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AWEA AGM Information 2023

Aug 14, 2023

51853_rns_2023-08-14_b693a1a0-6f2a-4bf6-a1b7-34b80071f8ea.pdf

AGM Information

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AWEA MECHANTRONIC CO., LTD.

Minutes of 2023 Annual Meeting of Shareholders

Time: 9:00 am on June 7 (Wednesday), 2023.

Place: No.15, Keyuan 2nd Rd., Xitun Dist., Taichung City (AWEA Taichung Branch)

  • Attendance: The total number of shares represented by the attending shareholders and proxies was 75,815,506 shares (including 70,116,066 shares by e-voting), representing 78.48% of the total of 96,594,171 issued shares of the Company.

  • Participants: Independent Director HUNG, HIS-PENG, Directors YANG, CHENG-JYUN, WANG, CHENG-HSUAN, YANG, CHING FENG and CPA YI,CHANG-YUN of EnWise CPAs & Co.

Chairperson: Chairman YANG, TE-HWA Minutes taker: LIN, HONG-HONG

  1. Call the Meeting to Order: (The number of shares present reached the quorum and the Chairperson called the meeting to order in accordance with the law))

  2. Chairperson Remarks: (omitted)

  3. Report Items

  4. 2022 Business Report (Refer to the attachment for details), please be informed.

  5. Audit Committee Review Report on the Financial Report for 2022 (Refer to the attachment for details), please be informed.

  6. Investment Status Report of the PRC (Please refer to meeting Handbook), please be informed.

  7. Employees' and Directors' Remuneration for 2022 (Refer to meeting Handbook), please be informed.

  8. Report on Funding Loans (Refer to meeting Handbook), please be informed.

  9. Ratification Items

Report No. 1 Proposed by the Board

Proposal: 2022 Business Report and Financial Statements, proposed for ratification.

  • Explanation: (1) Business report, balance sheet, statement of comprehensive income, statement of cash flows, and statement of changes in shareholders' equity (Refer to the attachment for details).

  • (2) The financial statements for 2022 have been audited and attested by CPAs CHEN, GUEI-DUAN and YI, CHANG-YUN of EnWise CPAs & Co., and together with the Business Report has been submitted to the Audit Committee for review and approval. The above financial statements and Business Report are hereby submitted for approval.

No questions raised by shareholders on this proposal

Resolution: The voting results of this proposal were as follows:

No. of voting rights of shareholders present at the meeting: 75,815,506 votes

Voting result % of the votes of shareholders present
No. of votes in favor: 75,726,282 votes
(including e-voting 70,033,861 votes)		 99.88%
No. of votes against: 9,644 votes
(including e-voting 9,644 votes)		 0.01%
No. of invalid votes: 0 votes 0.00%
No. of abstentions and not voted: 79,580 votes
(including e-voting 72,561)		 0.10%

The proposal was approved as proposed by the shareholders present after voting.

Report No. 2 Proposed by the Board

Proposal: Proposal for Distribution of 2022 Profits, proposed for approval.

  • Explanation: As of December 31, 2022, the Company had a retained earnings balance of NT$1,237,693,064 from the beginning of the year. After adding the net profit for the year ended December 31, 2022 of NT$354,142,189, other comprehensive income of NT$2,636,547, and the fair value gain of NT$1,124,154 for recognized on equity instruments measured at fair value through other comprehensive income, and deducting the appropriation of statutory reserve of NT$35,790,289, the total amount of distributable earnings amounted to NT$1,559,805,665. Attached herewith is the Company's 2022 earnings distribution statement for your review: (Refer to the attachment for details)

No questions raised by shareholders on this proposal

Resolution: The voting results of this proposal were as follows:

No. of voting rights of shareholders present at the meeting: 75,815,506 votes

Voting result % of the votes of shareholders
present
No. of votes in favor: 75,736,402 votes
(including e-voting 70,043,981 votes)		 99.89%
No. of votes against: 9,584 votes
(including e-voting 9,584 votes)		 0.01%
No. of invalid votes: 0 votes 0.00%
No. of abstentions and not voted: 69,520 votes
(including e-voting 62,501)		 0.09%

The proposal was approved as proposed by the shareholders present after voting.

5. Election Matters:

Proposal: Re-election of directors, proposed for election.

Explanation:

  • (1) The tenure of the twelfth term of directors of the Company will expire on June 9, 2023, and the re-election shall be conducted at the Annual General Meeting in accordance with the law.

  • (2) In accordance with the Company's Articles of Incorporation, there will be nine directors (including four independent directors) to be elected for a term of 3 years under the nomination by candidates system.

  • (3) The term of office for the newly elected directors shall be from June 7, 2023 to June 6, 2026. The term of office for the current directors shall expire upon completion of current year's annual shareholders' meeting.

  • (4) The list of the nominated directors has been approved by the board meeting on April 11, 2023. The personal information of

the nominees is as follows:

Director
Nominee		 Education Experience Present position Shareholding
YANG,
TE-HWA		 National Chung
Hsing University -
Bachelor's degree		 Our company: Chairman
Other company:
Chairman and Chief Executive Office
of GOODWAY Machine Corp.
Chairman of HUNG JIU MACHINE
CO., LTD.
Chairman of Jia Jin Investment Co.,
Ltd.
Chairman of Hung Hua Investment
Co., Ltd.
Chairman of Huahan Lease Co., Ltd.
Responsible person of
B-way,Billion-way(Cayman)
Responsible person of YAMA SEIKI
USA INC.
Managing Director of Recision
Machinery Research & Development
Center		 Twma.
Managing Director of Taiwan
Machine Tool Foundation
Director of Hong Hua Environmental		 Our company: Chairman
Other company:
Chairman and Chief Executive Office
of GOODWAY Machine Corp.
Chairman of HUNG JIU MACHINE
CO., LTD.
Chairman of Jia Jin Investment Co.,
Ltd.
Chairman of Hung Hua Investment
Co., Ltd.
Chairman of Huahan Lease Co., Ltd.
Responsible person of
B-way,Billion-way(Cayman)
Responsible person of YAMA SEIKI
USA INC.
Managing Director of Recision
Machinery Research & Development
Center
Protection and Digital Future
Foundation
Director of Huan Lung Technology
Co., Ltd.
Director general of
Industry-Academia Cooperation and
Training Association of Zhongke
Director of Turvo International Co.,
Ltd.
Chairman of Yang Wen-hsu Charity
Foundation		 Industry-Academia Cooperation and
Training Association of Zhongke
Director of Turvo International Co.,
Ltd.
Chairman of Yang Wen-hsu Charity
Foundation
YANG,
CHENG-JYUN		 National Chung
Hsing University
(Business
Administration)
-Master's degree		 Our company: Chief Executive
Officer
Responsible person of KEY BRIDGE
CO., LTD.
Chairman of Yih Chuan Machinery
Industry Co., Ltd.
Director of GOODWAY Machine
Corp.		 Our company: Chief Executive
Officer
Responsible person of KEY BRIDGE
CO., LTD.
Chairman of Yih Chuan Machinery
Industry Co., Ltd.
Director of GOODWAY Machine
Corp.		 0
YANG, CHING
FENG		 National Chung
Hsing University
(Accounting) -
Bachelor's degree		 Chief Executive Officer of Machine
Corp.		 Director of AweaMechantronic Co.,
Ltd.		 130,000
Representative of
GOODWAY
Machinery Co.,
Ltd.WANG,
CHENG-HSUAN		 Feng Chia University
(Information
Engineering) -
Bachelor's degree		 Director of AweaMechantronic Co.,
Ltd.
Chairman of Global Investment
Holdings.
Marketing Executive Officer of
GOODWAY Machine Corp.		 Director of AweaMechantronic Co.,
Ltd.
Special Assistant to Chief Executive
Officer AweaMechantronic Co., Ltd.
Marketing Executive Officer of
GOODWAY Machine Corp.		 47,941,311
Representative of
GOODWAY
Machinery Co.,
Ltd. CHUANG,
KUN-NAN		 Wenshan Elementary
School		 Chairman of Yo Hao Enterprise Co.,
Ltd.
Director of GOODWAY Machine
Corp.
General Director of The Association
of Manufacturers in the Taichung
Industrial Park		 Director of Fittech Co., Ltd. 47,941,311
Independent Director
Nominee		 Education Experience Present position Shareholding
HUNAG,
CHENG-YUNG		 National
Taipei
Institute
of
Technology Industrial
Design
Architecture
Department
National
Taiwan
Institute
of
Technology
(Construction
Engineering)
-Bachelor's degree		 Construction Manager of San-Ching
Engineering Co., Ltd.
Architect of Huang Cheng-Yung
Architectural firm
Chairman of Te Chang Construction
Co., Ltd.
General Director of Taiwan
Integrated Construction Engineering
& Industrial Association
Committee Member of Taipei City
Construction Waste Disposal
Review		 General Director of Taiwan
Integrated
Engineering
Association
Chairman
Construction Co., Ltd.
Chairman of Yu Hsin
Development&Construction Co.,
Ltd.
Chairman of Classic Railway
International Co., Ltd.
Chairman of Landplus
Construction & Engineering Co.,
Ltd.		 0
HUNG, HIS-PENG National Chung
Hsing University
(Institute of
Agricultural
Machinery Research)
-Master's degree		 Lecturer (Mechanical Engineering)
of Hsiuping University of Science
and Technology		 Independent Director of Awea
Mechantronic Co., Ltd.		 0
LO, LI-YING National Kaohsiung
First University of
Science and
Technology-
Bachelor's degree		 Chief Executive Officer of Fittech
Co., Ltd.
Assistant Chief Executive Officer of
Da Fon Environmental Technology
Co., Ltd.		 Chief Executive Officer of Fittech
Co., Ltd.		 0
SU, YU-JEN Grossmont College
-Associate degree		 MIS Engineer of Dayungs
Development Co.,Ltd		 MIS Engineer of Dayungs
Development Co.,Ltd		 0

