UNITECH — Audit Report / Information 2021

Nov 15, 2021

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Stock Code:2367

Unitech Printed Circuit Board Corporation

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: No. 3, Lane 4, Zhongshan Road, Tucheng District, New Taipei City Telephone: (02)2268-5071

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. List of major account titles

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors of Unitech Printed Circuit Board Corporation:

Opinion

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

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

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the 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 Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the report of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Impairment assessment on non-financial assets

Please refer to note 4(m) “Summary of Significant Accounting Policies- Impairment of non-financial assets”, Note 5 (b) “ Major Sources of Accounting Judgements, Estimations and Assumptions of UncertaintyImpairment Assessment on non-financial Assets”, and note 6 (h), (i) and (j) “Description of Estimation of impairment of non-financial assets”.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Description of key audit matter:

The Company’s overall operation was affected by the epidemic, resulting in a risk which the impairment loss of non-financial assets and the recoverable amount of assets may be lower than the carrying value of assets. The valuation of the impairment loss of assets that are based on the cash flow in the future is subject to the management’s judgement. As a result, we need to evaluate the adequacy of the valuation. Therefore, the impairment assessment on non-financial assets is one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: Assessing the methodology and assumption used by management to determine whether the assets are impaired. Conducting retrospective testing to compare the historical forecast cash flows with actualities to find out if there is the significant difference. Performing sensitivity analysis for the key assumptions which are used in the impairment model with reference to historical forecast cash flows. Consulting with our internal valuation specialist to evaluate the appropriateness of the weighted average cost of capital applied.

2. Valuation of Inventories

Please refer to note 4 (g) “Summary of Accounting Policies- Inventories”, note 5 (a) “Major Sources of Accounting Judgements, Estimations and Assumptions of Uncertainty- Valuation of inventories”, and note 6 (e) “Situation of allocate the impairment of inventories”.

Description of key audit matter:

Inventories are measured by the lower of cost and net realizable value accounting. Due to the rapid change of terminal product market, the clients’ intention about placing and changing orders for products could be affected. Furthermore, the rapid change also resulted in a risk in which the carrying value of inventories may be higher than its net realizable value, and caused the obsolete stock. Therefore, the valuation of inventories is one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: Evaluating the rationality of the policy of making provision to inventories impairment, evaluating the assumption of allowance for inventory valuation of the authorities, and the situation of obsolescence of inventory that has happened in prior periods; confirming whether the Company has undertaken the inventory valuation based on the policy; inspecting the inventory aging report and analyzing the difference in the inventory aging in comparison to prior periods. Understanding and evaluating the management’ s judgment on the calculation of the net realizable value; testing the appropriateness of the inventory valuation, evaluating the management's calculations of allowance for inventory loss to ensure their appropriateness and considering the adequacy of the Company’s disclosures in allowance for inventory valuation.

Other Matter

Part of the Company’s investee companies were accounted for by using the equity method based on its financial statements which were audited by other auditors. Our opinion, insofar as it relates to the Company’s investee companies are based solely on the report of other auditors. As of December 31, 2021 and 2020, the total assets of investee companies which constituted 6.26% and 6.07% of the Company’s total assets, respectively. For the years ended December 31, 2021 and 2020, the profit or loss of subsidiaries and affiliated companies accounted for by using the equity method which constituted (23.88)% and 4.13% of the income which the Company recognized before income tax, respectively.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the 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 or supervisors) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

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

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

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 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.

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

2. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Chuang Chun Wei and Hsu Ming Fang.

KPMG

Taipei, Taiwan (Republic of China) March 30, 2022

Notes to Readers

The accompanying parent company only financial statements are intended only to present the statement of financial position, financial performance and its cash flows in accordance with the 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollar)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1170 Accounts receivable, net (note 6(c)) 1180 Accounts receivable-related parties (note 7) 1200 Other receivables, net (note 6(d)) 1210 Other receivables-related parties, net (note 7) 1220 Current tax assets 1310 Inventories (note 6(e)) 1410 Prepayments 1476 Other financial assets-current (note 7 and 8) 1479 Other current assets, others Total current assets Non-current assets: 1517 Financial assets at fair value through other comprehensive income non- current (note 6(b)) 1550 Investments accounted for using equity method, net (note 6(f)(g)) 1600 Property, plant and equipment (note 6(h) and 8) 1755 Right-of-use assets (note 6(i)) 1780 Intangible assets (note 6(j)) 1840 Deferred tax assets (note 6(p)) 1915 Prepayments for business facilities (note 9) 1920 Refundable deposits (note8 and 9) 1990 Other non-current assets, others (note 9) Total non-current assets Total assets	December 31, 2021 Amount % $ 280,886 1 3,582,633 18 3,376 - 30,921 - 594 - 400 - 1,649,469 9 47,363 - 4,134 - 10,702 - 5,610,478 28 452,200 2 4,986,411 27 7,480,433 39 378,543 2 112,671 1 280,000 1 20,629 - 52,189 - 8,725 - 13,771,801 72 $ 19,382,279 100	December 31, 2020 Amount % 737,633 4 3,586,864 19 1,969 - - - 571 - 391 - 1,454,912 8 71,176 - 52,170 - 14,340 - 5,920,026 31 467,567 2 3,638,739 20 8,119,298 43 474,396 2 108,442 1 160,000 1 80,575 - 61,612 - 12,097 - 13,122,726 69 19,042,752 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(k)) 2110 Short-term notes and bills payable (note 6(l) and 8) 2170 Accounts payable 2180 Accounts payable-related parties (note 7) 2200 Other payables 2220 Other payables-related parties (note 7) 2280 Current Lease liabilities (note 6(n)) 2322 Current portion of long-term borrowings (note 6(m) and 8) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (note 6(m) and 8) 2570 Deferred tax liabilities (note 6(p)) 2580 Non current lease liabilities (note 6(n)) 2640 Net defined benefit liability, non-current (note 6(o)) Total non-current liabilities Total liabilities Equity (note 6(q)): 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Total retained earnings Other equity: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income 3445 Gains (losses) on remeasurements of defined benefit 3491 Other equity, the unearned remuneration of employees Total other equity Total equity Total liabilities and equity	December 31, 2021		December 31, 2020 Amount % 172,631 - 69,991 1 2,194,188 12 849,074 4 1,006,939 5 6,897 - 99,462 1 694,500 4 8,371 - 5,102,053 27 3,472,500 18 176,350 1 407,326 2 212,723 1 4,268,899 22 9,370,952 49 6,194,072 33 2,843,140 15 306,606 2 174,327 1 64,399 - 545,332 3 41,694 - 232,996 1 (182,812) (1) (2,622) - 89,256 - 9,671,800 51 19,042,752 100
			Amount %
			$ 411,146 2 - - 1,761,521 9 973,031 5 816,409 4 8,376 - 112,144 1 1,021,000 5 7,897 - 5,111,524 26 4,131,500 21 174,534 1 309,785 2 161,693 1 4,777,512 25 9,889,036 51 6,194,072 32 2,833,418 15 306,606 2 - - 386 - 306,992 2 33,030 - 306,303 1 (180,238) (1) (334) - 158,761 - 9,493,243 49 $ 19,382,279 100

$ 19,382,279 100 19,042,752 100

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

Unitech Printed Circuit Board Corporation

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

4000 Operating revenue, net (note 6(s) and 7) 5110 Cost of sales (note 6(e)(o) and 7) Gross loss from operations Operating expenses: 6100 Selling expenses and administrative expenses (note 6(o) and 7) 6300 Research and development expenses (note 6(o)) 6450 Expected credit loss (note 6(c)) Total operating expenses Net operating loss Non-operating income and expenses (note 6(f)(g)(u) and 7): 7100 Interest income 7010 Other income 7020 Other gains and losses, net 7050 Finance costs,net (note 6(h)) 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method, net 7670 Impairment loss (note 6(h)) Total non-operating income and expenses Loss from continuing operations before tax 7950 Less: Income tax expenses (note 6(p)) Loss 8300 Other comprehensive income: 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss Items that may not be reclassified subsequently to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences (on translation of foreign financial statements) Items that may be reclassified subsequently to profit or loss 8300 Other comprehensive loss, net of tax Total comprehensive income (loss) Basic earnings per share (NT dollars, note 6(r))	2021 Amount % $ 11,869,456 100 12,328,824 104 (459,368) (4) 1,128,547 10 64,470 - 12,467 - 1,205,484 10 (1,664,852) (14) 397 - 41,248 - (3,342) - (85,155) (1) 1,383,494 12 (26,194) - 1,310,448 11 (354,404) (3) (112,287) (1) (242,117) (2) 3,066 - 78,100 1 (752) - 80,414 1 (9,158) - (9,158) - 71,256 1 $ (170,861) (1) $ (0.39)	2020 Amount % 13,051,947 100 13,107,115 100 (55,168) - 1,240,391 10 76,590 1 - - 1,316,981 11 (1,372,149) (11) 4,468 - 403,273 3 (104,518) (1) (81,284) (1) (420,750) (3) - - (198,811) (2) (1,570,960) (13) (134,508) (1) (1,436,452) (12) 7,499 - 182,380 1 - - 189,879 1 64,067 - 64,067 - 253,946 1 (1,182,506) (11) (2.32)

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollar)

