,000) 187,018 - - - - - $ 187,018	$ 1,725,315 25,896 ( 2,695 ) ( 62,740) 1,685,776 719,425 67,216 ( 2,358 ) ( 23,433) 760,850 $ 924,926	$ 368,689 11,547 ( 261 ) ( 3,535) 376,440 184,920 29,078 ( 261 ) ( 413) 213,324 $ 163,116	$ 110,221 671 - - 110,892 81,007 4,847 - - 85,854 $ 25,038	$ 32,602 - - - 32,602 21,958 4,014 - - 25,972 $ 6,630	(	$ 147,204 3,342 - 981) 149,565 92,345 14,006 - - 106,351 $ 43,214	$ 1,734 ( 1,734 ) - - - - - - - - $ -	$ 2,595,994 214,722 ( 26,167 ) ( 242,256) 2,542,293 1,099,655 119,161 ( 2,619 ) ( 23,846) 1,192,351 $ 1,349,942
Balance at January 1, 2020 Additions Disposals Reclassifications Balance at December 31, 2020 Accumulated depreciation and impairment
Balance at January 1, 2020 Depreciation Disposals Reclassifications Balance at December 31, 2020 Carrying amount at December 31, 2020

The following items of property, plant and equipment are depreciated on a straight-line basis over the following useful lives:

the following useful lives:
Buildings
Main structure	35-60 years
Mechanical and electrical facilities	5-35 years
Engineering system	2-10 years
Air conditioning system	2-35 years
Decoration	2-35 years
Machinery and equipment	2-10 years
Transportation equipment	2-15 years
Office equipment	3-10 years
Other equipment	2-10 years

Property, plant and equipment pledged by the Company as collateral for bank borrowings are described in Note 32.

14. LEASE ARRANGEMENTS

a. Right-of-use assets

For the Year Ended December 31, 2021

Cost Balance at January 1, 2021 Additions Disposals Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Additions Disposals Balance at December 31, 2021 Carrying amount at December 31, 2021		Land $ 512,662 - - 512,662 31,297 16,157 - 47,454 $ 465,208		Buildings $ 1,063 - 1,063) - 937 126 1,063) - $ -	Transportation Equipment $ 8,900 4,423 ( 5,069) 8,254 6,121 2,738 ( 5,069) 3,790 $ 4,464		Total
			( (		( (	( (	$ 522,625 4,423 6,132) 520,916 38,355 19,021 6,132) 51,244 $ 469,672

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For the Year Ended December 31, 2020

Cost Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Additions Balance at December 31, 2020 Carrying amount at December 31, 2020		Land $ 491,941 20,721 512,662 15,139 16,158 31,297 $ 481,365		Buildings $ 1,063 - 1,063 512 425 937 $ 126	Transportation Equipment $ 8,900 - 8,900 2,816 3,305 6,121 $ 2,779		Total
							$ 501,904 20,721 522,625 18,467 19,888 38,355 $ 484,270

b. Lease liabilities

Lease liabilities
Carrying amounts Current Non-current		December 31
		2021 $ 14,166 $ 469,240	2020 $ 14,012 $ 479,567

Range of discount rate for lease liabilities (%) was as follows:

Land Buildings Transportation equipment	December 31
	2021 2020 2.16`～`2.48 2.16`～`2.48 - 1.42 0.69`～`1.42 1.05`～`1.42

c. Material lease activities and terms

The Company is leasing the land of Kaohsiung Luke plant from the management of Southern Taiwan Science Park. The lease period will expire in June 2039. The Company does not have a bargain purchase option to acquire the leased land at the expiration of the lease period

The Company and its subsidiaries did not enter into significant lease contracts for the years ended December 31, 2021 and 2020. Because of the market conditions severely affected by COVID-19 in 2020, the Company negotiated with the lessor, the management of Southern Taiwan Science Park, for rent concessions for land lease. The lessor agreed to provide unconditional 20% rent reduction from January 1, 2020 to December 31, 2020. The Company recognized in profit or loss the impact of rent concessions of NT$1,535 thousand (presented in other income for the years ended December 31, 2020.

d. Other lease information

Other lease information
Expenses relating to short-term leases and low-value asset leases Total cash outflow for leases		For the Year Ended December 31
	(	2021 $ 4,587 $ 30,386) (	2020 $ 4,347 $ 31,017)

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The Company leases certain buildings, transportation equipment and office equipment which qualify as short-term leases and low-value asset leases. The Company and its subsidiaries have elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. INVESTMENT PROPERTIES

For the Year ended December 31, 2021

For the Year ended December 31, 2021
Cost		Land	Buildings		Total

Balance at January 1, 2021 Additions Reclassification Balance at December 31, 2021 Accumulated depreciation
Balance at January 1, 2021 Depreciation Reclassification Balance at December 31, 2021 Carrying amount at December 31, 2021 For the Year Ended December 31, 2020 Cost Balance at January 1, 2020 Additions Reclassifications Disposals Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation Reclassifications Balance at December 31, 2020 Carrying amount at December 31, 2020
	(			(

The abovementioned investment properties were leased out for 1 to 15 years. The leases do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

The maturity analysis of lease payments receivable under operating leases of investment properties at December 31, 2021 was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards	December 31, 2021	December 31, 2021
		$ 14,387 7,965 5,520 5,640 5,760 43,680 $ 82,952

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The above items of investment properties are depreciated on a straight-line basis over the following estimated useful lives:

Buildings Main structure 10-60 years Engineering system 2-10 years

The investment properties of the Company are located at Annan District in Tainan City, Hunei District in Kaohsiung City and Kaohsiung Science Park. The fair value of the investment properties was assessed by the management of the Company based on the actual price registration information of nearby area or market evidence of transaction prices categorized as Level 3 input. Professional independent valuators were not involved in the fair value assessment. The fair value for the years ended December 31, 2021 and 2020 are NT$937,730 thousand and NT$824,805 thousand, respectively.

All of the Company’s investment properties are held under freehold interests. Investment properties pledged by the Company as collateral for bank borrowings are described in Note 32.

16. COMPUTER SOFTWARE

The computer software is amortized on a straight-line basis over 3 to10 years, the movements were as follows,

as follows,
Balance at January 1, 2020 Additions Amortization expenses Balance at December 31, 2020 Additions Amortization expenses Balance at December 31, 2021		Cost $ 139,265 5,964 - 145,229 1,559 - $ 146,788	Accumulated amortization ( $ 81,551 ) - ( 15,348) ( 96,899 ) - ( 14,617) ($ 111,516)		Carrying amount
			( ( ( ( (	( (	$ 57,714 5,964 15,348) 48,330 1,559 14,617) $ 35,272

18. BORROWINGS

a. Short-term borrowings

. Short-term borrowings
Bank loans Annual interest rate (%) . Short-term bills payable December 31, 2021 Secured Institute Mega Bills Finance Corporation Dah Chung Bills Finance Corporation China Bills Finance Corporation International Bills Finance Corporation Taching Bill Finance Ltd.	Par Value	December 31
		2021 $ 1,191,080	Carrying Amount $ 100,000 60,000 100,000 50,000 100,000 $ 410,000	2020 $ 1,306,240 0.63`～`1.15 Annual interest rate(%) 0.93 0.93 0.92 0.93 0.90

b. Short-term bills payable
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c.	December 31, 2020 Secured Institute Par Value Discount Amount International Bills Finance Corporation $ 60,000 $ - Long-term borrowings Bank loans Due on various dates through September 2024, interest at 0.52%-1.02% p.a., respectively Mortgage loans Due on various dates through July 2025, interest at 1.05%-1.15% p.a. and 1.05%-1.38% p.a., respectively Less: Current portion		Discount Amount	Discount Amount		Carrying Amount Annual interest rate(%) $ 60,000 0.93 December 31	Carrying Amount Annual interest rate(%) $ 60,000 0.93 December 31
			$	-
					2021 $ 585,000 1,149,000 1,734,000 697,333 $ 1,036,667		2020 $ 935,000 1,248,500 2,183,500 1,548,500 $ 635,000

The Company entered into a facility agreement of NT$1 billion with O-Bank for medium and long-term loans and guarantee the issuance of commercial paper until October 2023. The Company might not change the chairman during the contract period and the facility agreement stipulated that specified financial ratios and amounts should be met based on the Company and its subsidiaries’ reviewed consolidated financial statements for six months ended June 30 and audited annual consolidated financial statements.

The consolidated financial statements for the years ended December 31, 2021 and 2020 breached the contract; therefore, the long-term borrowings were all classified as current portion of long-term bank borrowings.

18. NOTES PAYABLE AND ACCOUNTS PAYABLE

All of the Company’s notes payable and accounts payable (included related parties) are generated from operating and unsecured to the creditors.

The Company has financial risk management policies to ensure that all payables are paid within the agreed credit terms.

19. OTHER PAYABLES

OTHER PAYABLES
Salaries and incentive bonus Commission and service fee Employee compensation and remuneration of directors Purchases of equipment Others		December 31
		2021 $ 105,970 41,289 17,826 1,060 42,996 $ 209,141	2020 $ 99,077 74,744 3,894 774 33,952 $ 212,441

20. PROVISIONS

Current

	December 31
	2021 $ 21,045	2020 $ 18,161

Warranties

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Movements of the warranties were as follows,

Balance at January 1 Recognition Written off Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	(	2021 $ 18,161 50,613 47,729) ( $ 21,045	2020 $ 26,251 61,964 70,054) $ 18,161

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Company’s obligations for warranties under local sale of goods legislation. The estimate was made on the basis of historical warranty trends and may vary with actual as a result of new materials, altered manufacturing processes or other events affecting product quality.

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan in the Republic of China. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The Company adopted the defined benefit plan under the Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company makes contributions, equal to a certain percentage of total monthly salaries, to a pension fund, which is deposited in the Bank of Taiwan in the name of and administered by the pension fund monitoring committee. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the standalone balance sheets in respect of the Company’s defined benefit plans were as follows:

benefit plans were as follows:
				December 31
		2021				2020
Present value of defined benefit obligation	$	245,890			$	264,155
Fair value of plan assets	(	172,376		)	(	185,516)
Net defined benefit liabilities	$	73,514			$	78,639
Movements of net defined benefit liabilities	(assets) were	as follows:
	Present Value of
	the Defined					Net Defined
	Benefit		Fair Value of the			Benefit
	Obligation			Plan Assets		Liabilities
Balance at January 1, 2020	$ 264,055		(	$ 193,795)		$ 70,260
						(Continued)

Movements of net defined benefit liabilities (assets) were as follows:

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Service cost Current service cost Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions Actuarial loss - changes in financial assumptions Actuarial loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2020 Service cost Current service cost Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions Actuarial loss - changes in financial assumptions Actuarial loss - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2021	Present Value of the Defined Benefit Obligation 1,673 2,112 3,785 $ - 1,927 9,633 6,684 18,244 - ( 21,929) ( 21,929) 264,155 1,328 924 2,252 - 9,204 ( 7,908 ) ( 15) 1,281 - ( 21,798) ( 21,798) $ 245,890	Fair Value of the Plan Assets - ( 1,575) ( 1,575) ( $ 6,478 ) - - - ( 6,478) ( 5,597 ) 21,929 16,332 ( 185,516) - ( 659) ( 659) ( 2,731 ) - - - ( 2,731) ( 5,268 ) 21,798 16,530 ($ 172,376)		Net Defined Benefit Liabilities
	( ( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( (	1,673 537 2,210 $ 6,478 ) 1,927 9,633 6,684 11,766 5,597 ) - 5,597) 78,639 1,328 265 1,593 2,731 ) 9,204 7,908 ) 15) 1,450) 5,268 ) - 5,268) $ 73,514 (Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans was as follows:

Operating costs Selling expenses General and administrative expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,217 266 110 $ 1,593	2020 $ 1,685 362 163 $ 2,210

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Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

1) Investment risk

The plan assets are invested in domestic and foreign equity securities, debt securities, and bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds, Ministry of Labor or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

2) Interest risk

A decrease in the government and corporate 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 plan’s debt investments.