(5) The re-election is conducted in accordance with the "Regulations for Election of Directors".

(6) Please proceed with the election.

Voting Result: The list of directors elected is as follows

Director

Director
Account number Name No. of votes
00003707 YANG, TE-HWA 77,673,385
B12028**** YANG, CHENG-JYUN 71,187,287
00004824 YANG, CHING FENG 70,075,685
00003297 Representative of GOODWAY Machinery Co., Ltd. WANG,
CHENG-HSUAN		 69,731,642
00003297 Representative of GOODWAY Machinery Co., Ltd. CHUANG,
KUN-NAN		 68,969,563

Independent Director

ndependent Director
ID No. Name No. of votes
P10203**** HUNAG, CHENG-YUNG 69,042,500
M10070**** HUNG, HIS-PENG 68,850,667
L22245**** LO, LI-YING 68,543,480
N12344**** SU, YU-JEN 68,219,428

6. Discussion Items:

Report No. 1 Proposed by the Board

Proposal: Proposal of Release the Prohibition on Newly Elected Directors from Participation in Competitive Business. Please proceed and discuss.

Explanation:

  • (1) In accordance with Article 209 of the R.O.C. Company Act, a director who does anything for himself or on behalf of another person that is within the scope of the company’s business, shall explain to the meeting of shareholders the essential contents of such as act and secure its approval.

  • (2) To attract outstanding talents in the industry, it is proposed to seek the consent of the shareholders' meeting to lift the restrictions on competitive activities for the newly appointed 13[th] board of directors and their representatives.

  • (3) The details of directors' concurrent positions are as follows:

Title Name Currently holding concurrent positions in other companies
Director YANG, TE-HWA Chairman and Chief Executive Officer of GOODWAY Machine Corp.
Chairman of HUNG JIU MACHINE CO., LTD.
Responsible person of B-way,Billion-way(Cayman)
Responsible person of YAMA SEIKI USA INC.
Managing Director of Recision Machinery Research & Development
Center
Director YANG,
CHENG-JYUN		 Chairman of Yih Chuan Machinery Industry Co., Ltd.
Director of GOODWAY Machine Corp.
Corporate Director and
Legal Representative		 WANG,
CHENG-HSUAN		 Chairman of Global Investment Holdings.
Marketing Executive Officer of GOODWAY Machine Corp.
Corporate Director and
Legal Representative		 CHUANG,
KUN-NAN		 Director of Fittech Co., Ltd.
Independent Director HUNAG,
CHENG-YUNG		 General Director of Taiwan Integrated Construction Engineering &
Industrial Association
Chairman of Te Chang Construction Co., Ltd.
Chairman of Yu Hsin Development&Construction Co., Ltd.
Chairman of Classic Railway International CO., Ltd. Chairman of
Landplus Construction & Engineering Co., Ltd.
Independent Director LO, LI-YING Chief Executive Officer of Fittech Co., Ltd.
Independent Director SU, YU-JEN MIS Engineer of Dayungs Development Co., Ltd.

No questions raised by shareholders on this proposal

Resolution: The voting results of this proposal were as follows:

  • No. of voting rights of shareholders present at the meeting: 75,815,506 votes
Voting result % of the votes of shareholders present
No. of votes in favor: 75,688,809 votes
(including e-voting 69,996,388 votes)		 99.83%
No. of votes against: 54,554 votes
(including e-voting 54,554 votes)		 0.07%
No. of invalid votes: 0 votes 0.00%
No. of abstentions and not voted: 72,143 votes
(including e-voting 65,124)		 0.09%

The proposal was approved as proposed by the shareholders present after voting.

Report No. 2 Proposed by the Board

Proposal: Amendment to the Company’s Corporate Charter (Articles of Incorporation). Please proceed to discuss. Explanation:

  • (1) The company intends to increase the number of directors to enhance corporate governance.

  • (2) The following is a comparison table of the articles before and after the amendment

Article before the amendment Article after the amendment Explanation
Article 17: The Company shall have a board
of directors consisting of five to nine
members, with a system of candidate
nomination by shareholders. The directors
shall be elected from the list of candidates for
directors nominated by shareholders, and their
term of office shall be three years, with the
possibility of reelection. The total
shareholding percentage of all directors shall
comply with the regulations of the securities
regulatory authority.
The aforementioned board of directors shall
include at least three independent directors,
and the number of directors shall not be less
than one-fifth of the total number of directors.
Regarding the professional qualifications,
shareholding, concurrent positions, election
methods, and other applicable matters related
to independent directors, they shall comply
with the relevant regulations of the securities
regulatory authority.		 Article 17: The Company shall have a board of
directors consisting ofseven to eleven
members, with a system of candidate
nomination by shareholders. The directors shall
be elected from the list of candidates for
directors nominated by shareholders, and their
term of office shall be three years, with the
possibility of reelection. The total shareholding
percentage of all directors shall comply with
the regulations of the securities regulatory
authority.
The aforementioned board of directors shall
include at least three independent directors, and
the number of directors shall not be less than
one-fifth of the total number of directors.
Regarding the professional qualifications,
shareholding, concurrent positions, election
methods, and other applicable matters related to
independent directors, they shall comply with
the relevant regulations of the securities
regulatory authority.		 Increase the range of the
company's director seats to
strengthen corporate
governance.
Article 32: This article of incorporation was
established on June 4th, 1986 .........., the 21st
amendment of the articles of incorporation
was on June 15th, 2022.		 Article 32: This article of incorporation was
established on June 4th, 1986 .........., the 21st
amendment of the articles of incorporation was
on June 15th, 2022,the 22ndamendment of the
articles of incorporation was on June 7, 2023.		 Addition and modification
frequency and dates.

