ZENITRON — Audit Report / Information 2021

Nov 9, 2021

ZENITRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

---

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

~1~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Zenitron Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Zenitron Corporation and its subsidiaries (the “Group”) as at December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for opinion

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

Key audit matters

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

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

~2~

Valuation of allowance for uncollectible accounts receivable

Description

Refer to Note 4(8)(9), Note 5(1) and Note 6(4) for accounting policies on accounts receivable, accounting estimates and assumptions on impairment assessment as well as details of related impairment, respectively.

The Group assesses impairment of accounts receivable based on historical experience and takes into consideration the customers’ historical default records and current financial conditions to estimate expected loss rate in recognising loss allowance. In addition, the Group provides for full allowance for uncollectible accounts from individual customers where there is an indication that they are individually identified as impaired or a credit impairment actually occurred. As the assessment of allowance for uncollectible accounts is subject to management’s judgment and estimates in determining the future collectability, such as management’s assessment of customer’s credit risk, we considered the valuation of allowance for uncollectible accounts receivable from individual customers a key audit matter.

How our audit addressed the matter

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

1. Understood and evaluated related policies and internal controls on credit risk management and accounts receivable impairment.

2. Assessed the calculation logic of year-end accounts receivable ageing report provided by management, reviewed the related supporting documents and verified it against the accounting records to ascertain the accuracy of the ageing classification.

3. For those material accounts receivable individually identified by the management to have been impaired, reviewed the supporting documents of impairment assessment provided by the management to assess the reasonableness of collectability.

4. Sampled significant overdue accounts receivable amounts and examined their subsequent collections.

~3~

Assessment of allowance for inventory valuation losses

Description

Refer to Note 4(11), Note 5(2) and Note 6(5) for accounting policies on inventory valuation, accounting estimates and assumptions and details of allowance for valuation losses, respectively.

The Group is mainly engaged in sales of electronic components. The Group measures ending inventories at the lower of cost and net realisable value and provides allowance for inventory valuation losses based on usable condition of inventories that were individually identified as obsolete. As the life cycle of such inventories is short, the market is competitive, and the assessment of allowance for valuation of inventories individually identified as obsolete often involves management’s subjective judgment, we considered the estimation of inventory valuation losses a key audit matter.

How our audit addressed the matter

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

1. Understood and evaluated the internal control procedures over the Group’s inventories individually identified as obsolete.

2. Understood the Group’s warehousing control procedures, reviewed the annual physical inventory count plan as well as participated and observed the annual physical inventory count in order to assess the effectiveness of the procedures the management used to identify and control obsolete inventories.

3. Obtained the details of inventories that were individually identified as obsolete by the management, reviewed the related supporting documents and verified it against the accounting records.

Recognition of distribution warehouses sales revenue

Description

Refer to Note 4(22) for accounting policies on revenue recognition.

The Group has two revenue types, including direct shipment from its own warehouses and shipment from distribution warehouses. For shipment from distribution warehouses, revenue is recognised when goods are picked up by customers. The Group’s responsible unit regularly obtains the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses. The supporting documents for revenue recognition include inventory movement records. As the distribution warehouses are located separately in various regions in China, the process of revenue recognition involves numerous manual procedures. Considering the appropriateness of the timing of distribution warehouses’ sales revenue recognition, we considered the recognition of distribution warehouses sales revenue a key audit matter.

~4~

How our audit addressed the matter

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

1. Understood the procedures of revenue recognition for shipment from distribution warehouses, evaluated and sampled the internal controls over the two parties’ daily reconciliation.

2. Obtained the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses for a certain period before and after the balance sheet date and checked whether the timing of revenue recognition was reasonable.

3. Observed the physical inventory count or sent out confirmation letters to the distribution warehouses with significant inventory amount.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Zenitron Corporation as at and for the years ended December 31, 2021 and 2020.

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

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’

~5~

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

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

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

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

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

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

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

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

~6~

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

Chen, Ching Chang[Yi-Fan, Lin] For and on Behalf of PricewaterhouseCoopers, Taiwan March 22, 2022

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

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

~7~

ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) 6(5) 6(3) 6(6) 6(7) 6(9) and 8 6(22) 8	December 31, 2021 AMOUNT % $ 1,615,196 7 23,064 - 727 - 286,952 1 9,300,481 43 109,955 1 8,655,709 40 147,553 1 20,139,637 93 973,995 5 426,533 2 62,087 - 36,492 - 81,454 - 66,314 - 1,646,875 7 $ 21,786,512 100	December 31, 2020	December 31, 2020
		AMOUNT $ 1,615,196 23,064 727 286,952 9,300,481 109,955 8,655,709 147,553 20,139,637 973,995 426,533 62,087 36,492 81,454 66,314 1,646,875 $ 21,786,512	AMOUNT $ 1,676,223 25,307 858,856 220,785 9,146,660 100,253 6,377,512 84,546 18,490,142 95,894 440,004 98,306 37,036 63,504 65,291 800,035 $ 19,290,177	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Other receivables Inventories, net Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income - non-current Property, plant and equipment Right-of-use assets Investment property, net Deferred income tax assets Other non-current assets Total non-current assets Total assets				9 - 4 1 47 1 33 1
				96
				1 2 1 - - -
				4
				100

(Continued)

~8~

ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(10) 6(11) 6(7) 6(17) 6(12) 6(22) 6(7) 6(13) 6(14) 6(15) 6(16) 9 6(16) and 11	December 31, 2021 AMOUNT % $ 9,598,056 44 699,361 3 2,525 - 4,616,535 21 498,566 2 157,658 1 42,730 - 82,935 1 15,698,366 72 577,835 3 115,882 1 21,307 - 80,890 - 795,914 4 16,494,280 76 2,138,249 10 1,036,486 5 766,625 3 1,066,524 5 284,348 1 5,292,232 24 5,292,232 24 $ 21,786,512 100	December 31, 2020	December 31, 2020
		AMOUNT $ 9,598,056 699,361 2,525 4,616,535 498,566 157,658 42,730 82,935 15,698,366 577,835 115,882 21,307 80,890 795,914 16,494,280 2,138,249 1,036,486 766,625 1,066,524 284,348 5,292,232 5,292,232 $ 21,786,512	AMOUNT $ 8,668,103 549,506 2,528 4,403,301 447,222 59,326 40,234 72,945 14,243,165 - 114,468 59,073 71,913 245,454 14,488,619 2,138,249 958,734 718,200 643,662 342,713 4,801,558 4,801,558 $ 19,290,177	%
Current liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Current income tax liabilities Current lease liabilities Other current liabilities Total current liabilities Non-current liabilities Bonds payable Deferred income tax liabilities Non-current lease liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity attributable to owners of parent Total equity Significant contingent liabilities and unrecognised contract commitments Significant subsequent events Total liabilities and equity				45 3 - 23 2 - - 1
				74
				- 1 - -
				1
				75
				11 5 4 3 2
				25
				25
				100

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

~9~

ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(17) $ 42,044,726 100 $ 34,401,169 100 6(5) ( 39,557,880) ( 94) ( 32,779,983) ( 95) 2,486,846 6 1,621,186 5 6(21) ( 1,069,211) ( 2) ( 857,343) ( 3) ( 353,456) ( 1) ( 336,866) ( 1) ( 1,422,667) ( 3) ( 1,194,209) ( 4) 1,064,179 3 426,977 1 2,734 - 6,425 - 6(18) 61,064 - 74,300 - 6(19) 69,117 - 169,516 - 6(20) ( 116,319) - ( 122,162) - 16,596 - 128,079 - 1,080,775 3 555,056 1 6(22) ( 203,065) ( 1) ( 83,031) - $ 877,710 2 $ 472,025 1 6(13) ($ 10,595) - ($ 5,623) - 6(3) 19,523 - 217,244 1 6(22) 2,119 - 1,124 - ( 69,535) - ( 75,020) - ($ 58,488) - $ 137,725 1 $ 819,222 2 $ 609,750 2 $ 877,710 2 $ 472,025 1 $ 819,222 2 $ 609,750 2 6(23) $ 4.10 $ 2.21 $ 3.94 $ 2.20

Operating Revenue Operating Costs Gross Profit Operating expenses Selling expenses General and administrative expenses Total operating expenses Operating Profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Total non-operating income and expenses Profit before Income Tax Income tax expense Profit for the Year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss Losses on remeasurements of defined benefit plans Unrealised gains from investments in equity instruments measured at fair value through other comprehensive income Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translation of foreign financial statements Other Comprehensive (Loss) Income for the Year Total Comprehensive Income for the Year Profit attributable to: Owners of the parent Comprehensive income attributable to: Owners of the parent Earnings per Share (in dollars) Basic earnings per share Diluted earnings per share

