AVISION — Audit Report / Information 2022

Nov 11, 2022

AVISION INC.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT DECEMBER 31, 2022 AND 2021

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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.

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AVISION INC.

DECEMBER 31, 2022 AND 2021 PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

TABLE OF CONTENTS

Contents

Page/Number/Index

1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Parent Company Only Balance Sheets 5. Parent Company Only Statements of Comprehensive Income 6. Parent Company Only Statements of Changes in Equity 7. Parent Company Only Statements of Cash Flows 8. Notes to the Parent Company Only Financial Statements (1) History and Organization (2) The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation (3) Application of New Standards, Amendments and Interpretations (4) Summary of Significant Accounting Policies (5) Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty (6) Details of Significant Accounts

1 2 ~ 4 5 ~ 11 12 ~ 13 14 15 16 ~ 17 18 ~ 70 18 18 18 ~ 19 19 ~ 29 29 29 ~ 52

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Contents Page/Number/Index

	(7) Related Party Transactions	53 ~ 55
	(8) Pledged Assets	56
	(9) Significant Contingent Liabilities and Unrecognised Contract	56
	Commitments
	(10) Significant Disaster Loss	56
	(11) Significant Events after the Balance Sheet Date	56
	(12) Others	56 ~ 69
	(13) Supplementary Disclosures	69 ~ 70
	(14) Segment Information	70
9.	Statements of Major Accounting Items
	Statement of Cash and Cash Equivalents	Statement 1
	Statement of Accounts Receivable	Statement 2
	Statement of Inventories	Statement 3
	Statement of Changes in Investments Accounted for Using the Equity	Statement 4
	Method
	Statement of Property, Plant and Equipment	Statement 5
	Statement of Accumulated Depreciation on Property, Plant and Equipment	Statement 6
	Statement of Accounts Payable	Statement 7
	Statement of Operating Income, Net	Statement 8
	Statement of Operating Costs	Statement 9
	Statement of Manufacturing Expense	Statement 10
	Statement of Selling Expenses	Statement 11

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Contents Page/Number/Index

Statement of Administrative Expenses	Statement 12
Statement of Research Development Expense	Statement 13
Statement of Labour, Depreciation and Amortization Expenses by Function	Statement 14

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR22000641

To the Board of Directors and Shareholders of AVISION INC.

Opinion

We have audited the accompanying balance sheets of AVISION INC. (the “Company”) as at December 31, 2022 and 2021, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

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

Key audit matters

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

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The key audit matters in relation to the parent company only financial statements for the year ended December 31, 2022 are stated as follows:

Impairment assessment of property, plant and equipment and right-of-use assets

Description

The Company’s property, plant and equipment and right-of-use assets amounted to NT$378,001 thousand as at December 31, 2022. Please refer to Note 5(1) for accounting estimates and assumption uncertainty related to impairment assessment of property, plant and equipment and right-of-use assets and Notes 6(6) and 6(7) for details of property, plant and equipment and right-of-use assets. The Company determined the recoverable amounts of property, plant and equipment and right-of-use assets at the higher of the value in use and fair value less costs of disposal and assessed whether there was any impairment on property, plant and equipment and right-of-use assets utilising the recoverable amounts. Given that the assessment of value in use of property, plant and equipment and right-of-use assets involves the estimation of future cash flows and determination of discount rates and the assumptions used to forecast future cash flows and determination of discount rates have significant influence on the estimation results of value in use of property, plant and equipment and right-of-use assets, we consider the impairment assessment of property, plant and equipment and right-of-use assets a key audit matter.

How our audit addressed the matter

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

1. Discussed the estimation procedures of future cash flows with the management and obtained an understanding on the Company’s product strategy and execution status.

2. Assessed the reasonableness of various assumptions used by the management to estimate future cash flows, including the expected growth rate and gross margin; and assessed the parameters used for discount rates, including the risk-free return rate, industry’s risk coefficient and long-term market return rate that were used to calculate cost of equity.

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Assessment of allowance for inventory valuation loss

Description

The Company mainly manufactures and sells multi-function peripherals, document scanners and network peripherals. Due to the rapid technology innovation and the paperless trend in the market for development of environmental protection, energy saving and carbon reduction, these inventories have a higher risk of incurring loss on decline in market value or obsolescence. Please refer to Note 5(2) for accounting estimates and assumption uncertainty related to assessment of allowance for inventory valuation loss and Note 6(4) for details of inventories. Inventories of the Company are stated at the lower of cost and net realisable value. Given that the amount and items of the Company’s inventories are significant and numerous and the management must determine the net realisable value of inventories on balance sheet date using judgements and estimates, we consider the assessment of allowance for inventory valuation loss a key audit matter.

How our audit addressed the matter

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

1. Assessed the consistency of provision policies and reasonableness of procedures used for allowance for inventory valuation loss.

2. Verified the accuracy of logic in inventory aging reports to ascertain whether the inventories aged over a certain period had been included in the report.

3. Reviewed the appropriateness of estimation basis used for net realisable value of inventories and discussed and verified the supporting documents obtained from the management to assess the reasonableness of allowance for valuation loss determined by the management.

Assessment of going concern assumption

Description

The Company had a deficit of NT$32,399 thousand for the year ended December 31, 2022 and the accumulated deficit as at December 31, 2022 was NT$924,847 thousand. As described in Note 12(1), the management of the Company had taken necessary measures to ascertain the Company can continue to operate in the future and gradually improve financial position.

Given that the aforementioned measures have significant influence on financial position of the Company

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within the next year, we consider the assessment of going concern assumption a key audit matter.

How our audit addressed the matter

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

1. Discussed with the management the events or conditions that affected going concern assumption and its response plan.

2. Assessed the feasibility of the management’s response plan and the result of improving financial position.

3. Obtained the reasonableness of cash flow projections for the next 12 months which were prepared by the management, including:

4. (1) Assessed the reasonableness of various assumptions in the forecasted financial information used by the management;

5. (2) Inquired the terms of the borrowing contracts and ascertained there were no defaults resulting in unexpected cash outflows;

6. (3) Reviewed the existing financing contracts and ascertained the credit periods and unused facilities. In addition, reviewed the contracts newly added after the balance sheet date to ascertain whether the financing facilities and periods are sufficient to cover working capital for the next 12 months.

7. Obtained and reviewed the management’s response plan and the declaration issued for feasibility of the plan.

8. Assessed the appropriateness of notes to the financial statement disclosed by the management.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

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

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

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of 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 parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,

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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.

Chiang, Tsai-Yen[Lin, Yu-Kuan ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 23, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only 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 parent company only 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.

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AVISION INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 8 6(2) 6(2) 6(2) and 7 7 6(4) 6(3) 6(5) 6(6) and 8 6(7) 8	December 31, 2022 AMOUNT % $ 274,169 10 7,000 - 2 - 241,199 9 345,929 12 20,431 1 6,980 - 358,239 13 22,698 1 29 - 1,276,676 46 20,831 1 1,104,048 39 239,237 9 138,764 5 3,437 - 8,578 - 1,514,895 54 $ 2,791,571 100	December 31, 2021	December 31, 2021
		AMOUNT $ 274,169 7,000 2 241,199 345,929 20,431 6,980 358,239 22,698 29 1,276,676 20,831 1,104,048 239,237 138,764 3,437 8,578 1,514,895 $ 2,791,571	AMOUNT $ 38,917 7,000 4 202,772 108,263 19,225 4,068 459,985 27,103 224 867,561 26,511 1,043,366 240,456 144,305 6,618 994 1,462,250 $ 2,329,811	%
Current assets 1100 Cash and cash equivalents 1136 Current financial assets at amortised cost, net 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1920 Guarantee deposits paid 15XX Total non-current assets 1XXX Total assets				2 - - 9 4 1 - 20 1 -
				37
				1 45 11 6 - -
				63
				100

(Continued)

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AVISION INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % 6(8) and 8 $ 190,141 7 $ 100,000 4 25,000 1 - - 6(17) 31,535 1 3,071 - 90 - - - 42,708 2 80,669 4 7 896,674 32 769,483 33 96,568 4 106,140 5 7 11,265 - 10,325 1 7,003 - 4,795 - 4,179 - 4,807 - 6(10) and 8 54,886 2 2,963 - 3,689 - 8,634 - 1,363,738 49 1,090,887 47 6(10) and 8 59,519 2 17,037 1 139,814 5 143,603 6 6(11) 59,200 2 89,797 4 258,533 9 250,437 11 1,622,271 58 1,341,324 58 6(13) 2,132,211 76 1,894,441 81 6(14) 92,215 4 77,455 3 6(15) 5,836 - 5,836 - ( 924,847) ( 33) ( 902,020) ( 39 ) 6(16) ( 129,446) ( 5) ( 80,556) ( 3 ) 6(13) ( 6,669) - ( 6,669) - 1,169,300 42 988,487 42 9 11 $ 2,791,571 100 $ 2,329,811 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables to related parties 2250 Provisions for liabilities - current 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current Liabilities Non-current liabilities 2540 Long-term borrowings 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3320 Special reserve 3350 Accumulated deficit Other equity 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant commitments and contingencies Significant events after the balance msheet date 3X2X Total liabilities and equity

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

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AVISION INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except loss per share)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(17) and 7 $ 1,699,737 100 $ 1,000,565 100 6(4)(20)(21) and 7 ( 1,259,907) ( 74) ( 778,508) ( 78) 439,830 26 222,057 22 ( 12,931) ( 1) ( 9,432) ( 1) 11,706 1 8,950 1 438,605 26 221,575 22 6(22)(23) and 7 ( 104,342) ( 6) ( 104,784) ( 10) ( 69,627) ( 4) ( 64,900) ( 7) ( 310,858) ( 19) ( 308,796) ( 31) 12(3) ( 37,814) ( 2) 590 - ( 522,641) ( 31) ( 477,890) ( 48) ( 84,036) ( 5) ( 256,315) ( 26) 6(18) 201 - 83 - 6(19) 6,310 - 836 - 6(20) 28,196 2 78,036 8 6(21) and 7 ( 9,686) ( 1) ( 5,634) ( 1) 6(5) 28,624 2 58,241 6 53,645 3 131,562 13 ( 30,391) ( 2) ( 124,753) ( 13) 6(24) ( 2,008) - ( 1,175) - ($ 32,399) ( 2) ($ 125,928) ( 13) 6(11) $ 14,348 1 $ 11,897 1 6(3)(14) ( 6,818) ( 1) ( 43,206) ( 4) 6(16) ( 39,008) ( 2) ( 29,009) ( 3) ( 31,478) ( 2) ( 60,318) ( 6) 6(16) 367 - ( 720) - 6(16) ( 3,431) - ( 18,467) ( 2) ( 3,064) - ( 19,187) ( 2) ($ 34,542) ( 2) ($ 79,505) ( 8) ($ 66,941) ( 4) ($ 205,433) ( 21) 6(25) ($ 0.17) ($ 0.69) ($ 0.17) ($ 0.69)

4000 Operating revenue 5000 Operating costs 5900 Gross profit 5910 Unrealized profit from sales 5920 Realized profit on from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impeairment (loss) gain 6000 Total operating expenses 6900 Operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Loss before income tax 7950 Income tax expense 8200 Loss for the year Other comprehensive income Item that will not be reclassified to profit loss: 8311 Remeasurements of defined benefit plans 8316 Unrealised loss from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8310 Total items thet will not be reclassified to profit or loss Items that may be reclassified to profit or loss: 8361 Financial statements translation differences of foreign operations 8380 Total share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8360 Total items that may be reclassified to profit or loss 8300 Total other comprehensive loss, net of tax 8500 Total comprehensive loss for the year Loss per share 9750 Basic loss per share 9850 Diluted loss per share