No questions raised by shareholders on this proposal

Resolution: The voting results of this proposal were as follows:

No. of voting rights of shareholders present at the meeting: 75,815,506 votes

Voting result % of the votes of shareholders present
No. of votes in favor: 775,732,290 votes
(including e-voting 70,039,869 votes)		 99.89%
No. of votes against: 14,171 votes
(including e-voting 14,171 votes)		 0.01%
No. of invalid votes: 0 votes 0.00%
No. of abstentions and not voted: 69,045 votes
(including e-voting 62,026)		 0.09%

The proposal was approved as proposed by the shareholders present after voting.

  1. Questions and Motions: After the Chairperson consulted all shareholders present, no extraordinary motion was proposed.

  2. Adjournment: At 9:29 a.m. on the same day, the Chairperson declared the meeting adjourned and it was approved by all shareholders present without any objection.

Chairperson: YANG, TE-HWA Minutes taker: LIN, HONG-HONG

【 Report Items 】

(1)2022 Business Report

Dear Shareholders,

Thank you for attending the 2023 Annual Shareholders' Meeting and for your continued support and care towards AWEA's management team. We hereby present a summary report of our business results for the fiscal year 2022 and an overview of our management plan for the fiscal year 2023:

1. Business Results Report

  • (1) Revenue Perspective ： Our company's net operating revenue for the fiscal year 2022 was NT$2,283,658 thousand. Compared with the net operating revenue of NT$2,492,430 thousand in 2021, the net operating revenue in 2022 decreased by NT$208,772 thousand, a decline of 8.38%.

  • (2) Profit or Loss Perspective ： Our company's net profit before tax for the fiscal year 2022 was NT$439,857 thousand, which increased by NT$258,128 thousand, a growth of 142.04% compared to the net profit before tax of NT$181,729 thousand for the fiscal year 2021. The net profit after tax for the fiscal year 2022 was NT$354,143 thousand (NT$3.67 per share), which increased by NT$223,283 thousand, a growth of 170.63% compared to the net profit after tax of NT$130,860 thousand (NT$1.35 per share) for the fiscal year 2021.

(3) The comparison of the net income for the years 2022 and 2021 is as follows ：

(Individual)

： In Thousands of New Taiwan Dollars

Item 2022 2021 Surplus (Deficit)
Amount		 Surplus (Deficit)
%
Net Operating Revenue 2,283,658
2,492,430
(208,772)
(8.38%)
Operating Expenses (1,825,556)
(2,077,984)
(252,428)
(12.15%)
Operating Margin 458,102
414,446
43,656
10.53%
Unrealized Profit on Intercompany
Sales		 (4,904)
3,502
(8,406)
(240.03%)
Net Operating Profit 212,519
139,903
72,616
51.90%
Net Profit before Tax 439,857
181,729
258,128
142.04%
Net Profit after Tax 354,143
130,860
223,283
170.63%

(Consolidated)

(Consolidated)
Item 2022 2021 Surplus (Deficit)
Amount		 Surplus (Deficit)
%
Net Operating Revenue 3,100,517
3,630,956
(530,439)
(14.61%)
Operating Expenses (2,432,617)
(2,951,020)
(518,403)
(17.57%)
Operating Margin 667,900
679,936
(12,036)
(1.77%)
Unrealized Profit on Intercompany
Sales		 (4,900)
1,924
(6,824)
(354.68%)
Net Operating Profit 298,225
266,199
32,026
12.03%
Net Profit before Tax 459,788
237,800
221,988
93.35%
Net Profit after Tax 349,287
122,033
227,254
186.22%
Attributable to Parent Company 354,143
130,860
223,283
170.63%

（ 4 ） 2022 Budget implementation and the financial income and expenditure are as follows: ：

As per the Applicable Public Company Rule for Financial Forecast Information by Public Companies, the Company is not obligated to disclose its financial forecast information for the year 2022. Therefore, there is no information available on the implementation of the budget for the year 2022.

  • (5) Breakthrough in Business Management ：

1. Product Development Breakthrough

Awea optimizes itself toward such features as larger scale, multification, five-axle, high-speed and intelligence:

  • (1) The high-speed five-axle aisle machining center AG and RG families fulfill the machining demand at five-axle and high-speed in mold/aviation industries.

3 

  - (2) Diversified horizontal/horizontal five-axle machining center family fulfills the mass production line requiring machines.

  - (3) Complete Bridge type of maching centerseries of models fit with Awea-made high-speed embedded main axle, thereby fulfilling our customers’ need for module machining process.

  - (4) MEGA5 series of superior-performed large five-axle machining center fulfills the need of high-speed and high-precision machining in aviation industry.

  - (5) FCV800S milling and turning compound machining center series fulfill our customers’ need of multi-machining process.

  - (6) Complete Bridge type of maching center series of models integrated into new generation of attached head series improve performance and function to the utmost and provide more options for our customers.

  - (7) Large Bridge type of maching center model integrated into Awea-made full automatic all-in-one head fulfills customers’ machining need at different angles.

  - (8) Large moving-pillar machining center’s MVP series, extra-large ground moving-beam machining center’s MCP series and brand-new moving-pillar & moving-beam MVCP models fulfill customers’ machining need of larger scope, longer travel and convenience.

  - (9) Brand new long-travel high-speed aluminum milling machining center provides extra high speed milling feeding and fulfills customers’ need of milling aluminum materials at high speed.

  - (10) The release of brand-new intelligent information control system, AiLINC, facilitates its machines to upgrade to be intelligent machine and bridge intelligent manufacture.

  1. Breakthrough in Production and Sales Layout

    • (1) Increase in sales of niche products and an increase in the proportion of gantry crane exports.

    • (2) Breakthrough in sales volume in mature markets such as Italy, Germany, North America, and Turkey.

    • (3) Expansion of new markets such as Eastern Europe, Northern Europe, ASEAN, and India.

    • (4) Successful development and launch of new products - new large gantry cranes and integration of Euro-standard supplementary heads.

    • (5) Provide a diverse selection of controllers and ensuring speedy delivery.

  2. Breakthrough in Company Management Improvement

    • (1) Establishing corporate culture to enhance corporate competitiveness.

    • (2) Effectively managing accounts receivable and inventory balances.

    • (3) Promoting lean production to control costs and enhance product competitiveness.

    • (4) Reasonable use of management expenses to reduce unnecessary expenditures.

  3. 2 、 2023 Business Plan Overview

  4. (1) 2023 Business strategy

  5. Market strategy: Utilize information platforms to establish a complete marketing document and sales system. Coordinate different regional agents to support each other in machine sales, reduce inventory levels, and increase delivery speed. Use the group image to complement domestic and international exhibitions, promote the market and reduce sales resistance.

    • (1) Domestic sales:

    • i. Establish the group's high-quality brand image to increase product market share.

    • ii. Strongly promote product lines such as horizontal machining centers, gantry machining centers, and 5-axis machines, etc.

    • iii. Shorten delivery time for order scheduling and increase flexibility in competitive order-taking.

    • (2) Export ：

    • i. Expand the sales of gantry machines, modular shipping design maximizes container space utilization, reduces costs, and increases competitiveness.

    • ii. Expansion of new markets such as Southeast Asia - India, Vietnam, Northern Europe, Eastern Europe, etc., which are listed as annual key tasks.

    • iii. Expand existing markets with different attribute agents to increase market share: the United States, Europe, etc.

    • iv. Improve the sales organization and human resources to strengthen the ability to identify and capitalize on emerging market trends.

    • (3) China ： Effectively utilize the production capacity of the Phase II factory and expand employee recruitment to enhance the production capacity of fighter aircraft models; continuously strengthen the order-taking and

4

production capabilities of larger equipment to improve overall profitability. 

  - i. Focus on mass production models, expand localized procurement of parts, reduce costs, and enhance market competitiveness.

  - ii. Improve the localized production efficiency of large gantry-type milling machines and five-axis machining centers, and develop localized additional functions to enhance product added value and profitability.