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

~10~

ZENITRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Year ended December 31, 2020 Balance at January 1, 2020 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2019 earnings Legal reserve Cash dividends Cash payment from capital surplus Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020 Year ended December 31, 2021 Balance at January 1, 2021 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2020 earnings Legal reserve Cash dividends Equity component of convertible bonds issued by the Company Overdue and unclaimed shareholder dividends Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2021	Notes						Equity attributable to	owners of the parent	owners of the parent				Total equity
			Share capital - common stock		Capital surplus		Retained	Earnings		Other equity interest
							Legal reserve		Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(3) 6(16) 6(16) 6(3) 6(3) 6(16) 6(12) 6(3)		$ 2,138,249 - - - - - - - $ 2,138,249 $ 2,138,249 - - - - - - - - $ 2,138,249	$ 965,034 - - - - - ( 6,300 ) - $ 958,734 $ 958,734 - - - - - 75,605 2,147 - $ 1,036,486			$ 695,154 - - - 23,046 - - - $ 718,200 $ 718,200 - - - 48,425 - - - - $ 766,625	$ 390,067 472,025 ( 4,499 ) 467,526 ( 23,046 ) ( 207,600 ) - 16,715 $ 643,662 $ 643,662 877,710 ( 8,476 ) 869,234 ( 48,425 ) ( 406,300 ) - - 8,353 $ 1,066,524		($ 90,671 ) - ( 75,020 ) ( 75,020 ) - - - - ($ 165,691 ) ($ 165,691 ) - ( 69,535 ) ( 69,535 ) - - - - - ($ 235,226 )	$ 307,875 - 217,244 217,244 - - - ( 16,715 ) $ 508,404 $ 508,404 - 19,523 19,523 - - - - ( 8,353 ) $ 519,574	$ 4,405,708 472,025 137,725 609,750 - ( 207,600 ) ( 6,300 ) - $ 4,801,558 $ 4,801,558 877,710 ( 58,488 ) 819,222 - ( 406,300 ) 75,605 2,147 - $ 5,292,232

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

~11~

ZENITRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net loss (gain) on financial assets at fair value through profit or loss Expected credit (gain) loss Depreciation and amortisation Loss (gain) on disposal of property, plant and equipment Interest expense Interest income Dividend income Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes and accounts receivable Other receivables Inventories Other current assets Changes in operating liabilities Notes and accounts payable Other payables Other current liabilities Other non-current liabilities Cash outflow generated from operations Interest received Interest paid Income tax paid Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Increase in other non-current assets Dividends received Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term loans Increase in short-term notes and bills payable Payments of lease liabilities Issuance of corporate bonds Cash dividends paid Overdue and unclaimed shareholder dividends Net cash flows from financing activities Effect of exchange rate changes Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 $ 1,080,775 $ 555,056 6(2)(19) 3,986 ( 52,030 ) 6(4) ( 23,123 ) 12,100 6(21) 68,915 71,700 351 ( 196 ) 6(20) 116,319 122,162 ( 2,734 ) ( 6,425 ) 6(18) ( 20,566 ) ( 26,654 ) ( 1,683 ) 96,773 ( 196,865 ) ( 2,227,640 ) ( 13,581 ) ( 19,157 ) ( 2,278,197 ) ( 2,192,841 ) ( 63,007 ) 30,524 213,231 1,216,988 52,949 123,088 9,990 18,232 8,977 ( 436 ) ( 1,044,263 ) ( 2,278,756 ) 2,734 6,425 ( 114,505 ) ( 122,972 ) ( 113,480 ) ( 44,787 ) ( 1,269,514 ) ( 2,440,090 ) ( 29,840 ) ( 74 ) 14,423 11,392 6(3) 13,571 25,892 6(6) ( 8,528 ) ( 13,739 ) 71 681 1,463 ( 1,138 ) ( 6,713 ) ( 2,237 ) 20,566 26,654 5,013 47,431 6(24) 929,953 3,155,795 6(24) 149,855 50,025 6(24) ( 41,791 ) ( 42,154 ) 6(24) 649,960 - 6(16) ( 406,300 ) ( 213,900 ) 2,147 - 1,283,824 2,949,766 ( 80,350 ) ( 79,444 ) ( 61,027 ) 477,663 1,676,223 1,198,560 $ 1,615,196 $ 1,676,223

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

~12~

ZENITRON CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

1. HISTORY AND ORGANISATION

Zenitron Corporation (the “Company”) was incorporated as a company limited by shares in October 1982. The Company has been listed on the Taiwan Stock Exchange and started trading since August 26, 2002. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the sales of electrical components.

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

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 21, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

Note : Earlier application from January 1, 2021 is allowed by the FSC.

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

~13~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

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

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

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

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

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

==> picture [487 x 48] intentionally omitted <==

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

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

New standards, interpretations and amendments issued by IASB but not endorsed by the FSC are as follows: New Standards,Interpretations andAmendments	yet included in the IFRSs as Effective date by International Accounting StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

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

~14~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

• (2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

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

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

  • (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

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

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

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

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

~15~

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

• B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiaries	Main business activities	Ownership (%)	Ownership (%)	Description
			December 31, 2021	December 31, 2020
The Company The Company The Company The Company Supertronic Supertronic Zenitron (HK) Zenitron (HK) Zenitron (HK) Zenitron (HK)	Supertronic International Corp. (Supertronic) Yo-Teh Investment Corporation (Yo-Teh) Zenicom Corporation (Zenicom) Zenitron (HK) Limited (Zenitron (HK)) Zenitron (HK) Zenicom (HK) Limited (Zenicom (HK)) Zenitron (Shanghai) International Trading Co., Ltd. (Zenitron (Shanghai)) Zenitron (Shenzhen) Technology Co., Ltd. (Zenitron (Shenzhen)) Shanghai Zenitron Electronic Trading Co., Ltd. (Shanghai Zenitron) ZTHC (Shanghai) Co., Ltd. (ZTHC (Shanghai))	Investment business Investment business Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of computer storage device, providing technical service and sales of related components	100.00 100.00 100.00 1.47 98.53 100.00 100.00 100.00 100.00 100.00	100.00 100.00 100.00 1.47 98.53 100.00 100.00 100.00 100.00 100.00	Note

Note: Yo-Teh, the subsidiary of the Company, filed for liquidation in 2021 as resolved by its Board of Directors.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

~16~

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

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

• A. Foreign currency transactions and balances

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

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

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

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

• B. Translation of foreign operations

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

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

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

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

• (5) Classification of current and non-current items

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

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

~17~

  - (c) Assets that are expected to be realised within twelve months from the balance sheet date;

  - (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

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

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

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

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

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

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

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

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

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

  • The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

~18~

(8) Accounts and notes receivable

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

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

(9) Impairment of financial assets

• For accounts receivable or contract assets that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

• (10) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

(11) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the moving average method. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

(12) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

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

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

~19~

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

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 1 ~ 55 year(s) Transportation equipment 1 ~ 5 year(s) Office equipment 1 ~ 15 year(s)

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

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

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

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

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

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

• (c) Any initial direct costs incurred by the lessee; and

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

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

(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 ~ 55 years.

~20~

(15) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(16) Borrowings

Borrowings comprise short-term bank borrowings and other short-term loans.

• (17) Notes and accounts payable

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

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

(18) Convertible bonds payable

• Convertible bonds issued by the Group contain conversion options (that is, the bondholders have the right to convert the bonds into the Group’s common shares by exchanging a fixed amount of cash for a fixed number of common shares) and call options. The Group classifies the bonds payable upon issuance as a financial asset or financial liability in accordance with the contract terms. They are accounted for as follows:

• A. The embedded call options are recognised initially at net fair value as ‘financial assets or financial liabilities at fair value through profit or loss’. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognised as ‘gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss’.

• B. The host contracts of bonds are initially recognised at the residual value of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss as stated above. Any difference between the initial recognition and the redemption value is accounted for as the premium on bonds payable and subsequently is amortised in profit or loss as an adjustment to the ‘finance costs’ over the period of circulation using the effective interest method.

• C. The embedded conversion options which meet the definition of an equity instrument are initially recognised in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

• D. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

~21~

• E. When bondholders exercise conversion options, the liability component of the bonds (including bonds payable and ‘financial assets or financial liabilities at fair value through profit or loss’) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.

(19) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(20) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

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

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

• C. Employees’ compensation and directors’ remuneration

• Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the accrued amounts and the subsequently actual distributed amounts resolved by the shareholders is accounted for as changes in estimates.