3) Salary risk

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

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate (%) Expected rate of salary increase (%) Turnover rate (%) Voluntary retirement rate (%)	December 31
	2021 2020 0.75 0.35 2.25 2.25 1`～`30 1`～`30 5`～`100 5`～`100

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

would increase (decrease) as follows:
Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease		December 31
	( (	2021 $ 5,033) ( $ 5,203 $ 4,972 $ 4,835) (	2020 $ 5,444) $ 5,633 $ 5,361 $ 5,209)

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.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2021 $ 5,268 11 years	2020 $ 5,597 11 years

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22. EQUITY

a. Ordinary Shares

Ordinary Shares
Numbers of shares authorized (in thousands) Amount of shares authorized Numbers of shares issued and fully paid (in thousands) Amount of shares issued		December 31
		2021 400,000 $ 4,000,000 254,827 $ 2,548,265	2020 400,000 $ 4,000,000 254,827 $ 2,548,265

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and the right to dividends.

b. Capital surplus

Capital surplus
May be used to offset a deficit, distributed as cash dividends,or transferred to share capital(Note)	December 31
	2021 $ 960,854 222,593 5,577 1,234 1,190,258 3,838 $ 1,194,096	2020 $ 960,854 222,593 5,577 1,234 1,190,258 3,838 $ 1,194,096
Additional paid-in capital Conversion of bonds Interest compensation Expired employee stock warrants Maybe used to offset a deficit only
Changes in percentage of ownership interests in subsidiaries

Note: The capital surplus could be used to offset a deficit and distributed as cash dividends or transferred to capital when the Company has no deficit (limited to a certain percentage of the Company’s paid-in capital and once a year).

c. Retained earnings and dividend policy

Under the Company’s Articles of Incorporation, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders.

The Company’s dividend policy takes into consideration the entire corporate environment, the growth of industry, long-term financial planning for sustainable development, and stable business development. In the planning of dividend distribution, the Company performs the following steps:

1) Determine the best capital budget.
2) Determine the need for capital loan to satisfy the best capital budget.
3) Determine how much capital could be raised from retained earnings.
38 -
4) Determine the funds needed to maintain the profitable operations of the Company. After the operations are funded, dividends could be distributed to shareholders. In principle, cash dividends should not be less than 50% of the total dividends distributed.

Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

In August 2021, the shareholder’s meeting of the Company approved to recover the net loss in 2020 from the undistributed earnings in the previous year, and distributed no earnings

The appropriation of earnings for 2019 had been approved in the shareholder’s meeting in June 2020. The appropriations and dividends per share were as follows:

Legal reserve Reversed of special reserve Cash dividends	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
	Appropriation of Earnings $ 5,895 ( 43,694 ) 50,965 $ 13,166	Dividend Per Share (NT$)
	(		$ 0.2

The appropriations of earnings for 2020 had been proposed in the Board of Directors’ meetings in March 2022. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	For the Year Ended December 31, 2021	For the Year Ended December 31, 2021	For the Year Ended December 31, 2021
	Appropriation of Earnings $ 12,445 50,965 $ 63,410	Dividend Per Share (NT$)
			$ 0.2

The proposal is subject to the resolution in the shareholders’ meeting to be held in June 2022.

d. Special reserve

On the first-time adoption of IFRSs, the Company transferred retained earnings to special reserve due to IFRSs adjustments. The Company reversed special reserve to retained earnings of NT$89,749 thousand.

e. Other equity

1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on translating foreign operations Share of exchange difference of subsidiaries accounted for using the equity method Income tax Balance at December 31	For	the Year Ended December 31	the Year Ended December 31
	( ( ( (	2021 $ 118,098 ) ( 20,784 ) 9,788 ) 6,114 ( $ 142,556) (	2020 $ 137,912 ) 21,498 3,270 4,954) $ 118,098)

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2) Unrealized gain and loss on financial assets at FVTOCI

For the Year Ended 2021 Balance at January 1 $ 87,658 Recognized for the year Unrealized gain and loss - equity instruments 48,328 Disposal of investments in equity instruments - Balance at December 31 $ 135,986 ERATING REVENUE Contract balances December 31, 2021 December 31, 2020 Notes and accounts receivable, long-term notes and accounts receivables $ 1,657,372 $ 1,619,142 Contract liabilities Sales of goods $ 399,490 $ 515,062 Disaggregation of revenue For the Year Ended 2021 Revenue from sale of goods $ 3,853,877 Revenue from maintenance and rebuilding services 369,394 $ 4,223,271	For the Year Ended 2021 Balance at January 1 $ 87,658 Recognized for the year Unrealized gain and loss - equity instruments 48,328 Disposal of investments in equity instruments - Balance at December 31 $ 135,986 ERATING REVENUE Contract balances December 31, 2021 December 31, 2020 Notes and accounts receivable, long-term notes and accounts receivables $ 1,657,372 $ 1,619,142 Contract liabilities Sales of goods $ 399,490 $ 515,062 Disaggregation of revenue For the Year Ended 2021 Revenue from sale of goods $ 3,853,877 Revenue from maintenance and rebuilding services 369,394 $ 4,223,271	For the Year Ended 2021 Balance at January 1 $ 87,658 Recognized for the year Unrealized gain and loss - equity instruments 48,328 Disposal of investments in equity instruments - Balance at December 31 $ 135,986 ERATING REVENUE Contract balances December 31, 2021 December 31, 2020 Notes and accounts receivable, long-term notes and accounts receivables $ 1,657,372 $ 1,619,142 Contract liabilities Sales of goods $ 399,490 $ 515,062 Disaggregation of revenue For the Year Ended 2021 Revenue from sale of goods $ 3,853,877 Revenue from maintenance and rebuilding services 369,394 $ 4,223,271	the Year Ended	the Year Ended	December 31
					2020 $ 49,642 ( 17,072 ) 55,088 $ 87,658 January 1, 2020 $ 1,961,425 $ 377,691 December 31
		2021 $ 3,853,877 369,394 $ 4,223,271			2020 $ 3,026,870 443,383 $ 3,470,253

23. OPERATING REVENUE

a. Contract balances
b. Disaggregation of revenue

25. PROFIT (LOSS) BEFORE INCOME TAX

The following items were included in profit (loss) before income tax:

a. Other income

Other income
Reversed of expenses payable Government subsidy income Rental income Dividend income Others	For the Year Ended December 31
		2021 $ 37,332 34,515 23,724 3,102 12,217 $ 110,890	2020 $ - 111,830 23,905 9,432 14,007 $ 159,174

Government subsidy income was mainly from the subsidy due to the COVID-19.

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b. Other gains and losses

Other gains and losses
Net foreign exchange gain (loss) Compensation expense Impairment loss (Note 11) Depreciation expense Loss on financial instruments at fair value through profit or loss Gain on disposal of property, plant and equipment Others	For	the Year Ended December 31
	( ( ( ( ( (	2021 $ 55,775 ) 578 ) ( - ( 10,994 ) ( 2,690 ) ( 912 94) ( $ 69,219) (	2020 $ 15,068 29,498 ) 19,830 ) 11,044 ) 6,308 ) 43,967 469) $ 8,114)

The components of net foreign exchange loss were as follows:

Foreign exchange gain Foreign exchange loss Net foreign exchange gain (loss) c. Finance costs Interest on bank loans Interest on lease liabilities Interest on short-term bills d. Depreciation and amortization Depreciation and amortization expenses Property, plant and equipment Right-of-use assets Investment properties An analysis of depreciation by function Operating costs Operating expenses Non-operating expenses Amortization expenses Computer software Others	For the Year Ended December 31 2021 2020 $ 35,544 $ 76,522 (91,319) (61,454) ($ 55,775) $ 15,068 For the Year Ended December 31 2021 2020 $ 33,358 $ 43,642 11,203 11,481 1,168 597 $ 45,729 $ 55,720 For the Year Ended December 31 2021 2020 $ 113,065 $ 119,161 19,021 19,888 9,735 9,805 $ 141,821 $ 148,854 $ 73,795 $ 75,761 57,032 62,049 10,994 11,044 $ 141,821 $ 148,854 $ 14,617 $ 15,348 13,782 17,389 $ 28,399 $ 32,737 (Continued)	For the Year Ended December 31 2021 2020 $ 35,544 $ 76,522 (91,319) (61,454) ($ 55,775) $ 15,068 For the Year Ended December 31 2021 2020 $ 33,358 $ 43,642 11,203 11,481 1,168 597 $ 45,729 $ 55,720 For the Year Ended December 31 2021 2020 $ 113,065 $ 119,161 19,021 19,888 9,735 9,805 $ 141,821 $ 148,854 $ 73,795 $ 75,761 57,032 62,049 10,994 11,044 $ 141,821 $ 148,854 $ 14,617 $ 15,348 13,782 17,389 $ 28,399 $ 32,737 (Continued)
		2021 $ 113,065 19,021 9,735 $ 141,821 $ 73,795 57,032 10,994 $ 141,821 $ 14,617 13,782 $ 28,399