Balance at January 1, 2020 Profit (loss) for the year ended December 31, 2020 Other comprehensive loss for the year ended December 31, 2020 Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends on ordinary share Disposal of subsidiaries Changes in equity of associates and joint ventures accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020 Profit (loss) for the year ended December 31, 2021 Comprehensive loss for the year ended December 31, 2021 Total comprehensive income Appropriation and distribution of retained earnings: Reversal of special reserve Other changes in capital surplus Changes in equity of associates and joint ventures accounted for using equity method Disposal of investments accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2021	Ordinary shares		Capital surplus			Retained earnings	Retained earnings	Retained earnings	Retained earnings			Total other equity interest	Total other equity interest	Total other equity interest	Total other equity interest			Total equity
					Legal reserve		Special reserve		Unappropriated retained earnings	Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income			Gains (losses) on remeasurements of defined benefit		The remuneration of employees
	$ 6,194,072 - - - - - - - - - 6,194,072 - - - - - - - - $ 6,194,072		2,831,974		133,076		157,021		2,180,933		(37,584) - 64,067 64,067 - - - 15,211 - - 41,694 - (9,158) (9,158) - - - 494 - 33,030		53,104		(189,847) - 7,499 7,499 - - - (464) - - (182,812) - 2,314 2,314 - - - 260 - (180,238)		(7,543) - - - - - - - 4,921 - (2,622) - - - - - 2,233 55 - (334)	11,315,206
			- -		- -		- -						- 182,380					(1,436,452) 253,946
			-		-		-						182,380					(1,182,506)
			- - - 717 10,449 -		173,530 - - - - -		- 17,306 - - - -											- - (495,526) 15,464 21,650 (2,488)
					306,606 - -		174,327 - -											9,671,800 (242,117) 71,256
					-		-											(170,861)
					- - - - -													- 337 (10,459) 2,426 -
					306,606													9,493,243

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Statements of Cash Flows

For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollar)

Cash flows from operating activities: Loss before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Interest expense Interest revenue Dividend revenue Share of loss (profit) associates accounted for using equity method Loss on disposal of property, plan and equipment Gain on disposal of investments accounted for using equity method Impairment loss on non-financial assets Loss on disposal of subsidiaries Other items Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Accounts receivable Accounts receivable-related parties Other receivable Other receivable-related parties Inventories Prepayments Other current assets Other current financial assets Accounts payable Accounts payable-related parties Other payable Other payable- related parties Other current liabilities Net defined benefit liabilities Total adjustments	2021 $ (354,404) 1,199,969 18,866 12,467 85,155 (397) - (1,383,494) 195 (8,324) 26,194 - 21,480 (27,889) (8,236) (1,407) (30,921) (23) (194,557) 23,813 3,638 48,036 (432,983) 123,957 (153,563) 1,479 (137) (47,964) (696,757)	2020 (1,570,960) 1,393,052 14,016 - 81,284 (4,468) (3,918) 420,750 28 - - 25,137 727 1,926,608 991,782 (1,962) 34,575 11,838 395,487 1,883 7,849 328 10,145 449,940 (522,555) 1,121 (4,394) (72,376) 3,230,269

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Statements of Cash Flows

For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollar)

Cash inflow generated from (used in) operations Interest received Dividend received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Disposal of subsidiaries Decrease (increase) in other non-current assets Net cash flows from investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase (decrease) in short-term notes and bills payable Increase from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollar, Unless Otherwise Specified)

(1) Company history

Unitech Printed Circuit Board Corporation (the “Company”) was incorporated on December 31, 1984, with registered address of No. 3, Lane 4, Zhongshan Road, Tucheng District, New Taipei City, Taiwan, as a company limited by shares under the Company Act of the Republic of China (R.O.C.). The major business activities of Unitech Printed Circuit Board Corporation (“ the Company” ) are the design, manufacture and sale of PCB.

(2) Approval date and procedures of the financial statements:

The Parent company financial statements was authorized for issue by the Board of Directors on March 30, 2022.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from April 1, 2021:

• ●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• －

• ●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

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Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations 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”

Content of amendment Effective date per IASB The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. January 1, 2023 The key amendments to IAS 1 include: ●requiring companies to disclose their material accounting policies rather than their significant accounting policies; ●clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and ●clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’s financial statements. January 1, 2023 The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. January 1, 2023

(Continued)

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Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Standards or Interpretations Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Content of amendment Effective date per IASB The amendments narrowed the scope of the recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

• ●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” and amendments to IFRS 17 “ Insurance Contracts”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

• (a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

• (b) Basis of preparation

• (i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

• 1) Financial assets at fair value through other comprehensive income are measured at fair value;

• 2) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note (4) (p).

• (ii) Functional and presentation currency

The functional currency of each Company entity is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollar (NTD), which is the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

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Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(c) Foreign currencies

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(Continued)

12

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

• (d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period; or

• (iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non current.

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period; or

• (iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Company’ s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(f) Financial Instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

13

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL：

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

(Continued)

14

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

5)

Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivables), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• debt securities that are determined to have low credit risk at the reporting date； and

• other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

(Continued)

15

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Company considers a financial asset to be in default when the financial asset is more than one year past due or the debtor is unlikely to pay its credit obligations to the Company in full.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being more than 90 days past due;

• the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• it is probable that the borrower will enter bankruptcy or other financial reorganization；or

• the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

(Continued)

16

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

6) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(Continued)

17

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

(Continued)

18

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investment in subsidiaries

When preparing the financial statements of Parent company, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary 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 as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in a Parent's ownership interest in a subsidiary that do not result in the loss of control are accunted for within equity.

• (j) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

• 1) Buildings and constructions 15~55 years 2) Machinery equipment 3~12 years 3) Office equipment 3-5 years

• 4) Other equipment 3-5 years

(Continued)

19

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in-substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

(Continued)

20

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

• 4) there is a change of its assessment on whether it will exercise a extension or termination option; or

• 5) there is any lease modification

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of machinery that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

From January 1, 2021, when the basis for determining future lease payments changes as required by interest rate benchmark reform, the Company will remeasure the lease liability by discounting the revised lease payments using the revised discount rate that reflects the change to an alternative benchmark interest rate.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

(Continued)

21

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The Company recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

• (l) Intangible assets

• (i) Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

• (iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

• 1) Computer software 5~10 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(Continued)

22

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(n) Revenue recognition

• (i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

● Sale of goods

The Company design, manufacture and sale PCB. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’ s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

(Continued)

23

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

• Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

• Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

• Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

• 1) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;

• 2) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

• 3) the costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(Continued)

24

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(o) Government grants and government assistance

The Company recognizes an unconditional government grant related to a salary and operations in profit or loss as other income when the grant becomes receivable. Other Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

(p) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

• (ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

25

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• (ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entitie which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

26

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(r) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee compensation.

(s) Operating segments

The Company discloses the operating segment information in the consolidated financial statement. Therefore, the Company does not disclose the operating segment information in the parent-comapnyonly financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

• (a) Judgement of whether the Group has substantive control over its investees

The Group holds 13.47% of the outstanding voting shares of Fulltech Fiber Glass Corp. and is the single largest shareholder of the investee. Although the remaining 86.52% of Fulltech Fiber Glass Corp.’s shares are not concentrated within specific shareholders, the Group still cannot obtain more than half of the total number of Fulltech Fiber Glass Corp.’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on Fulltech Fiber Glass Corp.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) Valuation of inventories

Since inventory must be measured at the lower of cost and net realizable value, the combined company assesses the amount of inventory due to normal wear and tear, obsolescence, or no market sales value on the reporting date, and offsets the inventory cost to net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future, so there may be major changes due to rapid changes in the industry. Please refer to note 6 (e) for detailed inventory evaluation and estimation.

(Continued)

27

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(b) Impairment of property, plant and equipment, and intangible assets

In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Company is required to make subjective judgments in determining the independent cash flows, useful lives, expected future income and expenses related to the specific asset groups considering of the nature of the industry. Any changes in these estimates based on changed economic conditions or business strategies and could result in significant impairment charges or reversal in future years. Refer to note 6 (h), (i) and (j) for further description of the key assumptions used to determine the recoverable amount.

(6) Explanation of significant accounts

• (a) Cash and cash equivalents

Cash in stock Demand deposits	December 31, 2021 $ 620 280,266 $ 280,886	December 31, 2020
		674 736,959
		737,633

Please refer to note 6(v) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Company.

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

Unlisted common shares	December 31, 2021 $ 452,200	December 31, 2020
		467,567

• (i) Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes.

During 2021, the Company has sold its listed common shares held as a result of a takeover offer for cash. The shares sold had a fair value of $67,956 thousand and the Company realized a loss of $486 thousand, which was recognized as other comprehensive income, and thereafter, was reclassified to retained earnings.

There was no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2020.

• (ii) For credit risk (including the impairment of debt investments) and market risk, please refer to note 6 (v).

• (iii) As of December 31, 2021 and 2020， the financial assets at fair value through other comprehensive income of the Company had not been pledged as collateral for its borrowings.

(Continued)

28

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

• (c) Notes and trade receivables

Notes receivables–measured as amortized cost Less: Loss allowance	December 31, 2021 $ 3,605,556 (22,923) $ 3,582,633	December 31, 2020 3,597,320 (10,456) 3,586,864

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

Current 1 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than a year Current 1 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than a year	December 31, 2021	December 31, 2021
	Gross carrying amount Weighted-average loss rate $ 3,357,575 0.00% 208,381 0.02% 11,133 1.67% 20,396 71.46% 8,071 100.00% $ 3,605,556 December 31, 2020		Loss allowance provision
			42 48 186 14,576 8,071
			22,923
		Weighted-average loss rate 0.10% 1.68% 29.41% 72.75% 100.00%	Loss allowance provision
			3,426 2,337 1,432 2,486 775
			10,456

The movement in the allowance for trade receivables were as follows:

Balance at January 1 Impairment losses recognized Amounts written off Balance at December 31	For the years ended December 31 2021 2020 $ 10,456 31,210 12,467 - - (20,754) $ 22,923 10,456
	2021 $ 10,456 12,467 - $ 22,923

The aforementioned trade receivables of the Company had not been pledged as collateral for its borrowings.

(Continued)

29

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(d) Other receivables

Tax refund receivables

December 31, 2021 $ 30,921	December 31, 2020
	-

The company had no other receivables impairment as of December 31, 2021 and 2020.