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

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AVISION INC.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2021 Balance at January 1, 2021 Loss for the year Other comprehensive income (loss) for the year Total comprehensive loss Cash capital increase Disposal of investments in equity instruments designated at fair value through other comprehensive income Share-based payments Balance at December 31, 2021 Year ended December 31, 2022 Balance at January 1, 2022 Loss for the year Other comprehensive income (loss) for the year Total comprehensive loss Cash capital increase Share-based payments Balance at December 31, 2022	Notes		Capital	surplus		Retained	earnings		Other equity interest	Other equity interest	Treasury stocks		Total equity
			Share capital - common stock	Capital surplus, additional paid- in capital		Special reserve	Accumulated deficit		Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(11)(16) 6(13) 6(16)(3) 6(12)(14)(2 3) 6(11)(16) 6(13) 6(12)(14)(2 3)		$ 1,794,441 - - - 100,000 - - $ 1,894,441 $ 1,894,441 - - - 237,770 - $ 2,132,211	$ 71,660 - - - - - 5,795 $ 77,455 $ 77,455 - - - ( 840 ) 15,600 $ 92,215		$ 5,836 - - - - - - $ 5,836 $ 5,836 - - - - - $ 5,836	($ 769,829) ( 125,928) 11,897 ( 114,031) ( 12,600) ( 5,560) - ($ 902,020) ($ 902,020) ( 32,399) 14,348 ( 18,051) ( 4,776) - ($ 924,847)	$ 56,090 - ( 19,187) ( 19,187) - - - $ 36,903 $ 36,903 - ( 3,064) ( 3,064) - - $ 33,839		($ 50,804 ) - ( 72,215 ) ( 72,215 ) - 5,560 - ($ 117,459 ) ($ 117,459 ) - ( 45,826 ) ( 45,826 ) - - ($ 163,285 )	($ 6,669) - - - - - - ($ 6,669) ($ 6,669) - - - - - ($ 6,669)	$ 1,100,725 ( 125,928 ) ( 79,505 ) ( 205,433 ) 87,400 - 5,795 $ 988,487 $ 988,487 ( 32,399 ) ( 34,542 ) ( 66,941 ) 232,154 15,600 $ 1,169,300

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

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AVISION INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Expected credit impairment loss (gain) Depreciation expense Amortisation expense Interest expense Interest income Share-based payments Gain on disposal of intangible assets accounted for using the equity method Unrealised gains on affiliates Realised gains on affiliates Changes in operating assets and liabilities Changes in operating assets Notes receivable Accounts receivable Accounts receivable-related parties Other receivables Other receivables-related parties Inventories Prepayments Other current assets Changes in operating liabilities Contract liabilities Notes payable Accounts payable Accounts payable-related parties Other payables Other payables-related parties Provisions Other current liabilities Net defined benefit liability Cash outflow generated from operations Interest received Interest paid Net cash flows used in operating activities

Year ended December 31 Notes 2022 2021 ($ 30,391 ) ($ 124,753 ) 12(3) 37,814 ( 590 ) 6(6)(7)(22) 21,038 20,114 6(22) 3,706 4,869 6(21) 9,686 5,634 6(18) ( 201 ) ( 83 ) 6(12)(23) 15,600 5,795 6(20) ( 75,358 ) ( 72,099 ) 6(17) ( 28,624 ) ( 58,241 ) 12,931 9,432 ( 11,706 ) ( 8,950 ) 2 ( 2 ) ( 76,241 ) ( 1,044 ) ( 237,666 ) 3,649 ( 1,206 ) 4,467 ( 2,912 ) 2,333 101,746 ( 268,329 ) 2,397 ( 13,748 ) 195 ( 134 ) 28,464 ( 12,585 ) 90 - ( 37,961 ) 24,189 127,191 225,011 ( 10,193 ) 12,705 940 6,787 2,208 ( 965 ) ( 4,945 ) 6,129 ( 16,246 ) ( 22,439 ) ( 169,642 ) ( 252,848 ) 201 83 ( 9,686 ) ( 5,634 ) ( 179,127 ) ( 258,399 )

(Continued)

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AVISION INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Earnings distribution of subsidiaries accounted for using the equity method Acquisition of property, plant and equipment Acquisition of intangible assets (Increase) decrease in guarantee deposits paid Proceeds from disposal of intangible assets Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Increase in long-term borrowings Repayment of long-term borrowings Short-term notes and bills payable Increase in guarantee deposits received Payments of lease liabilities Cash capital increase Net cash flows from financing activities Net increase (decrease) 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 2022 2021 12(3) ($ 1,138 ) $ - 6(3) - 6,647 6(5) - 20,000 6(26) ( 13,241 ) ( 7,658 ) ( 525 ) ( 7,329 ) ( 7,584 ) 2 7 - 133,269 ( 22,488 ) 144,931 6(27) 90,141 ( 35,094 ) 6(27) 135,000 20,000 6(27) ( 40,595 ) - 25,000 - 6(27) - 3 6(27) ( 4,833 ) ( 4,596 ) 6(13) 232,154 87,400 436,867 67,713 235,252 ( 45,755 ) 38,917 84,672 $ 274,169 $ 38,917

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

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AVISION INC.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

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

1. History and Organization

AVISION INC. (the “Company”) was incorporated as a company limited by shares under the provisions

of the Company Act of the Republic of China (R.O.C.). The Company is primarily engaged in the development and manufacture of digital office equipment (multi-function peripherals, document scanners and network peripherals).

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorised for issuance by the Board of Directors on March 23, 2023.

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”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

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

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

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

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	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
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 Company’s financial condition and financial performance based on the Company’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:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
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
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
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, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024

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

4. Summary of Significant Accounting Policies

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

(1) Compliance statement

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

(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 other comprehensive income.

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  - (b) 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional 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. 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

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

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

  • II. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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III. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

(4) 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;

• (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.

(5) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) 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 Company 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 Company measures the financial assets at fair value plus transaction

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costs. The Company 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 Company and the amount of the dividend can be measured reliably.

(7) Accounts and notes receivable

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

• 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.

• (8) Impairment of financial assets

For financial assets at amortised cost including accounts receivable that have a significant financing component, at each reporting date, the Company 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 Company recognises the impairment provision for lifetime ECLs.

(9) 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 Company 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 Company has not retained control of the financial asset.

• (10) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated based on the standard cost. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). 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 estimated costs of completion and the estimated costs necessary to make the sale.

(11) Investments accounted for using equity method / associates

• A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

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

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

• D. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• E. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• F. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• G. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• H. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• I. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

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• J. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

• (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 Company 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.

• 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 4 ~ 51 years Machinery and equipment 3 ~ 6 years Transportation equipment 4 ~ 6 years Office equipment 4 ~ 6 years Other equipment 3 ~ 6 years

(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 Company. For short-term leases or leases of low-value 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 Company 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

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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 amount of the initial measurement of lease liability. 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) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 5 years.

(15) Impairment of non-financial assets

The Company 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 long-term and short-term bank borrowings and other long-term and short-term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(17) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services 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) Provisions

Provisions are contingent liabilities from warranties and are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of

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time is recognised as interest expense.

(19) 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 Company 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 high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

  • 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.

• C. Employees’ compensation and directors’ and supervisors’ 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 resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, after taking into account the effects of ex-rights and ex-dividends, the Company calculates the number of shares based on the fair value per share at the day before the shareholders’ meeting held in the year following the financial reporting year.

- (20) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-

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vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

• (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 substantively enacted at the balance sheet date where the Company operates and generates 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 parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates that have been 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.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(22) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the

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consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(23) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(24) Revenue recognition

A. Sales of goods

• (a) The Company manufactures and sells multi-function peripherals, document scanners, network peripherals and related products. 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 customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. As the time interval between the transfer of committed goods and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• (b) The Company’s obligation to provide a repair for faulty products under the standard warranty terms is recognised as a provision.

• (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Service revenue

• (a) The Company provides product maintenance services or design services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the actual labour hours spent relative to the total expected labour hours. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

• (b) The Company’s estimate about revenue, costs and progress towards complete satisfaction of

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a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.

(25) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’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) Impairment assessment of property, plant and equipment and right-of-use assets

The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Company strategy might cause material impairment on assets in the future.

As of December 31, 2022, the carrying amount of property, plant and equipment and right-of-use assets was $378,001.

(2) Assessment of allowance for inventory valuation loss

Due to the rapid technology innovation and the paperless trend in the market for development of environmental protection, energy saving and carbon reduction, inventories of the Company have a higher risk of incurring loss on decline in market value or obsolescence. Inventories are stated at the lower of cost and net realisable value. The management must determine the net realisable value of inventories on balance sheet date using judgements and estimates.

As of December 31, 2022, the carrying amount of inventories was $358,239.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Total	December31,2022 649 $ 273,520 274,169 $	December31,2021
		631 $ 38,286
		38,917 $

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• A. The Company 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.

• B. The Company has no cash and cash equivalents pledged to others.

(2) Notes and accounts receivable

Notes and accounts receivable
		December	31, 2022		December	31, 2021
Notes receivable		$	2	$		4
Accounts receivable due from general customers		$	287,660	$		212,663
Accounts receivable due from related parties			345,929			108,263
Less: Allowance for uncollectible accounts	(		46,461)	(		9,891)
		$	587,128		$	311,035

• A. The ageing analysis of accounts receivable that were past due but not impaired is as follows ：

==> picture [468 x 177] intentionally omitted <==

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

December 31, 2022 December 31, 2021
Accounts receivable Notes receivable Accounts receivable Notes receivable
Not past due $ 301,785 $ 2 $ 201,615 $ 4
- -
Up to 30 days 215,956 52,413
- -
31 to 90 days 49,896 53,373
- -
91 to 180 days 23,891 9,632
180 to 270 41,539 - 907 -
days
271 to 360 - - 159 -
days
Over 360 days 522 - 2,827 -
$ 633,589 $ 2 $ 320,926 $ 4
----- End of picture text -----

The above ageing analysis was based on past due date

• B. As of December 31, 2022 and 2021, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2021, the balance of receivables from contracts with customers amounted to $313,052.

• C. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes and accounts receivable was the carrying amount.

• D. Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(3).

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

==> picture [467 x 215] intentionally omitted <==

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

Items December 31, 2022 December 31, 2021
Non-current items:
Equity instruments
AETAS Technology Inc. $ 1,015 $ 1,015
OTO PHOTONICS INC. 18,344 17,206
PROTECTLIFE INTERNATIONAL
BIOMEDICAL INC. 13,375 13,375
WIN CO E-TECHNOLOGY CORP. 3,000 3,000
JimTec Group Holding Inc. 2,999 2,999
Capsovision Inc. 49,282 49,282
88,015 86,877
Valuation adjustment of financial assets at fair value
( 67,184) ( 60,366)
through other comprehensive income
$ 20,831 $ 26,511
----- End of picture text -----

• A. The Company has elected to classify equity instruments investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $20,832 and $26,511 as at December 31, 2022 and 2021, respectively.

• B. Aiming to satisfy the working capital needs, the Company sold $6,647 of equity instruments investments at fair value and resulted in $5,560 of cumulative losses on disposal during the year ended December 31, 2021.

• C. Amounts recognised in profit or loss and 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	December31,2022	December31,2021
Fair value change recognised in other comprehensive income Cumulative gains (losses) reclassified to retained earnings due to derecognition	6,818) ($ - $	43,206) ($ 5,560 $

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

• E. Information relating to fair value of financial assets at fair value through other comprehensive income is provided in Note 12(4).