  - iii. Expand professional technical capabilities in integrating automated production lines to enhance sales competitiveness.

  - iv. Continuously expand market share in key industries such as semiconductors, new energy, and aerospace.

  - v. Expand sales of imported equipment to cope with the impact of the COVID-19 pandemic on local production efficiency and prepare early response strategies.

  1. Sales Strategy: Strengthening the recognition of agents and customers with the company.

    • (1) Highlighting the advantages of industrialized processing of machine models, catering to the development trends of industries such as aerospace, wind power, etc.

    • (2) Continuously strengthening product lines such as vertical and horizontal machines, gantry machines, and five-axis machines.

    • (3) Providing intelligent product features to help users enhance their production management capabilities.

    • (4) Establishing a mechanism for managing currency exchange risks, such as pricing in New Taiwan Dollars or sharing responsibility for currency exchange risks.

    • (5) Providing options for customized turnkey solutions to increase business opportunities.

  2. Management Strategy: Reduce error rates and improve work quality.

    • (1) Cost Management: Standardize and simplify processes; optimize resources and implement job training.

    • (2) Reach&Development Cost: Reduce design error rates, simplify and modularize design, and improve product cost-effectiveness.

    • (3) Production Cost: Lean production; get it right the first time.

    • (4) Sales Cost: Improve order quality and reduce error rate costs.

    • (5) Service Cost: Promptly respond to customer needs and proactively prevent recurring defects.

    • (6) Shipping Cost: Optimize packaging methods, reduce land and sea transportation costs, and improve the overall competitiveness of products.

    • (7) Capital Cost: Effectively plan the use of funds and minimize unnecessary expenditures.

    • (8) Self-Management: Strive for simplicity and efficiency and continue to enhance capabilities.

  3. (2) 2023 Sales targets

In the fiscal year 2023, we aim to sell 130 units of gantry machines and 420 units of C-type machines.

  • 3 、 Production and Marketing policies

Important Long-term Strategic Objectives ：

  • (1) Continuously diversify the market: Diversifying the market is advantageous in avoiding the risk of market concentration, and is a long-term policy established for the company to promote its stable development.

  • (2) Enhance customer satisfaction through service: Maintenance service is an important aspect of maintaining customers. A good maintenance and service system can lead to repeat orders. In the future, we will strive to achieve the goal of fast service and affordable maintenance.

  • (3) Develop products based on market demands: Strengthen interaction and understanding with the market, develop products based on market demands, and increase the company's market share.

  • 4 、 The future development of our company is affected by external competitive, regulatory, and macroeconomic environments. The following unfavorable factors affect our future development:

  • (1) The volatile exchange rate of the Taiwanese dollar affects order placement and production costs, which has an adverse impact on operations.

  • (2) Inflexible labor laws and regulations in Taiwan can lead to labor-management conflicts, resulting in increased operating costs and unfavorable industry development.

  • 5 、 Future development strategies for the company

  • (1) Marketing Strategy:

  • Adjust sales market share and strategy in response to the impact of COVID-19, the U.S.-China trade war, and inflation.

  • Showcase the advantages of the company's products in the aerospace and wind power green energy industries to expand industry supply and market share.

  • Allocate more resources to develop the area of intelligent products that are increasingly evident in conjunction with

5

Industry 4.0.

  1. Integrate and develop various five-axis application technologies to expand the sales market for five-axis machines.

  2. Actively improve various high-end five-axis products to meet the needs of the dynamic five-axis machine market.

  3. Actively expanding our international market and integrating exhibition, sales, service, and maintenance locations.

  4. Actively recruit talents and engage in industry-academia collaboration to cultivate our company's long-term competitive edge.

  5. Utilize information tools and platforms to integrate trade shows, advertisements, and public relations materials to strengthen marketing channels.

  6. (2) Procurement Strategy

  7. Strengthen the supply chain linkages to reduce the lead time for raw material delivery and decrease inventory holding costs, thereby enhancing delivery speed and agility.

  8. Collective purchasing and negotiations, conduct regular supplier evaluations, enforce ISO standards for assessing product quality, lead time, and price, and provide support to suppliers to enhance their competitiveness and in turn improve the competitiveness of our company.

  9. (3) Product Development Direction

  10. Develop new-generation products in line with national industrial policies such as green energy, wind power, and national defense, in preparation for future competitive advantages.

  11. Establish a complete product line and collaborate with GOODWAY Machine Cor. parent company to develop expertise in milling and lathe processes technologies.

  12. Research and develop high-value-added new products, such as gantry cranes with moving columns and stationary beams, gantry cranes with moving columns and moving beams, high-efficiency production machines, high-speed five-axis machines, and horizontal boring machines.

  13. Deepen the development of high-tech level intelligent and automated new products.

  14. Actively promote aerospace machining products in line with the world's aerospace industry development trends.

  15. Develop new-generation products that align with the global trend of energy-saving, carbon reduction, and green manufacturing.

  16. (4) Production Strategy Layout:

  17. Increase self-sufficiency rate, strengthen precision processing equipment and independent assembly capability to improve product quality.

  18. The construction of the DabouMei Phase II factory will enhance the production capacity of small vertical machining centers and achieve rapid supply capabilities.

  19. The Wujiang Phase II factory has entered mass production, and key precision components are supported by the parent company to increase production capacity in China.

After two years since the outbreak of the COVID-19 pandemic in 2022, the world is now facing the normalization of the pandemic, coupled with challenges such as material shortages, labor shortages, port congestion, and skyrocketing freight costs. In 2023, the post-pandemic era is marked by high global inflation, with the expectation that the Federal Reserve will raise interest rates to curb inflation, which will inevitably suppress global capital expenditures and indirectly affect the recovery of the machine tool industry. Fortunately, since the fourth quarter of 2022, global economies have gradually lifted strict pandemic controls, and major economies have released signals of partial economic activity recovery in the first quarter of 2023, which is a glimmer of hope in the current challenging industrial environment. We hope that this glimmer of hope will continue and usher in the dawn of global economic recovery.

Our Awea management team has always been diligent and prepared for all-round challenges. With your continuous support as shareholders, we believe that we have the confidence to overcome various adverse internal and external factors and enable the company to continue stable growth in the unfavorable business environment, as a way to reward your trust in the Awea management team. Once again, we thank all shareholders for their support and recognition, and wishing everyone good health and all the best!

AWEA MECHANTRONIC CO. LTD. Chief Executive Officer ： Cheng-Jyun Yang

Chairman ： De-Hua Yang Chief Executive Officer ： Cheng-Jyun Yang Accounting Supervisor: Hong-Bin Hsu

6

(2) Audit Committee’s Review Report

AWEA MECHANTRONIC CO. LTD. Audit Committee’s Review Report

The Board of Directors has prepared and submitted to the undersigned, Audit Committee of AWEA MECHANTRONIC CO. LTD 2022 Business Report, Consolidated Financial Statements and Dividend Distribution proposal. The Consolidated Financial Statements have been duly audited by Certified Public Accountants Guei-Duan Chen and Chang-Yun Yi of Jian Zhi Accounting Firm. The above Business Report, Consolidated Financial Statements and Dividend Distribution proposal have been examined and determined to be correct and accurate by the undersigned. This Report is duly submitted in accordance with Article 219 of the Company Law.