• (e) Inventories

Raw materials and consumables Work in progress Finished goods Merchandise inventory Allowance to reduce inventory to market	December 31, 2021 $ 255,487 1,003,391 336,421 275,821 1,871,120 (221,651) $ 1,649,469	December 31, 2020 247,714 858,109 315,554 249,142 1,670,519 (215,607) 1,454,912

For the years ended December 31, 2021 and 2020, the Company recognized cost of sales and expense amounted to $12,322,780 thousand and $13,098,140 thousand, respectively. For the years ended December 31, 2021 and 2020, the amounts of loss on valuation of inventories was $6,044 thousand and $8,975 thousand, and recognized as cost of sales.

As of December 31, 2021 and 2020, the Company did not provide any inventories as collateral for its borrowings.

• (f) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

Subsidiary Associates	December 31, 2021 $ 4,986,411 - $ 4,986,411	December 31, 2020
		3,598,533 40,206
		3,638,739

• (i) Subsidiary

Please refer to Consolidated Financial statements, 2021.

(Continued)

30

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(ii) Associates

The Company’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity	December 31, 2021 $ -	December 31, 2020
		40,206

In 2021 and 2020, the Company’s share of the net income of associates was as follows:

Attributable to the Company: Profit (loss) from continuing operations Other comprehensive income Comprehensive income (loss)	2021 $ 420 164 $ 584	2020 (2,750) 983 (1,767)

(iii) Guarantee

As of December 31, 2021 and 2020, the Company did not provide any investments accounted as collateral for its borrowings.

(g) Loss control of subsidiaries

(i) Schmidt Scientific Taiwan Ltd.

The Company had sold 57.17% of its shares in Schmidt Scientific Taiwan Ltd. to a third party with a consideration of $18,943 thousand on January 15, 2020. The Company derecognized Schmidt Scientific Taiwan Ltd. from the date of disposal as its subsidiary. The Company derecognized the assets, liabilities and the related equity components of Schmidt Scientific Taiwan Ltd., and recognized a loss on disposal of $25,137 thousand, and recorded it as net gains (losses) on disposal of investment.

Loss of disposal also included the amount $15,464 thousand due to loss control of subsidiaries that reclassified from equity to net gains (losses).

The carrying amount of assets and liabilities of Schmidt Scientific Taiwan Ltd. on the date of disposal was as follow:

(Continued)

31

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Cash and cash equivalents	$	73,132
Note and trade receivables (Includes related parties)		45,171
Inventories		22,882
Other current assets		10,878
Non-current financial assets at fair value through other comprehensive
income		5,985
Property, plant and equipment		63,358
Deferred tax assets		61,662
Other non-current assets		8,423
Short-term borrowings		(36,000)
Note and Trade payables (Includes related parties)		(47,452)
Other current liabilities		(14,786)
Long-term borrowings		(11,391)
Deferred tax liabilities		(114,466)
Net defined benefit liabilities—non-current		(17,312)
Other non-current liabilities		(30)
Carrying amount of net assets	$	50,054

(h) Property, plant, and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2021 and 2020, were as follows:

Cost or deemed cost: Balance on January 1, 2021 Additions Disposal Reclassification Balance on December 31, 2021 Balance at January 1, 2020 Additions Disposal Reclassification Balance on December 31, 2020 Deprecation and impairments loss: Balance on January 1, 2021 Deprecation Impairment Loss Disposal Balance at December 31, 2021	Land $ 407,228 - - - $ 407,228 $ 407,228 - - - $ 407,228 $ - - - - $ -	Buildings and constructions 2,558,482 - - 24,976 2,583,458 2,547,441 - - 11,041 2,558,482 725,410 50,744 - - 776,154	Machinery and equipment 11,970,621 - (12,196) 280,459 12,238,884 11,607,060 - (16,030) 379,591 11,970,621 7,809,899 757,783 26,194 (11,998) 8,581,878	Office facilities 317,425 - (7,626) 11,431 321,230 307,242 - (6,200) 16,383 317,425 249,744 20,592 - (7,626) 262,710	Other facilities 4,694,141 - (7,249) 122,404 4,809,296 4,600,193 - (21,022) 114,970 4,694,141 3,279,696 266,997 - (6,932) 3,539,761	Testing equipment 236,150 483,960 - (439,270) 280,840 428,745 329,390 - (521,985) 236,150 - - - - -	Total 20,184,047 483,960 (27,071) -
							20,640,936
							19,897,909 329,390 (43,252) -
							20,184,047
							12,064,749 1,096,116 26,194 (26,556)
							13,160,503

(Continued)

32

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Balance at January 1, 2020 Deprecation Disposal Balance on December 31, 2020 Carrying Value: Balance on December 31, 2021 Balance on December 31, 2020 Balance on January 1, 2020	Land $ - - - $ - $ 407,228 $ 407,228 $ 407,228	Buildings and constructions 675,195 50,215 - 725,410 1,807,304 1,833,072 1,872,246	Machinery and equipment 6,929,253 896,500 (15,854) 7,809,899 3,657,006 4,160,722 4,677,807	Office facilities 236,035 19,909 (6,200) 249,744 58,520 67,681 71,207	Other facilities 2,981,302 318,583 (20,189) 3,279,696 1,269,535 1,414,445 1,618,891	Testing equipment - - - - 280,840 236,150 428,745	Total 10,821,785 1,285,207 (42,243
							12,064,749
							7,480,433
							8,119,298
							9,076,124

• (i) Guarantee

As of December 31, 2021 and 2020, the property, plant and equipment of the Company had been pledged as collateral for long-term borrowings. Please refer to note 8.

• (ii) Acquisition of machinery and equipment

The Company calculated capitalization interest rate base on 1.85% and 1.92% for the year 2021 and 2020. The capitalized borrowings related to the acquisition of machinery and equipment were $5,172 thousand and $3,677 thousand, respectively.

• (iii) The decrease in sales revenue was due to the impact of COVID-19 pandemic in 2021, which caused the carrying amount of property, plant and equipment to exceed its recoverable amount, resulting in the amount of $26,194 thousand to be recognized as impairment loss in the statement of comprehensive income. The key assumption of assessing the recoverable amount is based on the discount rate of 10.24%, and the recoverable amount is determined according to the financial forecast which is based on the pre-tax cash flow projections approved by management. The impairment test on property, plant and equipment is to determine the recoverable amount for the asset's cash-generating unit, because every business unit could generate independent cashflow, in which the Company assesses the deviation between the recoverable amount and the carrying value of business units to determine whether the impairment loss is recognized.

• (i) Right-of-use-assets

The Company leases many assets including land and buildings, machinery and equipment and transportation facilities. Information about leases for which the Company as a lease was represented below:

Cost: Balance at January 1, 2021 Additions Disposal Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposal Balance at December 31, 2020	Land $ 441,087 - (17,445) $ 423,642 $ 441,087 - - $ 441,087	Buildings and constructions 163,050 1,251 (6,943) 157,358 160,738 2,482 (170) 163,050	Office facilities 15,900 1,598 - 17,498 7,181 11,758 (3,039) 15,900	Transportation facilities 39,773 23,401 (13,855) 49,319 36,214 5,130 (1,571) 39,773	Other assets 21,297 3,230 (4,102) 20,425 18,981 3,154 (838) 21,297	Total 681,107 29,480 (42,345) 668,242 664,201 22,524 (5,618) 681,107

(Continued)

33

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Accumulated depreciation and impairment losses: Balance at January 1, 2021 Deprecation for the year Disposal Balance at December 31, 2021 Balance at January 1, 2020 Depreciation for the year Disposal Balance at December 31, 2020 Carrying amount: Balance at December 31, 2021 Balance at December 31, 2020 Balance at January 1, 2020	Land $ 97,887 48,124 - $ 146,011 $ 48,627 49,260 - $ 97,887 $ 277,631 $ 343,200 $ 392,460	Buildings and constructions 73,765 37,537 (2,945) 108,357 36,006 37,759 - 73,765 49,001 89,285 124,732	Office facilities 4,410 3,627 - 8,037 4,056 3,393 (3,039) 4,410 9,461 11,490 3,125	Transportation facilities 22,169 9,799 (13,816) 18,152 11,735 11,448 (1,014) 22,169 31,167 17,604 24,479	Other assets 8,480 4,766 (4,104) 9,142 3,333 5,985 (838) 8,480 11,283 12,817 15,648	Total 206,711 103,853 (20,865) 289,699 103,757 107,845 (4,891) 206,711 378,543 474,396 560,444

Assets of the Company that have indications of impairment on the reporting date are tested for impairment on the basis of individual assets or their CGUs. According to the test for impairment for 2021, the recoverable amount for an asset or a CGU is the higher than its book value. Therefore the Company did not recognize any impairment loss on right-or-use assets.

(j) Intangible assets

The cost, amortization and impairment of the intangible assets of the Company for the years ended December 31, 2021 and 2020, were as follows:

Costs: Balance at January 1, 2021 Additions Balance at December 31, 2021 Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated amortization and impairment losses: Balance at January 1, 2021 Amortization for the year Balance at December 31, 2021 Balance at January 1, 2020 Amortization for the year Balance at December 31, 2020	Computer Software
	$ 125,454 21,299 $ 146,753 $ 41,311 84,143 $ 125,454 $ 17,012 17,070 $ 34,082 $ 4,940 12,072 $ 17,012

(Continued)

34

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Carrying value: Balance at December 31, 2021 Balance at December 31, 2020 Balance at January 1, 2020	Computer Software
	$ 112,671 $ 108,442 $ 36,371

(i) Amortization and impairment

The amortization of intangible assets and their repairment losses are in clued in the statement of comprehensive income:

Cost of sales Operating expense	2021 $ 2,931 $ 14,139	2020
		1,327
		10,745

• (k) Short-term notes and bills payable

As the year of December 31, 2021: None.

Commercial paper payable Less: Prepaid interest Total	December 31, 2020 Guarantee or acceptance institution Range of interest rates (%) Amount The Shanghai Commercial & Savings Bank, LTD. 0.92% $ 70,000 (9) $ 69,991
	Guarantee or acceptance institution
	The Shanghai Commercial & Savings Bank, LTD.