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(4) Inventories

nventories
Raw materials Semi-finished goods and work in progress Finished goods Raw materials Semi-finished goods and work in progress Finished goods			December31,2022
		Cost 134,797 $ 28,061 256,870 419,728 $ Cost 177,704 $ 39,441 318,683 535,828 $	Allowance for valuation loss 31,593) ($ 10,759) ( 19,137) ( 61,489) ($ Allowance for valuation loss 23,674) ($ 17,728) ( 34,441) ( 75,843) ($ December 31, 2021	Bookvalue 103,204 $ 17,302 237,733 358,239 $ Bookvalue 154,030 $ 21,713 284,242 459,985 $

The cost of inventories recognised as expense ：

Cost of goods sold Gain on reversal of decline in market value Loss on physical inventory Others	Year ended December 31,2022	Year ended December 31,2021
	1,266,122 $ 6,247) ( 32 22,332 1,282,239 $	789,498 $ 11,019) ( 29 27,155 805,663 $

The Company reversed a previous inventory write-down and accounted for as reduction of cost of goods sold because inventories with decline in market value were partially sold and scrapped for the years ended December 31, 2022 and 2021.

(5) Investments accounted for using equity method

Investee companies Subsidiaries - Avision International Inc. Avision Development Inc. Avision Brasil Ltda. Quantum Investment Co., LTD.		December 31,2022		December 31,2021
		1,042,792 $ 15,920 11,033 34,303 1,104,048 $		1,012,929 $ 5,569 8,051 16,817 1,043,366 $

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• A. Please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2022 for the information regarding the Company’s subsidiaries.

• B. For the years ended December 31, 2022 and 2021, investment income accounted for using the equity method was $28,624 and $58,241, respectively, and other comprehensive loss accounted for using the equity method was $42,072 and $48,196, respectively.

• C. The legal earnings and proceeds from capital reduction that Quantum Investment Co., LTD. a subsidiary that the Company accounted for using the equity method for the years ended December 31, 2021, appropriated and returned amounted to $20,000.

(6) Property, plant and equipment

At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Additions Reclassifications Depreciation expense Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment			2022
	Buildings Machinery and and Transportation Office structures equipment equipment equipment Others Total 416,956 $ 258,034 $ 2,470 $ 344 $ 19,574 $ 697,378 $ 191,621) ( 250,121) ( 2,437) ( 134) ( 12,609) ( 456,922) ( 225,335 $ 7,913 $ 33 $ 210 $ 6,965 $ 240,456 $ 225,335 $ 7,913 $ 33 $ 210 $ 6,965 $ 240,456 $ 732 3,037 - 347 9,746 13,862 - 1,155 - - 1,155) ( - 8,816) ( 3,303) ( 33) ( 128) ( 2,801) ( 15,081) ( 217,251 $ 8,802 $ - $ 429 $ 12,755 $ 239,237 $ 417,496 $ 262,182 $ - $ 584 $ 25,000 $ 705,262 $ 200,245) ( 253,380) ( - 155) ( 12,245) ( 466,025) ( 217,251 $ 8,802 $ - $ 429 $ 12,755 $ 239,237 $

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2021

			Buildings			Machinery
			and			and	Transportation				Office
			structures			equipment		equipment			equipment		Others			Total
At January 1
Cost		$	416,956		$	262,920	$	2,470		$	294	$	15,940		$	698,580
Accumulated depreciation
and impairment	(		182,835)	(		254,259)	(	2,025)	(		251)	(	11,436)	(		450,806)
	$		234,121	$		8,661	$	445	$		43	$	4,504	$		247,774
Opening net book amount
as at January 1		$	234,121		$	8,661	$	445		$	43	$	4,504		$	247,774
Additions			-			1,123		-			238		5,638			6,999
Reclassifications			-			1,055		-			-	(	1,055)			-
Depreciation expense	(		8,786)	(		2,926)	(	412)	(		71)	(	2,122)	(		14,317)
Closing net book amount
as at December 31	$		225,335	$		7,913	$	33	$		210	$	6,965	$		240,456
At December 31
Cost	$		416,956	$		258,034	$	2,470	$		344	$	19,574	$		697,378
Accumulated depreciation
and impairment	(		191,621)	(		250,121)	(	2,437)	(		134)	(	12,609)	(		456,922)
	$		225,335	$		7,913	$	33	$		210	$	6,965	$		240,456

• A. There was no interest capitalised for the years ended December 31, 2022 and 2021.

• B. Information about the property, plant and equipment that were pledged to others as collaterals is provided in Note 8.

• －

• (7) Leasing arrangements lessee

• A. The Company leases various assets including land and buildings. Rental contracts are typically made for periods of 3 to 20 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. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Transportation equipment		December 31, 2022		December 31, 2021		Year ended December 31, 2022		Year ended December 31, 2021
		Carrying amount		Carrying amount		Depreciation charge		Depreciation charge
		$ 138,103 - 661 138,764 $		$ 143,079 809 417 144,305 $		$ 4,976 809 172 5,957 $		$ 4,976 809 12 5,797 $

• C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $416 and $429, respectively.

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D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Gain on sublease of right-of-use assets	Year ended December 31, 2022 Year ended December 31, 2021 $2,923 $ 3,007 13,198 $ 14,004 $ 373 $ 98 $ 503 $ 503 $

• E. For the years ended December 31, 2022 and 2021, the Company’s total cash outflow for leases were $21,327 and $21,705, respectively.

• F. In determining the lease term, the Company takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option. The assessment of lease period is reviewed if a significant event occurs which affects the assessment.

(8) Short-term borrowings

assessment. hort-term borrowings
Type of borrowings		Year ended December 31, 2022 $ 110,141 80,000 190,141 $ 2.20%~6.9133%	Year ended December 31, 2021
Unsecured bank borrowings Secured bank borrowings Total Interest rate range			$ 100,000 - 100,000 $ 2.1%

Information about the collateral that was pledged for secured bank borrowings is provided in Note 8.

(9) Other payables

Other payables
Salary and bonus payables Pension payable Payable on equipment Others	December 31, 2022 58,036 $ 2,993 922 34,617 96,568 $	December 31, 2021
		58,363 $ 3,126 301 44,350 106,140 $

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- (10) Long term borrowings

Long-term borrowings
Type ofborrowings Long-term bank borrowings Credit loans Taiwan Cooperative Financial Holding Co. Ltd. Credit loans First Commercial Bank Credit loans Bank of Panhsin Credit loans Chang Hwa Commercial Bank Ltd. Other bank borrowings Credit loans Chailease Finance Co., Ltd. Less:Current portion Type ofborrowings	Borrowing period and repayment term Borrowing period is from October 25, 2021 to October 25, 2026; interest is repayable monthly. Borrowing period is from January 3, 2022to January 3, 2027; interest is repayable monthly. Borrowing period is from January 26, 2021 to January 15, 2025; interest is repayable monthly. Borrowing period is from June 30, 2022 to June 30, 2025; interest is repayable monthly. Borrowing period is from March 21, 2022 to March 21, 2024; interest is repayable monthly. Borrowing period and repayment term Borrowing period is from October 25, 2021 to October 25, 2026; interest is repayable monthly.	Interestraterange 2.1%～2.73% 1.5%~2.88% 2%~2.57% 2.53% 4.07% Interestraterange 2.1%～2.73%	Collateral December31,2022 N/A 17,178 $ N/A 24,741 N/A 20,833 N/A 16,757 Inventories 34,896 114,405 54,886) ( 59,519 $ Collateral December31,2021 N/A 20,000 $ 2,963) ( 17,037 $
Long-term bank borrowings Credit loans Taiwan Cooperative Financial Holding Co. Ltd. Less:Current portion

Details of collateral for secured borrowings of Chailease Finance Co., Ltd. are provided in Note 8.

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(11) 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 Labor Standards Act. 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. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

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

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	December31,2022	December31,2021
	186,147 $ 126,970) ( 59,177 $	206,097 $ 116,322) ( 89,775 $

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

At January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31			2022
		Present value of defined benefit obligations	Fair value of plan assets		Net defined benefit liability
	206,097 $ 1,127 1,443 208,667 - $ 9,243) ( 3,305 5,938) ( - 16,582) ( 186,147 $		116,322) ($ - 814) ( 117,136) ( 8,410) ($ - - 8,410) ( 18,006) ( 16,582 126,970) ($	89,775 $ 1,127 629 91,531 8,410) ($ 9,243) ( 3,305 14,348) ( 18,006) ( - 59,177 $

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2021

At January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension At December 31	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability 223,734 $ 99,623) ($ 124,111 $ 1,344 - 1,344 671 299) ( 372 225,749 99,922) ( 125,827 - $ 1,388) ($ 1,388) ($ 169 - 169 7,542) ( - 7,542) ( 3,136) ( - 3,136) ( 10,509) ( 1,388) ( 11,897) ( - 24,155) ( 24,155) ( 9,143) ( 9,143 - 206,097 $ 116,322) ($ 89,775 $

• (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 authorised 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, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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

Discount rate Future salary increases		Year ended December 31,2022		Year ended December 31,2021
		1.30% 4.00%		0.70% 4.00%

Assumptions regarding future mortality experience are set based on the 6th Taiwan Standard Ordinary Experience Mortality Table for the years ended December 31, 2022. Because the main actuarial assumption changed, the present value of defined benefit obligation

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is affected. The analysis was as follows ：

==> picture [441 x 135] intentionally omitted <==

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

Discount rate Future salary increases
Increase0.25% Decrease0.25% Increase0.25% Decrease0.25%
December 31, 2022
Effect on present value of
defined benefit obligation ($ 3,655) $ 3,768 $ 3,226 ($ 3,152)
Increase0.25% Decrease0.25% Increase0.25% Decrease0.25%
December 31, 2021
Effect on present value of
defined benefit obligation ($ 4,417) $ 4,563 $ 3,920 ($ 3,823)
----- End of picture text -----

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 plans of the Company for the next year amount to $13,413.

• (g) As of December 31, 2022, the weighted average duration of the retirement plan is 8 years. The analysis of timing of the future pension payment was as follows:

analysis of timing of the future pension	payment was as follows:
Within 1 year	$	19,812
1-2 year(s)		10,769
2-5 years		38,824
5-10 years		64,699
	$	134,104

• 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 based on 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.

• (b) The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2022 and 2021, were $16,493 and $16,628, respectively.

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(12) Share-based payment

• A. For the years ended December 31, 2022 and 2021, the Company’s share-based payment arrangements were as follows:

==> picture [452 x 48] intentionally omitted <==

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

Quantity granted
(share in Contract Vesting
Type of arrangement Grant date thousands) period conditions
----- End of picture text -----

Type of arrangement	Grant date t	housands)	period	conditions
10th employee stock options	2021.05~	10,000	5 years	2 years’ service
				vested 40%
	2021.11			3 years’ service
				vested 70%
				4 years’ service
				vested 100%
Cash capital increase reserved for employee preemption	2022.12.27	2,000	Not applicable	Immediate acquisition

• B. Details of the share-based payment arrangements are as follows:

Options outstanding at January 1 Options granted Options invalidated due to resignation Options outstanding at December 31 Options exercisable at December 31		2022			2021
	No. of options (share in thousands)	Weighted-average exercise price (in dollars)		No. of options (share in thousands)	Weighted-average exercise price (in dollars)
	10,000 - 451) ( 9,549 -	12.69 $ - 12.69 12.69 -		- 10,000 - 10,000 -	- $ 12.69 - 12.69 -

• C. The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved	Expirydate		No. of shares(in thousands) Exerciseprice(in dollars) 6,000 $ 14.35 4,000 $ 10.20 December31,2022 No. of shares(in thousands) Exerciseprice(in dollars) 6,000 $ 14.35 4,000 $ 10.20 December31,2021
			No. of shares(in thousands)
2021.05 2021.11 Issue date approved	2026.05 2026.11 Expirydate
			No. of shares(in thousands)
2021.05 2021.11	2026.05 2026.11		6,000 4,000	$ 14.35 $ 10.20

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• D. The fair value of stock options granted on grant date is measured using the Black-Scholes optionpricing model. Relevant information is as follows:

Type of arrangement	Grant date	Stock price (in dollars) Exercise price (in dollars) Expected price volatility (Note) Expected option life $ 10 14.35 $ 30.00%~ 47.00% 2.50-4.50 years 10 10.20 48.00%~ 63.00% 2.50-4.50 years	Expected dividends	Risk-free interest rate Fair value per share (in dollars) 0.20%- 0.28% $2.7416 ~5.5586 0.36%- 0.41% 3.0406 ~5.0994
Employee stock options Employee stock options	2021.05.03 2021.11.10		0.00% 0.00%

Note: Expected price volatility rate was estimated by using the stock prices of the most recent period with length of this period approximate to the length of the stock options’ expected life, and the standard deviation of return on the stock during this period.