The Audit Committee, Chairman: Mr. Yi-Min Lin

13 March 2023

7

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Appendix One

INDEPENDENT AUDITORS’ REPORT

The board of Directors and Shareholders

AWEA Mechantronic Company Limited

Opinion

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

In our opinion, according to our auditing result and other auditors’ report (please refer to “Other Items” section), the accompanying individual financial statements prepared, in all material aspects, in accordance with the Regulations Governing the Preparation of Financial Reports by Security Issuers, and can fairly present the individual financial position of the Company as of December 31, 2022 and 2021, and its individual financial performance and its individual cash flows for the ears then ended.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Individual Financial Statements section in our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of 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, according to our professional judgement, were of most significance in the audit of the Company’s individual financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the individual financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s individual financial statements for the year ended December 31, 2022 are stated as follows:

Revenue Recognition

The Company’s main source of revenue is the sales of machining center machine, and the revenue recognized in 2022 is NT$1,953,731 (in Thousands), accounting for about 86% of total operating income. And since the sales locations include Taiwan, Mainland China, Italy, United States and other markets, the sales conditions are not the same. Therefore, it is necessary to determine the timing of the transfer of the ownership risk and rewords of the sold goods according to customers’ order or contract documents. Since the timing and amount of revenue recognition have significance of impact to financial statements, we listed revenue recognition as one of the key audit matters.

For accounting policies related to revenue recognition, please refer to Note 4 to the individual financial statements.

We evaluated the rationality of sales revenue recognition, executed the cut-off tests and internal control tests to understand the Company’s sales revenue recognition processes and the design and implementation of related control systems. In addition, we performed related tests of controls to the sales and collection cycle, sampled sales contracts to confirm the accuracy of accounting system data, checked and adjusted the general ledger system data and sales system, and evaluated whether the timing of revenue recognition is handled in accordance with related statements.

Valuation of Inventory

The company is mainly engaged in the design, manufacture, and sale of special purpose machine,

17

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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automation equipment, and computer-controlled machine tools. As of December 31, 2022, the total inventory and allowance of loss for market price decline and obsolete and slow-moving inventories are NT$1,337,240 and NT$315,961 (in thousands), respectively. Inventories of the Company are measured by cost and net realizable value, and recorded allowance of loss for market price decline and obsolete and slow-moving inventories for inventories exceeding certain shelf life or individuals identified as obsolete. Due to fierce competition of parts market and the different speed of different parts obsolescence, the risks of loss for market price decline and obsolete is higher. The obsolete inventory items and the net realizable value method applied for their evaluation often involve subjective judgements, hence are highly uncertain. Considering the inventory and the allowance of loss for market price decline and obsolete and slow-moving inventories are in significance of impact to financial statements, we listed the allowance of loss for market price decline and obsolete and slow-moving inventories as one of the key audit matters. For inventory related policies, and key sources of evaluation and assumption of the inventory, please refer to Noe 4 and 5 to the individual financial statements, respectively.

We understand, evaluate, and test the design and implementation of inventory related internal controls. Obtain the evaluation data for inventory by the lower of cost and net realizable value prepared by managements, sampled the estimated pricing data to the latest sales record to assess the basis and reasonability of the management’s estimation of net realizable value. We also acquire inventory aging report to assess the appropriateness the policy to record the allowance of loss for market price decline and obsolete and slow-moving inventories.

Other Items

In the above mentioned individual financial statements, companies invested using equity method, YAMA SEIKI USA, INC and Huahan Leasing Co., Ltd., are not audited by us but entrusted other auditors to audit by the company. As of December 31, 2022 and 2021, the balance of investment using equity method are NT$109,850 and NT$96,604 (in thousands), respectively, both accounting for 2% of total assets. For the years ended December 31, 2022 and 2021, the proportion for these subsidiaries invested using equity method and the profit or loss of associates and joint ventures are NT$7,782 and NT$4,712 (in thousands), respectively, accounting for 2% and 3% of the profit before tax.

Responsibilities of Management and Those Charged with Governance for the Individual Financial

Statements

Management is responsible for the preparation and fair presentation of the individual 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 the individual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual 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 members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual financial statements are free from material misstatements, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is 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 that 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 based on these individual 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 individual financial statements, whether

18

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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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.

  1. Obtain an understanding of internal control relevant to the audit 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.

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

  3. 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 individual 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.

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

  5. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the individual financial statements. We are responsible for the direction, supervision, and performance of the group 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 individual financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Jui-Kuei Chen and Chang Yun Yi.

19

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Securities and Futures Commission, Ministry of Finance Approved-certified No.: (79)Tai-Cai-Certificate(1) No.27495

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Securities and Futures Commission, Ministry of Finance Approved-certified No.: (92)Tai-Cai-Certificate(6) No.121986

EnWise CPAs & Co. Taichung, Taiwan Republic of China March 13, 2023

20

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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INDEPENDENT AUDITORS’ REPORT

The board of Directors and Shareholders

AWEA Mechantronic Company Limited

Opinion

We have audited the accompanying consolidated financial statements of AWEA Mechantronic Company Limited and its subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated financial statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, according to our auditing result and other auditors’ report, the accompanying consolidated financial statements prepared, in all material aspects, in accordance with the Regulations Governing the Preparation of Financial Reports by Security Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and ISC Interpretations (ISC) endorsed and issued into effect by the Financial Supervisory Commission of Republic of China, and can fairly present the consolidated financial position of the Company as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the ears then ended.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section in our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of 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, according to our professional judgement, were of most significance in the audit of the Company’s consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2022 are stated as follows:

Revenue Recognition

The Company’s main source of revenue is the sales of machining center machine, and the revenue recognized in 2022 is NT$2,965,844 (in Thousands), accounting for about 96% of total operating income. And since the sales locations include Taiwan, Mainland China, Italy, United States and other markets, the sales conditions are not the same. Therefore, it is necessary to determine the timing of the transfer of the ownership risk and rewords of the sold goods according to customers’ order or contract documents. Since the timing and amount of revenue recognition have significance of impact to financial statements, we listed revenue recognition as one of the key audit matters.

For accounting policies related to revenue recognition, please refer to Note 4 to the consolidated financial statements.

We evaluated the rationality of sales revenue recognition, executed the cut-off tests and internal control tests to understand the Company’s sales revenue recognition processes and the design and implementation of related control systems. In addition, we performed related tests of controls to the sales and collection cycle, sampled sales contracts to confirm the accuracy of accounting system data, checked and adjusted the general ledger system data and sales system, and evaluated whether the timing of revenue recognition is handled in accordance with related statements.

21

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Valuation of Inventory

The company is mainly engaged in the design, manufacture, and sale of special purpose machine, automation equipment, and computer-controlled machine tools. As of December 31, 2022, the total inventory and allowance of loss for market price decline and obsolete and slow-moving inventories are NT$2,028,951 and NT$421,944 (in thousands), respectively. Inventories of the Company are measured by cost and net realizable value, and recorded allowance of loss for market price decline and obsolete and slow-moving inventories for inventories exceeding certain shelf life or individuals identified as obsolete. Due to fierce competition of parts market and the different speed of different parts obsolescence, the risks of loss for market price decline and obsolete is higher. The obsolete inventory items and the net realizable value method applied for their evaluation often involve subjective judgements, hence are highly uncertain. Considering the inventory and the allowance of loss for market price decline and obsolete and slow-moving inventories are in significance of impact to financial statements, we listed the allowance of loss for market price decline and obsolete and slow-moving inventories as one of the key audit matters. For inventory related policies, and key sources of evaluation and assumption of the inventory, please refer to Noe 4 and 5 to the consolidated financial statements, respectively.

We understand, evaluate, and test the design and implementation of inventory related internal controls. Obtain the evaluation data for inventory by the lower of cost and net realizable value prepared by managements, sampled the estimated pricing data to the latest sales record to assess the basis and reasonability of the management’s estimation of net realizable value. We also acquire inventory aging report to assess the appropriateness the policy to record the allowance of loss for market price decline and obsolete and slow-moving inventories.

Other Items – mention of other auditors’ report

In the above mentioned consolidated financial statements, companies invested using equity method, YAMA SEIKI USA, INC and Huahan Leasing Co., Ltd., are not audited by us but entrusted other auditors to audit by the company. As of December 31, 2022 and 2021, the balance of investment using equity method are NT$109,850 and NT$96,604 (in thousands), respectively, both accounting for 2% of total assets. For the years ended December 31, 2022 and 2021, the proportion for these subsidiaries invested using equity method and the profit or loss of associates and joint ventures are NT$7,782 and NT$4,712 (in thousands), respectively, both accounting for 2% of the profit before tax.