(l) Short-term borrowings

The short-term borrowings were summarized as follows:

Letters of credit Unsecured bank loans Secured bank loans Unused short-term credit lines Range of interest rates	December 31, 2021 $ 17,386 293,760 100,000 $ 411,146 $ 3,787,495 0.56%~0.93%	December 31, 2020 12,631 160,000 -
		172,631
		3,725,817
		0.46%~0.98%

For the collateral for short-term borrowings, please refer to note 8.

(Continued)

35

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(m) Long-term borrowings

The details were as follows:

Unsecured bank loans Secured bank loans Less: current portion Total Unused long-term credit lines Unsecured bank loans Secured bank loans Less: current portion Total Unused long-term credit lines		December 31, 2021 Rate Maturity year Amount 1.20%~1.46% 2023~2024 $ 515,000 1.10%~2.16% 2023~2026 4,637,500 (1,021,000) $ 4,131,500 $ 250,000 December 31, 2020 Rate Maturity year Amount 1.35%~1.68% 2022~2023 $ 375,000 1.10%~1.79% 2022~2025 3,792,000 (694,500) $ 3,472,500 $ 1,880,000
	Currency	Rate
	TWD TWD
	Currency	Rate
	TWD TWD	1.35%~1.68% 1.10%~1.79%

• (i) Collateral for long-term borrowings

For the collateral for long-term borrowings, please refer to note 8.

• (ii) Borrowings information is as follows:

• 1) The Company entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on March 30, 2017.

  • a) The syndicated banks of the Syndicated Loan Agreement consist of Bank of Taiwan, Taiwan Business Bank Co., Ltd., Mega International Commercial Bank Co., Ltd., Taiwan Cooperative Bank, Taipei Fubon Commercial Bank Co., First Commercial Bank Ltd., Chang Hwa Commercial Bank, Ltd., Shin Kong Commercial Bank Co., Ltd. Land Bank of Taiwan, Agricultural Bank of Taiwan, and The Shanghai Commercial & Savings Bank, Ltd..

    • i) The amount of total credit lines is NTD4,500,000,000 which is to repay existing financial liabilities, purchase mechanical equipment, and afford the middle-stage of working fund.

(Continued)

36

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

  - ii) Period of credit agreement, payment period and the way to repayment.

     1. Period: Five years from the first draw-down date.

     2. Payment period:

        - a. A type: Credit line of medium-term secured loans is NTD2,800,000,000, which can be used partly but cannot be used by revolving. six months from the first draw-down date. After six months, the unused amount will be cancelled automatically and shall not be used.

        - b. B type: Credit line of medium-term secured loans is NTD1,000,000,000, which can be used partly but cannot be used by revolving. Eighteen months from the first draw-down date. After 18 months, the unused amount will be cancelled automatically and shall not be used.

        - c. C  type: Credit line of medium-term loans is NTD700,000,000, which can be used partly and can be used by revolving.

  - iii) According to the syndicated credit agreement, during the credit period, the Company is based on the second quarter consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, selfowned asset ratio, etc.)

  - iv) The Company provided the guarantees of promissory notes, mechanical equipment, and buildings and constructions as collaterals for this syndicated credit agreement.

  - v) The Company started to use this credit line on May 31, 2017.

  - vi) The Company repaid all credit line on April 30, 2020.

• 1) The Company entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on March 31, 2020.

• a) The syndicated banks of the Syndicated Loan Agreement consist of Bank of Taiwan, Chang Hwa Commercial Bank, Ltd., Taiwan Business Bank Co., Ltd., Land Bank of Taiwan, Taiwan Cooperative Bank, First Commercial Bank, Bank SinoPac Co., Ltd., The Shanghai Commercial & Savings Bank, Ltd., Taipei Fubon Commercial Bank Co., Ltd., Mega International Commercial Bank Co., Ltd..

  • i) The amount of total credit lines is NTD3,800,000,000 and use for repaying the existing financial liabilities and expanding working capital.

  • ii) Period of credit agreement, payment period and the way to repayment.

    1. Period: Five years from the first draw-down date, but should be used within 6-month from the contract date, otherwise, the 6-month date from the contract date will be deemed as the first draw-down date.

(Continued)

37

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

1. Payment period:

2. a. A type: Credit line of medium-term secured loans is NTD2,900,000,000, which can be used partly but cannot be used by revolving. 6 months from the first draw-down date. After six months, the unused amount will be cancelled automatically and shall not be used.

3. b. B type: Credit line of medium-term loans is NTD900,000,000, which can be used by revolving.

4. Method of repayment:

5. a. A type: The date after 18-month from the first-drawn date is the first date of the payment of the principal. The repayment will be divided into eight payments, every six-month is deemed as one payment.

6. b. B type: The B type borrowing has the revolving credit facility. If the part of credit line expires, the remaining of the credit line could be borrowed further to repay for the original borrowings.

Under any circumstances, the Company should repay all principal, interest, other payables, and expenses which were not repaid on the expiry date of the credit agreement.

• iii) According to the syndicated credit agreement, during the credit period, the Company is based on the first, second and third quarters consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

• iv) The Company provided guarantees of promissory notes, mechanical equipment, buildings and constructions as collaterals for this syndicated credit agreement. Besides, the related-parties will be joint guarantors for the credit loan from this agreement.

• (n) Lease liabilities

The Company’s lease liabilities were as follows:

Current Non-current For the maturity analysis, please refer to note 6(v).	December 31, 2021 $ 112,144 $ 309,785	December 31, 2020
		99,462
		407,326

(Continued)

38

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The amounts recognized in profit or loss was as follows:

	For the years ended	For the years ended
	December 31, 2021	December 31, 2020
Interest on lease liabilities	$ 8,326	10,151
Expenses relating to leases of low-value assets, excluding
short-term leases of low-value assets	$ 5,205	5,958
The amounts recognized in the statement of cash flows	for the Company was as	follows:
	For the years ended	For the years ended
	December 31, 2021	December 31, 2020
Total cash outflow for leases	$ 136,196	86,969

• (i) Real estate leases

The Company leases land and buildings for its office space and employee accommodation. The leases of office space and employee accommodation typically run for 2-10 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

The Company expects the relative proportions of fixed and variable lease payments to remain broadly consistent in future years.

• (ii) Other leases

The Company leases office facilities, transportations and equipment, with lease terms of one to four years. In some cases, the Company has options transportation to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

The Company also leases office facilities and parking space with contract terms of one to four years. These leases are short-term and leases of low-value items. The Company has selected not to recognize right-of-use assets and lease liabilities for these leases.

(o) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Impact of asset ceiling Net defined benefit liabilities	December 31, 2021 $ 628,409 (466,716) 161,693 - $ 161,693	December 31, 2020 658,758 (446,035) 212,723 - 212,723

(Continued)

39

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to $466,716 thousand and $446,035 thousand as of December 31, 2021 and 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movement in present value of the defined benefit obligations for the Company were as follows:

Defined benefit obligations at January 1 Current service costs and interest Remeasurements loss (gain) －Actuarial loss (gain) arising from: －Financial assumptions Contributions paid by the employer Defined benefit obligations at December 31	2021 $ 658,758 18,076 (608) (47,817) $ 628,409	2020 697,022 25,494 3,576 (67,334) 658,758

• 3)

• Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Interest income Remeasuerments loss (gain) －Return on plan assets excluding interest income Contributions paid by the employer Contributions Benefits paid Fair value of plan assets at December 31	2021 $ 446,035 5,695 2,458 60,345 (47,817) $ 466,716	2020 405,409 6,625 10,090 91,245 (67,334) 446,035

(Continued)

40

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

4) Movements of the effect of the asset ceiling

There were no movements in the number of impacts of the company’s defined benefit plan asset ceiling in 2021 and 2020.

• 5) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Administration expense	2021 $ 9,842 2,539 $ 12,381 2021 $ 3,356 9,025 $ 12,381	2020
		13,296 5,573
		18,869
		2020
		4,900 13,969
		18,869

• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2021 December 31, 2020 % 1.000 % 1.250 % 0.750 % 0.750

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $12,092 thousand.

The weighted average lifetime of the defined benefits plans is 11 years.

• 7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing(decreasing) rate	Influences of defined benefit obligations Increased 0.25％ Decreased 0.25％ (16,289) 16,903 16,734 (16,205)

(Continued)

41

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

December 31, 2020 Discount rate Future salary increasing(decreasing) rate	Influences of defined benefit obligations Increased 0.25％ Decreased 0.25％ (17,580) 18,262 18,124 (17,531)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $118,243 thousand and $124,447 thousand for the years ended December 31, 2021 and 2020, respectively.

(p) Income tax

(i) Income tax expense

The components of income tax expense (gain) in the years 2021 and 2020 were as follows:

Current tax expense Adjustments for prior periods Deferred tax expense (gain) Origination and reversal of temporary differences Income tax (gain) expense	2021 $ 9,529 (121,816) $ (112,287)	2020 13,165 (147,673) (134,508)

(Continued)

42

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(ii) Reconciliation of income tax expense (gain) and loss before tax for 2021 and 2020 is as follows:

Loss excluding income tax Income tax using the Company’s domestic tax rate Change in provision prior periods Tax-exempt income Non-de ductible expenses Tax free subsidy income attributed to the epidemic Current-year losses for which no deferred tax asset was recognized Change in unrecognized temporary differences Share of profit (loss) of associates accounted for using equity method Others Income tax (gain) expense	2021 $ (354,404) $ (70,881) 9,529 - 218 - 232,208 6,448 (276,699) (13,110) $ (112,287)	2020
		(1,570,960)
		(314,192) 13,165 (784) 164 (70,357) 167,114 1,795 84,150 (15,563)
		(134,508)

• (iii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax liabilities

The consolidated entity is able to control the timing of the reversal of the temporary differences associated with investments in subsidiaries as of December 31, 2021 and 2020. Also, management considers it probable that the temporary differences will not reverse in the foreseeable future. Hence, such temporary differences are not recognized under deferred tax liabilities. Details are as follows:

Aggregate amount of temporary differences related to investments in subsidiaries Unrecognized deferred tax liabilities	December 31, 2021 $ 1,383,494 $ 276,699	December 31, 2020
		-
		-

• 2) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax loss	December 31, 2021 $ 62,835 396,591 $ 459,426	December 31, 2020
		78,490 167,114
		245,604

(Continued)

43

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes.

