WALSIN — Annual Report 2021

Dec 23, 2021

Walsin Lihwa Corporation

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

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INDEPENDENT AUDITORS REPORT

The Board of Directors and Shareholders Walsin Lihwa Corporation

Opinion

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

In our opinion, based on our audits and the reports of other auditors (as set out in the Other Matter section of our report), 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 Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements as of and for the year ended December 31, 2021. 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.

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The following are key audit matter of the Company’s financial statements as of and for the year ended December 31, 2021:

Sales Revenue Recognition

In 2021, the main products of the Company’s wires and cables business unit include bare copper wires, wires and cables. The fluctuation in prices of bare copper wires is often subject to the movement in prices of raw materials, and thus some of the sales prices are set according to the market prices agreed under the contracts at the time of shipments. The Company prepares reports on point of sale transactions by referring to the actual shipments and market price adjustments as the basis for revenue recognition. Due to the large number of transactions and different market prices that have been agreed upon by customers, the processing, recording and maintenance of such reports are performed manually in which their amounts are significant to the financial statements. Therefore, the accuracy of revenue recognized from sales of bare copper wires was considered as a key audit matter. Refer to Notes 4 and 21 to the financial statements for related accounting policies and disclosure of information relating to revenue recognition.

Our audit procedures performed in respect of the above key audit matter were as follows:

1. We obtained an understanding and tested the reasonableness of revenue recognition policy and internal control procedures over the sales of bare copper wires, and evaluated the effectiveness of relevant internal controls.

2. We performed sampling and reconciliation of sales prices and quantities with their respective amounts in the contracts and verified the accuracy of market price adjustments.

3. We verified the accuracy of monthly reports by recalculating the sales revenue and confirmed that the recognized amounts were consistent with those recorded in the general ledger.

Other Matter

The financial statements of certain equity-method investees included in the financial statements as of and for the years ended December 31, 2021 and 2020 were audited by other auditors. Our opinion, insofar as it relates to such investments, is based solely on the reports of other auditors. The investments in such investees amounted to NT$5,587,877 thousand and NT$4,238,472 thousand, which constituted 3.39% and 3.02% of the total assets as of December 31, 2021 and 2020, respectively; and the investment gains amounted to NT$743,761 thousand and NT$995,518 thousand for the years ended December 31, 2021 and 2020, respectively.

Responsibilities of Management and Those Charged with Governance for the 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 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.

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Those charged with governance (including audit committee) 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 the 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.

5. 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.

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

7. 3 -

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

The engagement partners on the audit resulting in this independent auditors’ report are Wen-Yea Shyu and Ker-Chang Wu.

Deloitte & Touche Taipei, Taiwan Republic of China February 22, 2022

Notice to Readers

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

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

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WALSIN LIHWA CORPORATION

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Contract assets - current (Notes 4 and 8) Notes receivable from unrelated parties (Notes 4, 9 and 28) Trade receivables from unrelated parties (Notes 4 and 9) Trade receivables from related parties (Notes 4, 9 and 28) Other receivables (Note 28) Inventories (Notes 4 and 10) Other current assets (Note 6) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 11) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4 and 13) Right-of-use assets (Notes 4 and 14) Investment properties (Notes 4 and 15) Deferred tax assets - non-current (Notes 4 and 23) Refundable deposits Long-term receivables from related parties (Note 28) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Derivative financial liabilities hedging - current (Notes 4 and 18) Trade payables to unrelated parties Current tax liabilities (Notes 4 and 23) Other payables to unrelated parties Other payables to related parties (Note 28) Lease liabilities - current (Notes 4 and 14) Current portion of long-term borrowings (Note 16) Other current liabilities (Note 27) Total current liabilities NON-CURRENT LIABILITIES Bonds Payable (Note 17) Long-term borrowings (Note 16) Deferred tax liabilities - non-current (Notes 4 and 23) Lease liabilities - non-current (Notes 4 and 14) Net defined benefit liabilities (Notes 4 and 19) Other non-current liabilities (Note 25) Total non-current liabilities Total liabilities EQUITY (Note 20) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income Other equity-others Total other equity Total equity TOTAL		2021 Amount % $ 5,023,659 3 8,864 - 151,065 - 36,993 - 4,488,125 3 630,518 - 985,084 1 15,567,272 10 2,051,688 1 28,943,268 18 - - 16,139,524 10 92,360,069 56 17,411,273 10 81,050 - 8,243,668 5 1,291,573 1 27,548 - - - 182,006 - 135,736,711 82 $ 164,679,979 100 $ 5,074,632 3 37,439 - - - 3,040,224 2 2,040,190 1 2,498,452 2 178,362 - 20,564 - 10,500,000 7 372,874 - 23,762,737 15 7,500,000 5 24,640,014 15 2,151,564 1 64,580 - 451,697 - 225,863 - 35,033,718 21 58,796,455 36 34,313,329 21 18,440,875 11 6,109,568 4 2,712,250 1 38,965,389 24 47,787,207 29 (6,100,687) (4) 11,534,267 7 (91,467) - 5,342,113 3 105,883,524 64 $ 164,679,979 100		2020
				Amount % $ 4,511,090 3 66,059 - 12,937 - 27,277 - 2,243,175 2 342,552 - 271,722 - 8,502,797 6 2,443,728 2 18,421,337 13 5,683,859 4 6,783,229 5 77,247,465 55 17,493,296 12 80,629 - 8,314,798 6 981,573 1 26,913 - 5,349,885 4 87,872 - 122,049,519 87 $ 140,470,856 100 $ 6,591,019 5 15,839 - 165,774 - 2,522,328 2 108,164 - 2,237,404 2 5,772,308 4 20,500 - 6,000,000 4 759,039 - 24,192,375 17 - - 31,140,014 22 131,132 - 61,202 - 290,237 1 187,661 - 31,810,246 23 56,002,621 40 32,260,002 23 15,690,406 11 5,428,200 4 3,110,410 2 27,791,577 20 36,330,187 26 (5,905,135) (4) 6,092,775 4 - - 187,640 - 84,468,235 60 $ 140,470,856 100

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

(With Deloitte & Touche auditors’ report dated February 22, 2022)

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WALSIN LIHWA CORPORATION

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

OPERATING REVENUE (Notes 4 and 21) OPERATING COSTS (Note 10) (UNREALIZED) REALIZED GAIN ON THE TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Dividend income Other income Gain (loss) on disposal of property, plant and equipment Foreign exchange (losses) gains , net Gain on valuation of financial assets and liabilities at fair value through profit or loss Impairment loss (Note 22) Other expenses Gain (loss) on disposal of investments (Note 22) Interest expense Share of profit of subsidiaries and associates under the equity method Total non-operating income and expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX (EXPENSE) BENEFIT (Notes 4 and 23) NET PROFIT FOR THE YEAR		2021 Amount % $ 97,789,648 100 (84,881,753) (87) (13,335) - 12,894,560 13 1,258,609 1 1,257,078 1 180,944 - 2,696,631 2 10,197,929 11 225,171 - 560,552 1 447,284 - 683 - (311,352) - 654,576 1 (557,721) (1) (78,196) - 461,026 - (425,367) - 7,218,874 7 8,195,530 8 18,393,459 19 (3,750,830) (4) 14,642,629 15		2020
				Amount % $ 64,097,690 100 (59,641,481) (93) 1,357 - 4,457,566 7 745,090 1 915,989 2 115,346 - 1,776,425 3 2,681,141 4 151,325 - 110,905 - 70,318 - (5,483) - 73,937 - 728,770 1 - - (264,156) - (365,451) - (452,964) - 3,935,768 6 3,982,969 7 6,664,110 11 27,039 - 6,691,149 11

(Continued)

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WALSIN LIHWA CORPORATION

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

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Notes 4 and 19) Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Share of other comprehensive loss of associates accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) Basic Diluted		2021 Amount % $ (160,650) - 2,611,742 2 2,892,990 3 5,344,082 5 (67,717) - (127,834) - (195,551) - 5,148,531 5 $ 19,791,160 20 $ 4.27 $ 4.26		2020
				Amount % $ 43,670 - 1,258,198 2 2,479,966 4 3,781,834 6 (276,160) (1) (82,616) - (358,776) (1) 3,423,058 5 $ 10,114,207 16 $ 2.04 $ 2.04

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

(With Deloitte & Touche auditors’ report dated February 22, 2022)

(Concluded)

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WALSIN LIHWA CORPORATION

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

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by WLC Excess of the consideration received over the carrying amount of the subsidiaries' net assets during disposal Change in capital surplus from investments in associates accounted for using the equity method Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 Buy-back of ordinary shares Cancelation of treasury shares Others BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings (Note 20) Legal reserve Special reserve Cash dividends distributed by WLC Excess of the consideration received over the carrying amount of the subsidiaries' net assets during disposal Change in capital surplus from investments in associates accounted for using the equity method Issuance of new shares in exchange for the shares of another company Net profit for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021, net of income tax Total comprehensive income (loss) for the year ended December 31, 2021 Others BALANCE AT DECEMBER 31, 2021	Share Capital Capital Surplus $ 33,260,002 $ 16,055,238 - - - - - - - - - 135,304 - - - - - - - - (1,000,000 ) (500,108 ) - (28) 32,260,002 15,690,406 - - - - - - - 3,124 - (26,782 ) 2,053,327 2,771,798 - - - - - - - 2,329 $ 34,313,329 $ 18,440,875		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 5,113,232 $ 4,043,138 $ 22,023,141 314,968 - (314,968 ) - (932,728 ) 932,728 - - (1,663,000 ) - - (2,481 ) - - 97,145 - - 6,691,149 - - 27,863 - - 6,719,012 - - - - - - - - - 5,428,200 3,110,410 27,791,577 681,368 - (681,368 ) - (398,160 ) 398,160 - - (3,088,200 ) - - - - - 77,160 - - - - - 14,642,629 - - (174,569) - - 14,468,060 - - - $ 6,109,568 $ 2,712,250 $ 38,965,389	Other Equity	Other Treasury Shares $ - $ - - - - - - - - - - - - - - - - - - (1,500,108 ) - 1,500,108 - - - - - - - - - - - - (91,467 ) - - - - - - - - - - - $ (91,467) $ -	Total Equity $ 77,384,341 - - (1,663,000 ) (2,481 ) 135,304 6,691,149 3,423,058 10,114,207 (1,500,108 ) - (28) 84,468,235 - - (3,088,200 ) 3,124 (118,249 ) 4,825,125 14,642,629 5,148,531 19,791,160 2,329 $ 105,883,524
				Exchange Differences on Translating the Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value through Financial Statements of Foreign Operations Other Comprehensive Income $ (5,546,359 ) $ 2,435,949 - - - - - - - - - (97,145 ) - - (358,776) 3,753,971 (358,776) 3,753,971 - - - - - - (5,905,135 ) 6,092,775 - - - - - - - - - (77,160 ) - - - - (195,552) 5,518,652 (195,552) 5,518,652 - - $ (6,100,687) $ 11,534,267

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

(With Deloitte & Touche auditors’ report dated February 22, 2022)

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WALSIN LIHWA CORPORATION

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

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Net gain on fair value change of financial assets and liabilities designated as at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of subsidiaries and associates under the equity method (Gain) loss on disposal of property, plant and equipment (Gain) loss on disposal of investments Impairment loss recognized on non-financial assets Unrealized (realized) gain on the transaction with associates Gain on lease modifications Net loss on foreign currency exchange Changes in operating assets and liabilities Decrease (increase) in financial assets mandatorily classified as at fair value through profit or loss (Increase) decrease in contract assets (Increase) decrease in notes receivable (Increase) decrease in trade receivables (Increase) decrease in other receivables (Increase) decrease in inventories Decrease (increase) in other current assets Increase in other financial assets Increase in other operating assets Increase in trade payables Increase in other payables Increase (decrease) in net defined benefit liabilities (Decrease) increase in other current liabilities Increase in other operating liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities	2021 $ 18,393,459 1,343,326 445 (654,576) 425,367 (225,171) (560,552) (7,218,874) (683) (461,026) 557,721 13,335 - 1,784 297,214 (138,128) (9,716) (2,532,916) (640,575) (7,064,475) 406,860 (14,820) (64,888) 517,896 525,554 810 (399,500) 38,202 2,536,073 235,112 1,358,109 (498,619) (138,061) 3,492,614	2020 $ 6,664,110 1,279,845 222 (728,770) 452,964 (151,325) (110,905) (3,935,768) 5,483 365,451 - (1,357) (38) 130,929 (214,241) 318,258 25,476 19,466 20,229 857,092 (1,982,992) (86,833) (85,778) 22,352 7,471 (128,289) 628,583 13,412 3,385,047 151,360 1,023,577 (373,617) (264,356) 3,922,011

(Continued)

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WALSIN LIHWA CORPORATION

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

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Capital reduction and refund from financial assets at fair value through other comprehensive income Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Acquisition of associates accounted for using the equity method Repatriation through the liquidation and capital reduction of investee companies accounted for using the equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Decrease (increase) in other receivables Payments for investment properties Other investing activities Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Proceeds from bonds payable Proceeds from long-term borrowings Repayment of long-term borrowings (Decrease) increase in other payables to related parties Repayment of the principal portion of lease Cash dividends paid Payments for buy-back of ordinary shares Other financing activities Net cash (used in) generated from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2021 $ (1,944,281) 3,615 - 4,948,895 (6,760,343) 699,515 (1,729,419) 2,204 (635) 7,016,224 (2,362) (404,184) 1,829,229 (1,559,788) 7,500,000 4,000,000 (6,000,000) (5,640,652) (23,133) (3,088,030) - 2,329 (4,809,274) 512,569 4,511,090 $ 5,023,659	2020 $ (477,574) - (5,353,790) - (7,181,164) 10,044,855 (1,025,204) 1,465 32,866 (5,573,463) - (370,896) (9,902,905) (2,708,228) - 20,640,014 (6,500,000) 962,923 (24,052) (1,662,891) (1,500,108) (28) 9,207,630 3,226,736 1,284,354 $ 4,511,090

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated February 22, 2022)

(Concluded)

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

WALSIN LIHWA CORPORATION

1. GENERAL INFORMATION

Walsin Lihwa Corporation (the “Company”) was incorporated in December 1966 and commenced business in December 1966. The Company made various investments in construction, electronics, material science, real estate, etc., to diversify its operations. The Company’s main products are wires, cables and stainless steel.

The Company’s shares have been listed on the Taiwan Stock Exchange (TWSE) since November 1972. In October 1995 and November 2010, the Company increased its share capital and issued global depositary shares (GDR), which are listed on the Luxembourg Stock Exchange under stock number 168527.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on February 22, 2022.

3. APPLICATION OF NEW AND REVISED STANDARDS, AMENDED AND INTERPRETATIONS

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

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have a material impact on the Company’s accounting policies.

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

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by the IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

• Note 1: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

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• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• 1) Annual Improvements to IFRS Standards 2018-2020

Several standards, including IFRS 9 “Financial Instruments”, were amended in the annual improvements. IFRS 9 requires the comparison of the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received, with that of the cash flows under the original financial liability when there is an exchange or modification of debt instruments. The new terms and the original terms are substantially different if the difference between those discounted present values is at least 10%. The amendments to IFRS 9 clarify that the only fees that should be included in the above assessment are those fees paid or received between the borrower and the lender.

• 2) Amendments to IFRS 3 “Reference to the Conceptual Framework”

The amendments replace the references to the Conceptual Framework of IFRS 3 and specify that the acquirer shall apply IFRIC 21 “Levies” to determine whether the event that gives rise to a liability for a levy has occurred at the acquisition date.

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

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The cost of those items is measured in accordance with IAS 2 “Inventories”. Any proceeds from selling those items and the cost of those items are recognized in profit or loss in accordance with applicable standards.

• 4) Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”

The amendments specify that when assessing whether a contract is onerous, the “cost of fulfilling a contract” includes both the incremental costs of fulfilling that contract (for example, direct labor and materials) and an allocation of other costs that relate directly to fulfilling contracts (for example, an allocation of depreciation for an item of property, plant and equipment used in fulfilling the contract).

Except for the above impact, as of the date the financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

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

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

Effective Date Announced by IASB (Note 1)

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

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

• 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture”

The amendments stipulate that, when the Company sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate, the gain or loss resulting from the transaction is recognized in full. Also, when the Company loses control of a subsidiary that contains a business but retains significant influence, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Company sells or contributes assets that do not constitute a business to an associate, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate, i.e., the Company’s share of the gain or loss is eliminated. Also, when the Company loses control of a subsidiary that does not contain a business but retains significant influence over an associate, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate, i.e., the Company’s share of the gain or loss is eliminated.

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• 2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

• 3) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Company should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

• Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

• The Company may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and

• Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

• a) The Company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;

• b) The Company chose the accounting policy from options permitted by the standards;

• c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;

• d) The accounting policy relates to an area for which the Company is required to make significant judgements or assumptions in applying an accounting policy, and the Company discloses those judgements or assumptions; or

• e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

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• 4) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Company uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

• 5) Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The amendments clarify that the initial recognition exemption under IAS 12 does not apply to transactions in which equal taxable and deductible temporary differences arise on initial recognition. The Company will recognize a deferred tax asset (to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized) and a deferred tax liability for all deductible and taxable temporary differences associated with leases and decommissioning obligations on January 1, 2022, and recognize the cumulative effect of initial application in retained earnings at that date. The Company will apply the amendments prospectively to transactions other than leases and decommissioning obligations that occur on or after January 1, 2022.

Except for the above impact, as of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

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

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

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

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

Current assets include:

• Assets held primarily for the purpose of trading;

• Assets expected to be realized within 12 months after the reporting period; and

• Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• Liabilities held primarily for the purpose of trading;

• Liabilities due to be settled within 12 months after the reporting period and

• Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

• d. Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction not retranslated.

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e. Inventories

Inventories consist of raw materials, supplies, finished goods and work-in-process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to Company similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

f. Investments accounted for using the equity method

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

1) Investment in subsidiaries

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

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

When the Company’s share of loss of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further loss, if any.

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

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides this, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Company directly disposed of the related assets or liabilities.

Profit or loss resulting from downstream transactions is eliminated in full only in the financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

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2) Investment in associates

An associate is an entity over which the Company has significant influence and which is neither a subsidiary nor an interest in a joint venture. The Company uses the equity method to account for its investments in associates.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of equity of associates.