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For the Year Ended December 31 2021 2020 An analysis of amortization by function Operating costs $ 19,086 $ 23,311 Operating expenses 9,313 9,426 $ 28,399 $ 32,737 (Concluded) e. Operating expenses directly related to investment properties For the Year Ended December 31 2021 2020 Direct operating expenses of investment properties that generated rental income $ 16,965 $ 10,642 f. Employee benefits For the Year Ended December 31 2021 2020 Short-term employee benefits Salaries $ 445,447 $ 420,016 Insurance 49,283 48,747 Others 28,477 27,968 523,207 496,731 Post-employment benefits Defined contribution plans 21,731 22,991 Defined benefit plans (Note 21) 1,593 2,210 23,324 25,201 $ 546,531 $ 521,932 Analysis of employee benefits by function Operating costs $ 393,423 $ 401,448 Operating expenses 153,108 120,484 $ 546,531 $ 521,932	For the Year Ended December 31 2021 2020 An analysis of amortization by function Operating costs $ 19,086 $ 23,311 Operating expenses 9,313 9,426 $ 28,399 $ 32,737 (Concluded) e. Operating expenses directly related to investment properties For the Year Ended December 31 2021 2020 Direct operating expenses of investment properties that generated rental income $ 16,965 $ 10,642 f. Employee benefits For the Year Ended December 31 2021 2020 Short-term employee benefits Salaries $ 445,447 $ 420,016 Insurance 49,283 48,747 Others 28,477 27,968 523,207 496,731 Post-employment benefits Defined contribution plans 21,731 22,991 Defined benefit plans (Note 21) 1,593 2,210 23,324 25,201 $ 546,531 $ 521,932 Analysis of employee benefits by function Operating costs $ 393,423 $ 401,448 Operating expenses 153,108 120,484 $ 546,531 $ 521,932	For the Year Ended December 31 2021 2020 An analysis of amortization by function Operating costs $ 19,086 $ 23,311 Operating expenses 9,313 9,426 $ 28,399 $ 32,737 (Concluded) e. Operating expenses directly related to investment properties For the Year Ended December 31 2021 2020 Direct operating expenses of investment properties that generated rental income $ 16,965 $ 10,642 f. Employee benefits For the Year Ended December 31 2021 2020 Short-term employee benefits Salaries $ 445,447 $ 420,016 Insurance 49,283 48,747 Others 28,477 27,968 523,207 496,731 Post-employment benefits Defined contribution plans 21,731 22,991 Defined benefit plans (Note 21) 1,593 2,210 23,324 25,201 $ 546,531 $ 521,932 Analysis of employee benefits by function Operating costs $ 393,423 $ 401,448 Operating expenses 153,108 120,484 $ 546,531 $ 521,932	For the Year Ended December 31 2021 2020 An analysis of amortization by function Operating costs $ 19,086 $ 23,311 Operating expenses 9,313 9,426 $ 28,399 $ 32,737 (Concluded) e. Operating expenses directly related to investment properties For the Year Ended December 31 2021 2020 Direct operating expenses of investment properties that generated rental income $ 16,965 $ 10,642 f. Employee benefits For the Year Ended December 31 2021 2020 Short-term employee benefits Salaries $ 445,447 $ 420,016 Insurance 49,283 48,747 Others 28,477 27,968 523,207 496,731 Post-employment benefits Defined contribution plans 21,731 22,991 Defined benefit plans (Note 21) 1,593 2,210 23,324 25,201 $ 546,531 $ 521,932 Analysis of employee benefits by function Operating costs $ 393,423 $ 401,448 Operating expenses 153,108 120,484 $ 546,531 $ 521,932	For the Year Ended December 31 2021 2020 An analysis of amortization by function Operating costs $ 19,086 $ 23,311 Operating expenses 9,313 9,426 $ 28,399 $ 32,737 (Concluded) e. Operating expenses directly related to investment properties For the Year Ended December 31 2021 2020 Direct operating expenses of investment properties that generated rental income $ 16,965 $ 10,642 f. Employee benefits For the Year Ended December 31 2021 2020 Short-term employee benefits Salaries $ 445,447 $ 420,016 Insurance 49,283 48,747 Others 28,477 27,968 523,207 496,731 Post-employment benefits Defined contribution plans 21,731 22,991 Defined benefit plans (Note 21) 1,593 2,210 23,324 25,201 $ 546,531 $ 521,932 Analysis of employee benefits by function Operating costs $ 393,423 $ 401,448 Operating expenses 153,108 120,484 $ 546,531 $ 521,932
			For
			2021 $ 445,447 49,283 28,477 523,207 21,731 1,593 23,324 $ 546,531 $ 393,423 153,108 $ 546,531	2020 $ 420,016 48,747 27,968 496,731 22,991 2,210 25,201 $ 521,932 $ 401,448 120,484 $ 521,932

g. Employees’ compensation and remuneration of directors and supervisors

To be in compliance with the Company Act, the Company distributed employees’ compensation and remuneration of directors and supervisors at the rates no less than 1% and no higher than 5%, respectively, of the pre-tax profit before deduction for employees’ compensation and remuneration of directors. The employees’ compensation and remuneration of directors and supervisors for the year ended December 31, 2021 were as follows:

Employees’ compensation Remuneration of directors	For the Year Ended December 31, 2021
	$ 14,348 3,478

Because of the net operating loss for the year ended December 31, 2020, employees’ compensation and remuneration of directors were not accrued.

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The employees’ compensation and remuneration of directors and supervisors (all in cash) for the year ended December 31, 2019 which have been approved by the Company’s board of directors in March 2020 were NT$3,894 thousand and NT$944 thousand, respectively. There was no difference between the actual amounts and the amounts recognized in the consolidated financial statements for the years ended December 31, 2019, respectively.

If there is a change in the proposed amounts after the annual standalone financial statements are authorized for issue, the difference is recorded as a change in accounting estimate.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors are available at the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAX

a. Major components of income tax expense (benefit) recognized in profit or loss are as follows:

For the Year Ended December 31 2021 2020 Current tax Adjustments for prior years $ 1,868 ($ 1,577) Deferred tax In respect of the current year 43,954 ( 108,536 ) Adjustments for prior years ( 16,204) ( 8,354) 27,750 (116,890) $ 29,618 ($ 118,467) The reconciliation of accounting profit and income tax expense (benefit) was as follows: For the Year Ended December 31 2021 2020 Profit (loss) before income tax $ 202,321 ($ 465,243) Income tax expense calculated at the statutory rate (loss carryforwards benefit) $ 40,464 ( $ 93,049 ) Non-deductible expenses in determining taxable income 3,490 ( 15,487 ) Adjustments for prior years ( 14,336) ( 9,931) $ 29,618 ($ 118,467)		For the Year Ended December 31

In accordance with Rule No. 10904550440 issued by the Ministry of Finance of Taiwan (MOF), the Company used the losses incurred in the first quarter of 2020 to estimate losses for the first six months of 2020 and this amount is deducted from the Company's unappropriated earnings for 2018 for filing the additional tax. For the 2020 consolidated financial reporting purpose, the tax on unappropriated earnings for 2018 is measured based on the actual loss for 2020, and the current income tax payable is adjusted accordingly.

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b. Income tax benefit recognized in other comprehensive income

Deferred tax In respect of the current period Translation of foreign operations Remeasurement on defined benefit plans	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	(	2021 $ 6,114 ( 290) $ 5,824 (	2020 $ 4,954 ) 2,353 $ 2,601)

c. Current tax assets and liabilities

Current tax assets and liabilities
Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31
		2021 $ 323 $ -	2020 $ - $ 11,916

d. Deferred tax assets and liabilities

Movements of deferred tax assets and liabilities were as follows:

For the Year Ended December 31, 2021

Deferred tax assets Temporary differences Write-downs of inventory Allowance for bad debts Share of loss of foreign subsidiaries Exchange difference on translating foreign operations Deduction of development cost Defined benefit plan Time difference of revenue recognition Loss carryforwards Others Deferred tax liabilities Temporary differences Land value increment tax	Balance, Beginning of Year $ 139,740 41,010 72,101 29,525 12,147 15,727 27,982 37,439 7,745 $ 383,416 $ 61,301	Recognized in Profit or Loss ( $ 22,789 ) ( 11,680 ) 12,835 - ( 4,039 ) ( 735 ) ( 18,993 ) 13,065 4,586 ($ 27,750) $ -	Recognized in Other Comprehensi ve Income		Exchange Differences
			$ - - - 6,114 - ( 290 ) - - - $ 5,824 $ -		$ 116,951 29,330 84,936 35,639 8,108 14,702 8,989 50,504 12,331 $ 361,490 $ 61,301

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For the Year Ended December 31, 2020

Deferred tax assets Temporary differences Write-downs of inventory Allowance for bad debts Share of loss of foreign subsidiaries Exchange difference on translating foreign operations Deduction of development cost Defined benefit plan Time difference of revenue recognition Loss carryforwards Others Deferred tax liabilities Temporary differences Land value increment tax	Balance, Beginning of Year $ 93,320 38,052 38,800 34,479 4,306 14,051 16,160 - 29,959 $ 269,127 $ 61,301	Recognized in Profit or Loss $ 46,420 2,958 33,301 - 7,841 ( 677 ) 11,822 37,439 ( 22,214) $ 116,890 $ -	Recognized in Other Comprehensi ve Income $ - - - ( 4,954 ) - 2,353 - - - ($ 2,601) $ -		Exchange Differences
					$ 139,740 41,010 72,101 29,525 12,147 15,727 27,982 37,439 7,745 $ 383,416 $ 61,301

e. Information about unused investment credits and Loss carryforwards

As of December 31, 2021, investment credits comprised of the following:

Laws and Statutes Statute for Upgrading Industries	Tax Credit Source Research and development expenditure	Remaining Creditable Amount $ 8,108	Expiry Year
			2022

As of December 31, 2021, loss carryforwards comprised of the following:

	Unused Amount $ 252,520	Expiry Year
		2030

f. Income tax assessments

The income tax returns of the Company through 2019 have been assessed by the tax authorities.

27. EARNINGS (LOSS) PER SHARE

The net profit (loss) and weighted average number of ordinary shares outstanding in the computation of earnings (loss) per share were as follows:

Net profit (loss) for the year

Net profit (loss) for the year		For the Year Ended December 31	For the Year Ended December 31
		2021 $ 172,703 (	2020 $ 346,776)

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Weighted average number of ordinary shares outstanding (in thousands of shares)

Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive potential ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		For the Year Ended December 31	For the Year Ended December 31
		2021 254,827 827 255,654	2020 254,827 - 254,827

The dilutive loss per share for the year ended December 31, 2020 was the same as the basic loss per share because the operating result was net loss and, therefore, no earnings distribution and no potential dilutive shares from earnings distribution.

Since the Company offered to settle the compensation paid to employees by cash or shares, the Company assumed that the entire amount of the compensation would be settled in shares and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

27. INVESTMENT IN SUBSIDIARIES-WITHOUT IMPACT OF CONTROLLING

In March, 2020, the subsidiary Honor Seiki acquired its outstanding common shares and accounted for as treasury shares and the Company’s percentage of ownership of Honor Seiki increased from 51% to 54%. The transaction was accounted for as equity transaction since the Company did not cease to have control over the subsidiary, and increased capital surplus by NT$3,838 thousand.

In November 2021, the Company acquired 1,200,000 shares of Quick-tech from non-controlling interests at a total price of NT$240 thousand. In addition, the Company subscribed for additional new shares of Quick-Tech in cash by NT$117,286 thousand at a percentage different from its existing ownership percentage, resulting in an increase in the percentage of ownership of Quick-Tech from 52% to 99%. In August, 2021, the Company acquired 1,000 shares, 220 shares, 170,000 shares, 1,584 shares and 1,000 shares of Tongfong, APEC, Quick-Tech, Honor Seiki, Tong-Yeh and Chin-Jig, respectively from the related party, Dong Ying Investment Co., Ltd., with a total price NT$6,087 thousand. The above transactions were accounted for as equity transaction since the Company did not cease to have control over the subsidiaries and reduced the retained earnings by NT$49,275 thousand.

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28. NON-CASH TRANSACTIONS

For the years ended December 31, 2021 and 2020, the Company entered into the following non-cash investing activities which were not reflected in the consolidated statements of cash flows:

Investing activities affecting both cash and non-cash items Acquisition of property, plant and equipment Decrease (increase) of payable for equipment Increase (decrease) of prepayment for equipment Cash paid Proceeds from disposal of property, plant and equipment Decrease (increase) of other receivables Cash received Proceeds from disposal of investment properties Decrease (increase) of other receivables Cash received	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	( (	2021 $ 16,715 286 ) 473) $ 15,956 $ 772 52,650 ( $ 53,422 $ - 13,494 ( $ 13,494	2020 $ 214,722 149 473 $ 215,344 $ 57,746 52,650) $ 5,096 $ 13,494 13,494) $ -

29. CAPITAL MANAGEMENT

The Company manages its capital to ensure that, as a whole, it will be able to continue as going concerns; the Company uses operating capital effectively and optimize debt and equity balance. The overall strategy of the Company has not significantly changed over in 2021.

The key management personnel of the Company reviews the capital structure periodically. As part of the review, the key management personnel considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

The capital structure of the Company consists of net debt and equity. It is the policy of the Company and its subsidiaries to monitor and comply with the terms of loan agreements (refer to Note 17).

30. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the Company and its subsidiaries believe the carrying amounts of financial asset and liabilities recognized in the consolidated financial statements approximate their fair values.