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize the benefits therefrom.

As of December 31, 2021, the information of the Company’s unused tax losses for which no deferred tax assets were recognized are as follows:：

Year of loss	Unused tax loss Expiry date $ 1,621,914 2030 1,761,041 2031 $ 3,382,955
2020(declared) 2021(estimated)

• 3) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Deferred Tax Assets: Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Deferred tax liabilities: Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Loss carryforward $ 160,000 120,000 $ 280,000 $ - 160,000 $ 160,000 Land revalue added rovaluation $ 171,517 - $ 171,517 $ 171,517 - $ 171,517	Others Total - $ 160,000 - 120,000 - $ 280,000 7,495 $ 7,495 (7,495) 152,505 - $ 160,000 Other Total 4,833 176,350 (1,816) (1,816) 3,017 174,534 - 171,517 4,833 4,833 4,833 176,350

(iv) The Corporation’ s income tax return for the year 2019 had been examined by the tax authorities.

(Continued)

44

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(q) Capital and other equitiy

As of December 31, 2021, the number of authorized ordinary shares were 700,000 thousand shares (2020: 700,000 thousand shares) with par value of $10 per share. The total value of authorized ordinary shares was amounted to $7,000,000 thousand (2020: $7,000,000 thousand). As of that date, 619,407 thousand (2020: 619,407 thousand) of ordinary shares amounted $6,194,070 thousand (2020: $6,194,070 thousand) were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus as of December 31, 2021 and 2020, were as follows:

Share premium Stock options-fair value differences of associates under equity method Cash dividend not drawn Disposal of subsidiaries	December 31, 2021 $ 2,675,703 157,208 507 - $ 2,833,418	December 31, 2020
		2,675,703 166,550 170 717
		2,843,140

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

According to the Company’s Article, net earnings should be used to offset the prior year’s deficits, if any, before paying any income taxes. 10% of retained earnings will be as legal reserve. The rest of the amount and undistributed surplus will be allocated on the basis of the allocation plan proposed by the Board of Directors and submitted to stockholders for approval.

Due to demand of expanding business, coordinating with Company’s long-term financial plan for sustainable development and stable economic development, The Company adopts Residual Dividend Policy. The main purpose for this policy is to measure financial demand that based on budget of future capital. The steps of distributions are as below: (1)The best capital budget. (2) Determine the financing required to meet the capital budget in the preceding paragraph. (3) Determine the amount of financing required to be financed by retained surplus (the remaining can be financed by cash increase or corporate bonds). (4) The remaining surplus can be distributed to shareholders in the form of dividends after retaining an appropriate amount according to operational needs. The distribution of future dividends takes into account the use of funds, and draws up an appropriate ratio of cash to stock dividends for the current year, in which cash dividends are 50% to 100%, and stock dividends are 50% to zero.

(Continued)

45

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

1) Legal reserve

When a company incurs no loss, it may pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

In accordance with Rule No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

The company’ s "other equity" item under the equity item on December 31, 2019 was negative and a resolution was passed during the general meeting of shareholders held on June 9, 2020 made a special surplus of $17,306 thousand.

The reversal of the Company’s special surplus reserve of $174,327 thousand had been recognized as other equity under equity item on December 31, 2020 based on the resolution approved during the general meeting of the shareholders held on June 29, 2021.

As of December 31, 2021 and 2020, the value of special reserve was $0 thousand and $174,327 thousand, respectively.

3) Earnings distribution

Earnings distribution for 2020 and 2019 was decided by the resolution adopted, at the general meeting of shareholders held on July 29, 2021 and June 9, 2020, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2020 Amount per share Total amount $ - -	2019	2019
	Amount per share $ -	Amount per share 0.80	Total amount
			495,526

(Continued)

46

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iii) other comprehensive income accumulated in reserves, net of tax and non-controlling interest

Balance at January 1, 2021 Exchange differences on translation of foreign financial statements: The Company Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income: The Company Subsidiary Associate Remeasurement of defined benefits plan: The Company Unearned employee compensation: Associate Disposal of investments accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income: The Company Subsidiary Balance at December 31, 2021	Exchange differences on translation of foreign financial statements $ 41,694 (9,158) - - - - - 494 - - $ 33,030	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 232,996 - 58,857 19,012 231 - - (1,016) 486 (4,263) 306,303	Remeasurement of defined benefits plan (182,812) - - - - 2,314 - 260 - - (180,238)	Unearned employee compensation (2,622) - - - - - 2,233 55 - - (334)	Total 89,256 (9,158) 58,857 19,012 231 2,314 2,233 (207) 486 (4,263) 158,761

(Continued)

47

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Balance at January 1, 2020 Exchange differences on foreign operations: The Company Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income: The Company Subsidiary Associate Remeasurement of defines benefits plan: The Company Subsidiary Associated Unearned employee compensation: Associated Disposal of investments in equity instruments designated at fair value through other comprehensive income: Subsidiary Disposal of subsidiary Balance at December 31, 2020 (r) Per share	Exchange differences on translation of foreign financial statements $ (37,584) 64,067 - - - - - - - - 15,211 $ 41,694	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 53,104 - 143,525 38,014 841 - - - - (2,488) - 232,996	Remeasurement of defined benefits plan (189,847) - - - - 6,514 943 42 - - (464) (182,812)	Unearned employee compensation (7,543) - - - - - - - 4,921 - - (2,622)	Total (181,870) 64,067 143,525 38,014 841 6,514 943 42 4,921 (2,488) 14,747 89,256

The details on the calculation of basic earnings per share and diluted earnings per share as of December 31, 2021 and 2020 as follow:

Basic earnings per share: Loss attributable to ordinary shareholders of the Company Weighted average number of ordinary shares at (in thousand of shares)	2021 $ (242,117) 619,407 $ (0.39)	2020 (1,436,452) 619,407 (2.32)

The profit after tax of the Company in 2021 and 2020 is loss. Therefore, there is no potential diluted ordinary share.

(Continued)

48

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(s) Revenue from contracts with customers

• (i) Details of revenue

2021 Major products/services lines: Layer of 2 HDI $ 280,102 Layer of 4 HDI 1,962,736 Layer of 6 HDI 2,468,205 Layer of 8 HDI 2,006,155 More than 10 Layers 5,008,438 Others 143,820 $ 11,869,456	2020
	218,799 1,635,919 2,487,965 1,498,841 7,098,660 111,763
	13,051,947

(ii) Contracts balances

Trade receivables Trade receivables-related parties Less: Loss Allowance	December 31, 2021 $ 3,605,556 3,376 (22,923) $ 3,586,009	December 31, 2020 3,597,320 1,969 (10,456) 3,588,833	January 1, 2020 4,609,856 7 (31,210) 4,578,653

For details on trade receivables and allowance for impairment, please refer to note 6(c).

• (t) Remuneration to employee and directors

In accordance with the Articles of Incorporation the Company should contribute 1% to 5% of the profit as employee compensation and no more than 3% as directors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit.

Due to the loss, there is no surplus to be allocated. Therefore, the Company did nor accrue the remuneration to employee and directors in 2021 and 2020.

(Continued)

49

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(u) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

Interest income from bank deposits Other interest income Other income The details of other income were as follows: Compensation income Design income Subsidy Dividend income Others	2021 $ 395 2 $ 397 2021 2,399 25,634 1,419 - 11,796 $ 41,248	2020
		4,465 3
		4,468
		2020
		12,773 29,658 352,703 3,918 4,221
		403,273

(ii) Other income

The Covid 19 pandemic had a significant impact on the Company’ s operations. In order to cope with the situation, the Company applied for a government subsidy, wherein the amount of $351,758 thousand was granted in 2020.

(iii) Other gains and losses

The details of other gains and losses were as follows:

Foreign exchange losses Losses on disposals of property, plant and equipment Losses on disposal of subsidiary Gain on disposal of investment accounted for using equity method Compensation losses Others	2021 $ (8,917) (195) - 8,324 (2,131) (423) $ (3,342)	2020
		(73,503) (28) (25,137) - (4,831) (1,019)
		(104,518)

(Continued)

50

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iv) Financial costs

The details of finance costs were as follows:

Interest expense on borrowings Interest expense on lease liabilities Less: Interest capitalization	2021 $ (82,001) (8,326) 5,172 $ (85,155)	2020 (74,810) (10,151) 3,677 (81,284)

(v) Financial instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of Credit risk

During 2021, the Company has a large customer base, it has not concentrated on transactions with a single customer. Therefore, there was no concentration of credit risk in its trade receivables. To minimize credit risk, the Company periodically evaluates the Company’s financial positions.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31,2021 Non-derivative financial liabilities Short-term borrowings Trade payables Trade payables-related parties Other payable Other payables-related parties Long term borrowings current portion Lease liabilities Long-term borrowings	Carrying amount $ 411,146 1,761,521 973,031 427,174 8,376 1,021,000 421,929 4,131,500 $ 9,155,677	Contractual cash flows 411,505 1,761,521 973,031 427,174 8,376 1,032,526 442,338 4,387,350 9,443,821	Within 12 months 411,505 1,761,521 973,031 427,174 8,376 1,032,526 118,768 77,051 4,809,952	1-5 years - - - - - - 271,791 4,310,299 4,582,090	Over 5 years
					- - - - - - 51,779 -
					51,779

(Continued)

51

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Carrying amount December 31,2020 Non-derivative financial liabilities Short-term borrowings $ 172,631 Short-term notes and bills payable 69,991 Trade payable 2,194,188 Trade payable-related parties 849,074 Other payable 607,838 Other payables-related parties 6,897 Long term borrowings, current portion 694,500 Lease liabilities 506,788 Long-term borrowings 3,472,500 $ 8,574,407	Contractual cash flows	Within 12 months 172,708 69,991 2,194,188 849,074 607,838 6,897 702,951 107,676 58,843 4,770,166	1-5 years - - - - - - - 335,743 3,641,655 3,977,398	Over 5 years
	172,708 69,991 2,194,188 849,074 607,838 6,897 702,951 546,092 3,700,498 8,850,237			- - - - - - - 102,673 -
				102,673

The Company did not expect that the timing of cash flow analysis expiary date will be early apparently, or the actual amount will be different apparently.