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

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

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

When the Company’s share of losses of an associate equals or exceeds its interest in that associate, the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from investments and the carrying amount of investment is net of impairment loss. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which it ceases to have significant influence over the associate. Any retained investment is measured at fair value on that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

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When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s financial statements only to the extent of interests in the associate that are not related to the Company.

• g. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

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

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

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

• h. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties also include land held for a currently undetermined future use.

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

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

• i. Intangible assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis within useful lives. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives are reported at cost less accumulated impairment loss.

On derecognition of an intangible asset, the differences between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

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• j. Impairment of property, plant and equipment, right-of-use asset, investment properties, intangible assets other than goodwill and assets related to contract costs

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

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

Before the Company recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories, property, plant and equipment and intangible assets related to the contract applicable under IFRS 15 shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

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

• k. Financial instruments

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

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

Financial assets

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

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• 1) Measurement category

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

• a) Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 27.

• b) Financial assets at amortized cost

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

• i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

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

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

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

• i. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

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

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition or time deposits with original maturities within 3-12 months from the date of acquisition and the interest paid to deposits which are terminated before maturity are higher than demand deposits, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

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• c) Investments in equity instruments at FVTOCI

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

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

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

• 2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments that are measured at FVTOCI, operating lease receivables, as well as contract assets.

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables, operating lease receivables and contract assets. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

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

• a) Internal or external information show that the debtor is unlikely to pay its creditors.

• b) When a financial asset is more than 90 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

• 3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

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

Equity instruments

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

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

Financial liabilities

• 1) Subsequent measurement

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

• a) Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liabilities are held for trading. Financial liabilities held for trading are stated at fair value, and any gains or losses on such financial liabilities are recognized in other gains or losses. Fair value is determined in the manner described in Note 27.

• b) Financial guarantee contracts

Financial guarantee contracts issued by the Company, if not designated as at FVTPL, are subsequently measured at the higher of:

• i. The amount of the loss allowance reflecting expected credit losses; and

• ii. The amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with the revenue recognition policies.

• 2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts and interest rate swaps.

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

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

l. Hedge accounting

The Company designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

1) Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognized in profit or loss in the line item relating to the hedged item.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised.

2) Cash flow hedges

The effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gains or losses relating to the ineffective portion are recognized immediately in profit or loss.

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as reclassification adjustments in the line items relating to the hedged item in the same period in which the hedged item affects profit or loss. If a hedge of a forecasted transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the non-financial asset or non-financial liability.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that was previously recognized in other comprehensive income (from the period in which the hedge was effective) remains separately in equity until the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the gains or losses accumulated in equity are recognized immediately in profit or loss.

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m. Levies

Levies imposed by a government are accrued as other liabilities when the transactions or activities that trigger the payment of such levies occur. If the obligating event occurs over a period of time, the liability is recognized progressively. If an obligation to pay a levy is triggered upon reaching a minimum threshold, the liability is recognized when that minimum threshold is reached.

• n. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

• o. Revenue recognition

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

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of wires, cables and stainless steel. Sales of wires, cables and stainless steel are recognized as revenue when the customer has full discretion over the manner of distribution and the price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Revenue from the others

• a) Revenue from the reading of services

Service income is recognized when services are rendered. Revenue should be recognized over time by measuring the progress toward complete satisfaction of the performance obligation.

• b) Construction contract revenue

A contract asset is recognized during construction and is reclassified to trade receivables at the point at which it is invoiced to the customer. If the milestone payment exceeds the revenue recognized to date, then the Company recognizes a contract liability for the difference. Certain payments retained by the customer as specified in the contract are intended to ensure that the Company adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Company satisfies its performance obligation.

When it is not able to reasonably measure the Company progress toward satisfaction of the performance obligation but expects to recover costs, the Company recognizes revenue only to the extent of costs incurred.

• p. Leases

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

• 1) The Company as lessor

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

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Under finance leases, the lease payments comprise fixed payments and variable lease payments which depend on an index or a rate. The net investment in a lease is measured at (a) the present value of the sum of the lease payments receivable by a lessor and any unguaranteed residual value accrued to the lessor plus (b) initial direct costs and is presented as a finance lease receivable. Finance lease income is allocated to the relevant accounting periods so as to reflect a constant, periodic rate of return on the Company’s net investment outstanding in respect of leases.

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

2) The Company as lessee

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

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

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate, residual value guarantees, the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives receivable. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the amounts expected to be payable under a residual value guarantee, a change in the assessment of an option to purchase an underlying asset, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

The Company negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 to change the lease payments originally due by June 30, 2022, that results in the revised consideration for the lease less than, the consideration for the lease immediately preceding the change. There is no substantive change to other terms and conditions. The Company elects to apply the practical expedient to all of these rent concessions and, therefore, does not assess whether the rent concessions are lease modifications. Instead, the Company recognizes the reduction in lease payment in profit or loss as, in the period in which the events or conditions that trigger the concession occur, and makes a corresponding adjustment to the lease liability.

• 26 -

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

• q. Government grants

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

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

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they are received.

The benefit of a government loan received at a below-market rate of interest is treated as a government grant measured as the difference between the proceeds received and the fair value of the loan based on prevailing market interest rates.

• r. Employee benefits

• 1) Short-term employee benefits

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

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

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

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

s. Income tax

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

1) Current tax

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

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

• 27 -

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all (deductible temporary differences and unused loss carry forward) to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The accounts include allowance for doubtful trade receivable accounts, inventory valuation losses, depreciation, impairment, pension, deferred tax assets, etc. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The Company considers the development of the country and the economic implications of the COVID-19 when making its critical accounting estimates such as estimation of cash flow, growth rate, discount rate and profitability. The estimates and underlying assumptions are audited on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

• 28 -

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and cash in bank		December 31	December 31
		2021 $ 1,050 5,022,609 $ 5,023,659	2020 $ 1,050 4,510,040 $ 4,511,090

The market rate intervals of cash in the bank at the end of the year were as follows (except for checking accounts’ interest rate of 0.00%):

Bank balance	**December 31 **
	2021 2020 0.001%-0.11% 0.001%-0.30%

As of December 31, 2021 and 2020, certain time deposits were classified and pledged as follows:

Purpose Other current assets - other Refundable deposits Negotiable certificate of deposits (not expired) Repatriation of offshore fund and projects grants Non-current assets Other - pledged time deposits To meet required security deposits		**December **	**31 **
		2021 $ - 80,493 80,493 600 $ 81,093	2020 $ 2,300 85,160 87,460 600 $ 88,060

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting) Commodity futures contracts Foreign exchange forward contracts Hybrid financial assets Corporate bonds Financial assets at FVTPL Current Non-current		December 31	December 31
		2021 $ 873 7,991 - $ 8,864 $ 8,864 - $ 8,864	2020 $ 66,059 - 5,683,859 $ 5,749,918 $ 66,059 5,683,859 $ 5,749,918

(Continued)

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Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts Exchange rate swap contracts Financial liabilities at FVTPL Current Non-current		**December 31 **	**December 31 **
		2021 $ - 37,439 $ 37,439 $ 37,439 - $ 37,439	2020 $ 15,839 - $ 15,839 $ 15,839 - $ 15,839 (Concluded)

As of December 31, 2021 and 2020, outstanding commodity futures not under hedge accounting were as follows:

							Valuation	Valuation
	Type of	Quantity		Expiration	Exercise Price	Market Price	(Loss) Gain
	Transaction	(Tons)	Trade Date	Date	(In Thousands)	(In Thousands)	(In Thousands)
December 31, 2021
Commodity futures
Copper	Buy	9,925	2021.09.01-	2022.01.19-	US$ 94,424	US$ 96,834	US$	2,410
			2021.12.31	2022.04.20
Copper	Sell	3,050	2021.12.10-	2022.01.19-	US$ 29,229	US$ 29,846	US$	(617 )
			2021.12.31	2022.03.31
Nickel	Sell	2,238	2021.11.04-	2022.02.04-	US$ 44,698	US$ 46,459	US$	(1,761 )
			2021.12.31	2022.03.31
December 31, 2020
Commodity futures
Copper	Buy	10,250	2020.04.30-	2021.01.20-	US$ 76,919	US$ 79,276	US$	2,357
			2020.12.31	2021.10.20
Nickel	Sell	882	2020.10.15-	2021.01.15-	US$ 14,560	US$ 14,597	US$	(37 )
			2020.12.17	2021.03.17

As of December 31, 2021 and 2020, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

Notional Amount Currency Maturity Date (In Thousands) December 31, 2021 Sell EUR to USD 2022.01.08-2022.02.17 EUR18,000/USD20,326 USD to NTD 2022.01.07-2022.02.10 USD100,000/NTD2,776,800 Buy EUR to USD 2022.01.10 EUR25,405/USD28,694 USD to NTD 2022.01.06-2022.02.21 USD129,363/NTD3,579,887 USD to JPY 2022.01.12-2022.01.18 USD4,784/JPY547,970 December 31, 2020 Sell EUR to USD 2021.04.08 EUR8,180/USD10,065 USD to NTD 2021.04.08 USD10,000/NTD280,870 Buy USD to NTD 2021.01.05 USD60,000/NTD1,699,190 USD to JPY 2021.01.28 USD5,343/JPY553,220

• 30 -

As of the December 31, 2021, outstanding exchange rate swap contracts not under hedge accounting were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2021	USD to NTD	2022.01.12	USD75,000/NTD2,097,188
			USD to NTD	2022.01.12	USD70,000/NTD1,957,375
			USD to NTD	2022.01.14	USD40,000/NTD1,109,600

For the years ended December 31, 2021 and 2020, the Company’s strategy for commodity futures contracts, forward exchange contracts and exchange rate swap contracts was to hedge exposures to fluctuations of essential materials’ prices and foreign exchange rates. However, those derivative financial instruments did not meet the criteria of hedge effectiveness; therefore, they were not accounted for by hedge accounting.

In January 2020, the Company bought 2-year corporate bonds of Golden Harbour International Pte. Ltd. in the amount of US$178,500 thousand. The bonds are embedded derivative instruments that pay a fixed interest rate of 5% plus a floating spread per annum. Due to the cash flow demand, the Company communicated with Golden Harbour International Pte. Ltd. on August 27, 2021 to exercise the early redemption to pay back the bonds. Refer to Note 12.

In January 2020, the Company bought an option contract for US$50 thousand. Under the contract, the issuer of the option will make an unconditional payment to the Company for the principal and interest of the abovementioned bonds if Golden Harbour International Pte. Ltd fails to redeem the bonds at maturity.

8. CONTRACT ASSETS

At the end of the year, contract balances were as follows:

Contract assets Cable installation Less: Allowance for impairment loss Contract assets - current		**December 31 **	**December 31 **
		2021 $ 151,065 - $ 151,065	2020 $ 12,937 - $ 12,937

The changes in the balance of contract assets and contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment.

• 31 -

9. NOTES RECEIVABLE AND TRADE RECEIVABLES

Notes receivable Notes receivable Notes receivable-non-operating Notes receivable from related parties Trade receivables Trade receivables Less: Allowance for impairment loss Trade receivables from related parties	December 31
	2021 2020 $ 36,024 $ 26,292 969 985 $ 36,993 $ 27,277 $ 4,488,125 $ 2,243,175 - - 4,488,125 2,243,175 630,518 342,552 $ 5,118,643 $ 2,585,727

The average credit period on the sales of goods was 60 days. In determining the collectability of a trade receivable, the Company considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. When the Company dealt with new entities, the Company reviewed the credit ratings of the entities and obtained sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company uses other publicly available financial information or its own trading records to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. In this regard, the management believes the Company’s credit risk is significantly reduced.

The Company applies the simplified approach to allowances for expected credit losses prescribed by IFRS 9, which permits the use of a lifetime expected credit loss allowance for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience with the respective debtors and an analysis of the debtors’ current financial positions. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the loss allowance based on the past due status of receivables is not further distinguished according to different segments of the Company’s customer base.

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

• 32 -

The following table details the loss allowance of trade receivables based on the Company’s provision matrix.

December 31, 2021

Not Past Due Up to 90 Days Expected credit loss rate 0% 0%-2% Gross carrying amount $ 4,940,106 $ 178,537 Loss allowance (lifetime ECLs) - - Amortized cost $ 4,940,106 $ 178,537 December 31, 2020 Not Past Due Up to 90 Days Expected credit loss rate 0% 0%-2% Gross carrying amount $ 2,576,308 $ 9,419 Loss allowance (lifetime ECLs) - - Amortized cost $ 2,576,308 $ 9,419	91 to 180 Days 0%-50% $ - - $ - 91 to 180 Days 0%-50% $ - - $ -	181 to 365 Days 0%-100% $ - - $ - 181 to 365 Days 0%-100% $ - - $ -	More than 365 Days 50%-100% $ - - $ - More than 365 Days 50%-100% $ - - $ -	Total $ 5,118,643 -
				$ 5,118,643
				Total $ 2,585,727 -
				$ 2,585,727

10. INVENTORIES

Raw materials Raw materials in transit Supplies Work-in-process Finished goods and merchandise Construction in progress		December 31	December 31
		2021 $ 2,852,040 2,446,150 1,161,688 1,732,064 7,145,905 229,425 $ 15,567,272	2020 $ 1,808,818 1,392,585 1,082,773 1,038,714 2,862,295 317,612 $ 8,502,797

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2021 and 2020 was NT$84,624,278 thousand and NT$59,353,177 thousand, respectively.

The cost of goods sold for the years ended December 31, 2021 and 2020 included reversals of inventory write-downs of NT$15,985 thousand and NT$299,477 thousand, respectively. The reversals of previous write-downs for the years ended December 31, 2021 and 2020 resulted from the inventory closeout.

• 33 -

11. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Domestic listed ordinary shares HannStar Display Corp. HannStar Board Corp. Teco Electric & Machinery Co., Ltd. Domestic unlisted ordinary shares Current Non-current		December 31	December 31
		2021 $ 5,423,342 2,894,429 7,293,386 528,367 $ 16,139,524 $ - 16,139,524 $ 16,139,524	2020 $ 3,685,476 2,763,734 26,378 307,641 $ 6,783,229 $ - 6,783,229 $ 6,783,229

These investments in equity instruments are not held for trading. Instead, they are held for medium- to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair values in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

On December 31, 2021 and 2020, the unrealized valuation gains resulting from these investments in equity instruments were gains of NT$2,611,742 thousand and NT$1,258,198 thousand, respectively, recognized in other comprehensive income (loss).

On January 6, 2021, the Company issued 205,333 thousand shares in exchange for 171,104 thousand shares of TECO Electric & Machinery Co., Ltd. WLC and TECO agreed to build a strategic alliance to enhance competitiveness and cooperation in next generation smart grid, smart manufacturing, and green energy industry. In addition, the Company also acquired the shares of TECO Electric & Machinery Co., Ltd. from the open market. As of December 31, 2021 and December 31, 2020, the Company held a total of 230,439 thousand and 954 thousand shares, respectively, of TECO Electric & Machinery Co., Ltd.

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates		December 31	December 31
		2021 $ 54,273,810 38,086,259 $ 92,360,069	2020 $ 45,661,308 31,586,157 $ 77,247,465

• 34 -

a. Investments in subsidiaries

Name of Subsidiary Unlisted companies: Walsin Lihwa Holdings Ltd. Concord Industries Ltd. Walsin Precision Technology Sdn. Bhd. Min Maw Precision Industry Corp. Ace Result Limited Walsin Info-Electric Inc. Chin-Cherng Construction Co., Ltd. P.T Walsin Lippo Industries Joint Success Enterprises Ltd. PT. Walsin Nickel Industrial Indonesia New Hono Investment Pte. Ltd. Others	December 31	December 31
	2021 Carrying Value Ownership Percentage $ 26,803,960 100.00 5,353,142 100.00 447,963 100.00 (Note 1) 365,703 100.00 383,632 100.00 335,371 99.51 6,348,728 99.22 818,205 70.00 5,175,692 49.05 2,381,125 50.00 (Note 2) 5,828,396 100.00 (Note 2) 31,893 $ 54,273,810	2020
		Carrying Value Ownership Percentage $ 26,135,792 100.00 4,631,181 100.00 - - 334,644 100.00 339,349 100.00 340,934 99.51 6,452,096 99.22 783,754 70.00 5,319,464 49.05 1,306,341 50.00 (Note 2) - - 17,753 $ 45,661,308

• Note 1: In order to adjust the investment structure of the Company, it was transferred from Concord Industries Ltd to Walsin Lihwa Co., Ltd.

• Note 2: In January 2020, the Company invested capital to establish PT. Walsin Nickel Industrial Indonesia (“WNII”). New Hono Investment Pte. Ltd (“NHI”) held 42% equity of WNII. According to the joint venture agreement signed by the Company and NHI in January 2020, the Company had the right to purchase 100% of NHI’s shares on the terms agreed by all parties to acquire 42% equity of WNII indirectly. On June 25, 2021, the board of directors of the Company resolved to acquire 100% of NHI’s shares and the Company acquired 100% of NHI’s shares at a price US$178,500 thousand on July 30, 2021. After the transaction, the Company directly and indirectly acquired 92% of WNII’s shares. The Investment Commission of the Ministry of Economic Affairs has approved the investment to pay by the Company’s own foreign exchange. Therefore, the Company communicated with Golden Harbour International Pte. Ltd. to exercise the early redemption and to pay back the US-currency bonds. The Company will pay the purchase of NHI’s shares by the redemption of the bonds. As of December 31, 2021, US$178,500 thousand has been paid.

• 35 -

b. Investments in associates

Name of Associate Material associates Winbond Electronics Corp. Walton Advanced Engineering, Inc. Walsin Technology Corp. Associates that are not individually material Others	December 31	December 31
	2021 Carrying Value Ownership Percentage $ 18,357,864 22.21 2,322,664 21.01 8,166,415 18.30 9,239,316 $ 38,086,259	2020
		Carrying Value Ownership Percentage $ 14,595,661 22.21 2,601,028 21.65 7,068,731 18.30 7,320,737 $ 31,586,157

Refer to Table 8 “Information on Investees” and Table 9 “Information on Investments in Mainland China” for the nature of activities, principal places of business and countries of incorporation of the associates.