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b. Fair value of financial instruments that are measured at fair value on a recurring basis 1) Fair value hierarchy

December 31,2021 Financial assets at fair value through profit or loss - current Mutual funds Financial assets at FVTOCI - non-current Domestic listed shares Domestic unlisted shares Financial liabilities at fair value through profit or loss - current Cross-currency swap contract December 31,2020 Financial assets at fair value through profit or loss - current Swap contracts Mutual funds Financial assets at FVTOCI - non-current Domestic listed shares Domestic unlisted shares Financial liabilities at fair value through profit or loss - current Cross-currency swap contract Foreign exchange forward contracts		Level 1 $ 26,963 $ 159,196 - $ 159,196 $ - $ - 16,683 $ 16,683 $ 113,838 - $ 113,838 $ - - $ -		Level 2 $ - $ - - $ - $ 2,404 $ 3,332 - $ 3,332 $ - - $ - $ 11,280 92 $ 11,372		Level 3 $ - $ - 35,335 $ 35,335 $ - $ - - $ - $ - 32,365 $ 32,365 $ - - $ -		Total
								$ 26,963 $ 159,196 35,335 $ 194,531 $ 2,404 $ 3,332 16,683 $ 20,015 $ 113,838 32,365 $ 146,203 $ 11,280 92 $ 11,372

There was no transfer between Level 1 and Level 2 for the years ended December 31, 2021 and 2020.

2) Reconciliation of Level 3 fair value measurements of financial assets

Financial assets Balance at January 1 Disposals Transfer out from Level 3 Change in fair value recognized in other comprehensive income Balance at December 31	Equity Instruments - Financial Assets at FVTOCI	Equity Instruments - Financial Assets at FVTOCI	Equity Instruments - Financial Assets at FVTOCI
		For the Year Ended December 31
		2021 $ 32,365 - ( - ( 2,970 ( $ 35,335	2020 $ 58,692 16,989 ) 7,170 ) 2,168) $ 32,365

3) Valuation techniques and input applied for the purpose of measuring Level 2 fair value measurement.

Derivative instruments used the quoted price of bank as the basis of the fair values.

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4) Valuation techniques and assumptions applied for the purpose of measuring Level 3 fair value measurement.

If there are no market price for reference, fair values were estimated by assessment approach. For unlisted shares, fair values were determined based on the net worth of companies.

c. Categories of financial instruments

Categories of financial instruments
Financial assets Financial assets at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at FVTPL Financial liabilities at amortized cost (2)	December 31
	2021 2020 $ 26,963 $ 20,015 2,896,292 3,221,049 194,531 146,203 2,404 11,372 4,350,219 4,547,972

1) The balances included financial assets at amortized cost, which comprise cash and cash equivalents, notes and accounts receivable (including related parties), other receivables (including related parties), other financial assets (current and non-current), refundable deposits, and long-term notes and accounts receivable.
2) The balances included financial liabilities at amortized cost, which comprise short-term borrowings, short-term bills payable, notes and accounts payable (including related parties), other payables, long-term borrowings (including those due in one year) and guarantee deposit received.
d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, notes and accounts receivable, notes and accounts payable, short-term and long-term borrowings, short-term bills payable and lease liabilities. The Finance Department provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks are market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company minimizes the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (refer to (a) below), interest rates (refer to (b) below) and other price (refer to (c) below).

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There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The Company is exposed to foreign currency risk due to sales, purchases, capital expenditures and equity investments denominated in foreign currencies. Exchange rate exposures are managed within approved policy parameters utilizing swap contract, cross-currency swap contract, and foreign exchange forward contracts.

The carrying amounts of significant foreign currency monetary assets and liabilities at the balance sheet date are disclosed in Note 34.

The Company is mainly exposed to the USD and CNY. The following table details the Company’s sensitivity to a 3% increase and decrease in the functional currency against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 3%. The sensitivity analysis included only outstanding foreign currency denominated monetary items.

	USD Impact	USD Impact	USD Impact		CNY Impact	CNY Impact	CNY Impact
	For the Year Ended December 31				For the Year Ended December 31
	2021		2020		2021		2020
(	$ 8,746)	(	$ 8,163)	(	$ 42,760)	(	$ 48,556)

Note: These were mainly attributable to the exposure of the USD and CNY (including cash and cash equivalent, accounts receivable and payable (including related parties), other receivable, other payable and short-term and long-term borrowings), which were not hedged at the balance sheet date.

In management’s opinion, the sensitivity analysis was unrepresentative of the inherent foreign exchange risk because the exposure at the balance sheet date did not reflect the exposure during the period. Foreign currency sales change according to customer order and business cycle.

b) Interest rate risk

The Company is exposed to interest rate risk because the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Company’s financial liabilities with exposure to interest rates at the balance sheet date were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial liabilities	December 31
	2021 2020 $ 37,020 $ 4,097 483,406 893,579 2,670,080 1,740,380

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The sensitivity analysis below was determined based on the Company’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. or floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. The interest rates change of 1% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates of financial liabilities had been 1% higher/lower and all other variables were held constant, the Company’s pre-tax profit and loss would have been lower/higher by NT$26,701 thousand and higher/ lower NT$17,404 thousand for the years ended December 31, 2021 and 2020, respectively.

c) Other price risk

The Company is exposed to equity price risk through their investments in mutual funds, and domestic listed shares.

If domestic listed shares equity prices and mutual funds had been 1% higher/lower, the other comprehensive income (loss) for the years ended December 31, 2021 and 2020 would have been higher/lower by NT$1,592 thousand and NT$1,138 thousand, as a result of the changes in fair value of financial assets at FVTOCI respectively; the pre-tax loss for the years ended December 31, 2021 and 2020 would have been lower/higher by NT$270 thousand and NT$167 thousand as a result of the changes in fair value of financial assets at FVTPL.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. As of the balance sheet date, the Company’s maximum exposure to credit risk is the carrying amount of the financial assets on the standalone balance sheets.

The Company adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

Except for the following customer, the Company did not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Company’s concentration of credit risk in receivables (including notes and accounts receivable, long-term notes receivable, overdue receivables and other receivables) by customer was as follows:

receivables) by customer was as follows:
Customer Company A Suzhou Tongyu Machine Tool Co., Ltd. (Suzhou Tongyu) Company B	December 31
	2021 $ 443,605 399,147 256,588 $ 1,099,340	2020
		$ 678,599 408,897 253,074 $ 1,340,570

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3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The table included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate at the end of the balance sheet date.

December 31, 2021

Non-interest bearing liabilities Interest bearing liabilities Finance lease liabilities Financial guarantee liabilities		Less than 1 Year $ 1,014,108 2,316,019 25,102 1,447,701 $ 4,802,930		1-5 Years $ 1,031 1,062,266 93,826 - $ 1,157,123		5+ Years $ - - 577,478 - $ 577,478		Total
								$ 1,015,139 3,378,285 696,406 1,447,701 $ 6,537,531

Further information for maturity analysis of lease liabilities was as follows:

Less than 1 Year	1-5 Years		5-10 Years	10-15 Years	15-20 Years	20+ Years
$ 25,102 $ 93,826 1 Year $ 998,232 2,940,186 25,193 1,762,792 $ 5,726,403	$ 93,826		$114,375 1-5 Years	$114,375		$234,353 Total

		$	- 660,975 92,148 - 753,123		$ 998,232 3,601,161 717,694 1,762,792 $ 7,079,879
		$

Further information for maturity analysis of lease liabilities was as follows:

Lease liabilities		Less than 1 Year		1-5 Years	5-10 Years		10-15 Years		15-20 Years		20+ Years
		$ 25,193		$ 92,148	$114,375		$114,375		$114,375		$257,228

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31. TRANSACTIONS WITH RELATED PARTIES

Except for the information discloses in other notes, details of transactions between the Company and other related parties were as follows:

a. The name of the related parties and their relationships with the Company

Related Party Name
Tongfong
APEC
Quick-Tech
Honor Seiki
Tong-Yeh
Chin-Jig
Suzhou Tongyu
TTJP
TTM
TTVN
TTS
TMM
SKTD Co., Ltd.
PCI
Anger Machining GmbH (Anger)
HPC Produktions GmbH
TTE
Union Top
Tongan
Mbi-group Beteiligung GmbH
TTGroup France (TTGF)
Contrel Technology Co., Ltd.
F.S.E Corporation
Ever Lumin Incorporation
Shiang Jen Co., Ltd. (Shiang Jen)
Hao Shiang Co., Ltd.
San Shin Co., Ltd. (San Shin)
Sysco Machinery Corporation
Dong Ying Investment Co., Ltd.
Sheng Li Machine Industry Co., Ltd.
PT. Tong-Tai Seikindo Utama

Relationship

Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Other related parties
Other related parties
Other related parties
Other related parties
Other related parties (was liquidated in August 2020)
Other related parties
Other related parties
Other related parties
Other related parties
Substantial related party

b. Sales of goods

Account Item Related Party Type Revenues from sales Subsidiaries Suzhou Tongyu Others Other related parties		For the Year Ended December 31	For the Year Ended December 31
		2021 $ 622,420 447,020 4,436 $ 1,073,876	2020 $ 462,011 321,798 5,009 $ 788,818

Sales to related parties are made at arm’s length and the collection terms have no material difference with unrelated parties.

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c. Purchase of goods

Related Party Type Subsidiaries Other related parties		For the Year Ended December 31	For the Year Ended December 31
		2021 $ 205,939 161,539 $ 367,478	2020 $ 213,779 154,205 $ 367,984

The purchase prices and payment term have no material difference with unrelated parties.

d. Receivables from related parties (not including loans to related parties)

Account Item Related Party Type Notes receivables - related parties Subsidiaries Other related parties Accounts receivable-related parties Subsidiaries Suzhou Tongyu Others Other related parties Other receivables - related parties Subsidiaries Other related parties		December 31	December 31
		2021 $ 3,549 - $ 3,549 $ 266,367 62,706 2,742 $ 331,815 $ 11,696 976 $ 12,672	2020 $ 507 3 $ 510 $ 275,056 34,535 2,906 $ 312,497 $ 10,556 18,238 $ 28,794

e. Payables to related parties

Account Item Related Party Type Accounts payable - related parties Subsidiaries Other related parties Other payables - related parties Subsidiaries Other related parties Contract liabilities Account Item Subsidiaries	Account Item Related Party Type Accounts payable - related parties Subsidiaries Other related parties Other payables - related parties Subsidiaries Other related parties Contract liabilities Account Item Subsidiaries			December 31	December 31
				2021 2020 $ 62,842 $ 66,331 64,782 64,498 $ 127,624 $ 130,829 $ 24,785 $ 29,265 844 949 $ 25,629 $ 30,214 December 31
		2021 $ 1,374			2020 $ 3,243

f. Contract liabilities
54 -

g. Loans to related parties

Loans to related parties
Account Item Other receivables - related parties Subsidiaries Anger Suzhou Tongyu Union Top TTE Others Account Item Interest income Subsidiaries	December 31 2021 2020 $ 247,428 $ 210,120 130,320 131,310 - 77,485 63,664 65,504 59,950 104,381 $ 501,362 $ 588,800 For the Year Ended December 31			December 31
		2021 $ 5,896			2020 $ 9,104

The Company provided short-term loans to its subsidiaries, with the interest rate calculated based on the average rate of the Company’s bank loans from ordinary financial institutions.