• (iii) Currency risk

• 1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk were as follows:

	F	inancial assets: Monetary items USD EUR JPY CNY inancial liabilities: Monetary items USD EUR JPY CNY		December 31, 2021	TWD 3,483,163 - 55 290,784 2,219,438 8,261 19,194 120,569	Foreign currency 138,096 1 1,226 53,310 76,482 264 79,471 24,894	December 31, 2020
			Foreign currency $ 125,837 U - E 229 J 66,939 C $ 80,182 U 264 E 79,808 J 27,755 C	Exchange rate SD/TWD= 27.68 UR/TWD= 31.32 PY/TWD= 0.24 NY/TWD= 4.34 SD/TWD= 27.68 UR/TWD= 31.32 PY/TWD= 0.24 NY/TWD= 4.34			Exchange rate TWD USD/TWD= 28.48 3,932,974 EUR/TWD= 35.02 32 JPY/TWD= 0.28 339 CNY/TWD= 4.38 233,338 USD/TWD= 28.48 2,178,215 EUR/TWD= 35.02 9,262 JPY/TWD= 0.28 21,958 CNY/TWD= 4.38 108,960
	F

(Continued)

52

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

• 2) Sensitivity ananlyses

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, financial assets at fair value through other comprehensive income, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the NTD against the USD, EUR, CNY, and JPY as of December 31, 2021 and 2020 would have increased (decreased) the equity by $11,252 thousand and $14,786 thousand. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.

• 3) Foreign exchange gain and loss on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2021 and 2020, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $8,917 thousand and $73,503 thousand, respectively.

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Company’s net income would have increased or decreased by $49,866 thousand and $46,181 thousand for 2021 and 2020 with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at variable rates and investment in variable-rate bills.

(Continued)

53

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(v) Other market price risk

For the years ended December 31, 2021 and 2020, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

Prices of securities at the reporting date Increasing 1% Decreasing 1%	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,
	2021	Net income - -	2020
	Other comprehensive income after tax $ 4,522 $ (4,522)		Other comprehensive income after tax 4,676 (4,676)	Net income
				-
				-

• (vi) Fair value of financial instruments

• 1) Fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or loss, financial instruments used for hedging, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents Trade receivable Trade receivable-related parties Other receivable-related parties Other financial assets Subtotal Total		December 31, 2021	December 31, 2021	December 31, 2021
	Book Value $ 452,200 280,886 3,582,633 3,376 594 4,134 3,871,623 $ 4,323,823		Fair value
		Level 1 452,200 - - - - - - 452,200	Level 2 - - - - - - - -	Level 3 - - - - - - - -	Total
					452,200
					- - - - -
					-
					452,200

(Continued)

54

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Financial liabilities measured at amortized cost Bank loans Trade payable Trade payable-related parties Other payable Other payable-related parties Lease liabilities Subtotal Total Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents Trade receivable Trade receivable-related parties Other receivable-related parties Other financial assets Subtotal Total Financial liabilities measured at amortized cost Back loans Short-term notes and bills payable Trade payable Trade payable--related parties Other payable Other payable-related parties Lease liabilities Subtotal Total		December 31, 2021	December 31, 2021	December 31, 2021
	Book Value $ 5,563,646 1,761,521 973,031 427,174 8,376 421,929 9,155,677 $ 9,155,677		Fair value
		Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - - - - December 31, 2020			Total
					- - - - - -
					-
					-
	Book Value $ 467,567 737,633 3,586,864 1,969 571 52,170 4,379,207 $ 4,846,774 $ 4,339,631 69,991 2,194,188 849,074 607,838 6,897 506,788 8,574,407 $ 8,574,407		Fair value
		Level 1 467,567 - - - - - - 467,567 - - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - -	Level 3 - - - - - - - - - - - - - - - - -	Total
					467,567
					- - - - -
					-
					467,567
					- - - - - - -
					-
					-

(Continued)

55

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

• 2) Valuation techniques for financial instruments not measured at fair value

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

• a) Financial assets measured at amortized cost

If the quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the estimated valuation or prices used by competitors are adopted.

• b) Financial assets and financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

• (w) Financial risk management

• (i) Overview

The Company have exposures to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

• 3) market risk

The following likewise discusses the Company’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

• (ii) Structure of risk management

The Company’ s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company Audit Committee oversees how management monitors compliance with the Company’ s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(Continued)

56

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

The main potential credit risk of the Company is derived from financial products, such as accounts receivable, but the main sales target are world-renowned manufacturers. In order to reduce the credit risk, the Company also regularly evaluates the customer’ s operating conditions and the possibility of recovery for period receivables. Because the customer has a large customer base and has a good reputation of profit and credit record, there is no risk of concentration on the credit risk of the company's accounts receivable.

1) Investments

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

2) Guarantees

The Company’ s policy is to provide financial guarantees only to wholly owned subsidiaries. At December 31, 2021, no other guarantees were outstanding (2020: none).

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

Loans and borrowings from the bank form an important source of liquidity for the Company. As of December 31, 2021 and 2020, the Company’ s unused credit line were amounted to $4,037,495 thousand and $5,605,817 thousand, respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the NTD, USD, EUR, JPY and CNY. The currencies used in these transactions are NTD, USD and CNY.

(Continued)

57

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

For the Company that use NTD as their functional currency, all borrowed CNY and US dollar loans will use forward contracts with the same maturity date as the loan repayment date for hedging.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the borrowing is the same as the currency of the cash flow generated by the operation of the consolidated company, mainly in the NTD, except for CNY and US dollars. In this case, economic hedging is provided without the need to sign derivatives, so hedging accounting is not adopted.

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Company buys or sells foreign currencies at real-time exchange rates to ensure that the net risk of risk remains at an acceptable level.

2) Interest rate risk

This is achieved partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of variability in cash flows attributable to movements in interest rates.

3) Other market price risk

The Company is exposed to equity price risk due to the investments in equity securities. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company minimizes the risk by holding different investment portfolios.

(x) Capital management

The Company’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at December 31	December 31, 2021 $ 9,889,036 (280,886) $ 9,608,150 $ 9,493,243 % 101.21	December 31, 2021 $ 9,889,036 (280,886) $ 9,608,150 $ 9,493,243 % 101.21	December 31, 2020 9,370,952 (737,633) 8,633,319 9,671,800 % 89.26
	$ $ $

(Continued)

58

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(y) Investing and financing activities not affecting current cash flow

January 1,2021 Long-term borrowings(including current portion) $ 4,167,000 Short-term borrowings 172,631 Lease liabilities 506,788 Total liabilities from financing activities $ 4,846,419 Long-term borrowings(including current portion) Short-term borrowings Lease liabilities Total liabilities from financing activities	Cash flows 985,500 238,515 (122,665) 1,101,350 January 1,2020 $ 4,089,000 737,499 555,124 $ 5,381,623	Lease payment change - - 29,480 29,480 Cash flows 78,000 (564,868) (70,860) (557,728)	Others - - 8,326 8,326 Lease payment change - - 22,524 22,524	December 31, 2021 5,152,500 411,146 421,929
				5,985,575
				December 31, 2020 4,167,000 172,631 506,788
				4,846,419

(7) Related-party transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the financial statements.

Name of related party

Unitech Electronics International Limited (Unitech BVI)

Da Tai investment Company

Schmidt Scientific Taiwan Ltd.

Unitech Electronics International Limited (Unitech HK)

CHANG, YUAN-MING CHEN, CHENG-HSIUNG

Fulltech Fiber Glass Corp. Ideal Bike Corporation

Unitech Printed Circuit Humanities and Education Foundation

Taiwan Federation of commerce

Pan-Pacific & Southeast Asia Women’s Association Ppseawa Taiwan R.O.C.

Relationship with the Group

The subsidiary of The Company

The subsidiary of The Company

The subsidiary of The Company (Had already disposed on January 15, 2020) The subsidiary of The Company

President of the company

Director of the company

An associate

The entity’s president is the second immediate family of the president of the Company

The entity’s president is the first immediate family of the president of the Company

The entity’s chairman is the first immediate family of the president of the Company

The entity’s chairman is the first immediate family of the president of the Company

(Continued)

59

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Name of related party

TESD Foundation Taiwan Coalition of Service Industries

The Business Development Foundation on the Chinese Straits

Relationship with the Group

The entity’s president is the first immediate family of the president of the Company

The entity’s chairman is the president of the Company

The entity’s Vice-president is the president of the Company

(b) Significant transactions with related parties

(i) The sales and receivables from parties were as follw:

Subsidiaries	Sales 2021 2020 $ 14,648 14,999	Trade receivables	Trade receivables
	2021 $ 14,648	December 31, 2021 3,376	December 31, 2020
			1,969

The credit period for general clients are 30-120days next monthly settlement; but for relatedparty is 120days next monthly settlement.

(ii) Purchase

The payables to related parties were as follows:

Subsidiaries	Purchase 2021 2020 $ 2,841,038 1,770,675	Payables-related parties	Payables-related parties
	2021 $ 2,841,038	December 31, 2021 973,031	December 31, 2020
			849,074

The payment condition to related-parties for the Company is on the basis of their capital. In general, the condition of receivables for clients is approximately 90 days; since the Company did not purchase the identical merchandise from other suppliers, price of transactions do not have comparison basis.

• (iii) Loans and guarantee to Related Parties

December 31, 2021 and 2020, the related parties had provided a guarantee for loans taken out by the president of Company.