~22~

(21) Income tax

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

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

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

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

• (22) Revenue recognition

Sales of goods - agency

• A. The Group is an agency of electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

~23~

• B. A receivable is recognised when the goods are delivered as this is the timing based on trade terms that the consideration is unconditional because only the passage of time is required before the payment is due.

• (23) Operating segments

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

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

• (1) Valuation of allowance for uncollectible accounts receivable

The assessment of accounts receivable impairment relies on the Company’s judgement and assumption about the recoverable amount of the accounts receivable in the future, taking into account various factors such as client’s financial status, the Company’s internal credit rating, transaction history, current economic condition and others which might affect the client’s repayment ability. Where there is suspicion of recoverability, the Company needs to assess the possible recoverable amount and recognise reasonable allowance. The assessment of impairment depends on reasonable expectation about future events on the basis of the conditions existing at the balance sheet date. The estimation may differ from the actual result and may lead to significant changes.

• (2) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

~24~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2021 307 $ 1,549,899 64,990 1,615,196 $	December31,2020
		944 $ 1,446,046 229,233
		1,676,223 $

• A. Time deposits are highly liquid investments that expire within three months.

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

• C. The Group has no cash and cash equivalents pledged to others.

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

Financial assets at fair value through profit or loss
		December	31,2021		December	31,2020
Current items
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks		$	34,479		$	45,927
Emerging stocks			1,163			1,163
Financial assets designated at fair
value through profit or loss
Non-hedging derivative-redemption of convertible
bonds			60			-
			35,702			47,090
Valuation adjustments	(		12,638)	(		21,783)
		$	23,064		$	25,307

• A. The Group recognised net (loss) gain amounting to ($3,986) and $52,030 on financial assets at fair value through profit or loss for the years ended December 31, 2021 and 2020, respectively.

• B. The Group disposed Fresco Logic Inc. for a consideration of $76,182 in the second quarter of 2020. In accordance with the trading contract, part of the disposal proceeds amounting to US$303 thousand will be set aside for any pending expenses, and the remaining amount will be received by the Group one year after the trade date. The Group received the remaining amount in the second quarter of 2021, which was recognised as gain on disposal amounting to $8,385 and shown as other income.

• C. The Group has no financial assets at fair value through profit or loss pledged to others as collateral.

• D. Information relating to financial assets at fair value through profit or loss is provided in Note 12(3).

~25~

(3) Financial assets at fair value through other comprehensive income

December 31, 2021 December 31, 2020

December31,2021	December31,2020
Current items Equity instruments Listed stocks - $ Emerging stocks 2,462 2,462 Valuation adjustment 1,735) ( 727 $ Non-current items Equity instruments Listed stocks 342,773 $ Unlisted stocks 109,913 452,686 Valuation adjustment 521,309 973,995 $	347,990 $ 2,462 350,452 508,404 858,856 $
	- 95,894
	95,894 -
	95,894 $

• A. The Group has elected to classify stock investments with steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $974,722 and $954,750 as at December 31, 2021 and 2020, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• B. Aiming to adjust strategic investments for long-term business, the Company reclassified investments in equity instruments amounting to $858,283 from current to non-current during the year ended December 31, 2021, and sold stock investments at fair value amounting to $13,571 and $25,892 which resulted to a cumulative gain on disposal of $8,353 and $16,715 during the years ended December 31, 2021 and 2020, respectively.

• C. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative gains reclassified to retained earnings due to derecognition
		2021
	19,523 $ 8,353) ($		217,244 $ 16,715) ($

• D. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

~26~

• E. Information relating to fair value of financial assets at fair value through other comprehensive income is provided in Note 12(3).

• (4) Notes and accounts receivable

income is provided in Note 12(3). Notes and accounts receivable
		December	31,2021		December	31,2020
Notes receivable		$	286,952		$	220,785
Accounts receivable		$	9,379,057		$	9,255,767
Less: Allowance for uncollectible accounts	(		78,576)	(		109,107)
		$	9,300,481		$	9,146,660

• A. The Group uses historical experience and takes into consideration the customers’ historical default records, current financial conditions and economic conditions of the industry to estimate expected loss rate in recognising loss allowance. In addition, the Group provides for adequate allowance for uncollectible accounts from individual customers where there is an indication that they are impaired based on specific identification or a credit impairment actually occurred and the customers did not provide any collateral.

• B. The ageing analysis of accounts and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days Over 90 days	December	Notes receivable 286,952 $ - - - 286,952 $ 31,2021	Accounts receivable 8,688,643 $ 301,830 187,497 77,797 9,255,767 $ December	Notes receivable 31,2020
	Accounts receivable 8,779,495 $ 323,783 190,896 84,883 9,379,057 $
				220,785 $ - - -
				220,785 $

The above ageing analysis was based on past due date.

• C. As of December 31, 2021, December 31, 2020 and January 1, 2020, the balances of receivables (including notes receivable) from contracts with customers amounted to $9,666,009, $9,476,552 and $7,249,849, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• D. The Group considers the characteristic of geographical region, product characteristics, and customer credit rating, applying the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

~27~

• E. The Group adjusts historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. As of December 31, 2021 and 2020, the provision matrix and loss rate methodology are as follows:

December 31, 2021 Expected loss rate Total accounts receivable December 31, 2020 Expected loss rate Total accounts receivable	0.11%-0.54% 8,779,495 $ 0.11%-0.44% 8,688,643 $ Notpast due Notpast due	Up to 30 dayspast due 0.11%-2.5% 323,783 $ Up to 30 days past due 0.11%-2.5% 301,830 $	31~90 dayspast due 0.11%-100% 190,896 $ 31~90 days past due 0.11%-100% 187,497 $	Over 90 dayspast due 0.11%-100% 84,883 $ Over 90 dayspast due 0.11%-100% 77,797 $	9,379,057 $ Total
					Total
					9,255,767 $

• F. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

for accounts receivable are as follows:
At January 1 (Reversal of) provision for impairment loss Transfers to overdue receivables Write-offs Effect of foreign exchange At December 31		2021		2020
	Accounts receivable 109,107 $ 23,123) ( 6,818) ( - 590) ( 78,576 $		Accounts receivable 97,944 $ 12,100 480) ( 457) ( 109,107 $

• G. Transferred financial assets that are derecognised in their entirety

The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the accounts receivable but is liable for the losses incurred on any business dispute. The Group meets the condition of financial assets derecognition as it did not provide other collaterals except for issuing a promissory note equal to the facility as the collateral. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable, and the related information is as follows:

December 31, 2021

	December	31,2021
Accounts receivable transferred 1,491,285 $ 260,636	Amount derecognised 1,491,285 $ 260,636	Amount advanced 1,491,285 $ 260,636	Amount available for advance - $ -	Interest rate of amount advanced
				0.91%~1.09% 0.91%~1.09%

~28~

Purchaser of accounts receivable Chang Hwa Bank Bank SinoPac	Accounts receivable Amount transferred derecognised 1,564,867 $ 1,564,867 $ 217,716 206,831 December	Amount Amount available Interest rate of amount advanced for advance advanced 1,564,867 $ - $ 0.94%~1.16% 206,831 10,885 0.94%~1.16% 31,2020

• H. Transferred financial assets that are not derecognised in their entirety

• (a) The Group entered into a factoring agreement with Chang Hwa Bank to sell its accounts receivable. Under the agreement, the Group transferred the entire accounts receivable and is obligated to provide partial guarantees for the default risk of the transferred accounts receivable. Therefore, the Group did not derecognise these accounts receivable. Related advance payments are recorded under short-term borrowings. As of December 31, 2020, the related information on accounts receivable that were sold but had not reached maturity is as follows:

December 31, 2020 Accounts receivable transferred $ 427,312 Amount advanced USD 15,000 thousand

• (b) There were no transferred financial assets that are not derecognised in their entirety as of December 31, 2021.