• E. Information on other equity interest measured at fair value:

Type ofarrangement	Grant date	Shareprice	Exercise Price	Fair value per unit (in dollars)
Cash capital increase reserved for employee preemption	2022.12.17	11.70 $	$ 10.00	1.70 $

• F. Expenses incurred on share-based payment transactions are shown below:

Share-based payment	Year ended December Year ended December 31,2022 31, 2021 15,600 $ 5,795 $

(13) Share capital

• A. As of December 31, 2022, the Company’s authorised capital was $3,000,000, consisting of 300,000 thousand shares of ordinary stock (including 400,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,132,211 with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

At January 1 Cash capital increase At December 31	2022	(unit: share in thousands) 2021	(unit: share in thousands) 2021
	189,248 23,777 213,025		179,248 10,000 189,248

• B. To fulfill working capital, repay bank borrowings or meet capital needs of future development and consider mobility and flexibility in raising capital, the Company’s shareholders at their

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annual meeting on July 12, 2021 adopted a resolution to raise additional cash by issuing 10,000 thousand ordinary shares through private placement and authorised the Board of Directors to fully handle the capital increase within a year from the date of the resolution at their annual meeting.

The Company’s Board of Directors approved the private placement to be priced at NT$8.74 (in dollars) per share on September 3, 2021. The Company issued 10,000 thousand shares through the private placement and collected $87,400 of proceeds on September 6, 2021 (the effective date).

Pursuant to the Securities and Exchange Act, the ordinary shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have been offered publicly. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued ordinary shares.

• C. To fulfill working capital, repay bank borrowings or meet capital needs of future development and consider mobility and flexibility in raising capital, the Company’s shareholders at their annual meeting on June 15, 2022 adopted a resolution to raise additional cash by issuing 20,000 thousand ordinary shares through private placement and authorised the Board of Directors to fully handle the capital increase within a year from the date of the resolution at their annual meeting.

The Company’s Board of Directors approved the private placement to be priced at NT$8.736 (in dollars) per share on June 15, 2022. The Company issued 3,777 thousand shares through the private placement and collected $32,996 of proceeds on June 29, 2022 (the effective date).

Pursuant to the Securities and Exchange Act, the ordinary shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have been offered publicly. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued ordinary shares.

• D. On March 18, 2022, the Company’s Board of Directors resolved to increase its capital, and increased 20,000 thousand shares and share capital of $200,000, with par value of $10 (in dollars), with the issuing price of $10 (in dollars) per share. The effective date was set on December 1, 2022. The registration has been completed on January 10, 2023.

• E. Treasury shares

• (a) Reason for share reacquisition was that those shares were held by the subsidiary, Quantum Investment Co.,Ltd. Movements in the number of the Company’s treasury shares (unit: in thousands) are as follows:

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At January 1/ December 31		December	December	31,2022		December31,2021	December31,2021
		Number of shares		Carryingamount		Number of shares	Carryingamount
		196		$ 6,669		196	$ 6,669

(b) Shares of the parent company held by subsidiaries had no voting rights before being reissued.

(14) Capital surplus

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 paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

reserve is insufficient.	.	.	.	.
Share premium Employee stock options Changes in equity of associates and joint ventures accounted for using the equity method Stock options expired Total At January 1 - $ 5,795 $ 63 $ 71,597 $ 77,445 $ Cash capital increase 840) ( - - - 840) ( Share-based payments 3,060 12,200 - 340 15,600 At December 31 2,220 $ 17,995 $ 63 $ 71,937 $ 92,215 $ 2022 Employee stock options Changes in equity of associates and joint ventures accounted for using the equity method Stock options expired Total At January 1 - $ 63 $ 71,597 $ 71,660 $ Share-based payments 5,795 - - 5,795 At December 31 5,795 $ 63 $ 71,597 $ 77,455 $ 2021									2022
	Share premium					Employee stock options			Changes in equity of associates and joint ventures accounted for using the equity method					Stock options expired			Total
						5,795 $ - 12,200 17,995 $				63 $ - - 63 $ 2021				71,597 $ - 340 71,937 $
										2021
				Employee stock options			Changes in equity of associates and joint ventures accounted for using the equity method					Stock options expired
				- $ 5,795 5,795 $				63 $ - 63 $				71,597 $ - 71,597 $				$
																$

(15) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay income tax and offset operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. After that, special reserve shall be set aside or reverse in accordance with the regulations or resolution of shareholders. The remainder, if any, along with prior years’ accumulated undistributed earnings, with a limit of 5% to 70%, shall be proposed by the Board of Directors to the shareholdings’

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meeting for approval. Earnings distributed in the form of cash shall be resolved by the Board of Directors and earnings distributed in the form of shares shall be resolved by the shareholders according to the requirements.

• B. The Company’s dividend policy is summarised below ：

• As the Company operates in a volatile business environment and is in the stable growth stage, the distribution ratio of stock dividends and cash dividends will be determined based on the Company’s future capital expenditures budget and capital needs to consider the Company’s future capital needs and long-term financial plan and maximise the shareholders’ equity. The Company distributes dividends following the aforementioned policy. However, when there are cash dividends distributed, the total amount of cash dividends distributed is between 10% and 100% of the total dividends distributed.

• The Company shall distribute earnings or compensate deficit after the end of every half fiscal year according to the Company Act. When distributing earnings, the Company shall first estimate and reserve taxes payable, offset operating losses and set aside legal reserve. Earnings distributed in the form of cash shall be resolved by the Board of Directors and earnings distributed in the form of shares shall be resolved by the shareholders according to the requirements.

• 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 Company will not distribute dividends as the shareholders resolved the deficit compensation for 2021 and 2020 at their meeting on June 15, 2022 and July 12, 2021, respectively. The deficit compensation for 2022 was proposed by the Board of Directors on March 23, 2023 and is yet to be resolved by the shareholders’ meeting in 2023.

• Information about deficit compensation of the Company as approved by the Board of Directors and resolved by the shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(16) Other equity items

2022

	2022			2022
(17)	Operating revenue Currencytranslation Unrealised gains (losses) on valuation Total At January 1 36,903 $ 117,459) ($ 80,556) ($ Revaluation – the Company - 6,818) ( 6,818) ( Revaluation – subsidiaries - 39,008) ( 39,008) ( Currency translation differences: –The Company 367 - 367 –Subsidiaries 3,431) ( - 3,431) ( At December 31 33,839 $ 163,285) ($ 129,446) ($ Currencytranslation Unrealised gains (losses) on valuation Total At January 1 56,090 $ 50,804) ($ 5,286 $ Revaluation – the Company - 43,206) ( 43,206) ( Revaluation – subsidiaries - 29,009) ( 29,009) ( Revaluation transferred to retained earnings – subsidiaries - 5,560 5,560 Currency translation differences: –The Company 720) ( - 720) ( –Subsidiaries 18,467) ( - 18,467) ( At December 31 36,903 $ 117,459) ($ 80,556) ($ 2021 Year ended December Year ended December 31,2022 31,2021 Revenue from contracts with customers 1,699,737 $ 1,000,565 $	Currencytranslation 36,903 $ - - 367 3,431) ( 33,839 $		Unrealised gains (losses) on valuation Total 117,459) ($ 80,556) ($ 6,818) ( 6,818) ( 39,008) ( 39,008) ( - 367 - 3,431) ( 163,285) ($ 129,446) ($ 2021
			Currencytranslation

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A. Disaggregation of revenue from contracts with customers

The Company derives revenue as follows:

==> picture [456 x 386] intentionally omitted <==

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

Revenue recognised Revenue recognised
2022 at a point in time over time Total
Total segment revenue
Taiwan $ 55,324 $ - $ 55,324
-
Germany 610,616 610,616
USA 434,302 1,019 435,321
China 608,587 - 608,587
Brazil 59,041 - 59,041
-
Japan 32,016 32,016
Others 417,919 1,554 419,473
Inter-segment revenue ( 520,641) - ( 520,641)
Revenue from external
customer contracts $ 1,697,164 $ 2,573 $ 1,699,737
Revenue recognised Revenue recognised
2021 at a point in time over time Total
Total segment revenue
Taiwan $ 43,473 $ - $ 43,473
-
Germany 191,114 191,114
USA 363,163 552 363,715
China 427,758 25,752 453,510
Brazil 41,372 - 41,372
-
Japan 31,552 31,552
Others 285,156 413 285,569
Inter-segment revenue ( 409,740) - ( 409,740)
Revenue from external
customer contracts $ 973,848 $ 26,717 $ 1,000,565
----- End of picture text -----

B. Contract assets and liabilities

• (a) The Company has recognised the following revenue-related contract liabilities:

(b) Revenue recognised that was included in the contract liability balance at the beginning of the year December 31, 2022 December31,2021 January1,2021 Contract liabilities 31,535 $ 3,071 $ 15,656 $	December 31, 2022	December31,2021	January1,2021

year
Revenue recognised that was included in the contract liability balance at the beginning of the year		Year ended December 31, 2022	Year ended December 31, 2021
		2,285 $	12,870 $

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(18) Interest income

Interest income：

Interest income from bank deposits Interest income from financial assets measured at amortised cost

Year ended December 31,2022 125 $ 76 201 $	Year ended December 31,2021
	26 $ 57
	83 $

(19) Other income

Other income, others

Year	ended December	Year	ended December
	31, 2022		31, 2021
$	6,310	$	836

(20) Other gains and losses

Income from subleasing right-of-use assets Net foreign currency exchange (loss) gain Gains on disposals of intangible assets Miscellaneous disbursements Total

	Year	ended December	Year ended December
		31,2022	31, 2021
	$	503	503 $
(		45,079)	8,199
		75,358	72,099
(		2,586)	2,262) (
	$	28,196	78,539 $

(21) Finance costs

Bank borrowings Other borrowings Lease liabilities Total

Year ended December 31, 2022		Year ended December 31,2021
5,188 $ 1,575 2,923 9,686 $		2,627 $ - 3,007 5,634 $

(22) Expenses by nature

Employee benefit expense Depreciation expense Amortisation expense Total

Year ended December 31,2022		Year ended December 31,2021
424,145 $ 21,038 3,706 448,889 $		413,400 $ 20,114 4,869 438,383 $

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(23) Employee benefit expense

Year ended December 31,2022 Wages and salaries 343,316 $ Share-based payments 15,600 Labour and health insurance fees 31,745 Pension costs 18,249 Other personnel expenses 15,235 Total 424,145 $	Year ended December 31,2021
	343,300 $ 5,795 31,328 18,344 14,633 413,400 $

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 6% for employees’ compensation and shall not be higher than 2% for directors’ remuneration. If the Company has accumulated losses, profit should be reserved to cover losses first.