The Company is the single largest shareholder of the above-mentioned material associates in which the Company has an ownership percentage of less than 50%. Considering the relative size and wide dispersion of the voting rights owned by other shareholders, the Company has no ability to direct the relevant activities of the associates and therefore has no control over these associates.

Fair values (Level 1) of investments in associates with available published price quotations are summarized as follows:

Name of Associate Winbond Electronics Corp. Walton Advanced Engineering, Inc. Walsin Technology Corp.		**December 31 **	**December 31 **
		2021 $ 30,050,846 $ 2,066,495 $ 14,846,688	2020 $ 25,675,797 $ 1,512,872 $ 20,491,986

All the associates were accounted for using the equity method.

The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

• 36 -

• 1) Material associates

December 31, 2021

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Company’s ownership Equity attributable to the Company Other adjustments Carrying amount Operating revenue Net profit for the year Other comprehensive income (loss) Total comprehensive income for the year December 31, 2020 Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Company’s ownership	Winbond Electronics Corp. $ 72,506,733 80,233,551 (28,644,931) (34,061,841) 90,033,512 (7,589,399) $ 82,444,113 22.21% $ 18,310,837 47,027 $ 18,357,864 $ 99,569,924 $ 15,000,122 4,186,931 $ 19,187,053 Winbond Electronics Corp. $ 47,530,801 78,512,439 (25,475,006) (29,975,547) 70,592,687 (5,143,568) $ 65,449,119 22.21%	Walton Advanced Engineering, Inc. $ 8,361,878 13,155,507 (5,019,961) (5,259,172) 11,238,252 (297,416) $ 10,940,836 21.01% $ 2,298,670 23,994 $ 2,322,664 $ 8,118,256 $ 118,732 (892,554) $ (773,822) Walton Advanced Engineering, Inc. $ 6,497,236 11,013,279 (3,189,422) (2,436,908) 11,884,185 - $ 11,884,185 21.65%	Walsin Technology Corp. $ 41,187,886 52,910,618 (21,557,433) (19,062,857) 53,478,214 (9,089,372) $ 44,388,842 18.30% $ 8,123,158 43,257 $ 8,166,415 $ 42,108,708 $ 8,961,076 1,157,156 $ 10,118,232 Walsin Technology Corp. $ 39,636,422 42,416,526 (19,714,368) (16,684,386) 45,654,194 (7,033,732) $ 38,620,462 18.30% (Continued)

• 37 -

Equity attributable to the Company Other adjustments Carrying amount Operating revenue Net profit for the year Other comprehensive income (loss) Total comprehensive income for the year 2) Associates that are not individually material The Company’s share of: Profit from continuing operations Other comprehensive income Total comprehensive income for the year	Winbond Electronics Corp. $ 14,536,249 59,412 $ 14,595,661 $ 60,683,171 $ 1,519,043 3,291,251 $ 4,810,294	Walton Advanced Engineering, Inc. Walsin Technology Corp. $ 2,572,926 $ 7,067,545 28,102 1,186 $ 2,601,028 $ 7,068,731 $ 5,399,201 $ 35,599,197 $ 254,887 $ 7,217,645 (49,194) 657,013 $ 205,693 $ 7,874,658 (Concluded) **For the Year Ended December 31 **	Walton Advanced Engineering, Inc. Walsin Technology Corp. $ 2,572,926 $ 7,067,545 28,102 1,186 $ 2,601,028 $ 7,068,731 $ 5,399,201 $ 35,599,197 $ 254,887 $ 7,217,645 (49,194) 657,013 $ 205,693 $ 7,874,658 (Concluded) **For the Year Ended December 31 **	Walton Advanced Engineering, Inc. Walsin Technology Corp. $ 2,572,926 $ 7,067,545 28,102 1,186 $ 2,601,028 $ 7,068,731 $ 5,399,201 $ 35,599,197 $ 254,887 $ 7,217,645 (49,194) 657,013 $ 205,693 $ 7,874,658 (Concluded) **For the Year Ended December 31 **
			2021 $ 185,157 1,794,745 $ 1,979,902	2020 $ 70,065 1,779,371 $ 1,849,436

The Company’s share of profit and other comprehensive income of associates for the years ended December 31, 2021 and 2020 was based on the associates’ financial statements audited by independent auditors for the same period. The financial statements of certain equity-method investees included in the financial statements were not audited by the auditors of the Company, but were audited by other independent auditors. The investment in such investee amounted to NT$5,587,877 thousand and NT$4,238,472 thousand as of December 31, 2021 and 2020, respectively; investment gain amounted to NT$743,761 thousand and NT$995,518 thousand for the years ended December 31, 2021 and 2020, respectively.

• 38 -

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2021 Additions Disposals Reclassified Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Disposals Impairment losses recognized (reversed) Depreciation expense Reclassified Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Additions Disposals Reclassified Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation expense Reclassified Balance at December 31, 2020 Carrying amount at December 31, 2020	Land Buildings and Improvements Machinery and Equipment $ 3,483,995 $ 6,898,636 $ 20,102,064 78,421 54,540 163,434 (1,164 ) (25,232 ) (90,497 ) 49,773 291,068 263,379 $ 3,611,025 $ 7,219,012 $ 20,438,380 $ 8,067 $ 4,146,696 $ 11,464,404 - (25,232 ) (90,296 ) - 24,962 553,609 - 164,134 815,930 - 55,108 8,231 $ 8,067 $ 4,365,668 $ 12,751,878 $ 3,602,958 $ 2,853,344 $ 7,686,502 $ 3,453,378 $ 6,656,121 $ 19,710,620 30,617 47,012 229,209 - (1,265 ) (231,033 ) - 196,768 393,268 $ 3,483,995 $ 6,898,636 $ 20,102,064 $ 8,067 $ 3,996,520 $ 10,918,051 - (1,265 ) (224,182 ) - 151,441 771,511 - - (976) $ 8,067 $ 4,146,696 $ 11,464,404 $ 3,475,928 $ 2,751,940 $ 8,637,660	Other Equipment Construction in Progress $ 4,018,641 $ 1,283,927 290,573 1,136,216 (62,645 ) (60 ) 36,374 (640,594) $ 4,282,943 $ 1,779,489 $ 2,674,800 $ - (62,549 ) - (20,850 ) - 265,901 - (63,339) - $ 2,793,963 $ - $ 1,488,980 $ 1,779,489 $ 3,788,415 $ 1,467,291 150,553 574,927 (88,582 ) - 168,255 (758,291) $ 4,018,641 $ 1,283,927 $ 2,531,329 $ - (88,485 ) - 230,980 - 976 - $ 2,674,800 $ - $ 1,343,841 $ 1,283,927	Total $ 35,787,263 1,723,184 (179,598 ) - $ 37,330,849 $ 18,293,967 (178,077 ) 557,721 1,245,965 - $ 19,919,576 $ 17,411,273 $ 35,075,825 1,032,318 (320,880 ) - $ 35,787,263 $ 17,453,967 (313,932 ) 1,153,932 - $ 18,293,967 $ 17,493,296

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings and improvements 3-50 years Machinery and equipment 3-20 years Other equipment 3-15 years

The Company’s main building and electrical and mechanical power equipment are depreciated over their estimated useful lives of 50 years and 20 years, respectively.

The Company owns parcels of land which were registered in the name of certain individuals because of certain regulatory restrictions. To secure its ownership of such parcels of land, the Company keeps in its possession the land titles with the annotation of being pledged to the Company. As of December 31, 2021 and 2020, the recorded total carrying value of such parcels of land amounted NT$491,917 thousand.

After appropriate evaluation, the Company recognized an impairment loss on property, plant and equipment of NT$557,721 thousand for the year ended December 31, 2021.

• 39 -

14. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Buildings Transportation equipment Additions to right-of-use assets Disposal Depreciation charge for right-of-use assets Land Buildings Transportation equipment		**December **	**31 **
	2021 2020 $ 49,464 $ 56,108 472 5,710 31,114 18,811 $ 81,050 $ 80,629 **For the Year Ended December 31 **
		2021 $ 24,290 $ - $ 6,644 5,238 11,987 $ 23,869	2020 $ 60,951 $ (1,052) $ 7,916 5,228 10,212 $ 23,356

b. Lease liabilities

Carrying amount Current Non-current		December	31
		2021 $ 20,564 $ 64,580	2020 $ 20,500 $ 61,202

Range of discount rates for lease liabilities was as follows:

Land Buildings Transportation equipment Other lease information Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	December 31	December 31	December 31
	2021 2020 1.75%-3.759% 1.75%-3.759% 1.409%-1.9% 1.409%-1.9% 3.038% 3.038% For the Year Ended December 31
		2021 $ 16,203 $ 201 $ (39,537)	2020 $ 11,370 $ 109 $ (35,531)

c. Other lease information

• 40 -

15. INVESTMENT PROPERTIES

Completed investment properties Cost Balance at January 1, 2021 Additions Balance at December 31, 2021 Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Balance at December 31, 2021 Balance at January 1, 2020 Depreciation expense Balance at December 31, 2020		**December 31 **	**December 31 **
		2021 $ 8,243,668	2020 $ 8,314,798 Completed Investment Properties $ 9,975,140 2,362 $ 9,977,502 $ 9,975,140 - $ 9,975,140 $ 1,660,342 73,492 $ 1,733,834 $ 1,557,785 102,557 $ 1,660,342

The completed investment properties are depreciated using the straight-line method over their estimated useful lives of 20 to 50 years.

The main investment properties of the Company are the Walsin Xin Yi Building and other completed investment properties. The building valuation was commissioned by independent appraisal agencies (third parties). As of December 31, 2021 and 2020, the fair values of completed investment properties were NT$29,482,520 and NT$29,252,925 thousand, respectively.

16. BORROWINGS

Short-term borrowings Current portion of long-term borrowings Long-term borrowings		December 31	December 31
		2021 $ 5,074,632 $ 10,500,000 $ 24,640,014	2020 $ 6,591,019 $ 6,000,000 $ 31,140,014

• 41 -

• a. Short-term borrowings as of December 31, 2021 and 2020 were as follows:

Materials procurement loans Bank line of credit	December 31	December 31	December 31
	2021 Interest Rate % Amount 0.64-0.70 $ 2,111,447 0.69-0.91 2,963,185 $ 5,074,632	2020
	Interest Rate % 0.64-0.70 0.69-0.91	Interest Rate % 0.70-0.90 0.65	Amount $ 5,091,019 1,500,000 $ 6,591,019

• b. Long-term borrowings as of December 31, 2021 and 2020 were as follows:

First Commercial Bank Hua Nan Commercial Bank Hua Nan Commercial Bank Chinatrust Commercial Bank Mega International Commercial Bank Co., Ltd. Bank of Taiwan Cathay United Bank Taiwan Cooperative Bank Taipei Fubon Commercial Bank Chang Hwa Commercial Bank KGI Bank Chinatrust Commercial Bank Standard Chartered Bank DBS Bank DBS Bank DBS Bank Standard Chartered Bank Bank of Taiwan The Export-Import Bank of the Republic of China	December 31
	2021 Significant Covenant Amount Long-term credit loan; principal repayments at maturity, from December 28, 2018 to December 28, 2021 $ - Long-term credit loan; principal repayments at maturity, from March 5, 2018 to March 5, 2021 - Long-term credit loan; principal repayments at maturity, from December 28, 2018 to December 28, 2021 - Mid-term credit loan; principal repayments at maturity, from March 5, 2018 to March 5, 2021 - Long-term credit loan; principal repayments at maturity, from March 5, 2018 to March 5, 2021 - Long-term credit loan; principal repayments at maturity, from March 4, 2019 to March 4, 2022 3,000,000 Long-term credit loan; principal repayments at maturity, from March 4, 2019 to March 4, 2022 1,500,000 Long-term credit loan; principal repayments at maturity, from March 4, 2019 to March 4, 2022 1,000,000 Long-term credit loan; principal repayments at maturity, from June 3, 2019 to June 3, 2022 1,000,000 Long-term credit loan; principal repayments at maturity, from June 3, 2019 to June 3, 2022 1,000,000 Long-term credit loan; principal repayments at maturity, from June 3, 2019 to June 3, 2022 1,500,000 Long-term credit loan; principal repayments at maturity, from September 3, 2019 to September 3, 2022 1,500,000 Long-term credit loan; principal repayments at maturity, from January 14, 2020 to December 31, 2023 5,352,144 Long-term credit loan; principal repayments at maturity, from March 30, 2020 to March 30, 2023 3,028,500 Long-term credit loan; principal repayments at maturity, from March 31, 2020 to March 31, 2023 3,018,600 Long-term credit loan; principal repayments at maturity, from April 15, 2020 to April 15, 2023 3,010,000 Long-term credit loan; principal repayments at maturity, from September 27, 2020 to December 31, 2023. 2,093,000 Long-term credit loan; principal repayments at maturity, from September 22, 2020 to September 22, 2025; principal to be repaid in two phases: From the 5th year, repayments are due once every six months; at rates of 20% and 80%, respectively. 3,000,000 Long-term credit loan from December 04, 2020 to December 04, 2027; principal to be repaid evenly in seven phases; 1st repayment due 48 months after the drawdown date, after which repayments are due once every six months. 1,137,770	2020
		Amount $ 1,000,000 1,500,000 1,500,000 1,000,000 1,000,000 3,000,000 1,500,000 1,000,000 1,000,000 1,000,000 1,500,000 1,500,000 5,352,144 3,028,500 3,018,600 3,010,000 2,093,000 3,000,000 1,137,770 (Continued)

• 42 -

Hua Nan Commercial Bank Taiwan Cooperative Bank Less current portion of long-term borrowings	December 31
	2021	Amount $ 2,000,000 2,000,000 35,140,014 (10,500,000) $ 24,640,014		2020
	Significant Covenant Long-term credit loan; principal repayment at maturity, from March 29, 2021 to March 29, 2026; principal to be repaid in two phases: From the 5th year, repayments are due once every six months. Long-term credit loan; principal repayment at maturity, from June 28, 2021 to June 28, 2026; principal to be repaid in two phases: 1st repayment due 48 months after the drawdown date, 2nd repayment due maturity date.		Amount $ - - 37,140,014 (6,000,000) $ 31,140,014 (Concluded)

• 1) Under the loan agreements with DBS Bank, the Company should maintain certain financial ratios during the loan term, which are based on the annual and semi-annual consolidated financial statements audited by the independent auditors. The financial ratios are as follows:

• a) Ratio of current assets to current liabilities not less than 100%;

• b) Ratio of total liabilities less cash and cash equivalents to tangible net worth not more than 120%;

• c) Ratio of net income before interest expenses, taxation, depreciation and amortization to interest expenses not less than 150%; and

• d) Tangible net worth (net worth less intangible assets) not less than NT$55,000,000 thousand.

• 2) The range of weighted average effective interest rates of the credit borrowings was 0.85%-1.20% and 0.10%-1.50% per annum as of December 31, 2021 and 2020, respectively.

• 3) As of December 31, 2021 and 2020, the Company’s current portion of long-term borrowings was NT$10,500,000 thousand and NT$6,000,000 thousand, respectively, under the loan agreement. The Company’s financial statements for the years ended December 31, 2021 and 2020 showed that the Company was in compliance with these ratio requirements.

17. BONDS PAYABLE

The 1st unsecured bonds in 2021		December 31	December 31
		2021 $ 7,500,000	2020 $ -

On October 8, 2021, the Company issued the first unsecured bonds for NT$7.5 billion, each with a face value of NT$10 million. The issuance period is 5 years, and the maturity date is on October 8, 2026. The annual interest rate is 0.7%. From the issuance date, the interest will be paid once a year, and the principal will be repaid once due.

• 43 -

18. FINANCIAL INSTRUMENTS FOR HEDGING

Financial liabilities for hedging-current Fair value hedges - exchange rate swap contracts		December 31	December 31
		2021 $ -	2020 $ 165,774

The Company used exchange rate swap contracts to minimize its exposure to changes in the exchange rate of its foreign-currency trade receivable and trade payable. The exchange rate swaps and the corresponding financial assets have the same terms, and management believes that the exchange rate swaps are highly effective hedging instruments. The outstanding exchange rate swap contracts of the Company at the end of the reporting period were as follows:

Currencies Contract Expiration Date Contract Amount (In Thousands) December 31, 2020 Exchange rate swap contracts USD to NTD 2022.01.13 USD21,000/NTD607,457 USD to NTD 2022.01.13 USD21,000/NTD607,467 USD to NTD 2022.01.13 USD30,000/NTD867,795 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD11,000/NTD318,197 USD to NTD 2022.01.13 USD27,000/NTD781,029 For the Year Ended December 31 2021 2020 Losses on the hedging instruments $ - $ (165,774) Gains on the hedged items $ - $ (90,000)	Currencies Contract Expiration Date Contract Amount (In Thousands) December 31, 2020 Exchange rate swap contracts USD to NTD 2022.01.13 USD21,000/NTD607,457 USD to NTD 2022.01.13 USD21,000/NTD607,467 USD to NTD 2022.01.13 USD30,000/NTD867,795 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD11,000/NTD318,197 USD to NTD 2022.01.13 USD27,000/NTD781,029 For the Year Ended December 31 2021 2020 Losses on the hedging instruments $ - $ (165,774) Gains on the hedged items $ - $ (90,000)	Currencies Contract Expiration Date Contract Amount (In Thousands) December 31, 2020 Exchange rate swap contracts USD to NTD 2022.01.13 USD21,000/NTD607,457 USD to NTD 2022.01.13 USD21,000/NTD607,467 USD to NTD 2022.01.13 USD30,000/NTD867,795 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD11,000/NTD318,197 USD to NTD 2022.01.13 USD27,000/NTD781,029 For the Year Ended December 31 2021 2020 Losses on the hedging instruments $ - $ (165,774) Gains on the hedged items $ - $ (90,000)	Currencies Contract Expiration Date Contract Amount (In Thousands) December 31, 2020 Exchange rate swap contracts USD to NTD 2022.01.13 USD21,000/NTD607,457 USD to NTD 2022.01.13 USD21,000/NTD607,467 USD to NTD 2022.01.13 USD30,000/NTD867,795 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD30,000/NTD867,810 USD to NTD 2022.01.13 USD11,000/NTD318,197 USD to NTD 2022.01.13 USD27,000/NTD781,029 For the Year Ended December 31 2021 2020 Losses on the hedging instruments $ - $ (165,774) Gains on the hedged items $ - $ (90,000)
		2021 $ - $ -	2020 $ (165,774) $ (90,000)

19. RETIREMENT BENEFIT PLANS

• a. Defined contribution plan

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

The total expense recognized in profit or loss for the years ended December 31, 2021 and 2020 was NT$95,977 thousand and NT$89,868 thousand, respectively, which represents contributions payable to these plans by the Company at rates specified in the rules of the plan.