• I. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Inventories

12(2). Inventories
Merchandise inventories Inventories in transit Merchandise inventories Inventories in transit		December31,2021
	8,725,897 $ 515,436 9,241,333 $ Cost	585,624) ($ - 585,624) ($ December31,2020 Allowance for valuation loss	Bookvalue
			8,140,273 $ 515,436
			8,655,709 $
	6,233,422 $ 556,990 6,790,412 $ Cost		Bookvalue
			5,820,522 $ 556,990
			6,377,512 $

~29~

The cost of inventories recognised as expense for the year:

Cost of goods sold Loss on decline in market value		2021 2020 39,347,235 $ 32,640,551 $ 210,645 139,432 39,557,880 $ 32,779,983 $ Year ended December31	2021 2020 39,347,235 $ 32,640,551 $ 210,645 139,432 39,557,880 $ 32,779,983 $ Year ended December31	2021 2020 39,347,235 $ 32,640,551 $ 210,645 139,432 39,557,880 $ 32,779,983 $ Year ended December31
		2021
		39,347,235 $ 210,645 39,557,880 $		32,640,551 $ 139,432 32,779,983 $

(6) Property, plant and equipment

At January 1, 2021 Cost Accumulated depreciation 2021 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31, 2021 Cost Accumulated depreciation At January 1, 2020 Cost Accumulated depreciation 2020 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31, 2020 Cost Accumulated depreciation		Land	Buildings and structures	Transportation	Office equipment	Total
		252,592 $ - 252,592 $ 252,592 $ - - - - 252,592 $ 252,592 $ - 252,592 $ Land	409,175 $ 264,545) ( 144,630 $ 144,630 $ - - 6,823) ( 362) ( 137,445 $ 408,558 $ 271,113) ( 137,445 $ Buildings and structures	51,828 $ 31,918) ( 19,910 $ 19,910 $ 2,252 272) ( 4,999) ( 27) ( 16,864 $ 50,404 $ 33,540) ( 16,864 $ Transportation	113,366 $ 90,494) ( 22,872 $ 22,872 $ 6,276 150) ( 9,246) ( 120) ( 19,632 $ 116,412 $ 96,780) ( 19,632 $ Office equipment	826,961 $ 386,957) ( 440,004 $ 440,004 $ 8,528 422) ( 21,068) ( 509) ( 426,533 $ 827,966 $ 401,433) ( 426,533 $ Total
		252,592 $ - 252,592 $ 252,592 $ - - - - 252,592 $ 252,592 $ - 252,592 $	408,193 $ 256,041) ( 152,152 $ 152,152 $ - - 8,091) ( 569 144,630 $ 409,175 $ 264,545) ( 144,630 $	52,602 $ 35,212) ( 17,390 $ 17,390 $ 7,888 330) ( 5,065) ( 27 19,910 $ 51,828 $ 31,918) ( 19,910 $	110,365 $ 83,299) ( 27,066 $ 27,066 $ 5,851 155) ( 9,809) ( 81) ( 22,872 $ 113,366 $ 90,494) ( 22,872 $	823,752 $ 374,552) ( 449,200 $ 449,200 $ 13,739 485) ( 22,965) ( 515 440,004 $ 826,961 $ 386,957) ( 440,004 $

~30~

(7) Lease arrangements – lessee

Lease arrangements–lessee
Right-of-use assets: Buildings and structures Lease liabilities: Current Non-current	December31,2021 62,087 $ 42,730 $ 21,307 64,037 $	December31,2020 98,306 $
		40,234 $ 59,073
		99,307 $

• A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise transportation equipment, buildings and structures. Low-value assets comprise office equipment. Right-of-use asset and lease liabilities were not recognised for these leases.

• C. The depreciation charges on right-of-use assets are as follows:

Buildings and structures		2021 2020 43,093 $ 44,026 $ Year ended December31	2021 2020 43,093 $ 44,026 $ Year ended December31
		2021
		43,093 $	44,026 $

• D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $8,984 and $120,324, respectively.

• E. Except for the depreciation charge, the information on profit or loss in relation to lease contracts is as follows:

is as follows:
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term leases and leases of low-value assets		2021 2020 3,338 $ 2,195 $ 15,148 13,534 Year ended December31
		2021
		3,338 $ 15,148	2,195 $ 13,534

• F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $60,277 and $57,883, respectively.

• G. The Group has applied the practical expedient to “Covid-19-related rent concessions”, and recognised the gain from changes in lease payments arising from the rent concessions amounting to $132 and $1,435 by increasing other income for the years ended December 31, 2021 and 2020, respectively.

~31~

－ (8) Lease arrangements lessor

For the years ended December 31, 2021 and 2020, the Group recognised rent income in the amounts of $7,225 and $6,886, respectively, based on the operating lease agreement, which does not include variable lease payments.

(9) Investment property

variable lease payments. Investment property
January 1, 2021 Cost Accumulated depreciation and impairment 2021 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2021 Cost Accumulated depreciation and impairment January 1, 2020 Cost Accumulated depreciation and impairment 2020 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2020 Cost Accumulated depreciation and impairment	Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,961) ( 25,371) 17,056 $ 19,980 $ 37,036 $ $ 17,056 $ 19,980 $ 37,036 - (544) (544) $17,056 $19,436 $ 36,492 $ 32,466 $ 29,941 $ 62,407 ( 15,410) ( 10,505) ( 25,915) 17,056 $ 19,436 $ 36,492 $ Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,418) ( 24,828) 17,056 $ 20,523 $ 37,579 $ $ 17,056 $ 20,523 $ 37,579 - (543) (543) $17,056 $19,980 $ 37,036 $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,961) ( 25,371) 17,056 $ 19,980 $ 37,036 $	Total
		37,036 $

~32~

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
	Year ended	December 31
	2021	2020
Rental revenue from investment property	2,629 $	2,546 $
Direct operating expenses arising from the
investment property that generated rental
income during the year	544 $	543 $

• B. The fair value of the investment property held by the Group was $99,370 and $95,101 as of December 31, 2021 and 2020, respectively, which were based on the trading prices of nearby areas.

• C. Refer to Note 8 for further information on investment property pledged to others as collateral.

• (10) Short-term borrowings

Short-term borrowings
Unsecured borrowings Interest rate range	December31,2021 9,598,056 $ 0.58%~4.15%	December31,2020
		8,668,103 $
		0.64%~4.25%

• A. For the years ended December 31, 2021 and 2020, the interest expense recognised in profit or loss amounted to $96,254 and $106,397, respectively.

• B. As of December 31, 2021 and 2020, the Group provided collaterals for the financing facility of short-term borrowings and issued guaranteed notes as collateral in the amount of $17,403,001 and $15,271,888, respectively.

(11) Short-term notes and bills payable

and $15,271,888, respectively. Short-term notes and bills payable
		December 31, 2021			December31,2020
Short-term notes and bills payable		700,000 $		$	550,000
Discount on short-term notes and bills payable	(	639)	(		494)
		699,361 $		$	549,506
Coupon rate		0.9%~1.1%			1%~1.2%

The abovementioned commercial paper was secured by financial institutions.

(12) Bonds payable

Bonds payable
Bonds payable Less: Discount on bonds payable		December31,2021
		600,000 $ (22,165) 577,835 $

The Company had no bonds payable as of December 31, 2020.

• A. The issuance of domestic convertible bonds by the Company

• (a) The terms of the fourth domestic unsecured convertible bonds issued by the Company are as follows:

~33~

  - i. The Company issued $600,000, 0% fourth domestic unsecured convertible bonds, as approved by the regulatory authority. The bonds mature three years from the issue date (August 3, 2021~ August 3, 2024) and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on August 3, 2021.

  - ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company during the period from the date after three months of the bonds issue (November 4, 2021) to 40 days before the maturity date (June 24, 2024), except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  - iii. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and the conversion price is $29.

  - iv. The Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any time after the following events occur: (i) the closing price of the Company’s common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three months of the bonds issue (November 4, 2021) to 40 days before the maturity date (June 24, 2024), or (ii) the outstanding balance of the bonds is less than 10% of the total initial issue amount during the period from the date after three months of the bonds issue to 40 days before the maturity date.

  - v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

• (b) As of December 31, 2021, there were no convertible bonds converted to ordinary shares and no corporate bonds repurchased.

• B. Regarding the issuance of convertible bonds, the equity conversion options of the fourth domestic unsecured convertible bonds amounting to $75,605 as of December 31, 2021 were separated from the liability component and were recognised in ‘capital surplus—share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognised in ‘financial assets at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts. The effective interest rate of the bonds payable after such separation was 1.46%.