We have also audited the individual financial statements of AWEA Mechantronic Co., Ltd. as of and for the years ended December 31, 2022 and 2021 on which we have issued an unqualified opinion with Other Items section for reference.

Responsibilities of Management and Those Charged with Governance for the Consolidated

Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the 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 members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatements, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is high-level of assurance but is not a guarantee that an audit

22

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Jui-Kuei Chen and Chang Yun Yi.

23

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

Securities and Futures Commission, Ministry of Finance Approved-certified No.: (79)Tai-Cai-Certificate(1) No.27495

==> picture [90 x 60] intentionally omitted <==

Securities and Futures Commission, Ministry of Finance Approved-certified No.: (92)Tai-Cai-Certificate(6) No.121986

EnWise CPAs & Co. Taichung, Taiwan Republic of China

March 13, 2023

24

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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AWEA Mechantronic Company Limited

INDIVIDUAL BALANCE SHEETS

December 31, 2022 and 2021

Code Items
CURRENT ASSETS
Cash and cash equivalents

Current financial assets at fair value through profit or loss

Notes receivable, net

Notes receivable due from related parties, net

Accounts receivable, net

Accounts receivable due from related parties, net

Other receivables
Other receivables due from related parties

Current tax assets

Inventories

Prepayments

Other current assets

Total current assets
NONCURRENT ASSETS
Non-current Financial assets at fair value through other
comprehensive income

Investments accounted for using equity method

Property, plant and equipment

Right-of-use assets

Intangible assets

Deferred income tax assets

Prepayments for business facilities
Guarantee deposits paid
Long-term notes receivable, net

Overdue receivables

Total non-current assets
Total assets		 Notes In Thousands of New Taiwan Dolloars
December 31,2022
31-Dec-21
Amount
%
Amount
%
$ 979,024
16 $ 629,970
11
377,002
6
172,417
3
254,096
4
170,905
3
1,060
-
15,197
-
419,852
7
486,472
9
68,917
1
119,357
2
10,629
-
9,422
-
70,042
1
65,278
1
-
-
-
-
1,021,279
17
977,757
18
6,734
-
9,682
-
541,959
9
317,744
6
3,750,594
61
2,974,201
53




10,458
-
16,829
-
1,002,016
16
1,037,352
18
1,395,401
22
1,439,750
26
12,276
-
24,080
-
6,794
-
7,909
-
54,214
1
103,049
2
300
-
3,964
-
3,914
-
4,137
-
12,115
-
29,673
1
-
-
-
-
2,497,488
39
2,666,743
47
$ 6,248,082
100 $ 5,640,944
100		 In Thousands of New Taiwan Dolloars
December 31,2022
31-Dec-21
Amount
%
Amount
%
$ 979,024
16 $ 629,970
11
377,002
6
172,417
3
254,096
4
170,905
3
1,060
-
15,197
-
419,852
7
486,472
9
68,917
1
119,357
2
10,629
-
9,422
-
70,042
1
65,278
1
-
-
-
-
1,021,279
17
977,757
18
6,734
-
9,682
-
541,959
9
317,744
6
3,750,594
61
2,974,201
53




10,458
-
16,829
-
1,002,016
16
1,037,352
18
1,395,401
22
1,439,750
26
12,276
-
24,080
-
6,794
-
7,909
-
54,214
1
103,049
2
300
-
3,964
-
3,914
-
4,137
-
12,115
-
29,673
1
-
-
-
-
2,497,488
39
2,666,743
47
$ 6,248,082
100 $ 5,640,944
100
Amount
%
$ 979,024
16
377,002
6
254,096
4
1,060
-
419,852
7
68,917
1
10,629
-
70,042
1
-
-
1,021,279
17
6,734
-
541,959
9
3,750,594
61



10,458
-
1,002,016
16
1,395,401
22
12,276
-
6,794
-
54,214
1
300
-
3,914
-
12,115
-
-
-
2,497,488
39
$ 6,248,082
100
Amount
%
$ 629,970
11
172,417
3
170,905
3
15,197
-
486,472
9
119,357
2
9,422
-
65,278
1
-
-
977,757
18
9,682
-
317,744
6
2,974,201
53


16,829
-
1,037,352
18
1,439,750
26
24,080
-
7,909
-
103,049
2
3,964
-
4,137
-
29,673
1
-
-
2,666,743
47
$ 5,640,944
100

1100

1110

1150

1160

1170

1180

1200

1210

1220

130X
1410

1470

11XX

1517

1550

1600

1755

1780

1840

1915

1920

1931

1937

15XX
1XXX		 4 and 6

4 and 6
4 and 6
4 and 7
4 and 6
4 and 7
7
4
4 and 6
7
8

4 and 6
4 and 6
4, 6, 7 and 8
4 and 6
4 and 6
4 and 6
4
4 and 6

Please refer to the accompanying notes to the individual financial reports.

25

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited INDIVIDUAL BALANCE SHEETS December 31, 2022 and 2021

Code Items
CURRENT LIABILITIES
Short-term loans

Short-term notes and bills payable

Current contract liabilities

Notes payable
Notes payable to related parties

Accounts payable
Accounts payable to related parties

Other accounts payable

Other payables to related parties

Current tax liabilities

Current provisions

Current lease obligations payable

Advance receipts

Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings

Deferred tax liabilities

Non-current lease liabilities

Non-current net defined benefit liability

Guarantee deposits
Total non-current liabilities
Total Liabilities
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE
Share capital

Ordinary share
Capital surplus

Capital surplus, additional paid-in capital arising from
ordinary share
Capital surplus, additional paid-in capital arising from
bond conversion
Capital surplus, gain on sale of fixed assets
Other additional paid-in capital
Retained earinings

Legal reserve
Special reserve
Unappropriated earnings
Other equity interest

Exchange differences on translation of foreign financial
statements
Unrealised gains (losses) from financial assets
measured at fair value through other comprehensive income
Total equity
Total liability and equity		 Notes In Thousands of New Taiwan Dolloars
31-Dec-21
31-Dec-20
Amount
%
Amount
%
$ 1,880,000
30 $ 1,290,000
23
289,641
5
259,907
5
73,324
1
97,752
2
393,505
6
502,033
9
11,770
-
13,279
-
72,828
1
143,508
3
1,489
-
5,750
-
89,106
1
109,798
2
1,677
-
1,850
-
47,627
1
17,995
-
11,055
-
11,240
-
11,420
-
11,606
-
42
-
11
-
2,070
-
1,224
-
2,885,554
45
2,465,953
44
-
-
2,206
-
99,315
2
107,360
2
918
-
12,764
-
8,991
-
12,794
-
628
-
2,641
-
109,852
2
137,765
2
2,995,406
47
2,603,718
46




965,942
15
965,942
17
6,124
-
6,124
-
57,468
1
86,447
2
4
-
4
-
31,920
1
31,920
1
527,176
8
513,898
9
98,077
2
98,077
2
1,595,597
26
1,366,883
24
(18,699)
-
(36,109) (1)
(10,933)
-
4,040
-
3,252,676
53
3,037,226
54
$ 6,248,082
100 $ 5,640,944
100		 In Thousands of New Taiwan Dolloars
31-Dec-21
31-Dec-20
Amount
%
Amount
%
$ 1,880,000
30 $ 1,290,000
23
289,641
5
259,907
5
73,324
1
97,752
2
393,505
6
502,033
9
11,770
-
13,279
-
72,828
1
143,508
3
1,489
-
5,750
-
89,106
1
109,798
2
1,677
-
1,850
-
47,627
1
17,995
-
11,055
-
11,240
-
11,420
-
11,606
-
42
-
11
-
2,070
-
1,224
-
2,885,554
45
2,465,953
44
-
-
2,206
-
99,315
2
107,360
2
918
-
12,764
-
8,991
-
12,794
-
628
-
2,641
-
109,852
2
137,765
2
2,995,406
47
2,603,718
46