• Whether the aforementioned employees’ compensation shall be distributed in the form of shares or in cash shall be resolved by the Board of Directors with a majority vote at its meeting attended by two-thirds of the total number of directors and reported to the shareholders’ meeting. In addition, the Articles of Incorporation shall specify the employees that are entitled to receive the aforementioned shares or cash, including the employees of subsidiaries who meet specific requirements.

• B. For the years ended December 31, 2022 and 2021, the Company did not accrue employees’ compensation and directors’ remuneration as it had accumulated deficit.

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

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(24) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
Current tax: Current tax on profits for the year Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Effect from tax losses Total deferred tax Income tax expense		Year ended December 31,2022		Year ended December 31,2021
		- $ 2,008 2,008 - $ - - 2,008 $		- $ 1,175 1,175 - $ - - 1,175 $

(b). Reconciliation between income tax expense and accounting profit

Tax calculated based on profit before tax and statutory tax rate Effect from items disallowed by the regulation Prior year income tax underestimation Temporary difference not recognised as deferred tax assets Taxable loss not recognised as deferred tax assets Income tax expense	Year ended December 31,2022 Year ended December 31, 2021 6,078) ($ 24,950) ($ 5,337) ( 2,074) ( 2,008 1,175 29 2,678) ( 11,386 29,702 2,008 $ 1,175 $

(c) The income tax (charge)/credit relating to components of other comprehensive income: None.

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• B. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses: None.

• C. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

December 31, 2022

Year incurred		Amount assessed / filed		Unused amount		Unrecognised deferred tax assets	Expiry year
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 46,480 95,679 56,931 1,753,212 $		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 46,480 95,679 56,931 1,753,212 $		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 46,480 95,679 56,931 1,753,212 $	2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

December 31, 2021

Year incurred		Amount assessed / filed		Unused amount		Unrecognised deferred tax assets	Expiry year
2013 2014 2015 2016 2017 2018 2019 2020 2021		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 393,599 148,511 2,096,232 $		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 393,599 148,511 2,096,232 $		196,668 $ 199,011 76,074 248,588 411,043 360,210 62,528 393,599 148,511 2,096,232 $	2023 2024 2025 2026 2027 2028 2029 2030 2031

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

as follows:
Deductible temporary differences	December31,2022 154,021 $	December31,2021
		171,798 $

• E. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

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(25) Loss per share

• A. Employee stock options for the years ended December 31, 2022 and 2021 had no dilutive effect and were not included in the calculation.

• B. Weighted average number of treasury shares outstanding had been deducted from weighted average number of ordinary shares outstanding for the years ended December 31, 2022 and 2021.

(26)

Supplemental cash flow information Investing activities with partial cash payments Weighted average number of ordinary shares outstanding Losses per share Amount aftertax (share in thousands) (in dollars) Basic and diluted losses per share Loss attributable to ordinary shareholders of the parent 32,399) ($ 192,806 0.17) ($ YearendedDecember31,2022 Weighted average number of ordinary shares outstanding Losses per share Amount aftertax (shareinthousands) (in dollars) Basic and diluted losses per share Loss attributable to ordinary shareholders of the parent 125,928) ($ 182,426 0.69) ($ Year ended December 31, 2021 Year ended December 31,2022 Year ended December 31,2021 Purchase of property, plant and equipment 13,862 $ 6,999 $ Add: Opening balance of payable on equipment 301 960 Less: Ending balance of payable on equipment 922) ( 301) ( Cash paid during the year 13,241 $ 7,658 $

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(27) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Payment of lease principal Interest expense Interest paid Changes in other non-cash items At December 31	Short-term borrowings 100,000 $ 90,141 - - - - 190,141 $	Long-term borrowings (including currentportion) 20,000 $ 94,405 - - - - 114,405 $	Short-term notes and billspayable Lease liabilities 2022	Short-term notes and billspayable Lease liabilities 2022	Guarantee deposits received Liabilities from financing activities-gross 22 $ 268,432 $ - 209,546 - 4,833) ( - 2,923 - 2,923) ( - 416 22 $ 473,561 $	Guarantee deposits received Liabilities from financing activities-gross 22 $ 268,432 $ - 209,546 - 4,833) ( - 2,923 - 2,923) ( - 416 22 $ 473,561 $
			- $ 25,000 - - - - 25,000 $	148,410 $ - 4,833) ( 2,923 2,923) ( 416 143,993 $
						473,561 $

At January 1 Changes in cash flow from financing activities Payment of lease principal Interest expense Interest paid Changes in other non-cash items At December 31		2021
	Short-term borrowings	Long-term borrowings (including current portion) Lease liabilities	Guarantee deposits received Liabilities from financing activities-gross
	135,094 $ 35,094) ( - - - - 100,000 $	- $ 152,577 $ 20,000 - - 4,596) ( - 3,007 - 3,007) ( - 429 20,000 $ 148,410 $	19 $ 287,690 $ 3 15,091) ( - 4,596) ( - 3,007 - 3,007) ( - 429 22 $ 268,432 $
				268,432 $

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of related partiespartiesarties

Names of related partiespartiesarties Relationship with the Company A subsidiary which has 100% of shares Quantum Investment Co., Ltd. directly owned by the Company A subsidiary which has 100% of shares Avision Development Inc. directly owned by the Company A subsidiary which has 100% of shares Avision International Inc. directly owned by the Company A subsidiary which has 99% of shares directly Avision Brasil Ltda. owned by the Company Avision Digital Office Equipment (Shanghai) A subsidiary which has 100% of shares Trading Co., Ltd. indirectly owned by the Company A subsidiary which has 100% of shares Avision (Suzhou) Co., Ltd. indirectly owned by the Company A subsidiary which has 100% of shares Avision Europe GmbH indirectly owned by the Company A subsidiary which has 100% of shares Yichun Avision Co., Ltd. indirectly owned by the Company A subsidiary which has 96.39% of shares Avision Labs, Inc. indirectly owned by the Company Suzhou Hongxin Microelectronics Technology Co., A subsidiary which has 79% of shares Ltd. indirectly owned by the Company SHENG,SHAO-LAN Chairman of the company

(2) Significant related party transactions

A. Operating revenue:

nificant related party transactions Operating revenue:
Avision Europe GmbH Subsidiaries	Year ended December 31,2022 610,616 $ 34,619 645,235 $	Year ended December 31,2021
		191,055 $ 52,388
		243,443 $

Goods are sold based on the normal commercial terms and conditions that would be available to third parties.

B. Purchases:

third parties. Purchases:
Avision (Suzhou) Co., Ltd.	Year ended December 31,2022 541,592 $	Year ended December 31,2021
		383,848 $

Goods are purchased from subsidiaries based on the normal commercial terms and conditions.

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C. Accounts receivable

Accounts receivable
		December31,2022		December31,2021
Avision Europe GmbH	$	339,595	$	87,700
Subsidiaries		6,334		20,563
	$	345,929	$	108,263

The receivables from related parties arise mainly from sale transactions and the terms of sales transactions are 60 ~ 90 days after monthly billings. The receivables bear no interest.

• D. Accounts payable

Accounts payable
Avision (Suzhou) Co., Ltd.	December31,2022 896,674 $	December31,2021
		769,483 $

The payables to related parties arise mainly from purchase transactions and are due 90 days after the date of purchase. The payables bear no interest.

• E. Other receivables

==> picture [472 x 67] intentionally omitted <==

• F. Other payables

receivables for freight fees on behalf of Other payables	others.
Avision (Suzhou) Co., Ltd. Avision Labs, Inc.	December31,2022 85 $ 11,180 11,265 $	December31,2021
		2,584 $ 7,741
		10,325 $

Other payables mainly consist of payables on payments on behalf of others, payables on service fees and rent payables.

• G. Property transactions:

Disposal of assets

For the year ended December 31, 2022: No disposal of asset transactions.

Year ended December 31, 2021 Accounts Proceeds Gains (Note) Intangible assets or Avision (Suzhou) Co., Ltd. research and development $ 133,269 $ 133,269 expenses

Note: It includes the unrealised gain amounting to $125,143.

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H. Loans from related parties:

Year ended December 31, 2022

For year ended December 31,2021: None. ans to /from related parties: a) Other receivables Ending balance Amount Contractperiod SHENG,SHAO-LAN - $ 19,500 $ 2022.1.26 ~ 2023.1.26 December 31, 2022 Subsidiaries - $ $	Rate Interest expense 2.10% 168 $ December 31, 2021 194

I. Loans to /from related parties:

• (a) Other receivables

• (b) The Company transfers accounts receivable due from related parties that are over a certain period of the normal credit period to other receivables. The ageing distribution is as follows

Subsidiaries	Ageingdistribution 120 to 180 days Over 180 days	December 31, 2022 December31,2021 - $ 194 $ - - - $ 194 $ Past due amount	December 31, 2022 December31,2021 - $ 194 $ - - - $ 194 $ Past due amount
			194 $ -
			194 $

The collection terms of the Company’s credit to Avision Brasil Ltda. are individually determined at the time of shipment (approximately 60 days after monthly billings). As of December 31, 2022 and 2021, the balance of accounts receivable amounted to $5,847 and $3,571, respectively, of which accounts receivables that were past due over 120 days were $0 and $194, respectively, which were reclassified to other receivables - related parties.

J. Other expenses

Other expenses
Avision Labs, Inc. Avision (Suzhou) Co., Ltd.	Year ended December31,2022 29,610 $ 710 30,320 $	Year ended December31,2021
		20,023 $ 2,815
		22,838 $

Other expenses mainly state payments on service fees and rent.

(3) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Share-based payments	Year ended December31,2022	Year ended December31,2022	Year ended December31,2021	Year ended December31,2021
		11,117 $ 684 1,002 12,803 $		11,480 $ - 476 11,956 $

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8. Pledged Assets

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

==> picture [492 x 175] intentionally omitted <==

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

Book value
Pledged asset December 31, 2022 December 31, 2021 Purpose
Time deposits
Performance guarantee
(shown as “current financial
for land lease
assets at amortised cost) $ 7,000 $ 7,000
Other long-term
Inventory
-
34,896 borrowings
Property, plant and Short-term borrowings
equipment 217,250 225,335 and credit line
Guarantee deposits paid 8,578 994 Performance guarantee
$ 267,724 $ 233,329
----- End of picture text -----

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

None.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

On March 23, 2023, the Board of Directors resolved to increase its capital through private placement

by issuing 20 million shares, which is yet to be resolved by the shareholders.

12. Others

(1) Countermeasures to improve operating and financial condition

The Company incurred losses of NT$32,399 thousand for the year ended December 31, 2022. As of December 31, 2022, the accumulated deficit balance amounted to NT$924,847 thousand. However, due to the deficit in recent years, the Company intends to implement the following measures to improve the Company’s operations and financial condition ：

• A. Actively developing business

Under the technical support of our existing products, the Company actively developed new customers and product cooperation projects and will endeavour to continually increase our shipments in the future, in order to bring growth momentum to our future operations.

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B. Adjust operation strategies

• Optimize the purchasing and producing process, calculate the minimum production volumes to reduce excessive raw material purchases through integrating orders for the same products, actively closeout inventory and increase inventory turnover.

• C. Capital financing plan

• (a) The Company has been maintaining good credit relationships with correspondent banks and based on the history record and experience, the Company will actively apply for renewal of existing financing limit from financial institutions. Additionally, the Company pledged the property as collateral to obtain new financing limits in order to make the capital movement flexibly.

• (b) Obtained financing limits from non-financial institutions through negotiating to increase the space for capital movement.

• (c) On March 23, 2023, the Board of Directors resolved to issue ordinary shares to raise the capital.