~34~

(13) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

• (b) The amounts recognised in the balance sheet are as follows:

		December	31, 2021		December	31, 2020
Present value of defined benefit obligations		$	87,812		$	84,217
Fair value of plan assets	(		13,500)	(		18,965)
Net defined benefit liability		$	74,312		$	65,252

• (c) Movements in net defined benefit liabilities are as follows:

	Present value of	Present value of
	defined benefit				Fair value of		Net defined
		obligations			plan assets	benefit liability
2021
Balance at January 1	($	84,217)		$	18,965	($	65,252)
Past service cost		-			-		-
Interest (expense) income	(	250)			53	(	197)
	(	84,467)			19,018	(	65,449)
Remeasurements:
Return on plan assets		-			272		272
Change in demographic
assumptions	(	946)			-	(	946)
Change in financial assumptions		3,128			-		3,128
Experience adjustments	(	13,049)			-	(	13,049)
	(	10,867)			272	(	10,595)
Pension fund contribution					180		180
Paid pension		7,522	(		5,970)		1,552
Balance at December 31	($	87,812)		$	13,500	($	74,312)

~35~

	Present value of	Present value of
	defined benefit				Fair value of		Net defined
		obligations			plan assets	benefit liability
2020
Balance at January 1	($	80,044)		$	19,246	($	60,798)
Past service cost		1,444			-		1,444
Interest (expense) income	(	592)			137	(	455)
	(	79,192)			19,383	(	59,809)
Remeasurements:
Return on plan assets		-			632		632
Change in demographic
assumptions	(	465)			-	(	465)
Change in financial assumptions	(	3,702)			-	(	3,702)
Experience adjustments	(	2,088)			-	(	2,088)
	(	6,255)			632	(	5,623)
Pension fund contribution		-			180		180
Paid pension		1,230	(		1,230)		-
Balance at December 31	($	84,217)		$	18,965	($	65,252)

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

the Annual Labor Retirement Fund Utilisation The principal actuarial assumptions used were	Report announced by the government. as follows:	Report announced by the government. as follows:
Discount rate Future salary increases	YearendedDecember31
	2021 0.70% 2.00%	2020
		0.30%
		2.00%

~36~

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with statistics and experience of the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

		Discount rate	Discount rate	Future salary increases	Future salary increases	Future salary increases
	Increase	0.25%	Decrease 0.25%	Increase 0.25%	Decrease	0.25%
December 31, 2021
Effect on present value of defined
benefit obligation	($	1,921)	1,989 $	1,959 $	($	1,901)
December 31, 2020
Effect on present value of defined
benefit obligation	($	2,061)	2,139 $	2,097 $	($	2,032)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plan of the Group for the year ending December 31, 2022 amount to $180.

• (g) As of December 31, 2021, the weighted average duration of the retirement plan is 8 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-5 years Over 5 years	3,141 $ 3,425 27,792 57,844
	92,202 $

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not lower than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $15,801 and $14,710, respectively.

~37~

  - (b) The overseas subsidiaries, Zenitron (HK) Limited, Zenitron (Shanghai) International Trading Co., Ltd, Zenitron (Shenzhen) Technology Co. Ltd., ZTHC (Shanghai) Co., Ltd., and Shanghai Zenitron Electronic Trading Co., Ltd, have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the local pension regulations are based on a certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, aforementioned companies have no further obligations. For the years ended December 31, 2021 and 2020, the amount of pension expenses that were recognised were $32,054 and $3,880, respectively.

• C. The overseas subsidiaries, Supertronic International Corp., Zenicom (HK) Limited have no employees, thus, they have no pension plan.

• (14) Share capital

• A. As of December 31, 2021, the Company’s authorised capital was $3,500,000, consisting of 350 million shares of ordinary stock (including 20 million shares reserved for employee stock options), and the paid-in capital was $2,138,249 with a par value of $10 (in dollars) per share.

• B. As of December 31, 2021 and 2020, the beginning and ending number of outstanding shares were both 213,825 thousand shares.

• (15) Capital surplus

• A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

• B. The shareholders at their meeting in June 2020 approved to distribute cash from capital surplus of $0.0294 (in dollars) per share, totaling $6,300.

• (16) Retained earnings \ events after the balance sheet date

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal of special reserve in accordance with related laws, if any. The remaining earnings are the distributable earnings for the year.

• B. Dividend policy:

  • (a) The distribution of dividends shall be above 50% of the current year’s distributable earnings and the cash dividends distributed shall not be lower than 20% of the current actual earnings distributed.

~38~

• (b) The Board of Directors is authorised to distribute all or part of the dividends and bonus in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• (c) When the Company has no deficit, the Board of Directors is authorised to distribute all or part of the legal reserve (for the part that exceeds 25% of paid-in capital) and capital surplus if it meets the requirements under the Company Act in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

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

• E. The appropriations of 2020 and 2019 earnings as resolved by the shareholders on July 5, 2021 and June 12, 2020, respectively are as follows:

Legal reserve Cash dividends	Dividend per share and cash distributed (indollars) 48,425 $ 406,300 1.90 $ 454,725 $ 2020 Amount	2019
	48,425 $ 406,300 454,725 $ Amount	Dividend per share and cash distributed (indollars) 23,046 $ 207,600 0.9708 $ 230,646 $ Amount

• F. Events after the balance sheet date

• On March 21, 2022, the Company’s Board of Directors proposed the distribution of 2021 earnings as follows:

earnings as follows:
Legal reserve Cash dividends	Dividend per share Amount and cash distributed (indollars) 87,759 $ 748,387 3.50 $ 836,146 $ 2021
	Amount 87,759 $ 748,387 836,146 $
		3.50 $

The aforementioned appropriation of 2021 earnings has not yet been reported to the shareholders.

~39~

(17) Operating revenue

Operating revenue
		Year ended	December	31
		2021		2020
Revenue from contracts with customers	$	42,044,726	$	34,401,169

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following geographical regions:

geographical regions:
Year ended December 31, 2021 Revenue from external customer contracts Year ended December 31, 2020 Revenue from external customer contracts	China 37,044,902 $ China 30,326,197 $	Taiwan 3,912,426 $ Taiwan 3,301,677 $	Others 1,087,398 $ Others 773,295 $	Total
				42,044,726 $
				Total
				34,401,169 $

• B. Contract liabilities (shown as ‘other non-current liabilities’)

For the years ended December 31, 2021 and 2020, the Group has recognised revenue-related contract liabilities in the amounts of $80,171 and $70,721, respectively.

(18) Other income

Other income
Dividend income Advertising income Rent income Other income	2021 2020 20,566 26,654 11,875 13,131 7,225 6,886 21,398 27,629 61,064 $ 34,515 $ YearendedDecember31
		26,654 13,131 6,886 27,629
		34,515 $

(19) Other gains and losses

Other gains and losses
			YearendedDecember31
			2021		2020
Foreign exchange gains		$	76,322	$	117,400
(Losses) gains on financial assets at fair value
through profit or loss	(		3,986)		52,030
Others	(		3,219)		86
		$	69,117	$	169,516

~40~

(20) Finance costs

Finance costs
Interest expense Convertible bonds Other interest expense	YearendedDecember31
	2021 96,254 $ 3,419 $ 16,646 116,319 $	2020
		106,397 $ - $ 15,765
		122,162 $

(21) Expenses by nature

Expenses by nature
Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Depreciation Amortisation	2021 2020 769,648 $ 636,883 $ 45,491 36,331 48,052 17,601 35,719 33,504 898,910 724,319 64,705 67,534 4,210 4,166 967,825 $ 796,019 $ YearendedDecember31
		724,319 67,534 4,166
		796,019 $

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 3%~12% for employees’ compensation and shall not be higher than 3% for directors’ remuneration.

• B. The Company’s directors’ remuneration and employees’ compensation accounted as operating expenses were as follows:

expenses were as follows:
Directors’ remuneration Employees’ compensation	Year ended December31
	2021 30,000 $ 36,000 66,000 $	2020
		15,000 $ 18,000
		33,000 $

• C. For the year ended December 31, 2021, the employees’ compensation and directors’ remuneration were estimated and accrued based on a certain percentage of distributable profit of current year as of the end of reporting period.

• D. The employees’ compensation of $18,000 and directors’ remuneration of $15,000 for 2020 were resolved by the Board of Directors and were in agreement with those amounts recognised in the 2020 financial statements.