965,942
15
965,942
17
6,124
-
6,124
-
57,468
1
86,447
2
4
-
4
-
31,920
1
31,920
1
527,176
8
513,898
9
98,077
2
98,077
2
1,595,597
26
1,366,883
24
(18,699)
-
(36,109) (1)
(10,933)
-
4,040
-
3,252,676
53
3,037,226
54
$ 6,248,082
100 $ 5,640,944
100
Amount
%
$ 1,880,000
30
289,641
5
73,324
1
393,505
6
11,770
-
72,828
1
1,489
-
89,106
1
1,677
-
47,627
1
11,055
-
11,420
-
42
-
2,070
-
2,885,554
45
-
-
99,315
2
918
-
8,991
-
628
-
109,852
2
2,995,406
47



965,942
15
6,124
-
57,468
1
4
-
31,920
1
527,176
8
98,077
2
1,595,597
26
(18,699)
-
(10,933)
-
3,252,676
53
$ 6,248,082
100
Amount
%
$ 1,290,000
23
259,907
5
97,752
2
502,033
9
13,279
-
143,508
3
5,750
-
109,798
2
1,850
-
17,995
-
11,240
-
11,606
-
11
-
1,224
-
2,465,953
44
2,206
-
107,360
2
12,764
-
12,794
-
2,641
-
137,765
2
2,603,718
46


965,942
17
6,124
-
86,447
2
4
-
31,920
1
513,898
9
98,077
2
1,366,883
24
(36,109) (1)
4,040
-
3,037,226
54
$ 5,640,944
100

2100

2110

2130

2150

2160

2170

2180

2200

2220

2230

2250

2280

2310

2399

21XX

2540

2570

2580

2640

2645

25XX
2XXX

3100

3110

3200

3211

3213

3240

3280

3300

3310

3320

3350

3400

3410

3420

3XXX
6 and 8

6
4 and 6
7
7
6
7
4
4 and 6
4, 6, and 7
7
6 and 8
4 and 6
4, 6, and 7
4 and 6

PARENT
6
6
6
6

Please refer to the accompanying notes to the individual financial reports.

26

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME The years ended December 31, 2022 and 2021

Code Items Notes In Thousands of New Taiwan Dollars, Except Earnings Per Share
2022
2021
Amount
%
Amount
%
$ 2,283,658
100 $ 2,492,430
100
(1,825,556) (80)
(2,077,984) (83)
458,102
20
414,446
17
(4,904)
-
3,502
-
453,198
20
417,948
17




(145,146)
(6)
(164,727)
(7)
(49,140)
(2)
(43,936)
(2)
(61,294)
(3)
(58,193)
(2)
14,901
1
(11,189)
(1)
(240,679) (10)
(278,045) (12)
212,519
10
139,903
5




16,006
1
1,247
-
31,373
1
29,772
1
104,081
5
(30,099)
(1)
(19,897)
(1)
(9,643)
-
95,775
4
50,549
2
227,338
10
41,826
2
439,857
20
181,729
7
(85,714)
(4)
(50,869)
(2)
354,143
16
130,860
5








3,296
-
(1,035)
-
(13,848)
(1)
5,303
-
(659)
-
207
-
21,763
1
25,162
1
(4,353)
-
(5,033)
-
6,199
-
24,604
1
$ 360,342
16 $155,464
6








$ 3.67
$1.35
$ 3.65
$1.35		 In Thousands of New Taiwan Dollars, Except Earnings Per Share
2022
2021
Amount
%
Amount
%
$ 2,283,658
100 $ 2,492,430
100
(1,825,556) (80)
(2,077,984) (83)
458,102
20
414,446
17
(4,904)
-
3,502
-
453,198
20
417,948
17




(145,146)
(6)
(164,727)
(7)
(49,140)
(2)
(43,936)
(2)
(61,294)
(3)
(58,193)
(2)
14,901
1
(11,189)
(1)
(240,679) (10)
(278,045) (12)
212,519
10
139,903
5




16,006
1
1,247
-
31,373
1
29,772
1
104,081
5
(30,099)
(1)
(19,897)
(1)
(9,643)
-
95,775
4
50,549
2
227,338
10
41,826
2
439,857
20
181,729
7
(85,714)
(4)
(50,869)
(2)
354,143
16
130,860
5








3,296
-
(1,035)
-
(13,848)
(1)
5,303
-
(659)
-
207
-
21,763
1
25,162
1
(4,353)
-
(5,033)
-
6,199
-
24,604
1
$ 360,342
16 $155,464
6








$ 3.67
$1.35
$ 3.65
$1.35
Amount
%
$ 2,283,658
100
(1,825,556) (80)
458,102
20
(4,904)
-
453,198
20



(145,146)
(6)
(49,140)
(2)
(61,294)
(3)
14,901
1
(240,679) (10)
212,519
10



16,006
1
31,373
1
104,081
5
(19,897)
(1)
95,775
4
227,338
10
439,857
20
(85,714)
(4)
354,143
16






3,296
-
(13,848)
(1)
(659)
-
21,763
1
(4,353)
-
6,199
-
$ 360,342
16






$ 3.67

$ 3.65
Amount
%
$ 2,492,430
100
(2,077,984) (83)
414,446
17
3,502
-
417,948
17


(164,727)
(7)
(43,936)
(2)
(58,193)
(2)
(11,189)
(1)
(278,045) (12)
139,903
5


1,247
-
29,772
1
(30,099)
(1)
(9,643)
-
50,549
2
41,826
2
181,729
7
(50,869)
(2)
130,860
5




(1,035)
-
5,303
-
207
-
25,162
1
(5,033)
-
24,604
1
$155,464
6




$1.35
$1.35
4000
5000
5900
5920
5950

6100
6200
6300
6450
6000
6900

7100
7010
7020
7050
7070
7000
7900
7950
8200

8310
8311
8316
8349
8360
8361
8399
8300
8500

9750
9850		 NET REVENUE

COST OF REVENUE

GROSS PROFIT
(Un)Realized profit on sales
Gross profit, net
OPERATING EXPENSES

Marketing
Management
Research and development
Expected credit loss (gain)
Total operating expenses
INCOME FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Other income

Other gains and losses

Finance cost

Share of Profit or Loss of Associates & Joint
Ventures Accounted for Using Equity Method
Total non-operating income and expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE

NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit obligation
Unrealized gain on investments in equity
instruments at fair value through other
comprehensive income
Income tax benefit (expense) related to items
that will not be reclassified subsequently
Items that may be reclassified subsequently to
profit or loss:
Exchange differences arising on translation
of foreign operations
Income tax benefit (expense) related to items
that may be reclassified subsequently
Other comprehensive income (loss), net of
income tax
TOTAL COMPREHENSIVE INCOME
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share		 6 and 7

6 and 7
7



6 and 7
4 and 6
6
4 and 6

Please refer to notes to the individual financial reports.

27

==> picture [67 x 51] intentionally omitted <==

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [90 x 60] intentionally omitted <==

==> picture [766 x 388] intentionally omitted <==

Please refer to the accompanying notes to the individual financial statements.