• D. Assets revitalization

The Company makes more effective utilization (including the possibility of leasing or selling) of the Company’s existing tangible assets, such as, land, factories and premises (including three plants in Hsinchu and Suzhou). Additionally, the Company negotiated for selling patent-related intellectual property rights and other intangible assets or collecting royalties from the aforementioned intangible assets. For the reinvestment, the Company is also actively seeking for counterparties to dispose of its shareholdings in order to obtain cash inflows. The Company has disposed part of financial assets at fair value through other comprehensive income to obtain cash inflows.

The Company assesses that the implementation of the above countermeasures will effectively improve its operations and financial condition and that there is no significant uncertainty regarding events or circumstances that may cause significant doubt on the Company’s ability to continue as a going concern.

(2) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. During the year ended December 31, 2022, the Company’s strategy, which was unchanged from 2021, was to maintain the gearing ratio within 50%.

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(3) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
December31,2022 Financial assets Financial assets at fair value through other comprehensive income 20,831 $ Financial assets at amortised cost Cash and cash equivalents 274,169 Notes receivable 2 Accounts receivable (including related parties) 587,128 Other receivables (including related parties) 27,411 Guarantee deposits paid 8,578 Other financial assets 7,000 925,119 $ Financial liabilities Financial liabilities at amortised cost Short-term borrowings 190,141 $ Short-term notes and bills payable 25,000 Long-term borrowings ( including current portion ) 114,405 Accounts payable (including related parties) 939,382 Other accounts payable (including related parties) 107,833 Guarantee deposits received 22 1,376,783 $ Lease liability 143,993 $	December31,2021
		26,511 $ 38,917 4 311,035 23,293 994 7,000 407,754 $ 100,000 $ - 20,000 850,152 116,465 22 1,086,639 $ 148,410 $

B. Financial risk management policies

• (a) The Company’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.

(b) Risk management is carried out by a central treasury department (the Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Exchange rate risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from various currency, primarily with respect to the USD. Foreign exchange risk arises from

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future commercial transactions and recognised assets, liabilities and net investments in foreign operations.

• ii. Management has set up a policy to require companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Company treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

• iii. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows ：

exchange rate fluctuations is as follows：
(Foreign currency: functional currency) Financial assets Monetary items USD: NTD EUR: NTD JPY: NTD RMB: NTD Non-monetary items Investments accounted for under equity method USD: NTD Financial assets at fair value through other comprehensive income USD: NTD Financial liabilities Monetary items USD: NTD	Foreign currency amount (In thousands) Exchange rate Book value (in thousands of New Taiwan Dollars) 23,645 $ 30.710 726,138 $ 1,277 32.720 41,783 820 0.2324 191 153 4.4080 674 34,475 $ 30.710 1,058,712 $ 338 30.710 10,378 31,884 $ 30.710 979,158 $ December31,2022
	Foreign currency amount (In thousands)	Exchange rate
	23,645 $ 1,277 820 153 34,475 $ 338 31,884 $	30.710 32.720 0.2324 4.4080 30.710 30.710 30.710	726,138 $ 41,783 191 674 1,058,712 $ 10,378 979,158 $

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(Foreign currency: functional currency) Financial assets Monetary items USD: NTD EUR: NTD JPY: NTD RMB: NTD Non-monetary items Investments accounted for under equity method USD: NTD Financial assets at fair value through other comprehensive income USD: NTD Financial liabilities Monetary items USD: NTD		Foreign currency amount (In thousands) Exchange rate Book value (in thousands of New Taiwan Dollars) 13,495 $ 27.680 373,542 $ 219 31.320 6,859 2,259 0.2405 543 6,762 4.3440 29,374 36,764 $ 27.680 1,017,634 $ 464 27.680 12,849 31,469 $ 27.680 871,062 $ December31,2022	Foreign currency amount (In thousands) Exchange rate Book value (in thousands of New Taiwan Dollars) 13,495 $ 27.680 373,542 $ 219 31.320 6,859 2,259 0.2405 543 6,762 4.3440 29,374 36,764 $ 27.680 1,017,634 $ 464 27.680 12,849 31,469 $ 27.680 871,062 $ December31,2022	Foreign currency amount (In thousands) Exchange rate Book value (in thousands of New Taiwan Dollars) 13,495 $ 27.680 373,542 $ 219 31.320 6,859 2,259 0.2405 543 6,762 4.3440 29,374 36,764 $ 27.680 1,017,634 $ 464 27.680 12,849 31,469 $ 27.680 871,062 $ December31,2022
		Foreign currency amount (In thousands)	Exchange rate
		13,495 $ 219 2,259 6,762 36,764 $ 464 31,469 $	27.680 31.320 0.2405 4.3440 27.680 27.680 27.680	373,542 $ 6,859 543 29,374 1,017,634 $ 12,849 871,062 $

iv. The total exchange gain and (loss), including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2022 and 2021, amounted to ($45,079) and $8,199, respectively.

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• v. Analysis of foreign currency market risk arising from significant foreign exchange variation ：

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

Year ended December 31, 2022
Sensitivity analysis
Effect on other
Degree of Effect on comprehensive
variation profit or loss income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD: NTD 1% $ 7,261 $ -
EUR: NTD 1% 418 -
JPY: NTD 1% 2 -
RMB: NTD 1% 7 -
Non-monetary items
Investments accounted for under
equity method
USD: NTD 1% $ - $ 10,587
Financial assets at fair value
through other comprehensive
income
USD: NTD 1% $ - $ 104
Financial liabilities
Monetary items
USD: NTD 1% ($ 9,792) $ -
----- End of picture text -----

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

Year ended December 31, 2022
Sensitivity analysis
Effect on other
Degree of Effect on comprehensive
variation profit or loss income
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD: NTD 1% $ 3,735 $ -
EUR: NTD 1% 69 -
JPY: NTD 1% 5 -
RMB: NTD 1% 294 -
Non-monetary items
Investments accounted for under
equity method
USD: NTD 1% $ - $ 10,176
Financial assets at fair value
through other comprehensive
income
USD: NTD 1% $ - $ 128
Financial liabilities
Monetary items
USD: NTD 1% ($ 8,711) $ -
----- End of picture text -----

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, other components of equity would have increased/decreased by $2,011 and $2,651, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk

• i. The Company’s main interest rate risk arises from borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 2022 and 2021, the Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars and US Dollars.

• ii. The Company’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• iii. If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, profit, net of tax for the years ended December 31, 2022 and 2021 would have increased/decreased by $1,800 and $960, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable, other receivables and guarantee deposits paid based on the agreed terms, and the contract cash flows of bank deposits.

• ii. The Company manages their credit risk taking into consideration the entire Company’s concern. According to the Company’s credit policy, the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. In line with credit risk management procedure, when the counterparty’s contract payments are past due over 365 days, the default has occurred.

• iv. The Company adopts the assumptions under IFRS 9, 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.

• v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii) Default or delinquency in interest or principal repayments;

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• (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

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

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

• viii. The Company used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable (including related parties). On December 31, 2022 and 2021, the provision matrix is as follows:

At December 31, 2022 Not past due Up to 30 days 31~90 days 91~180 days 180~270 days 271~360 days Over 360 days At December 31, 2021 Not past due Up to 30 days 31~90 days 91~180 days 180~270 days 271~360 days Over 360 days	Expected loss rate		Total book value		Loss allowance
	0.09% 3.62% 3.62% 4.14% 84.38% - 100.00% Expected loss rate		301,785 $ 215,956 49,896 23,891 41,539 - 522 633,589 $ Total book value		275 $ 7,818 1,806 990 35,050 - 522 46,461 $ Loss allowance
	0.10% 5.35% 5.35% 8.87% 27.12% 62.26% 100.00%		201,615 $ 52,413 53,373 9,632 907 159 2,827 320,926 $		202 $ 2,805 2,858 854 246 99 2,827 9,891 $

• ix. Movements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are as follows:
			2022
			Accountsreceivable
At January 1		$	9,891
Amount written off due to irrecoverability	(		1,244)
Provision for impairment			37,814
At December 31		$	46,461

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			2022
			Accounts receivable
At January 1		$	10,481
Reversal of impairment loss	(		590)
At December 31		$	9,891

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’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 Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

ii.The Company has the following undrawn borrowing facilities:

NTD	December31,2022 52,859 $	December31,2021
	$	130,000 $

• iii. The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

contractual undiscounted cash flows. Non-derivative financial liabilities
December 31,2022 Short-term borrowings Long-term borrowings (including current portion) Accounts payable (including related parties) Other payables (including related parties) Lease liability	Less than 1 year	Between 1 and 5years	Over 5years
	190,141 $ 54,886 939,382 107,833 7,011	- $ 59,519 - - 27,295	- $ - - - 153,036

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Non-derivative financial liabilities

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

Less than 1 Between 1
December 31, 2021 year and 5 years Over 5 years
----- End of picture text -----

Short-term borrowings	$	100,000	$	-	$	-
Long-term borrowings		2,963		17,037		-
(including current portion)
Accounts payable		850,152		-		-
(including related parties)
Other payables		116,465		-		-
(including related parties)
Lease liability		7,728		27,190		159,763

(4) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of 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. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks, beneficiary certificate 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. Other than those equity investments without active market whose fair value are included in level 2, the fair value of equity investments without active market are included in Level 3.

• B. The carrying amounts of cash, notes receivable, accounts receivable, other receivables, long-term and short-term borrowings, notes payable, accounts payable and other payables are approximate to their fair values.

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2022 and 2021 are as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

December31,2022 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities	Level 1 - $	Level 2 - $	Level3 20,831 $	Total
				20,831 $

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December 31, 2021 Level 1 Level 2 Level 3 Total

Assets

==> picture [428 x 63] intentionally omitted <==

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

• i. 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 balance sheet date.

• ii. When assessing non-standard and low-complexity financial instruments, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• 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 Company’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 and etc. In accordance with the Company’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.

• D. The following chart is the movement of Level 3 for the years ended December 31, 2022 and 2021:

At January 1,2022 Acquire for the year Losses recognised in other comprehensive income At December 31,2022 At January 1,2021 Disposals for the year Losses recognised in other comprehensive income At December 31,2021	Equityinstrument
	26,511 $ 1,138 6,818) ( 20,831 $ Equityinstrument
	76,364 $ 6,647) ( 43,206) ( 26,511 $

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• E. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

• F. For the years ended December 31, 2022 and 2021, there was no transfer into or out from Level 3.

• G. Treasury 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 frequently calibrating valuation model and updating inputs used to the valuation model and making any other necessary adjustments to the fair value

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

==> picture [457 x 45] intentionally omitted <==

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

Fair value at
December 31, Valuation Significant Relationship of
2022 technique unobservable input Range inputs to fair value
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	Fair value at December 31, 2022	Valuation technique	Significant unobservable input	Range	Relationship of inputs to fair value
Equity instrument: Unlisted shares Equity instrument: Unlisted shares	20,831 $ Fair value at December 31, 2021	Market comparable companies Valuation technique	Price to book ratio multiple Discount for lack of marketability Significant unobservable input	1.41~3.63 20%~40% Range	The higher the multiple, the higher the fair value; The higher the discount for lack of marketability,the lower the fair value. Relationship of inputs to fair value
	26,511 $	Market comparable companies	Price to book ratio multiple Discount for lack of marketability	1.49~6.08 20%~40%	The higher the multiple, the higher the fair value; The higher the discount for lack of marketability,the lower the fair value.