As the year of December 31, 2021 and 2020, the Company made the endorsement guarantee for its subsidiary which lent money from the financial institution, the amoubt is $2,112,697 thousand and $2,407,250 thousand, respectively.

As the year of December 31, 2021 and 2020, the Company provided collaterals for its subsidiary which lent money from financial institution, the amount is $0 and $38,000 thousand that classified into other financial assets- current.

(Continued)

60

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iv) Other

• 1) As of December 31, 2021 and 2020, other receivables raised due to collection and payment and various expense between the Company and related parties is $594 thousand and $571 thousand, respectively which classified into other receivables-related parties.

• 2) As of December 31, 2021 and 2020, donation to associates is $4,300 thousand and $4,600 thousand, respectively, which are classified under the item “Selling expenses and administrative expenses”.

• (c) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits	2021 $ 57,745	2020
		67,045

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2021 $ 407,228 1,712,050 2,935,996 1,655 - 46,491 $ 5,103,420	December 31, 2020
Land Building and construction Machinery and equipment Other equipment Certificate of deposit (Note 1) Certificate of deposit (Note 2)	Long-term borrowings Long-term borrowings Long-term borrowings Long-term borrowings Subsidiaries’ borrowings endorsement, Domestic (Foreign) sight L/C endorsement Bureau of Costoms’ endorsement, shipping, Center deposits, Letzer Industrial Park deposit and foreign workers’ deposit, Loung Te Industrial Park deposit		407,228 1,833,072 3,302,485 - 48,000 55,733
			5,646,518

“ ” (Note1) Classified into the account of Other financial assets-current .

“ ” (Note2) Classified into the account of Refundable Deposits .

(Continued)

61

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(9) Significant commitments and contingencies:

• (a) As of December 31, 2021, the total amount of the significant machinery and equipment contracts signed by the Company was approximately $343,863 thousand, and the payment of $252,759 thousand was classified into “Property, Plant and Equipment” and “Prepaid Equipment”.

• (b) The Company’s outstanding standby letter of credit are as follows:

USD JPY EUR	December 31, 2021 $ 569 $ 13,920 $ 264	(in thousand) December 31, 2020
		623
		96,540
		264

• (c) The Company and other 9 companies that are also shareholders of Taiwan International Securities Co., Ltd. (hereinafter referred to as Taiwan International Securities), entered into an agreement with Capital Securities Corp. (hereinafter referred to as Capital Securities) stipulating that the issue of investor compensation for the dispute over the sale of GVEC private investment products within $173,000 thousand by employees of Taiwan International Securities in 2005 will be handled by Capital Securities as the priority; the remaining amount and risks will be dealt by the company that signed of the agreement. However, the content and scope of "responsible processing" are not clearly defined, and the relevant cases are still in progress. Therefore, the Company is unlikely to be liable for compensation and should not have a significant impact on the Company's shareholders' equity.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:None

(12) Other:

• (a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
By function By item	2021			2020
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	2,288,985	449,160	2,738,145	2,413,273	485,689	2,898,962
Labor and health insurance	258,693	38,898	297,591	252,024	43,240	295,264
Pension	105,182	25,442	130,624	110,908	32,408	143,316
Remuneration of directors	-	5,525	5,525	-	5,485	5,485
Others	78,949	36,722	115,671	87,012	37,256	124,268
Depreciation	1,127,455	72,514	1,199,969	1,319,374	73,678	1,393,052
Amortization	2,931	15,935	18,866	1,327	12,689	14,016

(Continued)

62

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

The extra information for number of employee and expense of employee benefit for the Company were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Adjustment of Average salary expenses Supervisor's remuneration

The salary payment policy for the Company were as follow:

• (i) The salary payment policy, standard, portfolio and the procedure of payment regulation are on the basis of the Company’ s Human Resources regulation to execute. As for the profit allocation of director’s and supervision’s remuneration, the Company will firstly do the salary provision according to the Article of Association, and then resolution by remuneration committee. After those procedure, the profit allocation will have the approval form the Board and will be reported on the shareholder’s meeting.

• (ii) The relationship between remuneration payment and operating performance is positive, and will pay reasonably after the Company do the operating risk evaluation.

(Continued)

63

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(13) Other disclosures:

• (a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

• (i) Loans to other parties:

Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:
						(In Thousands of New Taiwan Dollars)
Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd. r r p	Other eceivable- elated arties	Yes	919,491 (USD13,000)	916,052	916,052	4%	2	-	General operating and return the loan	-	-	-	3,769,571	3,769,571

• Note: The company's direct and payment and operating rights shall not exceed the operating cost of the foreign company and the company's 100 value limit.

Note 1: The methods of capital loan and nature are as follows:

• (1) Fill in 1 for those who have business dealings.

• (2) Fill in 2 if there is a need for short-term financing.

(ii) Guarantees and endorsements for other parties:

								(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No. (Note1)	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise (Note3 and 5)	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note2)
0	The Company	Unitech BVI	2	4,746,621	1,069,150	896,960	314,168	-	% 9.45	7,594,594	Y	N	N
0	The Company	Shanghai Unitech Electronics Co., Ltd.	2	4,746,621	599,235	415,200	415,200	-	% 4.37	7,594,594	Y	N	Y
0	The Company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	2	4,746,621	838,325	800,537	645,684	-	% 8.43	7,594,594	Y	N	Y
1	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	2	1,884,786	2,610,960	1,694,904	1,694,904	-	% 44.96	7,539,142	Y	N	Y

Note1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (a) The Company is ‘0’.

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

• Note2: 7 forms of relationships in which corporate guarantees exist are defined as follows: (a) Entities have business relations with Company.

• (b) The Company directly or indirectly holds more than 50% of voting shares of its subsidiaries.

• (c) Investees directly or indirectly own more than 50% of voting shares of the Company.

• (d) The Company directly or indirectly holds 90% of voting shares of its subsidiaries.

• (e) Entities have construction contract agreements with the Company.

• (f) The reason for the Company jointly invested in the entities is to provide proportionate endorsements.

(g) The Company has contractual pre-sold home agreements with its related parties under the Consumer Protection Law. Note3: The Company’s aggregate amount allows endorsement or guarantee that does not exceed 50% of its net worth in December 31, 2021. Note4: The Company’s aggregate amount allows endorsement or guarantee that does not exceed 80% of its net worth in December 31, 2021.

(Continued)

64

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Note5: The Subsidiaries aggregate amount allows endorsement or guarantee that does not exceed 200% of its net worth in December 31, 2021.

(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(Thousand Shares)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company I	deal bike Corporation	Related party	Financial assets at fair value through profit or loss- noncurrent	34,000	452,200	% 11.35	452,200
Da Tai Investment Co., Ltd.	ANCAD Incorporated	-	"	26	1,700	% 2.02	1,700
Da Tai Investment Co., Ltd.	Taiwan First Biotechnolgy Corporation	-	"	5,306	93,636	% 4.00	93,636
DA-TAI Investment Co., Ltd.	Jih Sun Money Market Fund	-	Financial assets at fair value through profit or loss-current	3,942	59,073	% -	59,073

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Category and name of security (Note1)	Account name	Name of counter-party (Note2)	Relationship with the company (Note2)	Beginning Balance	Beginning Balance	Purchases (Note3)	Purchases (Note3)	Sales (Note3)	Sales (Note3)	Sales (Note3)	Sales (Note3)	Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
Shanghai Unitech Electronics Co., Ltd.	Structured Deposits	Financial assets at fair value through profit or loss- current	Bank of Communicati ons	None	-	-	-	187,500	-	187,958	187,500	458	-	-
Shanghai Unitech Electronics Co., Ltd.	Structured Deposits	Financial assets at fair value through profit or loss- current	Bank of Communicati ons	None	-	-	-	37,500	-	37,596	37,500	96	-	-
Shanghai Unitech Electronics Co., Ltd.	Structured Deposits	Financial assets at fair value through profit or loss- current	Bank of Communicati ons	None	-	-	-	25,000	-	25,039	25,000	39	-	-
Shanghai Unitech Electronics Co., Ltd.	Structured Deposits	Financial assets at fair value through profit or loss- current	Bank of Communicati ons	None	-	-	-	16,000	-	16,031	16,000	31	-	-

Note: Transaction currency in Thousands of CNY.

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary P	urchase	2,841,038	% 37.72	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	(973,031)	(35.50)%
Shanghai Unitech Electronics (Nantong) Co., Ltd.	The Company	The Parent company S	ale	(2,841,038)	% (62.92)	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	973,031	64.37%

(Continued)

65

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Shanghai Unitech Electronics (Nantong) Co., Ltd.	The Company	The Parent company	973,031	3.11	-	-	698,682 (CNY20,320 thousand) (USD21,999 thousand)	-
Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary	923,693	-	-	-	8,629 (USD1,947 thousand)	-

(ix) Trading in derivative instruments: None.