• 44 -

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Law are operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

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

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2021 $ 1,482,158 (1,028,335) $ 453,823	2020 $ 1,366,378 (1,074,219) $ 292,159

As of December 31, 2021 and 2020, net defined benefit liabilities of NT$2,126 thousand and NT$1,922 thousand, respectively, were recorded as “other payables - accrued expense.”

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2020 $ 1,456,719 $ (993,518) Service cost Current service cost 12,743 - Net interest expense (income) 10,917 (7,483) Recognized in profit or loss 23,660 (7,483) Remeasurement Return on plan assets (excluding amounts included in net interest) - (32,941) Actuarial (gain) loss Changes in demographic assumptions 3,949 - Changes in financial assumptions 30,358 - Experience adjustments (45,036) - Recognized in other comprehensive income (10,729) (32,941) Contributions from the employer - (128,929) Benefits paid (88,652) 88,652 Account paid (14,620) - Balance at December 31, 2020 1,366,378 (1,074,219) Service cost Current service cost 10,917 - Net interest expense (income) 6,801 (5,366) Recognized in profit or loss 17,718 (5,366)

Net Defined Benefit Liabilities (Assets) $ 463,201 12,743 3,434 16,177 (32,941) 3,949 30,358 (45,036) (43,670) (128,929) - (14,620) 292,159 10,917 1,435 12,352 (Continued)

• 45 -

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Remeasurement Return on plan assets (excluding amounts included in net interest) $ - $ (13,584) Actuarial (gain) loss Changes in demographic assumptions 38,641 - Changes in financial assumptions (15,729) - Experience adjustments 151,322 - Recognized in other comprehensive income 174,234 (13,584) Contributions from the employer - (11,138) Benefits paid (76,172) 76,172 Balance at December 31, 2021 $ 1,482,158 $ (1,028,335)

Net Defined Benefit Liabilities (Assets) $ (13,584) 38,641 (15,729) 151,322 160,650 (11,138) - $ 453,823 (Concluded)

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

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 6,240 945 4,918 249 $ 12,352	2020 $ 9,465 1,286 4,947 479 $ 16,177

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

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

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated using the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

• 46 -

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

Discount rate(s) Expected rate(s) of salary increase	**December 31 **
	2021 2020 0.625% 0.50% 2.25% 2.25%

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

Discount rate(s) 0.5% increase 0.5% decrease Expected rate(s) of salary increase 0.5% increase 0.5% decrease		December	31
		2021 $ (61,945) $ 66,092 $ 63,726 $ (60,375)	2020 $ (59,752) $ 63,935 $ 61,541 $ (58,145)

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

20. EQUITY

Share capital Ordinary shares Capital surplus Retained earnings Others		December 31	December 31
		2021 $ 34,313,329 18,440,875 47,787,207 5,342,113 $ 105,883,524	2020 $ 32,260,002 15,690,406 36,330,187 187,640 $ 84,468,235

• a. Share capital

Ordinary shares

Number of authorized shares (in thousands) Amount of authorized shares, par value $10 Number of issued and fully paid shares (in thousands) Amount of issued and fully paid shares		December 31	December 31
		2021 6,500,000 $ 65,000,000 3,431,333 $ 34,313,329	2020 6,500,000 $ 65,000,000 3,226,000 $ 32,260,002

• 47 -

As of January 1, 2020, the amount of the Company’s paid-in capital was NT$33,260,002 thousand, consisted of 3,326,000 thousand shares at par value of NT$10.

In August 2020 and November 2020, the Company reduced capital and cancelled 40,000 thousand and 60,000 thousand treasury shares, respectively. In January 2021, the Company issued 205,333 thousand shares of TECO Electric & Machinery Co., Ltd. Hence, as of December 31, 2021, the paid-in capital was NT$34,313,329 thousand, divided into 3,431,333 thousand ordinary shares at par value of NT$10.

As of December 31, 2021, two thousand GDRs of the Company were traded on the Luxembourg Stock Exchange. The total number of ordinary shares represented by the GDRs was 22 thousand shares (one GDR represents 10 ordinary shares).

b. Capital surplus

Issuance of ordinary shares The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Share of changes in capital surplus of associates Treasury share transactions Gain on disposal of property, plant and equipment Others		December 31	December 31
		2021 $ 12,639,452 3,124 440,288 2,254,074 2,074,231 1,029,706 $ 18,440,875	2020 $ 9,867,654 - 467,070 2,254,074 2,074,231 1,027,377 $ 15,690,406

The premium from shares issued in excess of par (share premium from issuance of ordinary shares, conversion of bonds and treasury share transactions) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

The capital surplus arises from changes in capital surplus of associates accounted for using the equity method, employee share options and share warrants may not be used for any purpose.

c. Retained earnings and dividend policy

The shareholders of the Company held their regular meeting on July 15, 2021, and in that meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”). Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit this requirement is not applicable when the legal reserve has reached the total capital, and then any remaining profit together with prior unappropriated earnings shall be appropriated for special reserve or appropriate reversal of special reserve in accordance with the laws and regulations, and then the balance shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends to shareholders. Other than the aforementioned regulations, the Company shall reserve no lesser than 40% of the balance amount as shareholders’ profit after offsetting its loss and tax payments in the previous year, capital reserve, and special reserve adjusted by the accumulated net deduction of other equity. The profits shall be distributed in cash or in form of shares; cash dividends shall not be lesser than 70% of the total dividends.

• 48 -

Before the amendments, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit this requirement is not applicable when the legal reserve has reached the total capital, and then any remaining profit together with prior unappropriated earnings shall be appropriated for setting aside or reversing a special reserve in accordance with the laws and regulations, and then shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends to shareholders. the Company shall reserve no lesser than 40% of the balance amount as shareholders’ profit after offsetting its loss and tax payments in the previous year, capital reserve and special reserve. The profits shall be distributed in cash or in form of shares; cash dividends shall not be lesser than 70% of the total dividends.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset any deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

Refer to Note 22 for the policies on the distribution of employees’ compensation and remuneration of directors and supervisors.

The appropriation of earnings for 2020 and 2019 was approved in the shareholders’ meeting on July 15, 2021 and May 29, 2020, respectively. The appropriation and dividends per share were as follows:

Legal reserve Special reserve Cash dividends		Appropriation of Earnings 2020 2019 $ 681,368 $ 314,968 (398,160) (932,728) 3,088,200 1,663,000 $ 3,371,408 $ 1,045,240	Dividends Per Share (NT$)
		2020 $ 681,368 (398,160) 3,088,200 $ 3,371,408	2020 2019 $ - $ - - - 0.90 0.50

The appropriations of earnings for 2021 had been proposed by the Company’s board of director on February 22, 2022 were as follows:

	Appropriation	Dividends Per	Dividends Per
	of Earnings	Share	(NT$)
Legal reserve	$ 1,454,522	$	-
Cash dividends	5,490,133		1.6
	$ 6,944,655

The appropriation of earnings for 2021 is subject to the resolution of the shareholders in their meeting to be held on May 13, 2022.

• 49 -

d. Special reserve

Special reserve		December 31	December 31
		2021 $ 2,712,250	2020 $ 3,110,410

Information regarding any changes to the above special reserve was as follows:

Balance at January 1 Appropriations Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 3,110,410 (398,160) $ 2,712,250	2020 $ 4,043,138 (932,728) $ 3,110,410

• e. Other equity items

• 1) Exchange differences on translation of the financial statements of foreign operations

Balance at January 1 Recognized for the year Share from subsidiaries and associates accounted for using the equity method Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ (5,905,135) (195,552) $ (6,100,687)	2020 $ (5,546,359) (358,776) $ (5,905,135)

Exchange differences relating to the translation of the results and net assets of the Company’s foreign operations from their functional currencies to the Company’s presentation currency (the New Taiwan dollar) were recognized directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve were reclassified to profit or loss on the disposal of the foreign operation.

• 2) Unrealized valuation gain (loss) on financial assets at FVTOCI

Balance at January 1 Unrealized gain - equity instruments Share from associates accounted for using the equity method Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 6,092,775 2,611,742 2,829,750 $ 11,534,267	2020 $ 2,435,949 1,258,198 2,398,628 $ 6,092,775

• 50 -

3) Other equity - others

Balance at January 1 Other equity from associates accounted for using the equity method Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ - (91,467) $ (91,467)	2020 $ - - $ -

f. Treasury shares

Treasury shares transactions for the year ended December 31, 2020 were summarized as follows:

Purpose of Buy-back To restore credibility and preserve shareholders’ rights	Number of Treasury Shares at January 1, 2020 -	Treasury Shares Increase During the Year 100,000,000	Treasury Shares Decrease During the Year Number of Treasury Shares as of December 31, 2020 100,000,000 -

Article 28.2 of the Securities and Exchange Law stipulates that the number of treasury shares held by the Company should not exceed 10% of the number of shares issued and that the cost of acquisition of treasury shares should not exceed the total of retained earnings, additional-paid-in capital and other realized capital surplus. In addition, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote, or exercise other shareholder’s rights on the treasury shares.

21. REVENUE

Sales revenue Other revenue	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 94,405,651 3,383,997 $ 97,789,648	2020 $ 63,215,460 882,230 $ 64,097,690

• 51 -

22. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

Non-operating Income and Expenses - Gain (Loss) on Disposal of Investments

Gain (loss) on disposal of investments - commodity futures Gain (loss) on disposal of investments - forward exchange contracts Gain on disposal of investments - exchange rate swap contracts Loss on disposal of investments - options Non-operating Income and Expenses - Impairment Loss Property, plant and equipment	**For the Year Ended **	**For the Year Ended **	**December 31 **
	2021 $ 431,529 16,695 14,301 (1,499) $ 461,026 For the Year Ended		2020 $ (240,856) (124,006) 2,349 (2,938) $ (365,451) December 31
		2021 $ (557,721)	2020 $ -

Employee Benefits Expense, Depreciation and Amortization

Short-term employment benefits Post-employment benefits Other employee benefits Depreciation Property, plant and equipment Right-of-use assets Investment properties Amortization		For the Year Ended December 31, 2021	For the Year Ended December 31, 2021	For the Year Ended December 31, 2021
		Operating Costs $ 1,684,098 $ 63,271 $ 150,075 $ 1,105,101 4,124 71,966 $ 1,181,191 $ -	Operating Expenses Non-operating Expenses and Losses $ 1,214,050 $ - $ 45,057 $ - $ 79,641 $ - $ 140,864 $ - 19,745 - 1,526 - $ 162,135 $ - $ 445 $ -	Total $ 2,898,148 $ 108,328 $ 229,716 $ 1,245,965 23,869 73,492 $ 1,343,326 $ 445

• 52 -

For the Year Ended December 31, 2020

Short-term employment benefits Post-employment benefits Other employee benefits Depreciation Property, plant and equipment Right-of-use assets Investment properties Amortization	Operating Costs $ 1,396,553 $ 65,415 $ 133,860 $ 1,038,978 3,218 96,632 $ 1,138,828 $ -	Operating Expenses Non-operating Expenses and Losses $ 999,715 $ - $ 40,630 $ - $ 60,013 $ - $ 114,954 $ - 20,138 - 5,925 - $ 141,017 $ - $ 222 $ -	Total $ 2,396,268 $ 106,045 $ 193,873 $ 1,153,932 23,356 102,557 $ 1,279,845 $ 222

According to the Company’s Articles, the Company accrues employees’ compensation and remuneration of directors at rates of no less than 1% and no higher than 1%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. For the years ended December 31, 2021 and 2020, the compensation of employees amounted to NT$187,000 thousand and NT$68,500 thousand, respectively, and the remuneration of directors and supervisors amounted to NT$75,000 thousand and NT$34,050 thousand, respectively. The compensation of employees and the remuneration of directors and supervisors for the years ended December 31, 2021 and 2020 were approved by the Group’s board of directors on February 22, 2022 and February 26, 2021, respectively.

Material differences between such estimated amounts and the amounts proposed by the board of directors on or before the date the annual financial statements are authorized for issue are adjusted in the year the compensation and remuneration were recognized. If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the compensation of employees and the remuneration of directors and supervisors for 2020 and 2019 that were respectively resolved by the Company’s board of directors on February 26, 2021 and February 27, 2020 and the respective amounts were recognized in the financial statements.

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Company’s board of directors in 2022 and 2021 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

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23. INCOME TAXES RELATING TO CONTINUING OPERATIONS

• a. Income tax recognized in profit or loss

Income tax expense (benefit) are as following:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Others Deferred tax In respect of the current year Adjustments to deferred tax attributable to changes in tax rates and laws Income tax benefit recognized in profit or loss	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 1,958,584 83,446 (1,632) - 2,040,398 1,715,707 (5,275) 1,710,432 $ 3,750,830	2020 $ 28,523 48,843 - 16,217 93,583 (94,000) (26,622) (120,622) $ (27,039)

A reconciliation of accounting profit and income tax expense (benefit) is as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate Equity in investees’ net gain Tax-exempt dividend income Loss on investments Tax-exempt subsidize revenue Others Income tax on unappropriated earnings Adjustments for prior years’ tax Income tax benefit recognized in profit or loss	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 18,393,459 $ 3,678,692 495,820 (112,110) (384,000) - (4,111) 83,446 (6,907) $ 3,750,830	2020 $ 6,664,110 $ 1,332,822 (861,000) (22,000) (495,100) (3,880) (102) 48,843 (26,622) $ (27,039)

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Company only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

• 54 -

b. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31	December 31
		2021 $ 32,006 $ 2,040,190	2020 $ 2,317 $ 108,164

c. Deferred tax assets and liabilities

Deferred tax assets Pension expense not currently deductible Provision for permanent devaluation loss on long-term investments Provision for devaluation loss on obsolete and slow-moving inventories Provision for impairment loss on idle assets Loss on liquidation of investments Loss deduction Others Deferred tax liabilities Reserve for land value increment tax Unrealized gain of investments		**December 31 **	**December 31 **
		2021 $ 32,000 547,000 25,000 10,000 384,000 - 293,573 $ 1,291,573 $ (131,132) (2,020,432) $ (2,151,564)	2020 $ 32,000 547,000 28,000 17,000 - 254,000 103,573 $ 981,573 $ (131,132) - $ (131,132)

d. The Company’s income tax returns through 2018 had been assessed by tax authorities.

24. EARNINGS PER SHARE

Basic earnings per share Net income Effect of dilutive potential ordinary shares Diluted earnings per share Net income plus dilutive effect			For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021	Earnings Per Share (In Dollars) After Income Tax (Attributable to Owners of the Company) $ 4.27 $ 4.26		2020
		Amounts (Numerator) After Income Tax (Attributable to Owners of the Company) Shares (Denominator) (In Thousands) $ 14,642,629 3,428,520 - 7,632 $ 14,642,629 3,436,152			Amounts (Numerator) After Income Tax (Attributable to Owners of the Company) Shares (Denominator) (In Thousands) $ 6,691,149 3,276,128 - 4,100 $ 6,691,149 3,280,228	Earnings Per Share (In Dollars)
						After Income Tax (Attributable to Owners of the Company) $ 2.04 $ 2.04

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25. OPERATING LEASE ARRANGEMENTS

Operating leases are related to the investment property owned by the Company with lease terms between 5 and 10 years, with an option to extend for additional 10 years. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have a bargain purchase option to acquire the property at the expiry of the lease period.

As of December 31, 2021 and 2020, deposits received under operating leases amounted to NT$167,217 thousand and NT$170,228 thousand, respectively (recorded under other liabilities - non-current).

As of December 31, 2021, the Company’s future minimum lease receivables on non-cancelable operating lease commitments are as follows:

Years of 2022 2023-2027	$ 645,634 1,049,526 $ 1,695,160

26. CAPITAL MANAGEMENT

The Company’s capital management objective is to ensure that it has the necessary financial resources and operational plan so that it can cope with the next 12 months working capital requirements, capital expenditures, debt repayments and dividends spending.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

Key management personnel of the Company review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and/or the amount of new debt issued or existing debt redeemed.

27. FINANCIAL INSTRUMENTS

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

The management considers the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate the fair values.

December 31, 2021

Financial liabilities Financial liabilities at amortized cost Bonds payable	Carrying Amount $ 7,500,000			Fair Value	Fair Value
			Level 1 $ -	Level 2 $ 7,500,000	Level 3 $ -	Total $ 7,500,000

The fair values of the financial assets and financial liabilities included in the Level 2 categories above have been determined in accordance with the income approach based on a discounted cash flow analysis. The observable inputs included bond duration, bond interest rates and credit rating.

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

• 1) Fair value hierarchy

December 31, 2021 Financial assets at FVTPL Derivatives not designated as hedging instruments Financial assets at FVTOCI Investments in equity instruments Securities listed in ROC Unlisted securities Financial liabilities at FVTPL Derivatives not designated as hedging instruments December 31, 2020 Financial assets at FVTPL Derivatives not designated as hedging instruments Corporate bonds Financial assets at FVTOCI Investments in equity instruments Securities listed in ROC Unlisted securities Financial liabilities at FVTPL Derivatives not designated as hedging instruments Derivative financial liabilities for hedging	Level 1 $ 873 $ 15,611,157 - $ 15,611,157 $ - Level 1 $ 66,059 - $ 66,059 $ 6,475,588 - $ 6,475,588 $ - - $ -	Level 2 $ 7,991 $ - - $ - $ 37,439 Level 2 $ - - $ - $ - - $ - $ 15,839 165,774 $ 181,613	Level 3 $ - $ - 528,367 $ 528,367 $ - Level 3 $ - 5,683,859 $ 5,683,859 $ - 307,641 $ 307,641 $ - - $ -	Total $ 8,864 $ 15,611,157 528,367 $ 16,139,524 $ 37,439 Total $ 66,059 5,683,859 $ 5,749,918 $ 6,475,588 307,641 $ 6,783,229 $ 15,839 165,774 $ 181,613

• 57 -

• 2) There were no transfers between Levels 1 and 2 in 2021 and 2020.