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

~41~

(22) Income taxes

A. Income tax expense

• (a) Components of income tax expense:

e taxes ome tax expense Components of income tax expense:
			YearendedDecember31
			2021			2020
Current tax:
Currrent tax on profits for the year		$	211,633		$	99,075
Prior year income tax under (over)
estimation			5,849	(		2,473)
Total current tax			217,482			96,602
Deferred tax:
Origination and reversal of temporary
differences	(		14,417)	(		13,571)
Total deferred tax	(		14,417)	(		13,571)
Income tax expense		$	203,065		$	83,031

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

follows:
Remeasurement of defined benefit obligations	2021 2020 2,119 $ 1,124 $ Year ended December 31
	2021 2,119 $

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

			Year ended December 31	Year ended December 31	Year ended December 31	Year ended December 31
			2021			2020
Tax calculated based on profit before tax and		$	306,311		$	179,747
statutory tax rate
Effects from items disallowed by tax regulation	(		109,095)	(		94,243)
Prior year income tax under (over) estimation			5,849	(		2,473)
Income tax expense		$	203,065		$	83,031

~42~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

						2021	2021
							Recognised in
								other
					Recognised in		comprehensive
			January1		profit	or loss		income		December31
Deferred tax assets
(liabilities):
Unrealised loss on valuation
loss and slow-moving
inventories		$	49,869		$	13,132	$	-		$	63,001
Unrealised loss on doubtful
debts			5,436	(		2,063)		-			3,373
Unpaid salary			2,724			3,348		-			6,072
Unrealised actuarial loss on
defined benefit plan			5,475			-		2,119			7,594
Share of profit of
subsidiaries accounted for
using equity method	(		114,468)			-		-	(		114,468)
	($		50,964)		$	14,417	$	2,119	($		34,428)
						2020
							Recognised in
								other
					Recognised in		comprehensive
			January1		profit	or loss		income		December31
Deferred tax assets
(liabilities):
Unrealised loss on valuation
loss and slow-moving
inventories		$	38,102		$	11,767	$	-		$	49,869
Unrealised loss on doubtful
debts			4,346			1,090		-			5,436
Unpaid salary			2,010			714		-			2,724
Unrealised actuarial loss on
defined benefit plan			4,351			-		1,124			5,475
Share of profit of
subsidiaries accounted for
using equity method	(		114,468)			-		-	(		114,468)
	($		65,659)		$	13,571	$	1,124	($		50,964)

~43~

• D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

December31,2021 Deductible temporary differences 106,570 $	December31,2020 184,415 $

• E. The Company’s income tax returns through 2019, except for 2018, have been assessed and approved by the Tax Authority.

• F. The domestic subsidiaries, Yo-Teh Investment Corporation’s and Zenicom Corporation’s income tax returns through 2019 and 2020, respectively, have been assessed and approved by the Tax Authority.

(23) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December31,2021	Year ended December31,2021	Year ended December31,2021
	Profit after tax 877,710 $ 877,710 $ - 2,544 880,254 $	Weighted average number of ordinary shares outstanding (shares in thousands) 213,825 213,825 1,183 8,503 223,511	Earnings per share(in dollars)
			4.10 $
			3.94 $

~44~

(24)	Changes in liabilities from financing activities Weighted average number of ordinary shares outstanding Earnings per Profit after tax (shares in thousands) share(in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 472,025 $ 213,825 2.21) ($ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 472,025 $ 213,825 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 946 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 472,025 $ 214,771 2.20 $ Year ended December31,2020 Short-term Short-term notes and Bonds Lease Liabilities from financing borrowings bills payable payable liabilities activities-gross January 1, 2021 8,668,103 $ 549,506 $ - $ 99,307 $ 9,316,916 $ Changes in cash flow from financing activities 929,953 149,855 649,960 41,791) ( 1,687,977 Changes in other non-cash items - - 72,125) ( 6,521 65,604) ( December 31, 2021 9,598,056 $ 699,361 $ 577,835 $ 64,037 $ 10,939,289 $ Short-term Short-term notes Liabilities from financing borrowings and bills payable Leaseliabilities activities-gross January 1, 2020 5,512,308 $ 499,481 $ 21,715 $ 6,033,504 $ Changes in cash flow from financing activities 3,155,795 50,025 42,154) ( 3,163,666 Changes in other non-cash items - - 119,746 119,746 December 31, 2020 8,668,103 $ 549,506 $ 99,307 $ 9,316,916 $	Changes in liabilities from financing activities Weighted average number of ordinary shares outstanding Earnings per Profit after tax (shares in thousands) share(in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 472,025 $ 213,825 2.21) ($ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 472,025 $ 213,825 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 946 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 472,025 $ 214,771 2.20 $ Year ended December31,2020 Short-term Short-term notes and Bonds Lease Liabilities from financing borrowings bills payable payable liabilities activities-gross January 1, 2021 8,668,103 $ 549,506 $ - $ 99,307 $ 9,316,916 $ Changes in cash flow from financing activities 929,953 149,855 649,960 41,791) ( 1,687,977 Changes in other non-cash items - - 72,125) ( 6,521 65,604) ( December 31, 2021 9,598,056 $ 699,361 $ 577,835 $ 64,037 $ 10,939,289 $ Short-term Short-term notes Liabilities from financing borrowings and bills payable Leaseliabilities activities-gross January 1, 2020 5,512,308 $ 499,481 $ 21,715 $ 6,033,504 $ Changes in cash flow from financing activities 3,155,795 50,025 42,154) ( 3,163,666 Changes in other non-cash items - - 119,746 119,746 December 31, 2020 8,668,103 $ 549,506 $ 99,307 $ 9,316,916 $	Earnings per share(in dollars) 2.21) 2.20
	January 1, 2021 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2021 January 1, 2020 Changes in cash flow from financing activities Changes in other non-cash items December 31, 2020	Short-term borrowings 8,668,103 $ 929,953 - 9,598,056 $ Short-term borrowings

~45~

7. RELATED PARTY TRANSACTIONS

Key management compensation

RELATED PARTY TRANSACTIONS Key management compensation
Salaries and other short-term employee benefits	Year ended December31
	2021 $73,718	2020
		$46,314

8. PLEDGED ASSETS

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

Book value

==> picture [494 x 32] intentionally omitted <==

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

December 31, December 31,
Pledged assets 2021 2020 Purpose
----- End of picture text -----

Accounts receivable, net: Accounts receivable as collateral Investment property Guarantee deposits paid (shown as ‘other non-current assets’)	- $ 2,867 10,000 12,867 $	427,312 $ Short-term borrowings 2,945 Short-term borrowings 10,000 Court deposits 12,945 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

As of December 31, 2021, other significant commitments were as follows:

As a requirement for the release of imported goods before duty and customs clearance, the Group has applied for customs guarantee with certain banks in the amount of $20,000.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The distribution of 2021 earnings was resolved by the Company’s Board of Directors on March 21, 2022. Please refer to Note 6(16) for more details.

12. OTHERS

(1) Capital risk management

The Group’s main objective when managing capital is to maintain an optimal credit ranking and capital ratio to support the operations and to maximize stockholders’ equity. Please refer to the consolidated balance sheet of each period for related liabilities and capital ratio.

~46~

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets designated as at fair value through profit or losss Financial assets at fair value through other comprehensive income Designation of equity instruments Financial assets at amortised cost/receivables Cash and cash equivalents Notes receivable Accounts receivable Other receivables Guarantee deposits paid (shown as ‘other non- current assets) Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other accounts payable Bonds payable Guarantee deposits received (shown as ‘other non-current assets’) Lease liabilities	December31,2021 22,764 $ 300 23,064 $ 974,722 $ 1,615,196 $ 286,952 9,300,481 109,955 56,118 11,368,702 $ 9,598,056 $ 699,361 2,525 4,616,535 498,566 577,835 3,120 15,995,998 $ 64,037 $	December31,2020
		25,307 $ -
		25,307 $
		954,750 $
		1,676,223 $ 220,785 9,146,660 100,253 57,581
		11,201,502 $
		8,668,103 $ 549,506 2,528 4,403,301 447,222 - 3,139
		14,073,799 $
		99,307 $

~47~

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s financial risk management policies is to identify and analyse all the risks by examining the impact of the macroeconomics, industrial developments, market competition and the Group’s business development so as to achieve the optimised risk position, to maintain adequate liquidity position and to centralise the management of all market risks.

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

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

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

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD RMB:NTD USD:HKD (Note) JPY:HKD (Note) Financial liabilities Monetary items USD:NTD JPY:NTD USD:HKD (Note) USD:RMB (Note) JPY:HKD (Note)			December 31,2021	December 31,2021
	Foreign currency amount (In thousands)	Exchange rate	Book value (In thousands of NTD)		Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	227,807 $ 355,401 56,083 225,242 84,405 284,167 $ 189,833 185,511 8,049 88,857	27.63 0.24 4.32 7.80 0.07 27.63 0.24 7.80 6.38 0.07	6,294,307 $ 85,296 242,279 6,223,436 20,257 7,879,951 $ 45,560 5,144,220 223,199 21,326	1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	62,943 $ 853 2,423 62,234 203 78,800 $ 456 51,442 2,232 213	- $ - - - - - $ - - - -

~48~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD RMB:NTD USD:HKD (Note) JPY:HKD (Note) Financial liabilities Monetary items USD:NTD JPY:NTD USD:HKD (Note) USD:RMB (Note) JPY:HKD (Note)	Foreign currency amount (In thousands) Exchange rate 199,209 $ 28.43 230,186 0.27 55,091 4.35 233,273 7.76 63,162 0.08 281,890 $ 28.53 53,597 0.28 160,790 7.76 7,175 6.52 46,403 0.08	Book value (In thousands of NTD) Degree of variation 5,663,512 $ 1% 62,150 1% 239,646 1% 6,631,961 1% 17,054 1% 8,042,322 $ 1% 15,007 1% 4,587,339 1% 204,703 1% 12,993 1% December 31,2020	Effect on profit or loss Effect on other comprehensive income 56,635 $ - $ 622 - 2,396 - 66,320 - 171 - 80,423 $ - $ 150 - 45,873 - 2,047 - 130 - Sensitivityanalysis

• Note: The functional currencies of certain consolidated entities are not NTD, thus, this information must be considered when reporting. For example, when a subsidiary’s functional currency is RMB, the subsidiary’s segments that are involved with USD must be taken into consideration.