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2021 (excluding information on investees in Mainland China):

(Thousand Shares)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2021	Balance as of December 31, 2021	Balance as of December 31, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2021	December 31, 2020	Shares (thousands)	Percentage of wnership	Carrying value
The Company	Unitech BVI	British Virgin Islands	Reinvestment	2,414,937	2,414,937	3.75	% 100.00	3,556,522	1,212,957	1,219,912
The Company	Da Tai Investment Co., Ltd.	Taiwan	General investment	820,019	820,019	82,000	% 100.00	1,212,906	84,199	84,199
The Company	Fulltech Fiber Glass Corp.	Taiwan	Manufacturing of glass and glass products	-	37,632	-	% -	-	614,208	420	Note1
The Company	Unitech Electronics International (HK)Limited	Hong Kong	Reinvestment	153,980	153,980	5,000	% 6.10	216,983	1,294,995	78,963
Da Tai Investment Co., Ltd.	Fulltech Fiber Glass Corp.	Taiwan	Manufacturing of glass and glass products	600,684	600,684	57,734	% 13.47	1,047,217	614,208	84,150
Unitech BVI	Unitech Electronics International (HK)Limited	Hong Kong	Reinvestment	2,480,927	2,480,927	77,000	% 93.90	3,861,468	1,294,995	1,216,032

Note1: The Company disposed all shares on July 19, 2021.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note2)	Book value	Accumu-lated remittance of earnings in current period
					Outflow	Inflow
Shanghai Unitech Electronics Co., Ltd.	Manufacturing and sale of PCB	2,474,777	( 2 )	2,480,927	-	-	2,480,927	1,316,769	100.00%	1,316,769	3,769,571	-
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Manufacturing and sale of PCB	3,916,480	( 3 )	367,320 (Note3)	-	-	367,320 (Note3)	(255,192	) 100.00%	(255,192)	3,369,261	-

(ii) Limitation on investment in Mainland China:

Company Name	Accumulated Investment in Mainland China as of December 31, 2021 (Note3)	Investment Amounts Authorized by Investment Commission, MOEA (Note4)	Upper Limit on Investment (Note5)
The Company	2,903,521 (USD 104,896 thousand)	2,903,521 (USD 104,896 thousand)	5,695,945

Note1: Investments are made through one of three ways:

• (1) Direct investment from Mainland China

• (2) Indirect investment from third-party country

• (3) Others

Note2: The recognition of gain and loss on investment based on the financial report which was assured by R.O.C. Accountant.

Note3: The amount includes the capitalization of retained earnings amounting to USD7,000 thousand.

Note 4: The conversion is based on the exchange rate of US dollar to New Taiwan dollar at the end of December 2021: 1: 27.68 respectively.

Note 5: The upper limit of the cumulative amount of the company's investment in mainland China is 60% of the net equity value.

(Continued)

66

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “ Information on significant transactions”.

• (d) Major shareholders:

(Unit: Share)

		(Unit: Share)
Shareholding Shareholder’s Name	Shares	Percentage
GUO-LING INVESTMENT CO. LTD	36,950,280	% 5.96

(14) Segment information:

Please refer to 2021 Consolidated Financial Statements.

67

Unitech Printed Circuit Board Corporation

Statement of cash and cash equivalents

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item Cash on hand Bank deposits

Description Amount Petty cash $ 620 Demand deposits Land Bank of Taiwan Tucheng Branch 17,914 Chang Hwa Bank Tucheng Branch 15,321 Others (All of them are less than 5%) 27,985 Subtotal 61,220 Foreign currency deposits Chang Hwa Bank Zhongshan North Road Branch (USD3,338 thousand) 92,182 Chang Hwa Bank Zhongshan North Road Branch (CNY10,227 thousand) 44,371 Mega International Commercial Bank South Panchiao Branch (USD1,096 thousand) 30,276 Taiwan Shin Kong Commercial Bank Songshan Branch (USD1,005 thousand) 27,748 Others (All of them are less than 5%) 24,469 Subtotal 219,046 $ 280,886

Note: Foreign currnecy deposit are coverted at the spot exchange rate notifieied by the Bank of Taiwan on 2021.12.31

USD:NTD=1:27.6800

CNY:USD=1:4.3415

68

Unitech Printed Circuit Board Corporation

Statement of trade receivables

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

	Item		Amount
Non Related-parties:
A58		$	492,118
G47			337,748
C37			318,042
Others (less than 5%)			2,457,648
Subtotal			3,605,556
Less: Allowance for bad debt			(22,923)
Net value		$	3,582,633

Statement of inventories

Item Raw materials and consumables Work in Progress Finished goods Merchandise inventory Subtotal Less: Allowance for Inventory Valuation Losses Total	Amount Cost Net realizable value Remark $ 255,487 243,297 adopted replacement cost 1,003,391 1,117,148 adopted net realizable value 336,421 214,794 〃 275,821 143,862 〃 1,871,120 1,719,101 〃 (221,651) 〃 $ 1,649,469
	Cost $ 255,487 1,003,391 336,421 275,821 1,871,120 (221,651) $ 1,649,469

69

Unitech Printed Circuit Board Corporation

Statement of financial assets measured at fair value through other

comprehensive income - non-current

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item		January 1,2021 Number of shares Fair value 4,898 $ 66,367 34,000 401,200 $ 467,567	Addition Number of shares Amount - - - - -	Decrease Number of shares Amount (4,898) (67,956) - - (67,956)	Disposal (486) - (486)	Evaluation 2,075 51,000 53,075	December 31, 2021 Number of shares Fair value - - 34,000 452,200 452,200	Endorsement or Pledge Remark N/A - N/A -
		Number of shares 4,898 34,000	Number of shares - -	Number of shares (4,898) -			Number of shares - 34,000
Non-current: Capital Securities Corporation Ideal Bike Corporation

70

Unitech Printed Circuit Board Corporation

Statement of changes in investments accounted for using the equity method

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Investee Valuation accounted for equity method: Unitech Electronics International Limited (BVI) Da Tai Investment Company Full Tech Fiber Glass Corp. Unitech Electronics International Limited (HK)	January 1, 2021 Number of shares Amount 3.75 $ 2,343,979 82,000 1,116,451 2,540 40,206 5,000 138,103 $ 3,638,739	A	d	dition Amount - - - - -	Ded	u	ctions Amount - - (40,964) -		Investment accounted under the equity method 1,219,912 84,199 420 78,963 1,383,494		Others - 13,895 405 - 14,300	Cumulative translation adjustment (7,369) (1,639) (67) (83) (9,158)	Cash Diviend - - - - -		December 31, 20	2	1 Amount Endorsement or Pledge 3,556,522 N/A 1,212,906 N/A - N/A 216,983 N/A 4,986,411
	Number of shares 3.75 82,000 2,540 5,000	Number of shares - - - -			Number of shares - - 2,540 -									Name of shares 3.75 82,000 5,000	Shareholding ratio(%) 100.00 100.00 6.10
							(40,964)

71

Unitech Printed Circuit Board Corporation

Statement of short-term borrowings

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Creditor	Characteristic of borrowings	December 31, 2021	Period	Credit line Pledges or collaterals 150,000 N/A 100,000 〃 300,000 〃 200,000 〃 200,000 〃 259,250 Land、 Buildings

Note: The interest interval is between 0.56%~0.93%.

Statement of trade payables

Item		Amount
Non related-parties:
Lin Horn Technology Co.,Ltd	$	275,066
Elite Materil Co., Ltd.		176,498
Atotech Twiwan Limited Corp.		117,886
Others (less than 5%)		1,210,175
Subtoal		1,779,625
Less: Gain on exchange rate		(18,104)
Total	$	1,761,521

72

Unitech Printed Circuit Board Corporation

Statement of other payables

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item		Amount
Salary payables	$	389,205
Equipment payables		131,847
Others		295,357
Total	$	816,409

Statement of long-term borrowings

Ammount of borrowings

		Ammount of	borrowings
		Current	Non-current
Item		portion	portion	Contract Period	Pledges or collaterals
Yuanta Commercial Bank		-	550,000	2023.06	Land and Buildings
Yuanta Commercial Bank		100,000	50,000	2023.06	Land and Buildings
Entie Commercial Bank		-	200,000	2023.06	N/A
Mega International		67,000	233,000	2026.02	Land and Buildings
Commercial Bank
Mega International		39,000	311,000	2026.12	Land and Buildings
Commercial Bank
Bank of Taiwan Syndicated		725,000	2,712,500	2025.04	Land, Buildings and
					Facilities
Kaohsiung Commercial Bank		60,000	5,000	2023.03	N/A
Kaohsiung Commercial Bank		30,000	70,000	2024.11	N/A
Total	$	1,021,000	4,131,500

Note: The interest interval is between 1.1%~2.16%.

73

Unitech Printed Circuit Board Corporation

Statement of operating revenue

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item	Quantity (Unit:sq ft)		Amount
Layer of 2 HDI	808.00	$	280,102
Layer of 4 HDI	4,274.00		1,962,736
Layer of 6 HDI	2,427.00		2,468,205
Layer of 8 HDI	2,030.00		2,006,155
Over layer of 10 HDI	2,181.00		5,008,438
Others	-		143,820
Net sales		$	11,869,456
	Summary of operating expenses
	Item		Amount
Selling expenses and	administrative expenses:
Salary expenses		$	440,945
Miscellaneous expense			132,703
Commissions expense			102,775
Others (less than 5% for each item)			464,591
Subtotal			1,141,014
Research and development expenses			64,470
Total		$	1,205,484

74

Unitech Printed Circuit Board Corporation

Statement of operating costs

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item		Amount
Direct raw material
Balance, beginning of year	$	110,438
Add: raw material purchased		1,717,268
Less: transferred to manufacturing expenses		(22,015)
direct raw material, end of year		(126,992)
Subtotal		1,678,699
Indirect raw material
Balance, beginning of year		137,276
Add: raw material purchased		1,884,091
Less: transferred to manufacturing expenses		(367,473)
indirect raw material, end of year		(128,495)
Subtotal		1,525,399
Direct labor		1,914,875
Manufacturing expenses		3,684,283
Manufacturing cost		8,803,256
Add: work in process, beginning of year		858,109
Less: work in process, end of year		(1,003,391)
transferred to other losses		(20,504)
transferred to research and development expenses		(688)
Cost of finished goods		8,636,782
Add: finished goods, beginning of year		143,853
finished goods(warehouse), beginning of year		171,702
Less: finished goods, end of year		(141,759)
transferred to other losses		(1,719)
finished goods(warehouse), end of year		(194,662)
Cost of goods sold- finished goods		8,614,197
Merchandise, beginning of the year		249,142
Add: Merchandise purchased		3,930,935
Less: Merchandise, end of the year		(275,821)
Cost of merchandise sold		3,904,256
Add: losses on inventory valuation and obsolescence		6,044
Less: advertisement expense and sample expenses		(23,457)
Income from scrap sales		(172,216)
Cost of sales	$	12,328,824

Statement of change in cost and accumulated depreciation of property, plant and equipment refer to note6(h). Statement of change in cost and accumulated depreciation of right-of-use assets refer to note6(i).