• 3) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2021

Financial Assets Balance at January 1, 2021 Additions Capital reduction and refund Recognized in other comprehensive income Balance at December 31, 2021 For the year ended December 31, 2020 Financial Assets Balance at January 1, 2020 Additions Recognized in other comprehensive income Balance at December 31, 2020	Financial Assets **at FVTOCI **
	Equity Instruments $ 307,641 149,993 (3,615) 74,348 $ 528,367 Financial Assets at FVTOCI
	Equity Instruments $ 318,073 29,250 (39,682) $ 307,641

• 4) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instruments Derivatives - foreign exchange forward contracts Derivatives - exchange rate swap contracts

Valuation Techniques and Inputs

Discounted cash flow. Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. Discounted cash flow. Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

• 58 -

• 5) Valuation techniques and inputs applied for Level 3 fair value measurement

Financial Instruments Unlisted equity securities Derivatives - options Hybrid instruments - corporate bonds

Valuation Techniques and Inputs

Market approach. Fair values are determined based on the observable share prices of comparable companies at the end of the reporting period, adjusted by the price earnings ratio and price-to-book ratio of the investees. Net asset method. Fair values are determined based on the book value of companies. Discounted cash flow. Present values are determined based on future cash flows discounted at market yield. Option pricing models. Fair values are determined using option pricing models where the significant unobservable input is historical volatility. Discounted cash flow. Future cash flows are estimated based on contract rates and discounted at a rate that reflects the credit risk of various counterparties.

• c. Categories of financial instruments

Financial assets Financial assets at amortized cost Cash and cash equivalents Contract assets - current Notes receivable and trade receivables (including related parties) Other receivables Long-term receivables (including related parties) Refundable deposits Financial assets at FVTPL (current and non-current) Financial assets at FVTOCI (current and non-current) Financial liabilities Financial liabilities at FVTPL (current and non-current) Derivative financial liabilities for hedging (current and non-current) Financial liabilities at amortized cost Short-term borrowings Trade payables Other payables Bonds Payable Long-term borrowings (including current portion) Deposits received (accounted for as other non-current liabilities)

**December 31 **

2021 2020 $ 5,023,659 $ 4,511,090 151,065 12,937 5,155,636 2,613,004 985,084 271,722 - 5,349,885 27,548 26,913 8,864 5,749,918 16,139,524 6,783,229 37,439 15,839 - 165,774 5,074,632 6,591,019 3,040,224 2,522,328 2,676,814 8,009,712 7,500,000 - 35,140,014 37,140,014 225,863 186,325

• 59 -

d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, borrowings, trade receivables and trade payables. The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Company through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk.

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

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company entered into foreign exchange forward contracts and interest rate swaps contracts to hedge foreign currency risk and interest rate risk.

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

a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts.

It is the Company’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged item to maximize hedge effectiveness.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period were as follows:

Assets U.S. dollar Japanese yen Euro Singapore dollar Hong Kong dollar Australian dollar Renminbi	December 31
	2021 2020 $ 6,038,747 $ 2,098,969 122,926 27,663 926,756 428,652 1,559 - 11,515 7,365 31,714 12,493 - 5 (Continued)

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Liabilities U.S. dollar Euro Swiss Franc Japanese yen	**December 31 **
	2021 2020 $ 2,567,987 $ 11,564,577 830 159 513 549 - 1,108 (Concluded)

The carrying amounts of the Company’s derivatives exposed to foreign currency risk at the end of the reporting period were as follows:

Assets U.S. dollar Euro Liabilities U.S. dollar Euro	**December 31 **
	2021 2020 $ 3,713,197 $ 7,556,970 795,675 - 7,888,800 284,800 563,760 232,966

Sensitivity analysis

The Company is mainly exposed to the U.S. dollar.

The following table details the Company’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items, and adjusts their translation at the end of the year for a 1% change in foreign currency rates.

Profit or loss	U.S. Dollar Impact
	For the Year Ended December 31
	2021 2020 $ 7,048 $ (24,264)

b) Interest rate risk

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates.

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The carrying amount of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial liabilities Sensitivity analysis		December 31	December 31
		2021 $ 7,500,000 $ 40,214,646	2020 $ - $ 43,731,033

The sensitivity analysis below was determined based on the Company’s exposure to interest rates for financial instruments at the end of the year. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the year was outstanding for the whole year.

If interest rates had been 1% basis points higher and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2021 and 2020 would decrease by NT$402,146 thousand and NT$437,310 thousand, respectively.

Hedge accounting

For the year ended December 31, 2020

The Company’s hedging strategy is to enter into foreign exchange forward contracts to avoid exchange rate exposure on 100% of the fair value of its foreign currency denominated receipts and payments and to manage exchange rate exposure. Those transactions are designated as fair value hedges. Adjustments are recognized directly in profit or loss and are presented as hedged items on the statements of comprehensive income.

Hedging Notional Line Item in Instrument Currency Amount Maturity Forward Price Balance Sheet Exchange rate swap contracts USD to NTD USD21,000/ NTD607,457 2021.1.13 $ 590,058 Financial liabilities for hedging USD to NTD USD21,000/ NTD607,467 2021.1.13 590,058 Financial liabilities for hedging USD to NTD USD30,000/ NTD867,795 2021.1.13 842,940 Financial liabilities for hedging USD to NTD USD30,000/ NTD867,810 2021.1.13 842,940 Financial liabilities for hedging USD to NTD USD30,000/ NTD867,810 2021.1.13 842,940 Financial liabilities for hedging USD to NTD USD30,000/ NTD867,810 2021.1.13 842,940 Financial liabilities for hedging USD to NTD USD11,000/ NTD318,197 2021.1.13 309,078 Financial liabilities for hedging USD to NTD USD27,000/ NTD781,029 2021.1.13 758,646 Financial liabilities for hedging

Carrying Amount Change in Value Used for Calculating Hedge Asset Liability Effectiveness $ - $ (17,398 ) $ - - (17,409 ) - - (24,855 ) - - (24,870 ) - - (24,870 ) - - (24,870 ) - - (9,119 ) - - (22,383 ) -

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2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. At the end of the year, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Company, could be equal to the total of the following:

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheet; and

• b) The maximum amount the entity would have to pay if the financial guarantee is called upon, irrespective of the likelihood of the guarantee being exercised.

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

In order to minimize credit risk, the management of the Company has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables. In addition, the Company reviews the recoverable amount of each individual trade receivables at the end of the year to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Company’s credit risk was significantly reduced.

3) Liquidity risk

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

• a) The following table details the Company’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods.

December 31, 2021 Non-derivative financial liabilities Variable interest rate liabilities Lease liabilities Non-interest bearing Fixed interest rate liabilities	1 Year $ 15,574,632 18,501 5,812,052 - $ 24,405,185	1-2 Years $ 16,502,244 15,124 29,024 - $ 16,546,392	2-5 Years $ 7,000,000 29,550 101,825 7,500,000 $ 14,631,375	5+ Years $ 1,137,770 20,125 - - $ 1,157,895	Total $ 40,214,646 83,300 5,942,901 7,500,000
					$ 53,740,847

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December 31, 2020

Non-derivative financial liabilities Variable interest rate liabilities Lease liabilities Non-interest bearing Fixed interest rate liabilities	1 Year $ 12,591,019 21,319 4,084,602 5,768,000 $ 22,464,940	1-2 Years $ 17,945,144 12,556 28,216 - $ 17,985,916	2-5 Years $ 12,057,100 22,822 115,184 - $ 12,195,106	5+ Years $ 1,137,770 26,308 - - $ 1,164,078	Total $ 43,731,033 83,005 4,228,002 5,768,000 $ 53,810,040

b) The Company’s derivative financial instruments with agreed settlement date were as follows:

December 31, 2021

On Demand or Less Than 1 Month 1-3 Months 3 Months to 1 Year Net settled Commodity futures contracts $ 14,706 $ (25,016) $ 11,183 Foreign exchange forward contracts 7,814 177 - Exchange rate swap contracts (37,439) - - $ (14,919) $ (24,839) $ 11,183 December 31, 2020 On Demand or Less Than 1 Month 1-3 Months 3 Months to 1 Year Net settled Commodity futures contracts $ (5,736) $ 58,469 $ 13,326 Foreign exchange forward contracts (15,524) - (315) Exchange rate swap contracts (165,774) - - $ (187,034) $ 58,469 $ 13,011	1-5 Years $ - - - $ - 1-5 Years $ - - - $ -	Total $ 873 7,991 (37,439) $ (28,575) Total $ 66,059 (15,839) (165,774) $ (115,554)

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e. Transfers of financial assets

Factored trade receivables that are not overdue at the end of the year were as follows:

Counterparty Proceeds from Receivables Factoring Amount Reclassified to Other Receivables 2021 CTBC bank $ 150,495 $ 5,786 2020 CTBC bank $ 137,121 $ 21,266	Advances Received - Unused US$ 2,700 US$ 2,700	Advances Received - Used Annual Interest Rates on Advances Received (Used) (%) $ - - $ - -

28. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Company and other related parties are disclosed as follows:

• a. Related party name and category

Related Party Name Related Party Category

Walsin Lihwa Holdings Ltd. Subsidiary Walsin Info-Electric Corp. Subsidiary Chin-Cherng Construction Co. Subsidiary Min Maw Precision Industry Corp. Subsidiary Dongguan Walsin Wire & Cable Co., Ltd. Subsidiary Jiangyin Walsin Specialty Alloy Materials Co., Ltd. Subsidiary Walsin Specialty Steel Corp. Subsidiary Changshu Walsin Specialty Steel Co., Ltd. Subsidiary Yantai Walsin Stainless Steel Co., Ltd. Subsidiary PT. Walsin Nickel Industrial Indonesia Subsidiary Walsin Internation Investments Limited Subsidiary Walsin Technology Corp. Associate Walton Advanced Engineering, Inc. Associate Chin-Xin Investment Co., Ltd. Associate Walsin Color Co., Ltd. Associate Winbond Electronics Corp. Associate Prosperity Dielectrics Co., Ltd. Associate HannStar Display Corp. Substantive related party Kuong Tai Metal Industrial Co., Ltd. Substantive related party HannStar Board Corp. Substantive related party Global Brands Manufacture Ltd. Substantive related party Info-Tek Corp. Substantive related party

• 65 -

b. Sales

Subsidiaries Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 3,564,180 1,743,620 $ 5,307,800	2020 $ 2,750,804 903,376 $ 3,654,180

• c. Rental income

Subsidiaries Associates Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,840 34,798 1,029 $ 38,667	2020 $ 240 33,658 993 $ 34,891

d. Purchases of goods

Subsidiaries Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 5,478 4,961 $ 10,439	2020 $ 8,938 3,891 $ 12,829

e. Administrative expenses

Subsidiaries Associates Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 390 14,889 13,558 $ 28,837	2020 $ 390 12,955 10,725 $ 24,070

The stock registration matters of the Company and related parties were handled together. The related fees allocated to the related parties were charged against general and administrative expenses.

• f. Dividend income

Other related parties HannStar Display Corp. HannStar Board Corp. Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 149,816 140,259 7,705 $ 297,780	2020 $ - 106,722 2,890 $ 109,612

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g. Notes receivable

Associates Prosperity Dielectrics Co., Ltd. Walsin Technology Corp. Trade receivables Subsidiaries Dongguan Walsin Wire & Cable Co., Ltd. Changshu Walsin Specialty Steel Co., Ltd. Jiangyin Walsin Specialty Alloy Materials Co., Ltd. Others Other related parties Trade payables Subsidiaries Yantai Walsin Stainless Steel Co., Ltd. Other related parties Other receivables (excluding financing provided) Subsidiaries Associates Other related parties		December 31	December 31
		2021 2020 $ 129 $ 129 841 856 $ 970 $ 985 December 31
		2021 2020 $ 81,510 $ 207,701 281,519 - 245,996 - 4,264 95,797 17,229 39,054 $ 630,518 $ 342,552 December 31
		2021 2020 $ 5,153 $ - 601 684 $ 5,754 $ 684 **December 31 **
		2021 $ 70,541 19,279 2,648 $ 92,468	2020 $ - 9,945 2,598 $ 12,543

h. Trade receivables

i. Trade payables

j. Other receivables (excluding financing provided)

• 67 -

• k. Other payables (included loans from related parties)

Related Party Category/Name Walsin Lihwa Holdings Ltd. Walsin Lihwa International Investments Ltd. Walsin Info-Electric Inc. Subsidiaries Related Party Category/Name Interest expense Subsidiaries		December 31	December 31
	2021 2020 $ 44,538 $ - - 5,698,656 130,062 72,058 1,406 1,594 $ 176,006 $ 5,772,308 For the Year Ended December 31
		2021 $ 11,910	2020 $ 22,415

The Company obtained loans from related parties at rates comparable to market interest rates.

• l. Disposals of property, plant and equipment (included investment properties)

Related Party Category/Name Walsin Info-Electric Inc. Prosperity Dielectrics Co., Ltd. Shanghai Walsin Lihwa Power Wine & Cable Co., Ltd.		Proceeds For the Year Ended December 31 2021 2020 $ - $ 17 - 295 - 91 $ - $ 403		Gain on Disposal	Gain on Disposal
				For the Year Ended December 31
		2021 $ - - - $ -		2021 $ - - - $ -	2020 $ - 295 91 $ 386

• m. Lease arrangements - Company is lessee

Line Item Related Party Category/Name Lease liabilities Subsidiaries Related Party Category/Name Interest expense Subsidiaries Lease expense Subsidiaries			December	December	31
	2021 2020 $ 416 $ 5,361 For the Year Ended December 31
		2021 $ 59 $ 450		2020 $ 152 $ -

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n. Guarantee deposits

Related Party Category/Name Associates Other related parties Loan to related parties Related Party Category/Name PT. Walsin Nickel Industrial Indonesia Interest revenue Subsidiaries		December 31	December 31
		2021 2020 $ 7,453 $ 7,225 282 282 $ 7,735 $ 7,507 December 31
	2021 2020 $ - $ 5,349,885 **For the Year Ended December 31 **
		2021 $ 222,172	2020 $ 127,413

o. Loan to related parties

The interest rate of the Company’s loan to the above-mentioned related parties is equivalent to the market interest rate.

• p. Compensation of key management personnel

The remuneration of directors and key executives in 2021 and 2020 was as follows:

Short-term benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 217,470 1,392 $ 218,862	2020 $ 126,999 1,414 $ 128,413

The remuneration of directors and key executives, as determined by the remuneration committee, was based on the performance of individuals and market trends.

29. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collaterals for construction contract and tariff guarantee for imported raw material:

Refundable deposits (recorded under non-current assets)		December	31
		2021 $ 600	2020 $ 600

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30. SIGNIFICANT CONTINGENCIES LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant contingencies and unrecognized commitments of the Company at December 31, 2021 and 2020 were as follows:

• a. Outstanding letters of credit not reflected in the accompanying financial statements as of December 31, 2021 and 2020 were as follows (in thousands):

New Taiwan dollar U.S. dollar Renminbi Japanese yen Euro	**December 31 **
	2021 2020 NT$ 47,575 NT$ 82,347 US$ 9,572 US$ 17,455 RMB 13,134 RMB 13,134 JPY 160,710 JPY 108,812 EUR 13,946 EUR 4,770

• b. Outstanding standby letters of credit not reflected in the accompanying financial statements were as follows (in thousands):

New Taiwan dollar U.S. dollar		**December 31 **	**December 31 **
		2021 NT$ 665,286 US$ 30	2020 NT$ 392,784 US$ 30

• c. Based on the tariff and relevant regulations, the Company shall issue a letter of credit to import goods and to meet the needs of post-release duty payment. The guaranteed amount was as follows:

New Taiwan dollar		December 31	December 31
		2021 NT$ 462,000	2020 NT$ 434,000

• d. Non-cancelable raw material procurement contracts were as follows:

U.S. dollar		December 31	December 31
		2021 US$ 42,595	2020 US$ 22,681

• e. The Company entered into a contract for the construction of new plants on the Company’s own land. The amount of the unrecognized commitments was as follows:

New Taiwan dollar		**December 31 **	**December 31 **
		2021 NT$2,702,350	2020 NT$ -

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31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the Company and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2021

Unit: Foreign Currency/In Thousands of Taiwan Dollars

		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
U.S. dollar	$	218,163	27.6800	$	6,038,747
Japanese yen		511,128	0.2405		122,926
Euro		29,590	31.3200		926,756
Singapore dollars		76	20.4600		1,559
Hong Kong dollar		3,245	3.5490		11,515
Australian dollar		1,579	20.0800		31,714
Investments accounted for using the equity
method
U.S. dollar		326,162	27.6800		9,028,163
Renminbi		8,674,482	4.3416		37,661,217
Indonesia rupiah		6,409,142	0.00198		12,690
Malaysian ringgit		70,490	6.3550		447,963
Financial liabilities
Monetary items
U.S. dollar		92,774	27.6800		2,567,987
Euro		26	31.3200		830
Swiss franc		17	30.1750		513
December 31, 2020
		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
U.S. dollar	$	73,700	28.4800	$	2,098,969
Japanese yen		100,120	0.2763		27,663
Euro		12,240	35.0200		428,652
Hong Kong dollar		2,005	3.6730		7,365
Australian dollar		569	21.9500		12,493
Renminbi		1	4.3648		5
Investments accounted for using the equity
method
U.S. dollar		28,042	28.4800		798,648
Renminbi		8,344,139	4.3648		36,420,832
Indonesia rupiah		4,184,015	0.0020		8,494
					(Continued)

• 71 -

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial liabilities
Monetary items
U.S. dollar	$	406,060	28.4800	$ 11,564,577
Japanese yen		4,011	0.2763	1,108
Euro		5	35.0200	159
Swiss franc		17	32.3050	549
				(Concluded)

For the years ended December 31, 2021 and 2020, realized and unrealized net foreign exchange loss were NT$311,352 thousand and gain NT$73,937 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Company entities.

32. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and investees:

• 1) Financing provided to others (Table 1)

• 2) Endorsements/guarantees provided (Table 2)

• 3) Marketable securities held (Table 3)

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (Table 4)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (Table 5)

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 6)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 7)

• 9) Trading in derivative instruments (Notes 7 and 18)

• 10) Information on investees (Table 8)

• b. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 9)

• 72 -

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Table 9):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year

  • c) The amount of property transactions and the amount of the resultant gains or losses

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes

  • e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services

• c. Information of shareholders: List all shareholders with ownership of 5% or quarter showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 10).

33. SEGMENT INFORMATION

The Company has provided the financial information of the operating segments in the consolidated financial statements. These parent company only financial statements do not provide such information.

• 73 -

TABLE 1

WALSIN LIHWA CORPORATION

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars and U.S. Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Amount Borrowed	Interest Rate (%)	Nature of Financing	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss		Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limit (Note 1)
													Item	Value
0	Walsin Lihwa Corporation	PT. Walsin Nickel Industrial Indonesia	Other receivables	Yes	$ 17,824,000 (US$ 640,000)	$ 8,857,600 (US$ 320,000)	$ - US$ -	3.50	Operating capital	$ -	Operating capital and purchase equipment	$ -	-	$ -	$ 42,353,410 (US$ 1,530,109)	$ 42,353,410 (US$ 1,530,109)

Notes:

1. The limit on the amount of financing provided to a single enterprise that holds less than 100% of a subsidiary whose equity is less than 100% owned, directly or indirectly by its parent company cannot exceed 40% of the parent company’s equity as presented in the financial statements of a subsidiary.

2. a. The limit on the amount of financing provided to a single enterprise was as follows:

3. PT. Walsin Nickel Industrial Indonesia = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)

4. b. The limit on the amount of financing provided was as follows:

The limit on the amount of financing provided = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)

1. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.

2. The amounts were translated using the exchange rate as of December 31, 2021: US$ to NT$ = 1:27.68.

3. 74 -

TABLE 2

WALSIN LIHWA CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars and U.S. Dollars)

No. (Note 1)	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Each Guaranteed Party’s Endorsement/ Guarantee Amounts (Note 3)	Highest Balance for the Period	Ending Balance (Note 4)	Actual Borrowing Amount	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statement (%)	Maximum Collateral/ Guarantee Amounts Allowable (Note 3)	Guaranteed Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship (Note 2)
0	Walsin Lihwa Corporation	PT. Walsin Nickel Industrial Indonesia	c	$ 12,196,998 (US$ 440,643)	$ 2,491,200 (US$ 90,000)	$ 2,491,200 (US$ 90,000)	$ 1,107,200 (US$ 40,000)	$ -	-	$ 105,883,524	Yes	No	No

Notes:

1. The information on Walsin Lihwa Corporation and its subsidiaries is listed and labeled on the entitled “No.” column.

2. a. “0” represents Walsin Lihwa Corporation.

3. b. Subsidiaries are numbered consecutively starting at 1.

4. The relationship between Walsin Lihwa Corporation and the endorsed/guaranteed entities can be classified into seven categories.

5. a. A company with which Walsin Lihwa Corporation does business.

6. b. A company in which Walsin Lihwa Corporation directly and indirectly holds more than 50% of the voting shares.

7. c. A company that directly and indirectly holds more than 50% of the voting shares in Walsin Lihwa Corporation.

8. d. A company in which Walsin Lihwa Corporation directly or indirectly holds 90% or more of the voting shares.

9. e. A company that fulfills Walsin Lihwa Corporation’s contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

10. f. A company in which all capital contributing shareholders make endorsements/guarantees for it and Walsin Lihwa Corporation’s joint-investment company in proportion to their shareholding percentages. g. A company in the same industry as Walsin Lihwa Corporation whereby either provides among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

11. According to the endorsements/guarantees provided and Financing provided by Walsin Lihwa Corporation, the total limit on the amount of endorsements/guarantees cannot exceed 100% of the net value of Walsin Lihwa Corporation’s current financial statement (including the consolidated financial statement). The limit on the amount of endorsements/guarantees provided and financing provided to a single enterprise cannot exceed the net value of the guaranteed company. The limit on the amount of guarantees to an invested company in which over 66.67% of the common shares are held cannot exceed the amount which is 250% of the net value multiplied by the equity percentage of the guarantee provider; however, the limits mentioned above are not applicable to Walsin Lihwa Corporation’s wholly-owned holding companies incorporated in duty-free areas overseas.

12. a. The limit on the amount of endorsements/guarantees provided was as follows:

NT$105,883,524 × 100% ＝ NT$105,883,524.

• b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:

  • PT. Walsin Nickel Industrial Indonesia: US$191,584 × 250% × 92% ＝ US$440,643.

• The currency exchange rate as of December 31, 2021 was as follows: US$ to NT$ = 1:27.68.

• 75 -

TABLE 3

WALSIN LIHWA CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Holding Company Name	Marketable Securities Type and Name of Issuer	Relationship of Issuer to the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
Walsin Lihwa Corporation	Share HannStar Display Corp. HannStar Board Corp. Teco Electric & Machinery Co., Ltd. Kuang Tai Metal Industrial Co., Ltd. Taiwan Submarine Cable Corp. (One-Seven Trading Co., Ltd.) Global Investment Holdings WK Technology Fund Universal Venture Capital Investment Hwa Bao Botanic Conservation Corp. Tung Mung Development Co., Ltd.	The holding company is a director of the issuing company The chairman of the holding company and the chairman of the company are second-class relatives - The holding company is a director of the issuing company The holding company is a director of the issuing company The holding company is a director of the issuing company - - The holding company is a supervisor of the issuing company -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	299,632,180 63,753,952 230,438,730 9,631,802 30,000 5,221,228 19,024 1,400,000 3,000,000 14,285,000	$ 5,423,342 2,894,429 7,293,386 276,509 149 60,283 187 12,650 28,596 149,993	9.90 12.06 10.77 9.39 6.67 2.97 1.91 1.16 15.00 4.01	$ 5,423,342 2,894,429 7,293,386 276,509 149 60,283 187 12,650 28,596 149,993

• 76 -

TABLE 4

WALSIN LIHWA CORPORATION

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Purpose of Transaction	Nature of Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Number of Shares/Units	Amount	Number of Shares/Units	Amount	Number of Shares/Units	Amount	Carrying Amount	Gain (Loss) on **Disposal **	Number of Shares/Units	Amount
Walsin Lihwa Corporation	Share Concord Industries Limited Walsin Precision Technology Corp. New Hono Investment Pte. Ltd Teco Electric & Machinery Co., Ltd.	Investments accounted for using the equity method Investments accounted for using the equity method Investments accounted for using the equity method Financial assets at fair value through profit or loss	Capital investment/ capital reduction Concord Industries Limited Capital investment Capital investment	Subsidiaries Subsidiaries Subsidiaries -	285,903,187 - - 954,000	$4,631,181 - - 26,378	47,000,000 32,178,385 42,000,000 229,484,730	$1,156,955 (Note 1) 447,963 (Note 2) 5,828,396 (Note 2) 7,267,008 (Note 3)	15,398,007 - - -	$ 434,994 - - -	$ 434,994 - - -	- - - -	317,505,180 32,178,385 42,000,000 230,438,730	$5,353,142 447,963 5,828,396 7,293,386

Note 1: The amount included subscription for shares, investment income or loss and changes in other equity.

Note 2: The amount included the purchase amount, investment income or loss and changes in other equity.

Note 3: The amount included the purchase amount, issuance of new shares in exchange for the shares of another company and adjustments through fair value.

• 77 -

TABLE 5

WALSIN LIHWA CORPORATION

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Types of Property	Transaction Date	Transaction Amount (Foreign Currencies in Thousands)	Payment Term	Counterparty	Nature of Relationships	Prior Transaction of	Prior Transaction of	Related Counterparty	Related Counterparty	Price Reference	Purpose of Acquisition	Other Terms
							Owner	Relationships	Transfer Date	Amount
Walsin Lihwa Corporation	Plant	2021/08/19- 2021/12/23	$521,333	Based on the terms in the contract	Chung-Lu Construction Co., Ltd.	-	N/A	N/A	N/A	N/A	Based on the marketability	Manufacturing and operating purpose	-

• 78 -

TABLE 6

WALSIN LIHWA CORPORATION

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

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Walsin Lihwa Corporation	Dongguan Walsin Wire & Cable Co., Ltd. Jiangyin Walsin Specialty Alloy Materials Co., Ltd. Koung Tai Metal Industrial Co., Ltd. Changshu Walsin Specialty Steel Co., Ltd.	100% indirectly owned subsidiary 100% indirectly owned subsidiary Director of the related party 100% indirectly owned subsidiary	Sales Sales Sales Sales	$ (2,273,189) (668,583) (1,743,620) (595,996)	(2) (1) (2) (1)	The payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers.	Similar Similar Similar Similar	Similar Similar Similar Similar	$ 81,510 245,996 17,229 281,518	2 5 - 5

• 79 -

TABLE 7

WALSIN LIHWA CORPORATION

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

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Financial Statement Account and Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Action Taken
Walsin Lihwa Corporation	Jiangyin Walsin Specialty Alloy Materials Co., Ltd. Changshu Walsin Specialty Steel Co., Ltd.	100% indirectly owned subsidiary 100% indirectly owned subsidiary	Trade receivables $ 245,996 Trade receivables 281,518	3.87 4.12	$ - -	- -	$ 99,789 194,308	$ - -

• 80 -

TABLE 8

WALSIN LIHWA CORPORATION

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE GROUP EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2021

Information of investees that Walsin Lihwa Corporation has controlling power or significant influence was as follows (in thousands of New Taiwan dollars):

Investor Company	Investee Company	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 (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2021	December 31, 2020	Number of Shares	Percentage of Ownership (%)	Carrying Amount
Walsin Lihwa Corporation	Walsin Lihwa Holdings Limited Concord Industries Limited Ace Result Global Limited Min Maw Precision Industry Corp. Waltuo Green Resources Corporation Walsin Precision Technology Corp. New Hono Investment Pte. Ltd Jin-Cherng Construction Co. Walsin Info-Electric Corp. PT. Walsin Lippo Industries PT. Walsin Lippo Kabel PT. Walsin Nickel Industrial Indonesia Joint Success Enterprises Limited Chin-Xin Investment Co., Ltd. Walsin Color Co., Ltd. Concord II Venture Capital Co., Ltd. Winbond Electronics Corp. Walton Advanced Engineering, Inc. Walsin Technology Corp. Powertec Electrochemical Corp.’s	Vistra Corporate Services Centre Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin Islands Vistra Corporate Services Centre Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin Islands Vistra Corporate Services Centre Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin Islands 25F., No. 1, Songzhi Rd., Xinyi District., Taipei City, Taiwan, R.O.C. No. 47, Bade Rd., Yanshui District, Tainan City 73743, Taiwan, R.O.C. 2115-1,Kawasan Perindustrian air Keroh, Fasa IV, Air Keroh, 75450 Melaka, Malaysia 5001 Beach Road #07-37 Golden Mile Complex Singapore (199588) 5th Floor, 192 Jingye 1st Road, Jhongshan District, Taipei 104, Taiwan, R.O.C. 25F., No. 1, Songzhi Rd., Xinyi District., Taipei City, Taiwan, R.O.C. JI. MH. Thamrin Block A1-1, Delta Silicon Industrial Park, Lippo Cikarang, Bekasi 17550, Indonesia JI. Jati 3 Blok J7/5, Newton Techno Park, Serang, Cikarang Selatan, Bekasi, Jawa Barat Gedung Wisma Mulia LT. 41 JL Jend Gatot Subroto NO. 42 Kuningan Barat Mmpang Prapatan Kota ADM. Jakarta Selatan Dki Jakarta Vistra Corporate Services Centre Wickhams Cay II, Road Town, Tortola, VG1110 British Virgin Islands 26F., No. 1, Songzhi Rd., Xinyi District., Taipei City, Taiwan, R.O.C. 1F., No. 5, Ln. 199, Liaoning St. Zhongshan District., Taipei City 104105, Taiwan, R.O.C. 4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an District., Taipei City 106,, R.O.C. No. 8, Keya 1st Rd., Daya Township, Taichung County 428, Taiwan, R.O.C. No. 18, Yugang N. 1st Rd., Qianzhen District., Kaohsiung City 806, Taiwan, R.O.C. 24F., No. 1, Songzhi Rd., Xinyi District., Taipei City, Taiwan, R.O.C. 13 F, No. 337, Fuxing N. Rd., Songshan District., Taipei City 105, Taiwan, R.O.C.	Investments Investments Investments Solar power systems management, design, and installation Waste disposal, resource recovery and cement products Production and sale of stainless steel plates Investments Construction Mechanical and electrical, communications, and power systems Steel wires Production and sale of cables and wires Production and sale of nickel pig iron Investments Investments Management of investments and conglomerates Venture capital and consulting affairs Research, development, production and sale of semiconductors and related components Production, sale, and testing of semiconductors Production and sale of ceramic capacitors Basic industrial chemical manufacturing and energy technical services	$ 14,495,777 13,611,135 1,587,416 180,368 10,000 434,994 5,003,810 611,688 270,034 481,663 11,656 1,509,171 1,164,273 2,237,969 457,610 257,860 7,429,920 1,185,854 1,649,039 2,945,925	$ 14,760,298 12,724,589 1,587,416 180,368 10,000 - - 611,688 270,034 481,663 11,656 1,509,171 1,164,273 2,237,969 457,610 257,860 7,429,920 1,185,854 1,649,039 2,945,925	473,730,393 317,505,180 44,739,988 29,995,859 1,000,000 32,178,385 42,000,000 577,583,403 29,854,246 10,500 1,050,000 500,000 36,058,184 179,468,270 49,831,505 26,670,699 883,848,423 109,628,376 88,902,325 318,522,792	100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.22 99.51 70.00 70.00 50.00 49.05 37.00 33.97 26.67 22.21 21.01 18.30 22.46	$ 26,803,960 5,353,142 383,632 365,703 19,203 447,963 5,828,396 6,348,728 335,371 818,205 12,690 2,381,125 5,175,692 8,011,194 1,053,790 174,332 18,357,864 2,322,664 8,166,415 -	$ 1,081,312 (162,677) 46,062 31,059 10,366 47,066 953,732 (108,838) (4,767) 90,143 5,705 2,598,802 (237,201) 528,594 (17,475) (16,822) 13,594,643 219,897 7,931,941 -	$ 1,081,391 (58,882) 46,062 31,059 10,366 30,256 849,748 (108,129) (4,744) 63,100 3,994 1,128,008 (115,394) 195,580 (5,936) (4,486) 2,984,304 46,403 1,450,358 -	(Note)

Note: Due to adjustments in the investment structure of the Group, it was transferred from Concord Industries Limited to Walsin Lihwa Corporation.

• 81 -

TABLE 9

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)

Walsin Lihwa Corporation

A. The names of investee companies in mainland China, their main businesses and products, total amount of paid-in capital, investment type, investment flows, percentage of ownership in investment, investment gain or loss, carrying amount, accumulated inward remittance of earnings and upper limit on investment in mainland China were as follows:

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Investment Type (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2021	Net Income (Loss) of the Investee	Percentage of Ownership in Investment (%)	Investment Gain (Loss) (Note 16)	Carrying Amount as of December 31, 2021	Accumulated Inward Remittance of Earnings as of December 31, 2021
					Outflow	Inflow
Jiangyin Walsin Steel Cable Co., Ltd. Shanghai Walsin Lihwa Power Wire & Cable Co., Ltd. Hangzhou Walsin Power Cable & Wire Co., Ltd. Walsin (China) Investment Co., Ltd. Changshu Walsin Specialty Steel Co., Ltd. Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd. Dongguan Walsin Wire & Cable Co., Ltd. Jiangyin Walsin Specialty Alloy Materials Co., Ltd. XiAn Walsin Metal Product Co., Ltd. (Note 13) Yantai Walsin Stainless Steel Co., Ltd.	Manufacture and sale of steel cables and wires Manufacture and sale of cables and wires Manufacture and sale of cables and wires Investments Manufacture and sale of specialized steel tubes Manufacture and sale of stainless steel Manufacture and sale of bare copper cables and wires Manufacture and sale of cold-rolled stainless steel and flat rolled products Manufacture and sale of specialized stainless steel plates Production and sale of electronic components and new alloy materials	$ 553,600 (US$ 20,000) 432,555 (US$ 15,627) 4,929,254 (US$ 178,080) 2,175,648 (US$ 78,600) 2,684,960 (US$ 97,000) 470,560 (US$ 17,000) (Note 7) 719,680 (US$ 26,000) 1,356,320 (US$ 49,000) 1,532,088 (US$ 55,350) 9,274,599 (US$ 335,065) (Note 11)	b b b b b b b b b b	$ 720,815 (US$ 26,041) (Note 2) 413,982 (US$ 14,956) (Note 3) 2,335,638 (US$ 84,380) (Note 4) 2,175,648 (US$ 78,600) (Note 5) 2,684,960 (US$ 97,000) (Note 6) 1,079,520 (US$ 39,000) (Note 8) 719,680 (US$ 26,000) (Note 9) 1,356,320 (US$ 49,000) (Note 10) 834,552 (US$ 30,150) 3,679,419 (US$ 132,927)	$ - - - - - - - - - - - - - - - - - - 2,214,400 (US$ 80,000)	$ - - - - - - - - - - - - - - - - - - - -	$ 720,815 (US$ 26,041) (Note 2) 413,982 (US$ 14,956) (Note 3) 2,335,638 (US$ 84,380) (Note 4) 2,175,648 (US$ 78,600) (Note 5) 2,684,960 (US$ 97,000) (Note 6) 1,079,520 (US$ 39,000) (Note 8) 719,680 (US$ 26,000) (Note 9) 1,356,320 (US$ 49,000) (Note 10) 834,552 (US$ 30,150) 5,893,819 (US$ 212,927)	$ 84,065 124,098 188,273 217,722 39,607 13,217 7,337 (1,462) (14,119) (260,618)	100.00 95.71 40.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	$ 84,065 118,774 73,296 217,722 39,607 13,217 7,337 (1,462) (14,119) (260,618)	$ 871,873 1,153,271 622,240 4,451,409 700,497 233,101 1,651,531 1,981,997 (766,837) 4,705,064	$ - - - - - - - - - -
												(Continued)