~68~

• I. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

have changed:
Financial assets Equity instrument Financial assets Equity instrument	Input Change Multipliers and discounts ±1 Input Change Multipliers and discounts ±1	Favourable change Unfavourable change $- $- December Recognised in profit or loss December			31,2022 Recognised in other comprehensive income
					Favourable change	Unfavourable change
		$-	$-		$282 31,2021	($282)
		Recognised in profit or loss			Recognised in other comprehensive income
		Favourable change	Unfavourable change		Favourable change	Unfavourable change
		$-	$ -		$ 358	($ 358)

• ’

• (5) Details of the impact of the Covid 19 pandemic to the Company s operations in 2022

• With the gradual recovery of global business activities in 2022, the number of customer orders also gradually increased. As of December 31, 2022, the Covid-19 pandemic had no significant impact on the Company’s going concern, impairment of assets and financing risks under the Company’s assessment. The Company will continue to track the development of the pandemic so that the Company can timely adjust the operational strategies in response.

13. Supplementary Disclosures

(1) Significant transactions information

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

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

• 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.

~69~

• 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 3.

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

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

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 8.

(4) Major shareholders information

Major shareholders information: Please refer to table 9.

14. Segment Information

Not applicable.

~70~

AVISION INC. And Subsidiaries

Loans to others Year ended December 31, 2022

Year ended December 31, 2022
Maximum outstanding balance during the year ended December 31, 2022 Balance at December 31,2022 Actual amount drawn down No. (Note 1) Creditor Borrower General ledger account Is a related party Table 1 Interest rate Nature of loan (Note 2) Amount of transactions with the borrower Reason for short-term financing Allowance for doubtful accounts	Collateral	Expressed in thousands of NTD (Except as otherwise indicated) Limit on loans granted to a single party (Note 7) Celling on total loans granted (Note 3) Footnote
	Item Value
1 AVISION INC. Avision Europe GMBH Other receivables - related parties Yes 4,938 $ - $ - $ 2.867% 1 187,896 $ - - $ 0 AVISION INC. Avision Brasil Ltda. Other receivables - related parties Yes 445 $ - $ - $ 2.867% 1 3,546 $ - -	None - $ None - $	598,577 $ 9,147 $	116,930 $ 116,930 $

Note 1: The Company is ‘0’, and the subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the nature of the loan as follows:

• A. Fill in 1 for business transactions.

B. Fill in 2 for short-term financing.

Note3: For the companies having business relationship with the Company, ceiling on total loans granted is 10% of the Company’s net assets; financial limit on loans granted to a single party is the higher value of business transactions amount during current year on the year of financing. For companies having short-term loans, celling on total loans is 20% of the Company’s net assets, and celling on loans to a single party with short-term financing is 10% of the Company’s net assets.

Table 1, page 1

AVISION INC. And Subsidiaries

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

Year ended December 31, 2022

Securities held by Table 2	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2022	As of December 31,2022	Fair value Footnote (Except as otherwise indicated) Expressed in thousands of NTD	Fair value Footnote (Except as otherwise indicated) Expressed in thousands of NTD
				Number of shares	Book value(Note)	Ownership (%)	Fair value
AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. Quantum Investment Co.,Ltd. Quantum Investment Co.,Ltd. Sunglow International Inc. Avision (Suzhou) Co., Ltd.	Stocks of OTO PHOTONICS INC. Stocks of AETAS Technology Inc. Stocks of PROTECTLIFE INTERNATIONAL BIOMEDICAL INC. Stcoks of WIN CO E-TECHNOLOGY CORP. JimTec Group Holding Inc. Capsovision Inc. SOLIDLITE CORPORATION AVISION INC. Henan Centrix Technology Co.,Ltd. Yichun Yilian Print Tech Co., Ltd.	None None None None None None None The parent company None None	Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income	1,046,243 shares of ordinary shares. 250,000 shares of ordinary shares. 323,400 shares of ordinary shares. 390,950 shares of ordinary shares. 50,000 shares of ordinary shares. 1,269,566 shares of preference shares. 1,256,000 shares of ordinary shares. 195,879 shares of ordinary shares. Cash of USD 281,320 Cash of CNY 30,000,000	4,662 $ - 699 5,092 4,270 6,108 7,997 2,184 - 68,378	3.13 0.56 2.72 19.35 1.00 1.10 5.72 0.09 15.00 9.54	4,662 $ - 699 5,092 4,270 6,108 7,997 2,184 - 68,378

Note: Fill in the amount after adjusted at fair value for the marketable securities measured at fair value.

Table 2, page 1

AVISION INC. 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, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to thirdpartytransactions	Differences in transaction terms compared to thirdpartytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
AVISION INC. AVISION INC. Avision (Suzhou) Co., Ltd.	Avision (Suzhou) Co., Ltd. Avision Europe GMbH Avision Digital Office Equipment (Shanghai) Trading Co., Ltd.	The company's subsidiary The company's subsidiary Affiliate	Purchases Sales Sales	541,592 $ 610,616) ( 291,280) (	54 36 13) (	45 days after monthly billings 90 days after monthly billings 90 days after monthly billings	Not applicable Not applicable Not applicable	Not applicable Not applicable Not applicable	896,674) ($ 339,595 43,373	90) ( 44 6

Table 3, page 1

AVISION INC. And Subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2022

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2022	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
Avision (Suzhou) Co., Ltd. AVISION INC.	AVISION INC. Avision Europe GMbH	The ultimate parent company The company's subsidiary	896,674 $ 339,595	0.65 2.86	- $ -	Not applicable Not applicable	261,391 $ 110,188	- $ -

Note: The Group's capital is used in an overall coordinated plan, and the net inter-company accounts receivable and accounts payable will be reserved first, and then remaining funds are remitted according to each company's capital requirement plan.

Table 4, page 1

AVISION INC. And Subsidiaries

Significant inter-company transactions during the reporting periods

Year ended December 31, 2022 Table 5

Expressed in thousands of NTD

(Except as otherwise indicated) Transaction

						Transaction
Number(Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 0 0 0 0 0 0 0 0 1 1	AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. AVISION INC. Avision (Suzhou) Co., Ltd. Avision (Suzhou) Co., Ltd.	Avision (Suzhou) Co., Ltd. Avision (Suzhou) Co., Ltd. Avision (Suzhou) Co., Ltd. Avision Digital Office Equipment (Shanghai) Trading Co., Ltd. Avision Labs, Inc. Avision Labs, Inc. Avision Labs, Inc. Avision Europe GMbH Avision Europe GMbH Avision Digital Office Equipment (Shanghai) Trading Co., Ltd. Avision Digital Office Equipment (Shanghai) Trading Co., Ltd.	1 1 1 1 1 1 1 1 1 3 3	Purchases Accounts payable Sales Sales Other expenses Sales Accounts payable Sales Accounts receivable Sales Accounts receivable	541,592 $ 896,674 594,098 14,489 29,610 10,983 11,180 610,616 339,595 291,280 43,373	Based on the price lists in force and terms Payment terms for 45 days after monthly billings Based on the price lists in force and terms Based on the price lists in force and terms Based on the price lists in force and terms Based on the price lists in force and terms Based on the price lists in force and terms Based on the price lists in force and terms Collection term for 90 days after the transation Based on the price lists in force and terms Payment terms for 60 days after monthly billings	0.19 0.30 0.21 0.01 0.01 0.00 0.00 0.22 0.12 0.10 0.01

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: for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction:

(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: Disclosing only the amount exceeded NT$10 million of transactions, and then the corresponding related party transactions are not disclosed separately.

Table 5, page 1

AVISION INC. And Subsidiaries

Information on investees (not including investees in Mainland China)

Year ended December 31, 2022 Table 6

Table 6 Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as at December 31,2022			Net profit (loss) of the investee for the year ended December 31, 2022	Expressed in thousands of NTD (Except as otherwise indicated) Investment income(loss) recognised by the Company for the year ended December 31, 2022 Note
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares Ownership (%)		Book value
AVISION INC. AVISION INC. AVISION INC. AVISION INC. Avision International Inc. Quantum Investment Co.,Ltd. Avision Development Inc. Sunglow International Inc.	Avision International Inc. Avision Development Inc. Avision Brasil Ltda. Quantum Investment Co.,Ltd. Fortune Investments Ltd. Avision Europe GmbH Sunglow International Inc. Avision Labs, Inc.	Samoa Samoa Brazil Taiwan Samoa Germany Samoa United States	Investment Investment Maintenance of scanners and multifunction printers Investment Investment Maintenance service of scanners Investment Sales and maintenance service of scanners	1,067,810 $ 287,794 49,822 1,000 1,098,614 2,379 287,794 48,694	1,067,810 $ 287,794 49,822 1,000 1,098,614 2,379 287,794 48,694	38,546,389 8,390,475 - 100,000 39,498,705 - 8,390,475 800,000	100.00 100.00 99.00 100.00 100.00 100.00 100.00 96.39	1,042,792 $ 15,920 11,033 34,303 1,354,920 40,098 17,460 17,448	9,230) ($ 9,294 1,891 26,688 9,230) ( 27,187 9,294 9,642	9,230) ($ 9,294 1,872 26,688 9,230) ( 27,187 9,294 9,294	Subsidiary Subsidiary Subsidiary Subsidiary Second-tier subsidiary Investee companies of the Company’s subsidiary Second-tier subsidiary Investee companies of the Company’s second-tier subsidiary

Table 6, page 1

AVISION INC. And Subsidiaries Information on investments in Mainland China Year ended December 31, 2022 Table 7

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 January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income of investee as of December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2022	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31,2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Avision (Suzhou) Co., Ltd. Avision Digital Office Equipment (Shanghai) Trading Co., Ltd. Henan Centrix Technology Co., Ltd. Yichun Avision Co., Ltd. Suzhou Hongxin Microelectronics Technology Co., Ltd. Companyname	Scanners and multifunction printers International Trade Discs for laser reading system and international trade Scanners and multifunction printers Research and development and sales of wafers Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022(Note 3)	1,352,791 $ 6,943 63,727 15,608 69,988 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) (Note 3)	2 2 2 3 3 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	1,352,791 $ 6,943 9,559 - -	$ - - - - -	$ - - - - -	1,352,791 $ 6,943 9,559 - -	30,905) ($ 19,875 - 168) ( 21,735) (	100 100 15 100 79	30,905) ($ 19,875 - 168) ( 17,170) (	1,229,418 $ 141,552 - 2,183 47,038	205,688 $ 54,950 - - -	Note 2 Note 2 Note 4 Note 4
AVISION INC.	$ 1,240,878	$ 1,296,195	$ 701,580

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 an existing company in the third area, Avision International Inc.and Fortune Investments Ltd., which then invested in the Avision (Suzhou) Co., Ltd. and Avision Digital Office Equipment (Shanghai) Trading Co., Ltd. in Mainland China. Through investing in an existing company in the third area, Avision Development Inc.and Sunglow International Inc., which then invested in the Henan Centrix Technology Co.,Ltd. in Mainland China. (3) Others

Note 2: Investment income (loss) recognised by the Company was based on the financial statements of the investee that were audited by R.O.C. parent company’s independent accountants. Note 3: At the end of this period, the investment amount transmitted from Taiwan to mainland China was US$41,634 thousand counted with original currency. The investment amount permitted by the Investment Commission of Ministry of Economic Affairs (MOEA) was US$43,490 thousand counted with original currency, of which US$1,135 thousand was capital increase through capitalisation of earnings, and did not include in the limit of the Investment Commission of Ministry of Economic Affairs (MOEA). Note 4: It was pertained to the investment in the investee in Mainland China through Avision (Suzhou) Co., Ltd. There was no amount remitted to Mainland China during the year.