• iii. The total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020, amounted to $76,322 and $117,400, respectively.

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, the Group is responsible for managing and analysing the credit risk for each of their clients. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to customers, including outstanding receivables.

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

• (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• (ii) If any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

• iii. The default occurs when the contract payments are past due over 60 days.

~49~

• iv. The Group classifies customer’s accounts receivable in accordance with the credit rating of the customer. The Group applies the modified approach using a provision matrix to estimate the expected credit loss.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• vi. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Please refer to Note 6(4) for details of the provision matrix and movements in loss allowance for the years ended December 31, 2021 and 2020.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

• ii. Except for those listed in the table below, the Group’s non-derivative financial liabilities will expire within 1 year. As of December 31, 2021 and 2020, the cash flows within 1 year of short-term borrowings, short-term notes and bills payable, notes payable, accounts payable and other payables are undiscounted and are in agreement with the balance of each account in the balance sheets.

December 31, 2021 Non-derivative financial liabilities: Lease liabilities Bonds payable December 31, 2020 Non-derivative financial liabilities: Lease liabilities	Less than 1year 44,569 $ - $ Less than 1year $43,538	Between 2 and 5 years 12,351 $ 600,000 $ Between 2 and 5 years $ 61,061	Over5 years
			- $
			- $
			Over5 years
			- $

• iii. The Group does not expect the timing of occurrence of the cash flows estimated through

the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of

~50~

financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with enough frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and OTC stocks is included in Level 1.

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

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(9).

• C. Financial instruments not measured at fair value

• (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable and other payables are approximate to their fair values.

Financial liabilities: Bonds payable		December	31, 2021
	Bookvalue 577,835 $		Fairvalue
		Level 1 - $	Level 2 578,222 $	Level3
				- $

There was no such transaction as of December 31, 2020.

• (b) The methods and assumptions of fair value estimate are as follows: Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

~51~

• D. Financial and non-financial instruments measured at fair value

• (a) The related information on financial and non-financial instruments measured at fair value by level based on the nature, characteristics and risks of the assets and liabilities are as follows:

December 31, 2021 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 22,443 $ Emerging stocks 321 Redemption of convertible Bonds - Financial assets at fair value through other comprehensive income Listed stocks 864,082 Emerging stocks 727 Unlisted stocks - 887,573 $ December 31, 2020 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 25,054 $ Emerging stocks 253 Financial assets at fair value through other comprehensive income Listed stocks 858,283 Emerging stocks 573 Unlisted stocks - 884,163 $	Level 2 - $ - - - - - - $ Level 2 - $ - - - - - $	Level3 - $ - 300 - - 109,913 110,213 $ Level3 - $ - - - 95,894 95,894 $	Total
			22,443 $ 321 300 864,082 727 109,913
			997,786 $
			Total
			25,054 $ 253 858,283 573 95,894
Financial assets at fair value through profit or loss Listed stocks Emerging stocks Financial assets at fair value through other comprehensive income Listed stocks Emerging stocks Unlisted stocks
			980,057 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. For the instruments the Group used market quoted prices as their fair values (that is, Level 1), the Group uses the closing price as market quoted price.

~52~

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk, etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• iv. The Group considers adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• E. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the years ended December 31, 2021 and 2020:

2020:
			2021					2020
					Redemption of
			Unlisted stocks	convertible bonds				Unlisted stocks
At January 1		$	95,894	$	-		$	139,107
Acquired during the year			29,840		300			-
Sold during the year			-		-	(		28,598)
Proceeds from capital reduction	(		14,423)		-	(		11,392)
Effect of exchange rate changes	(		1,398)		-	(		3,223)
At December 31		$	109,913	$	300		$	95,894

~53~

• G. Investment segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• H. The following is the qualitative information on significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
Non-derivative equity instrument: Unlisted shares Redemption of convertible bonds Non-derivative equity instrument: Unlisted shares		Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
		109,913 $ 300 $ Fair value at December 31, 2020	Net asset value Binomial model Valuation technique	Not applicable Volatility Significant unobservable input	Not applicable 22.02% Range (weighted average)	Not applicable The higher the volatility, the higher the fair value Relationship of inputs to fair value
		95,894 $	Net asset value	Not applicable	Not applicable	Not applicable

(4) Other matter

In response to the Covid-19 pandemic and preventive measures issued by the government, the Group has complied with the measures prescribed by the Central Epidemic Command Center and related provisions under the Communicable Disease Control Act. The Group has strictly controlled access to its offices and implemented a staggered work schedule to lower the risk of transmission and cross infection. Consequently, Covid-19 pandemic has no significant impact on the Company's operations and financial condition.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

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

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

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

~54~

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

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

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

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

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Notes 13(1) A, B and J.

(4) Major shareholders information

The Company has no shareholders with a shareholding ratio above 5%.

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry. The Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Segment information

The pre-tax net income is used to measure the operating segment profit (loss) and performance of the operating segments. The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

for the reportable segments is as follows:
Segment revenue Segment income Segment income, including: Depreciation and amortisation	YearendedDecember31
	2021 42,044,726 $ 877,710 $ 68,915 $	2020
		34,401,169 $
		472,025 $
		71,700 $

(3) Reconciliation for segment income (loss)

• A. The revenue from external customers reported to the Board of Directors is measured in a manner consistent with that in the statement of comprehensive income.

• B. The Group’s Board of Directors assesses performance of operating segments and allocates resources based on pre-tax net income; thus, reconciliation is not needed.

~55~

(4) Information on products and services

Revenue from external customers is mainly from sales of electronic components.

(5) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

Year ended December 31

China Taiwan Others	Non-current Revenue assets 37,044,902 $ 132,696 $ 3,912,426 458,730 1,087,398 42,044,726 $ 591,426 $ 2021	2020	2020
	Revenue 37,044,902 $ 3,912,426 1,087,398 42,044,726 $	Revenue 30,326,197 $ 3,301,677 773,295 34,401,169 $	Non-current assets
			178,183 $ 462,454
			640,637 $

(6) Major customer information

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

A

YearendedDecember31	YearendedDecember31
2021 Revenue 6,208,635 $	2020
	Revenue
	6,350,843 $

~56~

Loans to others

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Zenitron Corporation

Year ended December 31, 2021

No. (Note 1)	Creditor	Borrower	General ledger account (Note 2)	Is a related party	Maximum outstanding balance during the year ended December 31, 2021 (Note 3)	Balance at December 31, 2021(Note 8)	Actual amount drawn down	Interest rate	Nature of loan (Note 4)	Amount of transactions with the borrower (Note 5)	Reason for short- term financing (Note 6)	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party (Note 7)	Ceiling on total loans granted (Note 7)	Footnote
													Item	Value
0 0 1 1 2 3	Zenitron Coporation Zenitron Coporation ZTHC (Shanghai) Co., Ltd. ZTHC (Shanghai) Co., Ltd. Shanghai Zenitron Electronic Trading Co., Ltd Supertronic International Corp.	ZTHC (Shanghai) Co., Ltd. Zenicom Corporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes	613,760 $ 27,800 87,680 263,040 52,608 83,880	604,660 $ 27,630 86,800 260,400 52,080 83,040	215,950 $ - - 86,800 43,400 55,360	2.50% - - 2.50% 4.35% 0.0038	2 2 2 2 2 2	- $ - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- $ - - - - -	- - - - - -	- $ - - - - -	2,116,893 $ 2,116,893 683,268 683,268 177,814 5,676,918	2,116,893 $ 2,116,893 683,268 683,268 177,814 5,676,918

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

(1) The Company is ‘0’.

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

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

• Note 3: The maximum outstanding balance of loans to others for the year.

Note 4: The nature of the loan as follows:

(1)‘1’ for business transaction.

(2)‘2’ for short-term financing.