h. Endorsements and guarantees

Related Party Type Amount endorsed Subsidiaries Anger Union Top APEC Quick-Tech Others Amount utilized Subsidiaries Anger Union Top APEC Quick-Tech Others		For the Year Ended December 31	For the Year Ended December 31
		2021 $ 488,905 427,102 235,000 190,360 106,334 $ 1,447,701 $ 401,013 361,778 60,000 20,634 58,811 $ 902,236	2020 $ 661,878 496,406 245,000 201,960 157,548 $ 1,762,792 $ 580,457 196,227 153,120 84,983 95,622 $ 1,110,409

55 -

i. Other transactions with related parties

Related Party Type 1) After-sales service expenses (recognized as selling and marketing expenses) Subsidiaries Suzhou Tongyu TTJP TTGF Others Other related parties 2) Commission expense (recognized as selling and marketing expenses) Subsidiaries Suzhou Tongyu TTVN Others Other related parties 3) Rental income Subsidiaries Quick-Tech Others Other related parties Shiang Jen Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 29,292 18,383 16,601 12,052 780 $ 77,108 $ 8,255 - 1,967 281 $ 10,503 $ 1,679 5,129 5,160 6 $ 11,974	2020 $ 24,579 22,211 16,529 1,851 81 $ 65,251 $ 3,150 2,957 4,882 1,330 $ 12,319 $ 3,357 5,109 5,040 6 $ 13,512

The above rent was determined by negotiation and collected according to the contract. The contract price is comparable to the prices of similar contracts in the area.

j. Property, plant and equipment transactions

Acquisition of property, plant and equipment

The Company acquired the property, plant and equipment from subsidiary Quick-Tech with the purchase price amounted of NT$200,000 thousand. The transaction price and terms were determined by negotiation between both parties.

k. Compensation of key management personnel

Compensation of key management personnel
Short-term employee benefits Post-employment benefits	For the Year Ended December 31
		2021 $ 14,056 238 $ 14,294	2020 $ 15,693 402 $ 16,095

56 -

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The Company’s assets mortgaged or pledged as collateral for short-term and long-term borrowings, lease of land at Southern Science Industrial Park, and banker’s guarantee were as follows:

Property, plant and equipment Investment properties Other financial assets (including current and non-current portion)		December 31	December 31
		2021 $ 1,003,302 186,637 103,072 $ 1,293,011	2020 $ 1,062,252 175,530 53,156 $ 1,290,938

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Company as of December 31, 2021 were as follows:

a. Unused letters of credit in the amount of NT$9,338 thousand.
b. For sales bidding, export tariff and commodity tax, the Company and its subsidiaries entered into credit facility agreements with banks for commitment amount of NT$11,446 thousand.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

currencies were as follows:
December 31,2021	Foreign Currency (In Thousands)	Exchange Rate	Carrying Amount (In Thousands of New Taiwan Dollars)
	$ 332,459 17,743 10,159 174 990 6,952 82,470 7,211 4,344	4.344 (CNY: NTD) 27.68 (USD: NTD) 31.32 (EUR: NTD) 27.68 (USD: NTD) 31.32 (EUR: NTD) 6.355 (MRY: NTD) 0.2405 (JPY: NTD) 27.68 (USD: NTD) 4.344 (CNY: NTD)	$ 1,444,202 491,126 318,180 4,818 30,992 44,178 19,834 199,600 18,870 (Continued)
Monetary foreign currency assets CNY USD EUR Non-monetary foreign currency assets Investment accounted for using the equity method USD EUR MRY JPY Monetary foreign currency liabilities USD CNY

57 -

December 31,2020	Foreign Currency (In Thousands)	Exchange Rate	Carrying Amount (In Thousands of New Taiwan Dollars) 1,630,643 669,720 5,099 187,297 47,477 22,901 $ 397,633 12,110 (Concluded)
	372,548 23,515 179 5,348 6,993 82,884 $ 13,962 2,767	4.377 (CNY: NTD) 28.48 (USD: NTD) 28.48 (USD: NTD) 35.02 (EUR: NTD) 6.7895 (MRY: NTD) 0.2763 (JPY: NTD) 28.48 (USD: NTD) 4.377 (CNY: NTD)
Monetary foreign currency assets CNY USD Non-monetary foreign currency assets Investment accounted for using the equity method USD EUR MRY JPY Monetary foreign currency liabilities USD CNY

The total foreign exchange net gain (loss) amounted to (NT$55,775) thousand and NT$15,068 thousand for the years ended December 31, 2021 and 2020, respectively. It is impractical to disclose the net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies.

35. ADDITIONAL DISCLOSURES

a. Following are the additional disclosures required by the Securities and Futures Bureau for the Company:
1) Financial provided: Please see Table 1 attached;
2) Endorsement/guarantee provided: Please see Table 2 attached;
3) Marketable securities held (excluding investments in subsidiaries, associates and joint venture): Please see Table 3 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: None;
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 purchase 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 about the derivative financial instruments transaction: Please see Note 7;
58 -
b. Names, locations, and related information of investees over which the Company and its subsidiaries exercises significant influence (excluding information on investment in Mainland China): Please see Table 6 attached;
c. Information on investment in Mainland China
1) The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 7 attached;
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Please see Table 4 attached;
- c) The amount of property transactions and the amount of the resultant gains or losses: None;
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: None;
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: Please see Table 1 attached;
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: None.
d. Information of major shareholders: Please see Table 8 attached.

36. SEGMENT INFORMATION

Disclosure of the segment information in standalone financial statements is waived.

59 -

TABLE 1

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Financing Company	Counter-party	Financial Statement Account	Related Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Interest Rate	Nature for Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company	Financing Company's Total Financing Amount Limits	Note
													Item	Value
0 0 0 0 0 0 0 0 0 1 1 1 2	Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Union Top Union Top Union Top PCI-SCEMM	Tongtai Machinery Co., Ltd. Anger Machining GmbH SKTD Co., Ltd. Union Top Industrial (Samoa) Limited Tongtai Europe B.V. Suzhou Tongyu Machine Tool Co., Ltd. Quick-Tech Machinery Co., Ltd. Asia Pacific Elite Corp. Mbi-group Beteilingung GmbH Quick-Tech Machinery Co., Ltd. TongTai Europe B.V. Anger Machining GmbH TTGroup France	Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - related party Other receivables - relatedparty	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	$ 71,338 451,980 10,864 212,925 130,594 263,040 120,000 30,000 45,122 19,225 13,805 88,746 6,874	$ 34,600 328,860 4,810 - 63,664 130,320 60,000 - 25,056 - 13,392 85,629 6,264	$ 33,216 247,428 4,810 - 63,664 130,320 - - 21,924 - 6,366 85,629 4,864	1-1.7 1-1.7 1-1.7 1.19-1.7 1-1.7 1-1.7 1-1.5 - 1-1.15 - 1.2 1.5 1.18-1.5	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	$ - - - - - - - - - - - - -	Acquiring Building Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	$ - - - - - - - - - - - - -		$ - - - - - - - - - - - - -	$ 503,123 503,123 503,123 503,123 503,123 503,123 503,123 503,123 503,123 107,945 107,945 107,945 35,701	$ 1,006,247 1,006,247 1,006,247 1,006,247 1,006,247 1,006,247 1,006,247 1,006,247 1,006,247 215,889 215,889 215,889 71,402	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: The need for short-term financing.

Note 2: According to the “Procedures for Lending Funds to Other Parties” established by the Company, the aggregate lending amount and the amount lending to any individual entity having business relationship with the Company shall not exceed the total transaction amount between the parties during the period of 12 months prior to the time of lending and shall not exceed 20% of the net worth of the Company. The aggregate lending amount and the amount lending to any individual entity for short-term financing shall not exceed 20% and 10% of the net worth of the Company.
Note 3: According to the “Procedures for Lending Funds to Other Parties” established by the subsidiaries, the aggregate lending amount and the amount lending to any individual entity having business relationship with the Company shall not exceed the total transaction amount between the parties during the period of 12 months prior to the time of lending and shall not exceed 20% of the net worth of the Company. The aggregate lending amount and the amount lending to any individual entity for short-term financing shall not exceed 20% and 10% of the net worth of the Company.
60 -

TABLE 2

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorsement/Guarantee Provider	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/Guarant ee Amount Provided to Each Guaranteed Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/Guaran tee Collateralized by Properties	Ratio of Accumulated Endorsement /Guarantee to Net Equity per Latest Financial Statements (%)	Maximum Endorsement/Guarant ee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0 0 0 0 0 0 0 0 0	Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd.	Tongtai Machine Tool (SEA) Sdn. Bhd. PCI-SCEMM Union Top Industrial (Samoa) Limited Mbi-group Beteilingung GmbH Anger Machining GmbH Asia Pacific Elite Corp. Tongan GmbH Tong-Yeh Precision Co., Ltd. Quick-Tech Machinery Co., Ltd.	The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company The Company owns directly or indirectly over 50% ownership of the investee company	$ 1,509,370 1,509,370 1,509,370 1,509,370 1,509,370 1,509,370 1,509,370 1,509,370 1,509,370	$ 28,535 30,933 494,838 68,740 649,593 245,000 17,185 10,000 201,780	$ 27,680 - 427,102 52,994 488,905 235,000 15,660 10,000 190,360	$ - - 361,778 40,351 401,013 60,000 15,660 2,800 20,634	$ - - - - - - - - -	0.55 - 8.49 1.05 9.72 4.67 0.31 0.20 3.78	$ 2,515,617 2,515,617 2,515,617 2,515,617 2,515,617 2,515,617 2,515,617 2,515,617 2,515,617	Y Y Y Y Y Y Y Y Y	- - - - - - - - -	- - - - - - - - -

Note: According to the “Procedures for Making Endorsements and Guarantees” established by the Company, the ceilings on the amounts to make endorsements/guarantees are as follows,

For Tongtai Machine & Tool Co., Ltd.,
(1) The ceilings on the amounts for the aggregate amounts to the entities shall not exceed 50%of the net worth of the Company.
(2) The ceilings on the amounts for any individual entity to the entities shall not exceed 30% of the net worth of the Company.
For Tongtai Machine & Tool Co., Ltd. and subsidiaries,
(1) The ceilings on the amounts for the aggregate amounts to the entities shall not exceed 50%of the net worth of the Company.
(2) The ceilings on the amounts for any individual entity to the entities shall not exceed 30% of the net worth of the Company.
(3) Except for (1) and (3), the total amount of endorsement/guarantee provided by the Company to any individual entity deriving from business relations shall not exceed the total business amount between such party and the Company for the twelve-month period immediately before the extension of endorsement/guarantee (the business amount refers to purchase amount or sales amount of the goods between the parties, whichever is higher)

61 -

TABLE 3

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2021

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

Held Company Name	Type and Name of Marketable Securities	Relationship with The Company	Financial Statement Account		DECEMBER	DECEMBER	31, 2021			Note
				Shares/Units	Carrying Value		Percentage of Ownership (%)		Fair Value
Tongtai Machine & Tool Co., Ltd.	Common stock Contrel Technology Co., Ltd. SHIANG JEN CO., LTD. World Known MFG (Cayman) Limited USYNC INC. WORLD KNOWN MFG. CO., LTD. Mutual funds Cathay Asia-Pacific Income Balanced Fund	Same president The held company as its director - - - -	Financial assets at fair value through other comprehensive income – non-current Financial assets at fair value through other comprehensive income – non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current	6,849,178 1,520,000 280,000 295,371 229,729 2,105,263		$ 149,312 16,667 9,884 12,521 6,147 $ 194,531 $ 26,963			$ 149,312 16,667 9,884 12,521 6,147 $ 194,531 $ 26,963

62 -

TABLE 4

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer(Seller)	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/Sale	Purchase/Sale Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Tongtai Machine & Tool Co., Ltd.	Suzhou Tongyu Machine Tool Co., Ltd. Asia Pacific Elite Corp. Quick-Tech Machinery Co., Ltd. Tongfong Auto Tech Co., Ltd. SHIANG JEN CO., LTD.	Subsidiary Subsidiary Subsidiary Subsidiary Other related parties	Sales Sales Sales Purchases Purchases	( $ 622,420 ) ( 210,182 ) ( 153,982 ) 137,100 106,444	( 6 ) ( 2 ) ( 2 ) 2 1	Comparable with ones of non-related party transactions Comparable with ones of non-related party transactions Comparable with ones of non-related party transactions Comparable with ones of non-related party transactions Comparable with ones of non-related party transactions	$ - - - - -	- - - - -	$ 266,367 12,065 19,280 ( 54,252 ) ( 46,692 )	8 - 1 ( 3 ) ( 3 )

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TABLE 5

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2021

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

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Tongtai Machine & Tool Co., Ltd.	Suzhou Tongyu Machine Tool Co., Ltd. Anger Machining GmbH	Subsidiary Subsidiary	$ 399,146 (Note 1) 254,006 (Note 2)	2.3 0.96	$ - -	- -	$ 168,226 227,383	$ - -

Note 1: Including accounts receivable amounted of NT$266,367 thousand and other receivable amounted of NT$132,779 thousand. Other receivable was excluded in the calculation turnover rate. Note 1: Including accounts receivable amounted of NT$1,490 thousand and other receivable amounted of NT$252,516 thousand. Other receivable was excluded in the calculation turnover rate.