• 82 -

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Investment Type (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2021	Net Income (Loss) of the Investee	Percentage of Ownership in Investment (%)	Investment Gain (Loss) (Note 16)	Carrying Amount as of December 31, 2021	Accumulated Inward Remittance of Earnings as of December 31, 2021
					Outflow	Inflow
Changzhou China Steel Precision Materials Co., Ltd. Nanjing Taiwan Trade Mart Management Co., Ltd. Shaanxi Tianhong Silicon Industrial Corporation Jiangsu Taiwan Trade Mart Development Co., Ltd. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. (Note 14) Walsin (Nanjing) Development Co., Ltd. Nanjing Walsin Property Management Co., Ltd. Walsin Nanjing Culture and Arts Co., Ltd.	Melting and forging of nonferrous metallic materials and composites as well as new types of alloys Business and asset management, consulting and advertising services Polysilicon production Development and management of Nanjing Taiwan Trade Mart Management Co., Ltd. Communications equipment and electronic components Construction, rental and sale of buildings and industrial factories Property management, business management and housing leasing Organize culture and arts communication activity, cultural performance, culture and arts forwarding agency	$ 1,206,848 (US$ 43,600) 27,680 (US$ 1,000) 5,209,932 (RMB 1,200,000) 43,416 (RMB 10,000) 675,541 (RMB 155,597) 1,384,000 (US$ 50,000) 4,342 (RMB 1,000) 6,512 (RMB 1,500)	b b b b b b b b	$ 362,054 (US$ 13,080) 27,680 (US$ 1,000) - (US$ -) 8,415 (US$ 304) - RMB - 1,378,464 (US$ 49,800) (Note 15) - RMB - - RMB -	$ - - - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - - - -	$ 362,054 (US$ 13,080) 27,680 (US$ 1,000) - (US$ -) 8,415 (US$ 304) - RMB - 1,378,464 (US$ 49,800) (Note 15) - RMB - - RMB -	$ 210,875 15,963 (1,132,244) 456 11,768 (234,792) (6,073) 8,676	30.00 100.00 19.00 20.00 6.02 99.60 99.60 99.60	$ 63,264 15,963 - 91 - (233,859) (6,049) 8,643	$ 441,125 (414,815) - (Note 12) 9,326 74,849 9,607,206 (5,206) -	$ 844,794 (US$ 30,520) - - - - - - -

B. The upper limit on investment of WLC in mainland China was as follows:

Accumulated Investment in Mainland China as of Investment Amounts Authorized by the Upper Limit on Investment December 31, 2021 Investment Commission, MOEA (NT$ in Thousands) (NT$ and US$ in Thousands) (NT$ and US$ in Thousands) $ 17,817,284 $ 17,646,969 N/A (Note 19) (US$ 643,688) (US$ 637,535)

(Continued)

• 83 -

Notes:

1. Investments can be classified into the following three categories:

2. a. Direct investment in mainland China.

3. b. Reinvestment in mainland China through companies in a third country. c. Others.

4. Including US$15,000 thousand investment through Walsin (China) Investment Co., Ltd.

5. Including US$14,950 thousand investment through Walsin (China) Investment Co., Ltd.

6. Including US$13,300 thousand investment through Walsin (China) Investment Co., Ltd., US$53,000 thousand investment through Ace Result Global Ltd. and US$22,730 thousand dividends appropriated from Dongguan Walsin Wire & Cable Co., Ltd., Jiangying Walsin Steel Cable Co., Ltd., Shanghai Walsin Lihwa Power Wire & Cable Co., Ltd. and Hangzhou Walsin Power Cable & Wire Co., Ltd.

7. Capital investment of US$28,600 thousand was contributed from the accounts payable of Walsin (China) Investment Co., Ltd. to Walsin Lihwa Holdings Limited.

8. Including US$20,000 thousand investment through Walsin Specialty Steel Corp. and US$42,000 thousand dividends appropriated from Changshu Walsin Specialty Steel Co., Ltd. and Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd.

9. Inclusive of capital reduction to cover accumulated deficits US$22,000 thousand.

10. Including US$4,800 thousand investment through Walsin (China) Investment.

11. Investment through Walsin (China) Investment Co., Ltd.

12. Including investments through Walsin (China) Investment Co., Ltd. of US$4,500 thousand and US$4,500 thousand of the own capital of Walsin (China) Investment Co., Ltd.

13. Including investments of its own capital of RMB578,796 thousand from Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd., Changzhou Wujin NSL Co., Ltd. and Changshu Walsin Specialty Steel Co., Ltd. and RMB3,750 thousand made through Changzhou Wujin NSL Co., Ltd. Including US$32,927 thousand investment through Yantai Huanghai Iron and Steel Co., Ltd. and Yantai Dazhong Recycling Resource Co., Ltd. which were merged.

14. The amount was adjusted by the capital of XiAn Lv Jing Technology Co., Ltd. of RMB228,000 thousand and by the fair value.

15. XiAn Walsin Metal Product Co., Ltd. merged XiAn Lv Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited.

16. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. was formerly known as Shaanxi Optoelectronics Technology Co., Ltd.

17. 15 The amount included investment through Joint Success Enterprise Limited approved in the previous years.

18. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and renminbi.

19. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68, RMB to NT$ = 1:4.34161. The average exchange rates of December 31, 2021 were as follows: US$ to NT$ = 1:27.976, RMB to NT$ = 1:4.33908.

20. Amount was recognized based on audited financial statements.

21. Upper limit on investment:

WLC was approved as the operation headquarters by the Industrial Development Bureau, Ministry of Economic Affairs and is thus exempted from the related regulations of “Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China”.

(Continued)

• 84 -

C. Significant direct or indirect transactions between the Company and investees in mainland China

(In Thousands of New Taiwan Dollars)

Related Party	Nature of Relationship	Transaction Type	Amount	% to Total		Transaction terms		Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Unrealized Loss
					Unit Price	Payment Terms	Compare to General Transactions	Ending Balance	% to Total
Dongguan Walsin Wire & Cable Co., Ltd. Jiangyin Walsin Specialty Alloy Materials Co., Ltd. Changshu Walsin Specialty Steel Co., Ltd. Shanghai Walsin Lihwa Power Wire & Cable Co., Ltd. Yantai Walsin Stainless Steel Co., Ltd.	100% indirectly owned subsidiary 100% indirectly owned subsidiary 100% indirectly owned subsidiary 100% indirectly owned subsidiary 100% indirectly owned subsidiary	Sales Sales Sales Sales Sales	$ (2,773,189) (668,583) (595,996) (18,689) (7,723)	(2) (1) (1) - -	The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers.	The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers. The price and payment terms are set by quotations on the local market, and the transaction terms are similar to those of general customers.	Similar Similar Similar Similar Similar	$ 81,510 245,996 281,518 4,515 -	2 5 5 - -	$ - (4,734) (11,732) - -

(Concluded)

• 85 -

TABLE 10

WALSIN LIHWA CORPORATION AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2021

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
LGT Bank (Singapore) Investment Fund under the custody of Standard Chartered Winbond Electronics Corp. Chin-Xin Investment Co., Ltd. Teco Electric & Machinery Co., Ltd.	251,504,000 222,000,000 220,011,000 205,332,690	7.32 6.46 6.41 5.98

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (included treasury shares) by the Company as of the last business day for the current quarter. The share capital in the financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers their shareholdings to the trust, the above information will be disclosed by the individual trustee who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

• 86 -

WALSIN LIHWA CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of financial instruments at fair value through profit or loss - current Statement of notes receivable Statement of trade receivables Statement of other receivables Statement of inventories Statement of other current assets Statement of financial assets at FVOCI - non-current Statement of investments accounted for using the equity method Statement of changes in property, plant and equipment Statement of changes in accumulated depreciation of property, plant and equipment Statement of changes in accumulated impairment of property, plant and equipment Statement of changes in right-of-use assets Statement of changes in accumulated depreciation of right-of-use assets Statement of changes in investment properties Statement of changes in accumulated depreciation of investment properties Statement of changes in accumulated impairment of investment properties Statement of deferred income tax assets Statement of other non-current assets - others Statement of short-term borrowings Statement of financial assets at FVTPL - current Statement of trade payables Statement of other payables Statement of other current liabilities Statement of bonds payable Statement of long-term borrowings Statement of deferred income tax liabilities Statement of lease liabilities Statement of other non-current liabilities Major Accounting Items in Profit or Loss Statement of operating revenue Statement of operating costs Statement of selling and marketing expenses Statement of general and administrative expenses Statement of research and development expenses Statement of non-operating income and expenses - other income Statement of non-operating income and expenses - miscellaneous Statement of employee benefits expenses, depreciation and amortization

**Statement Index **

1 2 3 4 5 6 7 8 9 Note 13 Note 13 Note 13 10 10 Note 15 Note 15 Note 15 Note 23 11 12 13 14 15 16 Note 17 17 Note 23 18 19 20 21 22 23 24 25 26 27

• 87 -

STATEMENT 1

WALSIN LIHWA CORPORATION

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

Item Description Cash on hand and petty cash Company factories and offices Cash in banks Checking accounts and demand deposits Foreign currency deposits Including US$91,173 thousand @27.68, JPY266,048 thousand @0.2405, EUR12,578 thousand @31.32 and RMB1 thousand @4.34161	Amount $ 1,050 2,041,020 2,981,589 $ 5,023,659

• 88 -

STATEMENT 2

WALSIN LIHWA CORPORATION

STATEMENT OF FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Type of
Transaction	Description	Expiration Date	Exercise Price	Fair Value
Buy	Copper	2022.01.19-2022.04.20	US$94,424	$	66,713
Sell	Copper	2022.01.19-2022.03.31	US$29,229		(17,086)
Sell	Nickel	2022.02.04-2022.03.31	US$44,698		(48,754)
Sell	EUR to USD	2022.01.18-2022.02.17	EUR18,000/USD20,326		(1,357)
Sell	USD to NTD	2022.01.07-2022.02.10	USD100,000/NTD2,776,800		10,865
Buy	EUR to USD	2022.01.10	EUR25,405/USD28,694		1,485
Buy	USD to NTD	2022.01.06-2022.02.21	USD129,363/NTD3,579,887		(3,664)
Buy	USD to JPY	2022.01.12-2022.01.18	USD4,784/JPY547,970		662
				$	8,864

• 89 -

STATEMENT 3

WALSIN LIHWA CORPORATION

STATEMENT OF NOTES RECEIVABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Client Name Notes receivable from operating activities Client A Client B Client C Client D Client E Client F Others (Note) Notes receivable not from operating activities Others (Note)	Amount $ 8,791 7,211 6,234 2,658 2,361 2,346 6,423 36,024 969 $ 36,993

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

• 90 -

STATEMENT 4

WALSIN LIHWA CORPORATION

TRADE RECEIVABLES DECEMBER 31, 2021

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

Client Name Unrelated parties Client G Client H Others (Note)	Amount $ 1,330,444 304,575 2,853,106 $ 4,488,125

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

• 91 -

STATEMENT 5

WALSIN LIHWA CORPORATION

OTHER RECEIVABLES DECEMBER 31, 2021

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

Item Description Other receivables Business tax refund receivable Discount on raw material Other receivable - related parties Financial products receivable Others	Amount $ 345,990 326,678 92,468 91,775 128,173 $ 985,084

• 92 -

STATEMENT 6

WALSIN LIHWA CORPORATION

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

Item Description Finished goods Copper wire Wire and cables Special steel Work in process Wire and cables Special steel Others Raw materials Copper plates Special steel and alloy iron Others Raw materials in transit Raw materials Construction in progress Less: Allowance for inventory and obsolescence losses (Note 1)		Amount	Amount
		Cost $ 1,271,127 1,702,332 4,255,839 7,229,298 493,703 1,079,078 183,395 1,756,176 486,842 2,191,423 182,228 2,860,493 2,446,150 1,168,240 229,425 (122,510) $ 15,567,272	Fair Value (Note 2) $ 1,271,127 1,627,703 4,247,075 7,145,905 493,703 1,054,966 183,395 1,732,064 486,842 2,191,376 173,822 2,852,040 2,446,150 1,161,688 229,425 - $ 15,567,272

Note 1: Including finished goods of $83,393 thousand, work in process of $24,112 thousand, raw materials of $8,453 thousand, and raw materials in transit of $6,552 thousand.

Note 2: Fair value is the net realizable value.

• 93 -

STATEMENT 7

WALSIN LIHWA CORPORATION

STATEMENT OF OTHER CURRENT ASSETS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Description Prepayments Prepaid expenses and prepayment for purchase Offset against business tax payable Restricted deposit Repatriation of offshore fund	Amount $ 1,720,537 250,658 80,493 $ 2,051,688

• 94 -

STATEMENT 8

WALSIN LIHWA CORPORATION

STATEMENT OF FINANCIAL ASSETS AT FVOCI - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Name and Type of Securities HannStar Display Corp. HannStar Board Corp. Teco Electronic and Machinery Co., Ltd. Kuang Tai Metal Industrial Co., Ltd. Global Investment Holdings WK Technology Fund Universal Venture Capital Investment Taiwan Submarine Communication Cables Corp. (One-Seven Trading Co., Ltd.) Hwa Bao Botanic Conservation Corp. Tung Mung Development Co., Ltd.	Balance, January 1, 2021 Shares Amount 299,632,180 $ 3,685.476 63,753,952 2,763,734 954,000 26,378 9,631,802 210,382 5,221,228 50,078 380,477 5,949 1,400,000 11,128 30,000 184 3,000,000 29,920 - - $ 6,783,229	Additions in Investment Acquired Shares Amount - $ 1,737,866 (Note 1) - 130,695 (Note 1) 229,484,730 7,267,008 (Notes 1, 2 and 3) - 66,127 (Note 1) - 10,205 (Note 1) - - - 1,522 (Note 1) - - - - 14,285,000 149,993 (Note 3) $ 9,363,416	Decrease in Investment Shares Amount - $ - - - - - - - - - 361,453 5,762 (Notes 1 and 4) - - - 35 (Note 1) - 1,324 (Note 2) - - $ 7,121	Balance, December 31, 2021 Shares Fair Value Collateral 299,632,180 $ 5,423,342 Nil 63,753,952 2,894,429 Nil 230,438,730 7,293,386 Nil 9,631,802 276,509 Nil 5,221,228 60,283 Nil 19,024 187 Nil 1,400,000 12,650 Nil 30,000 149 Nil 3,000,000 28,596 Nil 14,285,000 149,993 Nil $ 16,139,524
		Acquired Shares - - 229,484,730 - - - - - - 14,285,000
	Shares 299,632,180 63,753,952 954,000 9,631,802 5,221,228 380,477 1,400,000 30,000 3,000,000 -		Shares - - - - - 361,453 - - - -	Shares 299,632,180 63,753,952 230,438,730 9,631,802 5,221,228 19,024 1,400,000 30,000 3,000,000 14,285,000

Note 1: The amount included allowance evaluation for using the fair value method.

Note 2: The amount included issuance of new shares in exchange for the acquired shares.

Note 3: The investment bought in 2021.

Note 4: The amount included capital reduction refund.

• 95 -

STATEMENT 9

WALSIN LIHWA CORPORATION

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

Name and Type of Securities Walsin Lihwa Holdings Limited Concord Industries Limited Min Maw Precision Industry Corp. Ace Result Limited Waltuo Green Resources Corporation Walsin Precision Technology Sdn Bhd New Hono Investment Pte. Ltd. Chin-Cherng Construction Co. Walsin Info-Electric Corp. PT. Walsin Lippo Industries PT. Walsin Lippo Kabel PT. Walsin Nickel Industrial Indonesia Joint Success Enterprises Limited Chin-Xin Investment Co., Ltd. Walsin Color Co., Ltd. Concord II Venture Capital Co., Ltd. Powertec Electrochemical Corp. Impairment loss Winbond Electronics Corp. Walton Advanced Engineering, Inc. Walsin Technology Corp.	Balance, January 1, 2021 Shares Amount 483,230,393 $ 26,135,792 285,903,187 4,631,181 26,565,000 334,644 44,739,988 339,349 1,000,000 8,837 - - - - 515,699,455 6,452,096 29,854,246 340,934 10,500 783,754 1,050,000 8,916 500,000 1,306,341 36,058,184 5,319,464 179,468,270 6,002,698 49,831,505 1,132,611 26,670,699 185,428 318,552,792 1,678,639 - (1,678,639) 883,848,423 14,595,661 109,628,376 2,601,028 88,902,325 7,068,731 $ 77,247,465	Additions in Investment Acquired Shares Amount - $ 932,689 47,000,000 1,156,955 3,430,859 31,059 - 44,283 - 10,366 32,178,385 447,963 42,000,000 5,828,396 61,883,948 - - - - 34,451 - 3,774 - 1,074,784 - - - 2,008,496 - - - - - - - - - 3,762,203 - - - 1,097,684 $ 16,433,103	Decrease in Investment Shares Amount 9,500,000 $ 264,521 15,398,007 434,994 - - - - - - - - - - - 103,368 - 5,563 - - - - - - - 143,772 - - - 78,821 - 11,096 - - - - - - - 278,364 - - $ 1,320,499	Balance, December 31, 2021 Percentage of Ownership Shares (%) Amount 473,730,393 100.00 $ 26,803,960 317,505,180 100.00 5,353,142 29,995,859 100.00 365,703 44,739,988 100.00 383,632 1,000,000 100.00 19,203 32,178,385 100.00 447,963 42,000,000 100.00 5,828,396 577,583,403 99.22 6,348,728 29,854,246 99.51 335,371 10,500 70.00 818,205 1,050,000 70.00 12,690 500,000 50.00 2,381,125 36,058,184 49.05 5,175,692 179,468,270 37.00 8,011,194 49,831,505 33.97 1,053,790 26,670,699 26.67 174,332 318,552,792 22.46 1,678,639 - (1,678,639) 883,848,423 22.21 18,357,864 109,628,376 21.01 2,322,664 88,902,325 18.30 8,166,415 $ 92,360,069	Market Value or Net Assets Value Unit Price Total Amount Valuation Collateral $ 26,803,960 Equity method Nil 5,353,142 Equity method Nil 365,703 Equity method Nil 383,632 Equity method Nil 19,203 Equity method Nil 447,963 Equity method Nil 2,227,163 Equity method Nil 6,348,712 Equity method Nil 335,371 Equity method Nil 818,205 Equity method Nil 12,690 Equity method Nil 2,651,529 Equity method Nil 5,077,250 Equity method Nil 8,106,508 Equity method Nil 1,053,790 Equity method Nil 174,332 Equity method Nil - Equity method Nil - Equity method Nil 30,050,846 Equity method Nil 2,066,495 Equity method Nil 14,846,688 Equity method Nil $ 107,143,182
				Percentage of Ownership Shares (%) 473,730,393 100.00 317,505,180 100.00 29,995,859 100.00 44,739,988 100.00 1,000,000 100.00 32,178,385 100.00 42,000,000 100.00 577,583,403 99.22 29,854,246 99.51 10,500 70.00 1,050,000 70.00 500,000 50.00 36,058,184 49.05 179,468,270 37.00 49,831,505 33.97 26,670,699 26.67 318,552,792 22.46 - 883,848,423 22.21 109,628,376 21.01 88,902,325 18.30
	Shares 483,230,393 285,903,187 26,565,000 44,739,988 1,000,000 - - 515,699,455 29,854,246 10,500 1,050,000 500,000 36,058,184 179,468,270 49,831,505 26,670,699 318,552,792 - 883,848,423 109,628,376 88,902,325	Acquired Shares - 47,000,000 3,430,859 - - 32,178,385 42,000,000 61,883,948 - - - - - - - - - - - - -	Shares 9,500,000 15,398,007 - - - - - - - - - - - - - - - - - - -		Unit Price