Note 5: The amount of business transactions when nature of the loan is 1, which is the amount of business transactions occurred between the creditor and borrower in the current year.

• Note 6: Purpose of loan when nature of loan is 2, for example, repayment of loan, acquisition of equipment, working capital, etc.

Note 7: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in the creditor company’s “Procedures for Provision of Loans”, the calculation and amount are as follows:

(1) Limit on loans granted to a single party is 40% of the creditor company’s net assets based on the latest financial statements.

(2) Ceiling on total loans granted is 40% of the creditor company’s net assets based on the latest financial statements.

(3) Limit on loans granted between foreign companies which the Company directly or indirectly holds 100% of their voting shares is 200% of the creditor company’s net assets based on the latest financial statements.

Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing Loaning of Funds and Making of

Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated.

However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has authorized the chairman to loan funds in instalments

• or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”,

the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

Zenitron Corporation

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Provision of endorsements and guarantees to others

Year ended December 31, 2021

Number (Note 1)	Endorser/guarantor	Party being endorsed/guaranteed		Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2021 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2021 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
		Companyname	Relationship with the endorser/ guarantor (Note 2)
0 0 0 0	Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation	Zenitron (HK) Limited Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. ZTHC (Shanghai) Co., Ltd.	3 3 3 3	7,938,348 $ 7,938,348 7,938,348 7,938,348	2,090,720 $ 536,510 783,180 455,300	1,462,032 $ 529,000 778,020 448,180	1,093,977 $ 181,800 313,548 -	- $ - - -	27.63% 10.00% 14.70% 8.47%	7,938,348 $ 7,938,348 7,938,348 7,938,348	Y Y Y Y	N N N N	N Y Y Y

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

(1) The Company is ‘0’.

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

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to: (1) Having business relationship.

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

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

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

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

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

Note 3: The calculation for and amount of limit on endorsements/guarantees are as follows: (If any contingent loss is recognised in the financial statements, the recognised amount should be indicated)

(1) Limit on endorsements/guarantees provided for a single party is 150% of the Company’s net assets.

(2) Ceiling on total amount of endorsements/guarantees is 150% of the Company's net assets.

Note 4: The year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees. Note 6: The actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

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

Table 3

Zenitron Corporation and Subsidiaries

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

December 31, 2021

Expressed in NTD

(Except as otherwise indicated)

Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenicom Corporation Zenicom Corporation Supertronic International Corp ) Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer (Note 2)	General ledger account		As of December31,2021	As of December31,2021		Footnote (Note 4)
				Number of shares (Share/Unit)	Book value (Note 3)	Ownership (%)	Fair value
	Stock Yeong Guan Group Stock Dynapack International Technology Corporation Stock Orient Pharma Co., Ltd. Stock ADLINK TECHNOLOGY INC. Stock NU INC. Stock Quadlink Technology Inc. Stock MEAN WELL ENTERPRISES CO., LTD. Stock Yeong Guan Group Stock Orient Pharma Co., Ltd. Stock Capital Investment Development Corp.	- - - - - - - - - -	Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss 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 Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income	153,834 93,000 39,462 13,334,592 1,022,727 500,000 200,000 51,087 17,454 1,520,000	9,691,542 $ 9,532,500 727,285 864,081,562 7,474,468 10,000,000 57,340,000 3,218,481 321,677 35,098,683	0.14 0.06 0.02 6.13 7.89 3.62 0.13 0.05 0.01 3.57	9,691,542 $ 9,532,500 727,285 864,081,562 7,474,468 10,000,000 57,340,000 3,218,481 321,677 35,098,683

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’. Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

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

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

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Zenitron Corporation and Subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2021

Purchaser/seller	Counterparty	Relationship with the counterparty (Note 2)			Transaction		Differences in transaction terms compared to third party transactions (Note 1)	Differences in transaction terms compared to third party transactions (Note 1)	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote (Note 3)
			Purchases (sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Zenitron Coporation Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenicom (HK) Limited Zenitron Coporation	Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (HK) Limited Zenitron Coporation Zenicom (HK) Limited	1 2 1 2 1 2 3 3 3 3 2 1	Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases	6,796,830) ($ 6,796,830 601,986) ( 601,986 352,428) ( 352,428 612,836) ( 612,836 645,329) ( 645,329 198,487) ( 198,487	(32) 29 (3) 38 (2) 32 (2) 56 (3) 41 (99) 1	Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings	Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price	Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties	1,082,574 $ 1,082,574) ( 83,635 83,635) ( 23,626 23,626) ( 49,442 49,442) ( 50,091 50,091) ( 21,511 21,511) (	18 (36) 1 (44) 0 (25) 1 (52) 1 (26) 97 (1)

Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns. Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

• (1) Parent company to subsidiary. (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts, and differences in types of transactions compared to third-party transactions.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Zenitron Corporation and Subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2021

Table 5 Creditor	Counterparty	Relationship with the counterparty (Note 2)	Balance as at December 31, 2021 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Accounts receivable Zenitron Coporation Other receivables Zenitron Coporation SUPERTRONIC INT’L. CORP.	Zenitron (HK) Limited ZTHC (Shanghai) Co., Ltd. Zenitron (HK) Limited	1 1 3	1,082,574 $ 218,394 2,017,508	6.33 - -	- $ - -	- - -	378,266 $ - -	- $ - -

Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties…. Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Expressed in thousands of NTD

Zenitron Corporation and Subsidiaries

Significant inter-company transactions during the reporting period

Year ended December 31, 2021

Table 6

(Except as otherwise indicated)

Number (Note1)	Companyname	Counterparty	Relationship (Note2)			Transaction
				General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 1 1	Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron (HK) Limited Zenitron (HK) Limited	Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd.	1 1 1 1 3 3	Sales Accounts receivable Sales Other receivables Sales Sales	6,796,830 $ 1,082,574 601,986 218,394 612,836 645,329	Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties In accordance with mutual agreements Selling price has no obvious difference from the third parties Selling price has no obvious difference from the third parties	16 5 1 1 1 2

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

(1) Parent company is ‘0’.

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

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

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

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

Zenitron Corporation and Subsidiaries

Information on investees

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

Year ended December 31, 2021

Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2021	Shares held as at December 31,2021	Shares held as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021 (Note 2(2))	Investment income recognised by the Company for the year ended December 31, 2021 (Note 2(3))	Footnote
				Balance as at December 31,2021	Balance as at December 31,2020	Number of shares (in thousand)	Ownership (%)	Book value
Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Supertronic International Corp. Supertronic International Corp.	Zenicom Corporation Zenitron (HK) Limited Supertronic International Corp. Yo-Teh Investment Corporation Zenitron (HK) Limited Zenicom (HK) Limited	Taiwan Hong Kong B. V. I. Taiwan Hong Kong Hong Kong	Trading of electronic components and assembly Trading of electronic components and assembly Reinvested holding company Reinvested holding company Trading of electronic components and assembly Trading of electronic components and assembly	55,854 $ 2,008 618,023 84,167 471,639 92,780	55,854 $ 2,008 618,023 84,167 471,639 92,780	1,520 510 18,704 7,700 34,272 23,800	100.00 1.47 100.00 100.00 98.53 100.00	26,264 $ 9,542 2,838,459 66,264 639,592 87,555	4,211) ($ 494,272 492,234 8,588 494,272 2,957	4,211) ($ 7,266 492,234 8,588 487,006 2,957	Subsidiary Second-tier subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

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

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

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

(2) The ‘Net profit (loss) of the investee for the year ended December 31, 2021’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2021’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Zenitron Corporation and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2021

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income (loss) of investee for the year ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 (Note 2)	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Zenitron (Shanghai) International Trading Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Shanghai Zenitron Electronic Trading Co., Ltd.	Trading of electronic components and assembly Selling computer memory equipment and related components and providing technical support Trading of electronic components and assembly Trading of electronic components and assembly	157,730 $ 116,601 93,080 94,760	(2) (2) (2) (2)	97,270 $ 116,601 32,620 -	- $ - - -	- $ - - -	97,270 $ 116,601 32,620 -	9,105 $ 18,074 10,728 45	100.00 100.00 100.00 100.00	9,105 $ 18,074 10,728 45	188,625 $ 341,634 78,548 88,907	- $ - - -

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Zenitron Corporation	246,491 $	443,484 $	3,175,339 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

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

(2) Through investing in Zenitron (HK) Limited, an existing company in the third area, which then invested in the investee in Mainland China.

(3) Others

Note 2: Basis for investment income (loss) recognition is the financial statements that are audited and attested by R.O.C. parent company’s CPA. Note 3: The numbers in this table are expressed in New Taiwan Dollars.