64 -

TABLE 6

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Tongtai Machine & Tool Co., Ltd. Union Top Industrial (Samoa) Limited Chin-Jig Technology Co., Ltd. PCI-SCEMM Tongan GmbH Mbi-group Beteiligung GmbH Mbi-group Beteiligung GmbH Anger Machining GmbH Anger Machining GmbH Tongtai Machine & Tool Japan Co., Ltd.	Tongfong Auto Tech Co., Ltd. Asia Pacific Elite Corp. Quick-Tech Machinery Co., Ltd. Honor Seiki Co., Ltd. Tong-Yeh Precision Co., Ltd. Chin-Jig Technology Co., Ltd. Tongtai Machine & Tool Japan Co., Ltd. Tong Tai Machinery Co., Ltd. Tongtai Seiki Vietnam Co., Ltd. Tongtai Machine Tool (SEA) Sdn. Bhd. Tongtai Machine Tool (MFG) Sdn. Bhd. Tong-Tai Seiki USA, Inc. Tongtai Mexico, S.A. DE C.V. PCI-SCEMM Tongtai Europe B.V. Union Top Industrial (Samoa) Limited Tongan GmbH Cyber Laser Taiwan Co., Ltd. Printin3d DigiTech Co., Ltd. Great Pursuit Limited Time Trade Internation Limited TTGroup France Mbi-group Beteiligung GmbH HPC Produktions GmbH Anger Machining GmbH Anger Machining Inc. Anger Service Deutschland GmbH SKTD Co., Ltd.	Kaohsiung City Taichung City Tainan City Kaohsiung City Kaohsiung City Taipei City Japan Thailand Vietnam Malaysia Malaysia USA Mexico France Netherlands Samoa Austrian Tainan City Taoyuan City Samoa Samoa France Austrian Austrian Austrian USA Germany Japan	Sales of electric automation equipment Sales and manufacturing of equipment Sales and manufacturing of equipment Sales and manufacturing of equipment Sales of electric automation equipment Sales of mold and equipment Sales and manufacturing of equipment Sales of customized machine Sales of customized machine Sales of customized machine Sales and manufacturing of equipment Sales of merchandise Sales and maintenance of machine tools Sales, manufacturing and maintenance of machine tools Sales of merchandise General investment General investment Machine and manufacturing of electronic component Development of 3D printer of digital Implantology General investment General investment Sales of merchandise General investment Sales of mold and equipment Sales, manufacturing and maintenance of machine tools Sales and maintenance of machine tools Sales and maintenance of machine tools Design and development of machine tools	$ 14,005 409,240 197,989 106,721 14,521 27,990 31,561 5,854 9,054 5,107 71,952 71,667 10,155 182,200 96,221 560,867 597,771 20,000 10,000 40,054 32,771 1,076 611,202 1,215 $ 595,855 122 868 23,203	$ 13,974 409,238 80,582 100,731 14,476 27,971 31,561 5,854 9,054 5,107 71,952 71,667 10,155 182,200 96,221 560,867 597,771 20,000 10,000 40,054 32,771 1,076 611,202 1,215 $ 595,855 122 868 23,203	1,500,000 14,515,634 11,896,891 22,108,109 1,054,482 2,800,000 889 999,998 631,080 520,000 8,500,000 100 65,999 1,000,000 9,000 16,465,400 35,000 2,000,000 1,000,000 - - 30,000 - - - 60,000 - 780	100.00 100.00 100.00 54.00 60.00 70.00 100.00 100.00 100.00 52.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 33.00 40.00 55.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.00	$ 45,617 142,234 13,378 562,948 27,093 44,040 19,834 20,531 20,118 9,288 34,890 4,818 6,541 357,009 ( 38,726 ) 1,065,244 ( 287,291 ) - 7,897 - 25,782 494 ( 227,190 ) 61,321 ( $ 242,039 ) 1,680 1,638 14,435	$ 14,250 46,565 ( 98,206 ) 63,967 ( 2,899 ) ( 10,884 ) ( 106 ) ( 2,653 ) 2,266 1,216 ( 897 ) ( 139 ) ( 190 ) ( 14,764 ) ( 14,718 ) 84,118 ( 117,722 ) - 316 - ( 6,261 ) ( 1,184 ) ( 119,067 ) 4,612 ( $ 123,885 ) 5,592 440 ( 290 )	$ 14,243 47,517 ( 51,401 ) 34,689 ( 1,741 ) ( 7,618 ) ( 106 ) ( 2,653 ) 2,266 632 ( 897 ) ( 139 ) ( 190 ) ( 14,764 ) ( 14,718 ) 84,118 ( 117,722 ) - 126 - ( 6,261 ) ( 1,184 ) ( 117,339 ) 4,612 ( $ 123,885 ) 5,592 440 ( 287 )

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TABLE 7

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 2)	Method of Investment (Note 2)	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Remittance of Funds (Note 1)	Remittance of Funds (Note 1)	Remittance of Funds (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2021(Note 1)	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) `（`Note 2`）`	Carrying Amount as of December 31, 2021	Accumulated Repatriation of Investment Income as of December 31, 2021
							Outward		Inward
Tong-Yu Machine Tool (Shanghai) Co., Ltd. Suzhou Tongyu Machine Tool Co., Ltd. Shanghai Tong-Tai-Shin Trading Co., Ltd. Hao-Tern-Shin Electronics (Shenzhen) Co., Ltd. Chin-Jig Precision Machine (Shanghai) Co., Ltd.	Sales and maintenance of machine tools Manufacturing of digital control machine and system International trade Sales and manufacturing of printed circuit board Sales and manufacturing of mold and equipment		$ 66,653 692,000 5,536 69,200 15,224	Investments through a holding company registered in a third region Investments through a holding company registered in a third region Investments through a holding company registered in a third region Investments through a holding company registered in a third region Investments through a holding company registered in a third region		$ 66,653 692,000 5,536 38,059 15,224	$		$	$ 66,653 692,000 5,536 38,059 15,224	( $ 4,896 ) 95,418 ( 281 ) - ( 6,261 )	100.00 100.00 100.00 55.00 70.00	( $ 4,896 ) 95,418 ( 281 ) - ( 4,383 )	$ 94,207 1,231,614 9,362 - 15,123	$ - 53,223 8,972 - 47,997

Investee Company		Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2021(Note 1)			Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA(Note 3)
The Company Chin-Jig Technology Co., Ltd.		$ 802,248 15,224			$ 802,248 15,224			$ 3,018,740 37,749

Note 1: The amounts were calculated based on the foreign exchange rate as of December 31, 2021. Note 2: The basis for recognition of investment income (loss) is based on the financial statements reviewed and attested by R.O.C. parent company’s CPA. Note 3: The limit on investment in Mainland China pursuant to “Principle of investment or Technical Cooperation in Mainland China” shall not exceed 60% of their net worth.

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TABLE 8

TONGTAI MACHINE & TOOL CO., LTD. INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2021

Name of The Major Shareholder	Shares	Shares
	Number of Shares Owned(shares)	Percentage of Ownership (%)
San Shin Investment Co., Ltd.	20,776,889	8.15

Note 1: Major shareholders in the Table above are shareholders owning 5% or more of the Company’s common shares (only ones that have completed dematerialized registration and delivery) based on calculations performed by the Taiwan Depository & Clearing Corporation using data as of the last business date at the end of each quarter.
Note 2: Where the stocks are entrusted by shareholders, information is disclosed by the individual account of settlor who has segregated trust accounts opened by trustees. As for shareholders filing shareholdings of insiders with 10% or more of the Company’s stocks pursuant to the securities and exchange laws and regulations, the number of stocks owned shall be ones owned by the persons plus ones entrusted where the shareholders have the power to decide how to utilize the trust property. Please access the Market Observation Post System website for information on insiders’ shareholding filings.
67 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM

STATEMENT INDEX

ITEM	STATEMENT I
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH	Note 7
PROFIT OR LOSS - CURRENT
STATEMENT OF NOTES RECEIVABLES AND LONG-TERM NOTES	2
RECEIVABLES
STATEMENT OF ACCOUNTS RECEIVABLES	3
STATEMENT OF OTHER RECEIVABLES	4
STATEMENT OF INVENTORIES	5
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT	6
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR	7
USING EQUITY METHOD
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 13
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF	Note 13
PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	Note 14
STATEMENT OF CHANGES IN ACCUMULATEDDEPRECIATION OF	Note 14
RIGHT-OF-USE ASSETS
STATEMENT OF CHANGES IN INVESTMENT PROPERTIES	Note 15
STATEMENT OF CHANGES IN ACCUMULATED DPRECIATION OF	Note 15
INVESTMENT PROPERTIES
STATEMENT OF CHANGES IN COMPUTER SOFTWARE	Note 16
STATEMENT OF DEFERRED TAX ASSETS	Note 25
STATEMENT OF OTHER FINANCIAL ASSETS	8
STATEMENT OF SHORT-TERM BORROWINGS	9
STATEMENT OF SHORT-TERM BILLS PAYABLE	Note 17
STATEMENT OF FINANCIAL LIABILITIES AT FAIR VALUE THROUGH	Note 7
PROFIT OR LOSS - CURRENT
STATEMENT OF CONTRACT LIABILITIES - CURRENT	10
STATEMENT OF ACCOUNTS PAYABLE	11
STATEMENT OF OTHER PAYABLES	Note 19
STATEMENT OF PROVISIONS	Note 20
STATEMENT OF LONG-TERM BORROWINGS	12
STATEMENT OF LEASE LIABILITIES	13
STATEMENT OF DEFERRED TAX LIABILITIES	Note 25
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF OPERATING REVENUES	14
STATEMENT OF OPERATING COSTS	15
STATEMENT OF OPERATING EXPENSES	16
STATEMENT OF OTHER GAINS AND LOSSES	Note 24
STATEMENT OF FINANCE COST	Note 24
STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND	17
AMORTIZATION

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STATEMENT 1

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Cash on hand Bank deposits in New Taiwan dollar Checking accounts Demand deposits Foreign currency deposits (Note) USD 3,955 thousand CNY 6,235 thousand EUR 461 thousand JPY 53,374 thousand GBP 280 thousand Cash equivalents E.SUN Bank - CNY time deposit amounted of CNY 6,000 thousand with annual interest rate 2.85% and maturity date at 2022.01.21 E.SUN Bank - CNY time deposit amounted of CNY 5,000 thousand with annual interest rate 2.6% and maturity date at 2022.01.18 E.SUN Bank - USD time deposit amounted of USD 1,000 thousand with annual interest rate 0.22% and maturity date at 2022.01.26		Amount
		$ 1,247 93 356,058 356,151 109,452 27,085 14,425 12,837 10,433 174,232 530,383 26,064 21,720 27,680 75,464 $ 607,094

Note: US$1=NT$27.68, CNY1=NT$4.344, JPY1=NT$0.2405, EUR 1=NT$31.32 and GBP 1= NT$37.30.