Table 7, page 1

AVISION INC. And Subsidiaries

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

Year ended December 31, 2022

Table 8

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable(payable)	Accounts receivable(payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing		Others
	Amount	%	Amount	%	Balance at December 31, 2022	%	Balance at December 31, 2022	Purpose	~~Maximum~~ balance during the year ended December 31,2022	Balance at December 31,2022	Interest rate	Interest during the year ended December 31, 2022
Avision (Suzhou) Co., Ltd. Avision (Suzhou) Co., Ltd. Avision Digital Office Equipment (Shanghai) Trading Co., Ltd.	($ 1,135,691) 594,098 14,489	75 27 1	$ - - -	- - -	($ 953,584) 56,910 40	91 7 -	$ - - -	- - -	$ - - -	$ - - -	- - -	$ - - -	None None None

Table 8, page 1

AVISION INC. And Subsidiaries Major shareholders information December 31, 2022

Table 9

Name of major shareholders	Shares	Shares
	Name of shares held	Ownership (%)
LUO,SIOU-CHUN SHENG,SHAO-LAN “Avision Inc. trust, hope and love” fund account of the charitable trust in Bank SinoPac TAIWAN MASK CORPORATION	21,370,178 14,117,300 10,325,886 10,000,000	11.05 7.00 5.34 5.17

Table 9, page 1

AVISION INC. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2022

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

Statement 1

Item Description Cash on hand and petty cash Bank deposits Checking accounts Demand deposits - NTD - Foreign currency USD 804 thousand conversion rate 30.710 EUR 1,271 thousand conversion rate 32.720 JPY 557 thousand conversion rate 0.2324 CNY 128 thousand conversion rate 4.408		Amount
		649 $ 10 206,524 24,690 41,603 129 564 274,169 $

Statement 1,Page1

AVISION INC. STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2022

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

Statement 2 Client Name Amount General customers Visioneer Inc. 151,315 $ Starfish 38,503 INFOACER CORPORATION 20,593 SUN ELECTRONICS LTD. 20,104 MICROSENS 18,399 Others 38,746 287,660 Less: Allowance for uncollectible accounts 46,461) ( 241,199 Related parties Avision Europe GmbH 339,595 Avision Digital Office Equipment (Shanghai) Trading Co., Ltd. 40 Avision Brasil Ltda. 5,847 Avision Labs, Inc. 447 345,929 Total 587,128 $

Note

Balance of each client has not exceeded 5% of total account balance Accounts aged over a year amounted to $522

Statement 2,Page1

AVISION INC. STATEMENT OF INVENTORIES

DECEMBER 31, 2022

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

Statement 3

Statement 3
			Amount
Item			Cost	Market Value Note
Raw materials		$	134,797	109,362 $
Semi-finished goods			28,061	27,253
Finished goods			256,870	290,397
			419,728	427,012 $
Less: Allowance for inventory valuation loss	(		61,489)
		$	358,239

Note: Please refer to Note 4(10) for the method of determining net realisable value.

Statement 3,Page1

AVISION INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 4

Name Avision International Inc. Avision Development Inc. Avision Brasil Ltda. Quantum Investment Co., LTD. Total	Shares (in thousands) Amount 38,546 1,012,929 $ 8,390 5,569 USD $550,500 8,051 100 16,817 1,043,366 $ BeginningBalance	Shares (in thousands) Amount - 39,093 $ - 1,057 - 1,110 - 9,202) ( 32,058 $ Addition(Decrease) (Note)	Investment Income(Loss)	Shares (in thousands) Percentage of 38,546 100% 8,390 100% USD $550,500 99% 100 100% EndingBalance	Shares (in thousands) Percentage of 38,546 100% 8,390 100% USD $550,500 99% 100 100% EndingBalance	Amount 1,042,792 $ 15,920 11,033 34,303 1,104,048 $	Unit Price Total Amount 27.05 $ 1,042,792 $ 1.90 15,920 0.02 11,033 343.03 34,303 Market Value or Net Assets Value	Collateral Note None None None None None None None None
					Percentage of 100% 100% 99% 100%
			9,230) ($ 9,294 1,872 26,688 28,624 $	38,546 8,390 USD $550,500 100

Note: Addition (Decrease) includes unrealised profit from sales of investments accounted for using the equity method and accumulated translation adjustment of investees.

Statement 4,Page1

AVISION INC.

STATEMENT OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 5

Item Buildings and structures Machinery and equipment Transportation equipment Office equipment Others	BeginningBalance Addition Decrease Reclassifications 416,956 $ 732 $ 192) ($ - $ 258,034 3,037 44) ( 1,155 2,470 - 2,470) ( - 344 347 107) ( - 19,574 9,746 3,165) ( 1,155) ( 697,378 $ 13,862 $ 5,978) ($ - $	EndingBalance Collateral 417,496 $ Please refer to Note 8 262,182 None - None 584 None 25,000 None 705,262 $

Statement 5,Page1

AVISION INC.

STATEMENT OF ACCUMULATED DEPRECIATION ON PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 6

6
Item Buildings and structures Machinery and equipment Transportation equipment Office equipment Others	BeginningBalance 191,621 $ 250,121 2,437 134 12,609 456,922 $	Addition Decrease 8,816 $ 192) ($ 3,303 44) ( 33 2,470) ( 128 107) ( 2,801 3,165) ( 15,081 $ 5,978) ($	EndingBalance
			200,245 $ 253,380 - 155 12,245
			466,025 $

Statement 6,Page1

AVISION INC. STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2022

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

Statement 7

SupplierName General suppliers CANON COMPONENTS INC. SILICON APPLICATION CORP. ARROW ELECTRONICS TAIWAN LTD. RUBBERTEK INDUSTRIAL CO., LTD. CHANG YU STEEL MODEL INDUSTRY CO., LTD. Others Related parties Avision (Suzhou) Co.,Ltd.	Amount 5,146 $ 4,536 4,030 3,950 2,170 22,876 42,708 896,674 939,382 $	Note
		Balance of each supplier has not exceeded 5% of total account balance

Statement 7,Page1

AVISION INC.

STATEMENT OF OPERATING INCOME, NET FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 8 Item Multi-function peripherals and related products Image scanners Digital office equipment Other products Other operating revenue Service revenue	Volume 81,655 sets 72,823 sets 180,653 sets	Amount 447,765 $ 123,756 976,007 128,478 21,158 2,573 1,699,737 $	Note

Statement 8,Page1

AVISION INC.

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 9

Statement 9
Item			Amount
Beginning raw materials		$	177,704
Add: Raw materials purchased			297,577
Less: Ending raw materials	(		134,797)
Transferred to expenses	(		5,988)
Transferred to disposals	(		4,568)
Loss on physical inventory	(		30)
Raw materials used			329,898
Direct labor			25,442
Manufacturing expense			166,094
Manufacturing cost			521,434
Add: Beginning work in progress			3,563
Less: Ending work in progress	(		3,102)
Add: Beginning semi-finished goods			35,878
Net purchase for the year			12,436
Less: Ending semi-finished goods	(		24,959)
Transferred to expenses	(		8,526)
Loss on physical inventory for
semi-finished goods	(		2)
Transferred to disposals	(		3,539)
Cost of finished goods			533,183
Add: Beginning finished goods			318,683
Net purchase for the year			676,768
Less: Ending finished goods	(		256,870)
Transferred to expenses	(		7,817)
Cost of goods manufactured and sold			1,263,947
Gain on reversal of decline in market value	(		6,247)
Others			2,207
Operating costs		$	1,259,907

Statement 9,Page1

AVISION INC. STATEMENT OF MANUFACTURING EXPENSE FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 10

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Item Description Amount Note
----- End of picture text -----

Wages and salaries Depreciation expense Royalty expense Other expenses	69,841 $ 13,425 16,467 66,361 Balance of each item has not exceeded 5% of total account balance 166,094 $

Statement 10,Page1

AVISION INC. STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 11

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

Item Description Amount Note
----- End of picture text -----

Wages and salaries Rent expense Import/export (customs) expense Other expenses	24,130 $ 12,493 43,997 23,722 Balance of each item has not exceeded 5% of total account balance 104,342 $

Statement 11,Page1

AVISION INC. STATEMENT OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 12

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

Item Description Amount Note
Wages and salaries
$ 33,342
Service expense
16,744
Insurance expense
4,520
Balance of each item
Other expenses has not exceeded 5% of
15,021 total account balance
$ 69,627
----- End of picture text -----

Statement 12,Page1

AVISION INC.

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022

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

Statement 13

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

Item Description Amount Note
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Wages and salaries Insurance expense Other expenses	223,795 $ 20,045 67,018 Balance of each item has not exceeded 5% of total account balance 310,858 $

Statement 13,Page1

AVISION INC.

STATEMENT OF LABOUR, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

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

Statement 14

Statement 14
Nature Function	Year ended December 31			Year ended December 31
	2022			2021
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee benefit expense
Wages and salaries	87,824 $	255,492 $	343,316 $	84,517 $	258,783 $	343,300 $
Share-based payments	3,629	11,971	15,600	1,402	4,393	5,795
Labour and health insurance fees	7,730	24,015	31,745	7,259	24,069	31,328
Pension costs	4,445	13,804	18,249	4,252	14,092	18,344
Directors’ remuneration	-	-	-	-	-	-
Other personnel expenses	5,084	10,151	15,235	4,516	10,117	14,633
Depreciation expense	13,426	7,612	21,038	13,103	7,011	20,114
Amortisation expense	146	3,560	3,706	-	4,869	4,869

Note:

• 1.�As at December 31, 2022 and 2021, the Company had average of 403 and 405 employees, including 5 and 5 non-employee directors, respectively.

• 2.�A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information ：��

• (1)Average employee benefit expense in current year was $1,065 ((Total employee benefit expense in current year–Total directors’ compensation in current year)/(Number of employees in current year–Number of non-employee directors in current year))

• Average employee benefit expense in previous year was $1,043 ((Total employee benefit expense in previous year–Total directors’ compensation in previous year)/(Number of employees in previous year–Number of non-employee directors in previous year)).

• (2)Average employee salaries in current year were $862 (Total employee salaries in current year/(Number of employees in current year–Number of non-employee directors in current year)).

• Average employee salaries in previous year were $858 (Total employee salaries in previous year/(Number of employees in previous year–Number of non-employee directors in previous year)).

• (3)Adjustments of average employee salaries were 0.45% ((Average employee salaries in current year–Average employee salaries in previous year)/Average employee salaries in previous year).

• (4)There was no supervisor’s remuneration as the Company had set up an audit committee.

• (5)The remuneration policies of the Company’s directors, managers and employees are described as follows:

• The remuneration policies of the Company are determined based on the position, personal ability, contribution to the Company and performance and have a positive correlation with the operating performance.

• A.Directors: In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, is distributed as directors’ remuneration. The ratio is not higher than 2%. The distribution is reviewed by the remuneration committee and reported to the Board of Directors for resolution.

• B.Managers: The remuneration committee of the Company assesses managers’ salaries based on the position, professional knowledge, contribution to the Company’s operations and future risk. The assessment is reviewed by the remuneration committee and reported to the Board of Directors for resolution.

• C.Employees: Employees’ salaries are stipulated by regularly measuring and considering the general pay levels of the market and industry. If the Company has distributable profit of the current year, 6% shall be distributed as employees’

• compensation. However, if the Company has accumulated deficit, earnings shall first be reserved to cover losses. Employees’ compensation can be distributed in the form of shares or cash. The employees include the employees of subsidiaries who meet specific requirements. The requirements are stipulated by the Board of Directors. The distribution is reviewed by the remuneration committee and reported to the Board of Directors for resolution.

• D.The Company has set up work rules and related personnel management regulation which cover basic salaries, working hours, leave, pension payment, labour and health insurance payment, workers’ compensation, etc. for the hired employees and also set up an employees’ welfare committee which was elected by the employees to handle various welfare matters.

Statement 14,Page1