• 96 -

STATEMENT 10

WALSIN LIHWA CORPORATION

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Cost Land Buildings and improvements Other equipment Accumulated depreciation Land Buildings and improvements Other equipment	Balance at January 1, 2021 $ 62,209 15,681 33,891 $ 111,781 $ 6,101 9,971 15,080 $ 31,152	Addition $ - - 24,290 $ 24,290 $ 6,644 5,238 11,987 $ 23,869	Deduction Balance at December 31, 2021 $ (654) $ 61,555 - 15,681 (9,234) 48,857 $ (9,978) $ 126,093 $ (654) $ 12,091 - 15,209 (9,324) 17,743 $ (9,978) $ 45,043

• 97 -

STATEMENT 11

WALSIN LIHWA CORPORATION

STATEMENT OF OTHER NON-CURRENT ASSETS - OTHERS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Description Temporary payment Income tax refund receivable	Amount $ 150,000 32,006 $ 182,006

• 98 -

STATEMENT 12

WALSIN LIHWA CORPORATION

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

			Balance,		Annual Interest
Item	Description	December 31, 2020		Contract Period	Rates (%)	Collateral
Bank lines of credit
Standard Chartered Bank	Line of credit	$	559,500	2021.05.18-2022.02.18	Note	Nil
DBS Bank	Line of credit		555,900	2021.11.22-2022.05.23	Note	Nil
Standard Chartered Bank	Line of credit		426,735	2021.12.01-2022.04.14	Note	Nil
Standard Chartered Bank	Line of credit		421,050	2021.12.01-2022.04.25	Note	Nil
HSBC Bank	Line of credit		1,000,000	2021.12.29-2022.01.19	Note	Nil
Materials procurement loans			2,963,185			Nil
Taiwan Cooperative Bank	Purchase and equipment payment		1,551	2021.12.10-2022.01.09	Note	Nil
Taiwan Cooperative Bank	Purchase and equipment payment		1,290	2021.12.13-2022.01.12	Note	Nil
Taiwan Cooperative Bank	Purchase and equipment payment		1,246	2021.12.14-2022.01.13	Note	Nil
Taiwan Cooperative Bank	Purchase and equipment payment		1,538	2021.12.20-2022.01.19	Note	Nil
Taiwan Cooperative Bank	Purchase and equipment payment		1,556	2021.12.20-2022.01.19	Note	Nil
Taiwan Cooperative Bank	Purchase and equipment payment		4,634	2021.12.23-2022.01.22	Note	Nil
First Commercial Bank	Purchase and equipment payment		188,833	2021.12.06-2022.06.03	Note	Nil
First Commercial Bank	Purchase and equipment payment		277,717	2021.12.06-2022.06.03	Note	Nil
First Commercial Bank	Purchase and equipment payment		540,068	2021.12.22-2022.06.20	Note	Nil
First Commercial Bank	Purchase and equipment payment		166,883	2021.12.22-2022.06.20	Note	Nil
First Commercial Bank	Purchase and equipment payment		101,461	2021.12.30-2022.06.28	Note	Nil
First Commercial Bank	Purchase and equipment payment		214,678	2021.12.30-2022.06.28	Note	Nil
First Commercial Bank	Purchase and equipment payment		290,697	2021.12.30-2022.06.28	Note	Nil
First Commercial Bank	Purchase and equipment payment		188,391	2021.12.30-2022.06.28	Note	Nil
First Commercial Bank	Purchase and equipment payment		96,715	2021.12.30-2022.06.28	Note	Nil
Hua Nan Commercial Bank	Purchase and equipment payment		17,545	2021.12.02-2022.05.20	Note	Nil
Hua Nan Commercial Bank	Purchase and equipment payment		6,527	2021.12.08-2022.05.25	Note	Nil
Hua Nan Commercial Bank	Purchase and equipment payment		6,787	2021.12.09-2022.05.27	Note	Nil
Hua Nan Commercial Bank	Purchase and equipment payment		963	2021.12.17-2022.06.02	Note	Nil
Hua Nan Commercial Bank	Purchase and equipment payment		9,720	2021.12.27-2022.06.14	Note	Nil
			2,118,800
			5,081,985
Less: Foreign exchange gain			(7,353)
		$	5,074,632

Note: The effective interest rate ranges of the procurement loans were 0.64%-0.70%; the effective interest rate ranges of the bank lines of credit were 0.69%-0.91%.

• 99 -

STATEMENT 13

WALSIN LIHWA CORPORATION

STATEMENT OF DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING - CURRENT DECEMBER 31, 2021

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

		Maturity
	Item Description	Date	Notional Amount	Fair Value
Exchange	rate swap contracts USD to NTD	2022.01.12	USD75,000/NTD2,097,188	$ (20,383)
Exchange	rate swap contracts USD to NTD	2022.01.12	USD70,000/NTD1,957,375	(19,024)
Exchange	rate swap contracts USD to NTD	2022.01.14	USD40,000/NTD1,109,600	1,968
				$ (37,439)

• 100 -

STATEMENT 14

WALSIN LIHWA CORPORATION

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

Vendor Name Company A Company B Company C Other (Note)	Amount $ 389,028 313,443 167,030 2,170,723 $ 3,040,224

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

• 101 -

STATEMENT 15

WALSIN LIHWA CORPORATION

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

Item Description Payable Bonus Employee’s compensation Salaries and wages Others (Note) Payables on equipment Other payables - others	Amount $ 956,524 262,000 207,489 966,513 2,392,526 103,933 1,993 $ 2,498,452

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

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STATEMENT 16

WALSIN LIHWA CORPORATION

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

Item Description Advance payment Accrued sales contract loss Other current liabilities - other	Amount $ 324,579 26,621 21,674 $ 372,874

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STATEMENT 17

WALSIN LIHWA CORPORATION

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

Creditor Repayment Contract Period Annual Interest Rates (%) Bank of Taiwan Bullet repayment 2019.03.04-2022.03.04 Note Cathay United Bank Bullet repayment 2019.03.04-2022.03.04 Note Taiwan Cooperative Bank Bullet repayment 2019.03.04-2022.03.04 Note Taipei Fubon Commercial Bank Bullet repayment 2019.06.03-2022.06.03 Note Chang Hwa Commercial Bank Bullet repayment 2019.06.03-2022.06.03 Note KGI Bank Bullet repayment 2019.06.03-2022.06.03 Note Chinatrust Commercial Bank Bullet repayment 2019.09.03-2022.09.03 Note Standard Charted Bank Bullet repayment 2021.09.27-2023.12.31 Note DBS Bank Bullet repayment 2020.03.30-2023.09.30 Note DBS Bank Bullet repayment 2020.03.31-2023.03.31 Note DBS Bank Bullet repayment 2020.04.15-2023.04.15 Note Standard Charted Bank Bullet repayment 2020.09.27-2023.12.31 Note Bank of Taiwan Principal repayments every six months at 20%, 80% from the end of the fifth year from drawing date (September 2020) 2020.09.22-2025.09.22 Note The Export-Import Bank of the Republic of China Principal repayments every six months from the end of the second year from drawing date (December 2020) 2020.12.04-2027.12.04 Note Hua Nan Commercial Bank Principal to be repaid in two phases: From the 5th year, repayments are due once every six months 2021.03.29-2026.03.29 Note Taiwan Cooperative Bank 1st repayment due 48 months after the drawdown date, 2nd repayment due maturity date. 2021.06.28-2026.06.28 Note			Amount	Total Collateral $ 3,000,000 Nil 1,500,000 Nil 1,000,000 Nil 1,000,000 Nil 1,000,000 Nil 1,500,000 Nil 1,500,000 Nil 5,352,144 Nil 3,028,500 Nil 3,018,600 Nil 3,010,000 Nil 2,093,000 Nil 3,000,000 Nil 1,137,770 Nil 2,000,000 Nil 2,000,000 Nil $ 35,140,014
		Current Portion of Long-term Borrowings $ 3,000,000 1,500,000 1,000,000 1,000,000 1,000,000 1,500,000 1,500,000 - - - - - - - - - $ 10,500,000	Non-current Portion of Long-term Borrowings $ 5,352,144 3,028,500 3,018,600 3,010,000 2,093,000 3,000,000 1,137,770 2,000,000 2,000,000 $ 24,640,014

Note: The effective interest rate ranges were 0.85%-1.20%.

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STATEMENT 18

WALSIN LIHWA CORPORATION

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

Item Lease Terms Discount Rate Land 2011.03.01-2041.02.28 1.75-3.759 Buildings and improvements 2017.02.01-2022.02.28 1.409-1.9 Other equipment 2016.09.01-2024.12.01 3.038 Less: Current portion	Amount $ 50,758 416 33,970 85,144 (20,564) $ 64,580

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STATEMENT 19

WALSIN LIHWA CORPORATION

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

Item Description Amount Deposits received $ 225,863

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STATEMENT 20

WALSIN LIHWA CORPORATION

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

Item Description Bare copper wire 99,724 tons Wire and cables 36,195 tons Copper communication cable 344,280 Km pair Optical communication cable 119,730 Km core Stainless steel 643,432 tons Copper plates Other operating revenue Other	Amount $ 26,580,174 12,497,675 570,088 216,999 53,498,571 1,042,144 94,405,651 3,383,997 $ 97,789,648

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STATEMENT 21

WALSIN LIHWA CORPORATION

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

Item Raw materials Raw materials inventory, January 1 Add: Purchases of raw materials Internal transfer variance, quantity variance Less: Other sending (resending, lending and outsourcing) Selling raw materials Raw materials inventory, December 31 Other receiving transfer among factories and part number) Raw materials used Direct labor Manufacturing overhead Manufacturing cost Add: Work in process inventory, January 1 Incoming Work in process variance reserved Less: Others (picking for R&D, sample and outsourcing) Internal transfer variance, quantity variance Selling work in process Work in process inventory, December 31 Cost of finished goods Add: Finished goods inventory, January 1 Purchases of finished goods Receiving from outsourcing and returned goods Internal transfer of returned goods Finished goods variance reserved Less: Selling expense and picking for construction in progress, etc. Others (retirement) Finished goods inventory, December 31 Cost of finished goods sold Add: Cost Idle capacity loss Less: More or less clause and gain on physical inventory Loss on the reduction of inventory to LCM Others Variance allocation Cost of goods sold Construction cost Other operating costs

Amount $ 1,826,575 58,270,907 72,911 (309,048) (380,844) (2,860,493) (136,206) 56,483,802 918,742 7,288,533 64,691,077 1,096,723 1,265,661 253,907 (241,676) (846,574) (318,205) (1,756,176) 64,144,737 2,924,996 2,249,280 23,943,849 446,486 178,734 (799,593) (52,585) (7,229,298) 85,806,606 699,049 276,889 (303,246) (15,985) (983,340) (1,783,613) 83,696,360 927,918 257,475 $ 84,881,753

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STATEMENT 22

WALSIN LIHWA CORPORATION

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

Item Description Selling and marketing expenses Warehousing and shipping expense Salary and wages expense Other (Note)	Amount $ 879,573 199,535 179,501 $ 1,258,609

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

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STATEMENT 23

WALSIN LIHWA CORPORATION

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

Item Description General and administrative expenses Salary and wages expense Depreciation expense Professional service fee Insurance expense Remuneration pf Directors Other (Note) Less: Administrative expense of investment enterprise (the deduction of investment income)	Amount $ 956,181 136,719 102,828 76,243 75,000 314,291 (404,184) $ 1,257,078

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

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STATEMENT 24

WALSIN LIHWA CORPORATION

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

Item Description Research and development expenses Salary and wages expense Research outsourcing expense Depreciation expense Consumption of raw material expense Process research and development Others (Note)	Amount $ 75,549 27,824 20,629 18,799 12,234 25,909 $ 180,944

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

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STATEMENT 25

WALSIN LIHWA CORPORATION

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

Item Description Other income Gain on reversal of accrued sales contract loss Financial income Others (Note)	Amount $ 209,262 189,586 48,436 $ 447,284

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

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STATEMENT 26

WALSIN LIHWA CORPORATION

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

Item Description Miscellaneous expenses Employee benefits Finance costs Others	Amount $ 52,063 17,651 8,482 $ 78,196

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STATEMENT 27

WALSIN LIHWA CORPORATION

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

Employee benefits expense Salaries and wages expense Labor/Health insurance Pension expense Directors’ salaries Depreciation Property, plant and equipment Right-of-use assets Investment property Amortization expense Employee benefits expense Salaries and wages expense Labor/Health insurance Pension expense Directors’ salaries Depreciation Property, plant and equipment Right-of-use assets Investment property Amortization expense		For the Year Ended December 31, 2021	For the Year Ended December 31, 2021
		Operating Costs Operating Expenses Non-operating Expenses and Losses $ 1,684,098 $ 1,214,050 $ - $ 150,075 $ 79,641 $ - $ 63,271 $ 45,057 $ - $ - $ 84,089 $ - $ 1,105,101 $ 140,864 $ - 4,124 19,745 - 71,966 1,526 - $ 1,181,191 $ 162,135 $ - $ - $ 445 $ - For the Year Ended December 31, 2020		Total $ 2,898,148 $ 229,716 $ 108,328 $ 84,089 $ 1,245,965 23,869 73,492 $ 1,343,326 $ 445
		Operating Costs $ 1,396,553 $ 133,860 $ 65,415 $ - $ 1,038,978 3,218 96,632 $ 1,138,828 $ -	Operating Expenses Non-operating Expenses and Losses $ 999,715 $ - $ 60,013 $ - $ 40,630 $ - $ 42,348 $ - $ 114,954 $ - 20,138 - 5,925 - $ 141,017 $ - $ 222 $ -	Total $ 2,396,268 $ 193,873 $ 106,045 $ 42,438 $ 1,153,932 23,356 102,557 $ 1,279,845 $ 222 (Continued)

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• Note 1: As of December 31, 2021 and 2020, the Company had 2,820 and 2,725 employees, of which 11 and 11 were non-employee directors for respective years.

• Note 2: The average employee benefits expenses were $1,152 thousand and $993 thousand for the years ended December 31, 2021 and 2020, respectively. The average salaries and wages were $1,032 thousand and $883 thousand for the years ended December 31, 2021 and 2020, respectively.

• Note 3: There was a 17% adjusted change in the average salaries and wages.

• Note 4: The Company did not have supervisions for the year ended December 31, 2021 and 2020. Therefore, there’s no compensation to the supervisor.

• Note 5: The company’s compensation policy:

• a. The Company's remuneration is established on the principle of being able to attract and retain talent as follows:

1) Salary:

• A reasonable and competitive overall remuneration based on the market value of each professional function and the employee's contribution to their responsibilities.

• Bonus payments are made in accordance with the Company's operational performance, the achievement of team objectives and the employee's personal contribution and performance.

• Employees are paid and compensated on the basis of their academic experience, technical expertise, professional seniority and personal performance, without discrimination based on gender, race, religion, political affiliation, marital status or union affiliation.

• The starting salary standards for fresh graduates and foreign workers comply with local laws and regulations.

• The Company creates harmonious labor relations within the scope of the law, in accordance with the relevant local laws and regulations.

• The Company reviews its profitability and conducts market salary survey annually to plan salary adjustments.

• 2) Bonuses and Rewards: The reward and compensation system offered by the Company is designed to motivate employees who perform well in their work. Performance bonuses and production bonuses are granted based on the Company's operational performance, achievement of team goals and individual performance, and employees are remunerated according to the Company's profitability.

• 3) The Company establishes compensation committee to ensure the compensation arrangements of the Company comply with applicable laws and regulations and are sufficient to recruit outstanding talents.

(Continued)

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• b. Compensation for employees and directors:

The Company's Article 25-1 includes the amount and coverage of compensation for employees and directors. If the Company turns a profit in a year, no less than 1% of the profit should be distributed to its employees as compensation and no more than 1% to directors as compensation. The actual amount should be determined by a board meeting where no less than two-thirds of the directors are present and more than half of the directors present votes to approve the suggested amounts. The amounts should be reported to the shareholders meeting. However, if the Company still has accumulated deficit from previous terms, it should first reserve the amount needed to settle the outstanding balance.

• c. Remuneration of directors and supervisors:

The Company’s Independent Directors and Directors who are authorized by the Board of Directors to regularly involve in the Company’s operation may receive remuneration; the amount of remuneration shall be reviewed in accordance with Director’s participation and value contributed in the Company’s operation, together with reference of international and domestic industrial practice, by the Remuneration Committee and submitted to the Board of Directors for approval.

(Concluded)

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