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STATEMENT 2

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF NOTES RECEIVABLES AND LONG-TERM NOTES RECEIVABLES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Customer Name Notes receivable Non-Related Parties Company C Company D Company E Others (Note) Less: Unrealized interest revenue Related Parties Asia Pacific Elite Corp. Tong-Yeh Precision Co., Ltd. Quick-Tech Machinery Co., Ltd. Long-term notes receivable Company C Others (Note)		Amount
		$ 58,590 8,365 8,171 60,166 135,292 1,628 $ 133,664 $ 1,957 1,548 44 $ 3,549 $ 35,398 1,622 $ 37,020

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

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STATEMENT 3

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF ACCOUNTS RECEIVABLES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Customer Name Non-Related Parties Company A Company B Company F Others (Note) Less: Allowance for impairment loss Related Parties Suzhou Tongyu Machine Tool Co., Ltd. Others (Note)		Amount $ 442,999 256,587 82,788 506,679 1,289,053 137,729 $ 1,151,324 $ 266,367 65,448 $ 331,815	Note
			Sale of goods Sale of goods Sale of goods Sale of goods and maintenance services

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

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STATEMENT 4

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF OTHER RECEIVABLES DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Item Non-Related Parties Tax refund receivable Others (Note) Related Parties Receivable from financing provided to others Others (Note)	Amount
	$ 6,042 3,019 $ 9,061 $ 501,362 12,672 $ 514,034

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

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STATEMENT 5

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF INVENTORIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

==> picture [444 x 159] intentionally omitted <==

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

Amount
Carrying Value Net Realizable Value
Item (Note 1) (Note 2)
Raw materials $ 1,284,669 $ 1,327,988
Supplies 147,768 150,446
Work-in-progress 716,524 1,069,556
Finished goods 552,045 715,289
$ 2,701,006 $ 3,263,279
----- End of picture text -----

Note 1: Net carrying value with a deduction of allowance for loss on inventory value decline of inventories amounted of NT$584,757 thousand.
Note 2: Refer to Note 4 for information of net realizable value.
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STATEMENT 6

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Balance, January 1, 2021 Shares Fair Value 6,849,178 $ 103,422 280,000 10,416 1,520,000 16,003 295,371 10,382 229,729 5,980 $ 146,203	Additions Shares Fair Value - $ 45,890 - - - 664 - 2,139 - 167 $ 48,860	Decrease Shares Fair Value - $ - - ( 532 ) - - - - - - ($ 532)	Balance, December 31, 2021 Fair Value Shares (Note 1) 6,849,178 $ 149,312 280,000 9,884 1,520,000 16,667 295,371 12,521 229,729 6,147 $ 194,531
			Shares 6,849,178 280,000 1,520,000 295,371 229,729
Shares 6,849,178 280,000 1,520,000 295,371 229,729	Shares - - - - -	Shares - - - - -

Note 1: Fair values are measured on the basis of the closing price on the balance sheet date or measured using the valuation techniques in Note 30.

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STATEMENT 7

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investments in subsidiaries Tongfong Auto Tech Co., Ltd. Asia Pacific Elite Corp. Quick-Tech Machinery Co., Ltd. Honor Seiki Co., Ltd. Tong-Yeh Precision Co., Ltd. Chin-Jig Technology Co., Ltd. Tongtai Machine & Tool Japan Co., Ltd. Tong Tai Machinery Co., Ltd. Tongtai Seiki Vietnam Co., Ltd. Tongtai Machine Tool (SEA) Sdn. Bhd. Tongtai Machine Tool (MFG) Sdn. Bhd. Tong-Tai Seiki USA, Inc. Tongtai Mexico, S.A. DE C. V. Process Conception Ingenierie-Societe de Construction D' equipments, De Mecanisations Et De Machines Tongtai Europe B.V. Union Top Industrial (Samoa) Limited Tongan GmbH Accumulated impairment Asia Pacific Elite Corp. Quick-Tech Machinery Co., Ltd. Add: Credit balance for investments accounted for using the equity method Investments in associates Cyber Laser Taiwan Co., Ltd. Printin3d DigiTech Co., Ltd. Accumulated impairment- Cyber Laser Taiwan Co., Ltd.	Balance, January 1, 2021 Shares Amount 1,499,000 $ 46,336 14,515,414 112,001 6,238,800 8,786 18,253,424 530,328 1,052,898 29,851 2,799,000 52,034 889 22,901 999,998 26,378 631,080 16,509 520,000 9,261 8,500,000 38,216 100 5,099 65,999 7,126 1,000,000 414,776 9,000 ( 30,644 ) 16,465,400 989,528 35,000 ( 196,835) 2,081,651 ( 17,286 ) ( 11,989 ) 227,479 2,279,855 2,000,000 7,841 1,000,000 7,771 15,612 ( 7,841) 7,771 $ 2,287,626	Balance, January 1, 2021 Shares Amount 1,499,000 $ 46,336 14,515,414 112,001 6,238,800 8,786 18,253,424 530,328 1,052,898 29,851 2,799,000 52,034 889 22,901 999,998 26,378 631,080 16,509 520,000 9,261 8,500,000 38,216 100 5,099 65,999 7,126 1,000,000 414,776 9,000 ( 30,644 ) 16,465,400 989,528 35,000 ( 196,835) 2,081,651 ( 17,286 ) ( 11,989 ) 227,479 2,279,855 2,000,000 7,841 1,000,000 7,771 15,612 ( 7,841) 7,771 $ 2,287,626	Additions Shares Amount 1,000 $ - 220 47,519 5,658,091 16,581 3,854,685 32,620 1,584 - 1,000 - - - - - - 3,609 - 27 - - - - - - - - - - - 75,716 - - 179,953 - - 98,538 278,491 - - - 126 126 - 126 $ 278,617	Additions Shares Amount 1,000 $ - 220 47,519 5,658,091 16,581 3,854,685 32,620 1,584 - 1,000 - - - - - - 3,609 - 27 - - - - - - - - - - - 75,716 - - 179,953 - - 98,538 278,491 - - - 126 126 - 126 $ 278,617	Decrease Shares Amount - ( $ 719 ) - - - - - - - ( 2,758 ) - ( 7,994 ) - ( 3,067 ) - ( 5,847 ) - - - - - ( 3,326 ) - ( 281 ) - ( 585 ) - ( 57,767 ) - ( 8,082 ) - - - ( 90,456) ( 180,882 ) - - - ( 180,882) - - - - - - 126 ($ 180,882)	Decrease Shares Amount - ( $ 719 ) - - - - - - - ( 2,758 ) - ( 7,994 ) - ( 3,067 ) - ( 5,847 ) - - - - - ( 3,326 ) - ( 281 ) - ( 585 ) - ( 57,767 ) - ( 8,082 ) - - - ( 90,456) ( 180,882 ) - - - ( 180,882) - - - - - - 126 ($ 180,882)		Balance, December	Balance, December	31,	2021 Amount $ 45,617 159,520 25,367 562,948 27,093 44,040 19,834 20,531 20,118 9,288 34,890 4,818 6,541 357,009 38,726 ) 1,065,244 287,291) 2,076,841 17,286 ) 11,989 ) 326,017 2,373,583 7,841 7,897 15,738 7,841) 7,897 $ 2,381,480
	Shares 1,499,000 14,515,414 6,238,800 18,253,424 1,052,898 2,799,000 889 999,998 631,080 520,000 8,500,000 100 65,999 1,000,000 9,000 16,465,400 35,000 2,000,000 1,000,000		Shares 1,000 220 5,658,091 3,854,685 1,584 1,000 - - - - - - - - - - - - -		Shares - - - - - - - - - - - - - - - - - - -		Shares 1,500,000 14,515,634 11,896,891 22,108,109 1,054,482 2,800,000 889 999,998 631,080 520,000 8,500,000 100 65,999 1,000,000 9,000 16,465,400 35,000 2,000,000 1,000,000		% of Owners hip 100 99.83 99.14 54.47 60.09 70 100 100 100 52 100 100 100 100 100 100 100 33 40			Unit Price $ 30.41 10.07 1.82 30.51 25.69 15.73 22,310.46 20.53 31.88 17.86 4.10 48,180 99.11 357.01 ( 3,914.00 ) 65.56 ( 8,208.31 ) 5.5 4.7
		( ( ( ( (				( ( ( ( ( ( ( ( ( ( ( ( ( (				( ( ( ( (			( (

Note: Except for increase or decrease in investment, the change in the current year was mainly from the elimination of unrealized profit or loss from downstream transactions, gain and loss from investment, adjustments in equity from investments and dividends received.

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STATEMENT 8

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF OTHER FINANCIAL ASSETS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Bank Name Interest Rates (%) Current HSBC - Time deposits 2.3 HSBC - Time deposits 2.2 Noncurrent Bank of Taiwan - Time deposit 0.755 Bank of Taiwan - Time deposit 0.755 CTBC Bank - Time deposit 0.12 CTBC Bank - Time deposit 0.05 E.SUN Bank - Time deposit 0.04	Period 2021.12.03`～`2022.03.03 2021.07.19`～`2022.01.19 2021.07.01`～`2022.07.01 2021.07.02`～`2022.07.02 2021.12.22`～`2022.03.22 2021.12.28`～`2022.03.28 2021.12.24`～`2022.03.24	Amount $ 6,516 4,344 $ 10,860 $ 4,000 4,068 22,144 45,000 17,000 $ 92,212	Note
			Note 1 Note 1 Note 2 Note 2 Note 3 Note 3 Note 3

Note 1: Deposit due to bank guarantee for subsidiary, Anger.

Note 2: Deposit due to lease of land.

Note 3: Deposit due to loan for subsidiary, Anger.

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STATEMENT 9

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Type Unsecured loans First Commercial Bank Shanghai Commercial & Savings Bank Taishin International Bank Bank of Taiwan Mega Bank Cathay Bank Mizuho Bank DBS Bank Yuanta Commercial Bank	Contract Period 2021.10.26`～`2022.03.30 2021.12.03`～`2022.01.07 2021.12.24`～`2022.01.24 2021.10.08`～`2022.03.15 2021.10.20`～`2022.04.23 2021.12.24`～`2022.01.22 2021.09.17`～`2022.03.17 2021.08.26`～`2022.05.09 2021.12.03`～`2022.01.07	Range of Interest Rates(%) 0.95 0.90 0.98 0.90 0.90 0.89 0.90 0.65 0.95		Balance, End of Year $ 200,000 20,000 150,000 300,000 130,000 80,000 60,000 166,080 85,000 $ 1,191,080	Loan Commitments $ 500,000 200,000 250,000 300,000 188,400 80,000 300,000 276,800 200,000	Collateral None None None None None None None None None	Note
							- - - - Loan Commitment: NT$50,000 thousand and US$5,000 thousand - - Loan Commitment: US$10,000 thousand -

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STATEMENT 10

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF CONTRACT LIABILITIES - CURRENT DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Customer Name Company G Company H Company I Company J Company K Others (Note)	Amount
	$ 39,393 30,312 29,325 28,949 28,512 242,999 $ 399,490

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

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STATEMENT 11

TONGTAI MACHINE & TOOL CO., LTD

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

Vendor Name Non-related Parties ING CHYUAN INDUSTRIAL CO., LTD. MITSUBISHI ELECTRIC TAIWAN CO., LTD. TAICHUNG BRANCH THK TAIWAN CO., LTD. TAINAN OFFICE Others (Note) Related Parties Tongfong Auto Tech Co., Ltd. Shiang Jen Co., Ltd. San Shin Co., Ltd. Others (Note)	Amount
	$ 39,093 37,553 35,659 565,026 $ 677,331 $ 54,252 46,692 18,090 8,590 $ 127,624

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

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STATEMENT 12

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF LONG-TERM BORROWINGS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Bank Name Unsecured Loans Export-Import Bank of the Republic of China Export-Import Bank of the Republic of China Export-Import Bank of the Republic of China Mortgage loans Bank of Taiwan O-Bank Chang Hwa Bank	Contract Period and Repayment Method Repayable in June and October 2022 Repayable semiannually through March 2021 to September 2024 Repayable semiannually through March 2019 to September 2022 Repayable semiannually through December 2021 to June 2024 Repayable semiannually through April 2020 to October 2023 Repayable quarterly through October 2022 to July 2025	Interest Rates (%) 0.52 1.02 1.02 1.08 1.15 1.05		Balance, December 31,2021	Balance, December 31,2021	Balance, December 31,2021	Balance, December 31,2021	Total $ 350,000 55,000 180,000 585,000 650,000 99,000 400,000 1,149,000 $ 1,734,000	Collateral None None None Note Note Note	Note
				Current $ 350,000 55,000 60,000 465,000 100,000 99,000 33,333 232,333 $ 697,333		Over 1 Year $ - - 120,000 120,000 550,000 - 366,667 916,667 $ 1,036,667

Note: Refer to Note 32 for further information.

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STATEMENT 13

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Land Transportation Equipment Less: Current portion Lease liabilities-noncurrent	Object Note Lease of company cars	Period 2007.06`～` 2039.06 2019.03`～` 2024.12	Discount Rates(%) 2.16`～`2.48 0.69`～`1.42		Amount
					$ 478,922 4,484 14,166 $ 469,240

Note: Refer to Note 14 for lease content.

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STATEMENT 14

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF OPERATING REVENUES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Quantities (Number) Total Operating Revenues Revenue from sale of goods Machining Center 441 PCB Processing Machine 461 CNC Lathe 346 Others (Note) 44 Revenue from maintenance service Sales return and allowance Sales allowance ( Maintenance return and allowance (	Amount $ 1,298,477 1,330,399 900,968 327,051 3,856,895 369,844 4,226,739 3,018 ) 450) $ 4,223,271

Note: The amount of each item included in others does not exceed 10% of the account balance.

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STATEMENT 15

TONGTAI MACHINE & TOOL CO., LTD

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

Item Raw materials, beginning of year Raw material purchased Raw materials, end of year Transfer in from work-in-progress Sale of raw materials Others Raw materials used Supplies, beginning of year Supplies purchased Supplies, end of year Transfer in from work-in-progress Sale of supplies Others Supplies used Direct labor Manufacturing expenses Manufacturing cost Work in progress, beginning of year Work in progress, end of year Transfer in from finished goods Transfer out to raw materials Transfer out to supplies Transfer out to expense Total manufacturing cost Finished goods, beginning of year Transfer out to finished goods Finished goods, end of year Transfer out to work-in-progress Transfer out to fixed assets Total production cost Sale of raw materials and supplies Cost of goods sold Warranties cost Maintenance and repair cost Others Operating costs		Amount
	( ( ( ( ( ( ( ( ( ( ( (	$ 879,982 2,363,892 1,284,669 ) 76,588 74,981 ) 7,904) 1,952,908 144,422 341,783 147,768 ) 190,948 18,220) 511,165 248,608 344,227 3,056,908 686,550 716,524 ) 19,652 190,948 ) 76,588 ) 149,360) 2,629,690 751,753 4,028 3,379 552,045 ) 19,652 ) 9,875) 2,807,278 93,201 2,900,479 50,613 157,469 240,424 $ 3,348,985

Note: The inventories were stated as net carrying value with a deduction of allowance for loss on inventory value decline of inventories.

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STATEMENT 16

TONGTAI MACHINE & TOOL CO., LTD

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

Item Payroll expense (including pension and remuneration of director) After sales service expense Commission expense Import/export expense Sundry purchases expense Entertainment expense Depreciation expense Repairs and maintenance expense Reversal of expected credit loss Others		Selling Expenses $ 57,604 86,333 26,270 36,394 31,706 16,911 12,621 185 - 77,842 $ 345,866	General and Administrative Expenses $ 72,232 - - - 2,095 941 44,411 7,256 - 89,069 $ 216,004	Research and Development Expenses $ - - - - - - - - - 100,966 $ 100,966	Reversal of Expected Credit Loss $ - - - - - - - - ( 6,657 ) - ($ 6,657)		Total
					( (	(	$ 129,836 86,333 26,270 36,394 33,801 17,852 57,032 7,441 6,657 ) 267,877 $ 656,179

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STATEMENT 17

TONGTAI MACHINE & TOOL CO., LTD

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Employee benefits Salaries Labor and health insurance Post-employment benefits Remuneration of directors Others Depreciation Amortization	For the Year Ended	For the Year Ended	For the Year Ended	For the Year Ended	December 31, 2021 Classified as Others Total $ - $ 443,787 - 49,283 - 23,324 - 1,660 - 28,477 $ - $ 546,531 $ 10,994 $ 141,821 - 28,399	December 31, 2021 Classified as Others Total $ - $ 443,787 - 49,283 - 23,324 - 1,660 - 28,477 $ - $ 546,531 $ 10,994 $ 141,821 - 28,399	December 31, 2021 Classified as Others Total $ - $ 443,787 - 49,283 - 23,324 - 1,660 - 28,477 $ - $ 546,531 $ 10,994 $ 141,821 - 28,399	For the Year Ended	For the Year Ended	For the Year Ended	For the Year Ended	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
	Classified as Operating Costs		Classified as Operating Expenses		Classified as Others			Classified as Operating Costs		Classified as Operating Expenses		Classified as Others			Total
		$ 320,793 38,322 18,142 - 16,166 $ 393,423 $ 73,795 19,086		$ 122,994 10,961 5,182 1,660 12,311 $ 153,108 $ 57,032 9,313		$ - - - - - $ - $ 10,994 -			$ 326,355 38,022 19,689 - 17,382 $ 401,448 $ 75,761 23,311		$ 92,086 10,725 5,512 1,575 10,586 $ 120,484 $ 62,049 9,426		$ - - - - - $ - $ 11,044 -		$ 418,441 48,747 25,201 1,575 27,968 $ 521,932 $ 148,854 32,737

Note 1: As of December 31, 2021 and 2020, the Company had 715 and 771 employees, respectively, which included 11 and 10 non-employee directors, respectively.
Note 2: Average employee benefits for the years ended December 31, 2021 and 2020 were NT$774 thousand and NT$ 684 thousand, respectively.
Note 3: Average salaries for the years ended December 31, 2021 and 2020 were NT$630 thousand and NT$550 thousand, respectively.
Note 4: Changes of adjustments of average salaries was 15%.
Note 5: The Company has established an Audit Committee to replace supervisors.
Note 6: The Company's remuneration policies are as follows:

The remuneration of independent directors of the Company is set at NT$420 thousand per person per year and the Compensation Committee may adjust it at its discretion according to the value of its participation in and contribution to the Company’s operations.

The Articles of Incorporation of the Company stipulated the Company to distribute remuneration of directors at the rates no higher than 5% of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. After the board of directors resolved the amount of directors’ remuneration, the Compensation Committee will then make a distribution proposal based on the individual director’s participation in the Company’s operations and contribution value.

The salary of the Company’s managers is determined and regularly evaluated by the Compensation Committee based on Taiwan’s human resources market, industry categories of the same nature, and the value of the managers’ participation in and contribution to the Company’s operations. The remuneration of managers is based on the provisions of the Company’s Articles of Incorporation. If there is profit in any given fiscal year, it shall allocate at the rates no less than 1% of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. After the board of directors resolved the amount of employee compensation, the

85 -

Compensation Committee will then formulate a distribution proposal based on the manager’s personal and departmental performance achievement rate and the degree of important contribution to the Company, and the distribution will be distributed after the board of directors’ resolutions.

The Articles of Incorporation of the Company stipulated the Company to distribute employees’ compensation at the rates no less than 1% of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. After the board of directors resolved the amount of employee compensation, bonuses will be issued based on the results of the employees’ annual performance appraisal.

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AI assistant

TONGTAI — Audit Report / Information 2021

52398_rns_2021-11-22_7b553ab1-fd10-4295-8f1f-21d7dc3f534a.pdf

Tongtai Machine & Tool Co., Ltd.

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Inventory valuation

Other Matter

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

Auditors’ Responsibilities for the Audit of the Standalone Financial Statements

Notice to Readers

TONGTAI MACHINE & TOOL CO., LTD

STANDALONE BALANCE SHEETS DECEMBER 31, 2021 AND 2020

TONGTAI MACHINE & TOOL CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

TONGTAI MACHINE & TOOL CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

TONGTAI MACHINE & TOOL CO., LTD.

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

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

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

TONGTAI MACHINE & TOOL CO., LTD. AND SUBSIDIARIES

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

TONGTAI MACHINE & TOOL CO., LTD.

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

2) Investments in associates

g. Property, plant and equipment

1) Financial assets

i Financial asset at FVTPL

2) Equity instruments

1) The Company as lessor

2) The Company as lessee

2) Retirement benefits

q. Taxation

1) Current tax

2) Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. NOTES AND ACCOUNTS RECEIVABLE, LONG-TERM NOTES AND ACCOUNTS RECEIVABLE, AND OVERDUE RECEIVABLE, NET

December 31, 2021

9. INVENTORIES

10. FINANCIAL ASSETS AT FAIR VALUE THOUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

b. Investments in associates

12. OTHER FINANCIAL ASSETS

13. PROPERTY, PLANT AND EQUIPMENT

For the Year Ended December 31, 2020

14. LEASE ARRANGEMENTS

For the Year Ended December 31, 2020

b. Lease liabilities

15. INVESTMENT PROPERTIES

16. COMPUTER SOFTWARE

18. BORROWINGS

18. NOTES PAYABLE AND ACCOUNTS PAYABLE

19. OTHER PAYABLES

20. PROVISIONS

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

1) Investment risk

2) Interest risk

3) Salary risk

22. EQUITY

2) Unrealized gain and loss on financial assets at FVTOCI

23. OPERATING REVENUE

25. PROFIT (LOSS) BEFORE INCOME TAX

a. Other income

b. Other gains and losses

25. INCOME TAX

b. Income tax benefit recognized in other comprehensive income

For the Year Ended December 31, 2020

27. EARNINGS (LOSS) PER SHARE

TONGTAI Audit Report / Information 2021