28

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited

INDIVIDUAL STATEMENTS OF CASHFLOWS

The years ended December 31, 2022 and 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustment for:
Depreciation expense
Amortization expense
Expected credit losses recognized (reversal) on investments in debt
instruments
Interest expense
Interest income
Dividend revenue
Share of profit (loss) of associates and joint ventures accounted for using
equity method,
Financial instruments at fair value through profit or loss
Loss (gain) on disposal or retirement of property, plant and equipment
Loss (gain) on disposal or retirement of intangible assets
Profit from lease modification
Gains on disposals of investments
Unrealized (realized) gain from sale
Changes in operating assets and liabilities:
Notes receivable
Notes receivable from related parties
Account receivables
Account receivables from related parties
Other receivables
Other receivables from related parties
Inventories
Prepayments
Other current assets
Overdue receivables
Long-term notes receivable
Current contractual liabilities
Notes payable
Notes payable from related parties
Accounts payable
Accounts payable from related parties
Other payables
Other payables from related parties
Provisions
Advance receipts
Other current liabilities
Net defined benefit liability
Cash generated from operations
Interest received
Income tax received (paid)
Net cash generated by operating activities
(Continued)		 In Thousands of New Taiwan Dollars
2022
2021
$ 439,857
$ 181,729
72,373
79,185
1,915
1,311
(14,901)
11,189
19,897
9,643
(16,006)
(1,247)
(18,114)
(1,724)
(95,775)
(50,549)
11,149
(7,073)
241
(1,190)
-
48
(283)
-
(2,095)
-
4,904
(3,502)
(84,082)
(8,052)
14,137
(13,233)
87,423
(10,826)
50,580
6,811
2,707
(4,179)
236
(190)
(43,522)
(120,929)
2,948
22,441
(254)
8,582
(6,784)
2,494
19,191
5,969
(24,428)
23,336
(108,528)
209,036
(1,509)
8,463
(70,680)
11,725
(4,261)
1,849
(19,636)
3,087
(173)
153
(185)
(11,190)
31
(960)
846
(52)
(507)
(598)
216,712
351,557
12,091
1,221
(19,885)
9,342
208,918
362,120		 In Thousands of New Taiwan Dollars
2022
2021
$ 439,857
$ 181,729
72,373
79,185
1,915
1,311
(14,901)
11,189
19,897
9,643
(16,006)
(1,247)
(18,114)
(1,724)
(95,775)
(50,549)
11,149
(7,073)
241
(1,190)
-
48
(283)
-
(2,095)
-
4,904
(3,502)
(84,082)
(8,052)
14,137
(13,233)
87,423
(10,826)
50,580
6,811
2,707
(4,179)
236
(190)
(43,522)
(120,929)
2,948
22,441
(254)
8,582
(6,784)
2,494
19,191
5,969
(24,428)
23,336
(108,528)
209,036
(1,509)
8,463
(70,680)
11,725
(4,261)
1,849
(19,636)
3,087
(173)
153
(185)
(11,190)
31
(960)
846
(52)
(507)
(598)
216,712
351,557
12,091
1,221
(19,885)
9,342
208,918
362,120
$ 439,857
72,373
1,915
(14,901)
19,897
(16,006)
(18,114)
(95,775)
11,149
241
-
(283)
(2,095)
4,904
(84,082)
14,137
87,423
50,580
2,707
236
(43,522)
2,948
(254)
(6,784)
19,191
(24,428)
(108,528)
(1,509)
(70,680)
(4,261)
(19,636)
(173)
(185)
31
846
(507)		 $ 181,729
79,185
1,311
11,189
9,643
(1,247)
(1,724)
(50,549)
(7,073)
(1,190)
48
-
-
(3,502)
(8,052)
(13,233)
(10,826)
6,811
(4,179)
(190)
(120,929)
22,441
8,582
2,494
5,969
23,336
209,036
8,463
11,725
1,849
3,087
153
(11,190)
(960)
(52)
(598)
216,712
12,091
(19,885)		 351,557
1,221
9,342
208,918 362,120

29

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1

==> picture [67 x 51] intentionally omitted <==

TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [90 x 60] intentionally omitted <==

(Continued)

AWEA Mechantronic Company Limited

INDIVIDUAL STATEMENTS OF CASHFLOWS

The years ended December 31, 2022 and 2021

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or
loss
Acquisitions of financial assets at fair value through other comprehensive
income
Proceeds from disposal of financial assets at fair value through other
comprehensive income
Acquisitions of investments accounted for using equity method
Acquisitions of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in guarantee deposits paid
Increase in other receivables from related parties
Acquisitions of intangible assets
Increase in other financial assets
Decrease (increase) in prepayments for business facilities
Dividends received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans
Increase (decrease) in short-term notes payable
Increase (decrease) in long-term borrowings
Increase (decrease) in guarantee deposits received
Repayment of the principal portion of lease liabilities
Cash dividends paid
Interest paid
Net cash generated (used) in financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR		 In Thousands of New Taiwan Dollars
2022
2021
(236,175)
(159,812)
22,536
-
(11,268)
(11,549)
3,790
8,539
-
(7,333)
(20,297)
(8,855)
2,272
1,190
223
3,749
(5,000)
(65,000)
(800)
(4,314)
(223,962)
(46,420)
3,664
(754)
165,665
84,352
(299,352)
(206,207)
590,000
412,065
29,734
(199,904)
(2,206)
939
(2,013)
1,700
(11,410)
(11,654)
(144,890)
(241,484)
(19,727)
(9,069)
439,488
(47,407)
349,054
108,506
629,970
521,464
$ 979,024
$ 629,970		 In Thousands of New Taiwan Dollars
2022
2021
(236,175)
(159,812)
22,536
-
(11,268)
(11,549)
3,790
8,539
-
(7,333)
(20,297)
(8,855)
2,272
1,190
223
3,749
(5,000)
(65,000)
(800)
(4,314)
(223,962)
(46,420)
3,664
(754)
165,665
84,352
(299,352)
(206,207)
590,000
412,065
29,734
(199,904)
(2,206)
939
(2,013)
1,700
(11,410)
(11,654)
(144,890)
(241,484)
(19,727)
(9,069)
439,488
(47,407)
349,054
108,506
629,970
521,464
$ 979,024
$ 629,970
(236,175)
22,536
(11,268)
3,790
-
(20,297)
2,272
223
(5,000)
(800)
(223,962)
3,664
165,665		 (159,812)
-
(11,549)
8,539
(7,333)
(8,855)
1,190
3,749
(65,000)
(4,314)
(46,420)
(754)
84,352
(299,352) (206,207)
590,000
29,734
(2,206)
(2,013)
(11,410)
(144,890)
(19,727)		 412,065
(199,904)
939
1,700
(11,654)
(241,484)
(9,069)
439,488 (47,407)
349,054
629,970		 108,506
521,464
$ 979,024 $ 629,970

Please refer to the accompanying notes to the individual financial statements.

30

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited CONSOLIDATED BALANCE SHEETS

December 31, 2022 and 2021

Code Items
CURRENT ASSETS
Cash and cash equivalents
Current financial assets at fair value through
profit or loss
Notes receivable, net
Notes receivable due from related parties, net
Accounts receivable, net
Accounts receivable due from related parties, net
Other receivables
Other receivables due from related parties
Current tax assets
Inventories
Prepayments
Other current assets
Total current assets
NONCURRENT ASSETS
Non-current Financial assets at fair value
through other comprehensive income
Investments accounted for using equity
method
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred income tax assets
Prepayments for business facilities
Guarantee deposits paid
Long-term notes receivable, net
Overdue receivables
Other non-current assets
Total non-current assets
Total assets		 Notes
4 and 6
4 and 6
4 and 6
4 and 7
4 and 6
4 and 7
7
4
4 and 6
7
8
4 and 6
4 and 6
4, 6, 7 and 8
4, 6 and 8
4 and 6
4 and 6
4
4 and 6		 December 31,2022 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
17 $ 937,652
15
5
172,417
3
6
247,478
4
-
3,765
-
7
526,533
9
-
13,810
-
-
9,628
-
-
174
-
-
732
-
24
1,549,646
25
1
75,973
1
8
321,502
5
68
3,859,310
62



-
16,829
-
2
96,604
3
26
1,872,994
30
2
146,084
2
-
12,043
-
1
148,210
2
-
3,964
-
-
12,931
-
1
29,673
1
-
-
-
-
8,638
-
32
2,347,970
38
100 $ 6,207,280
100		 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
17 $ 937,652
15
5
172,417
3
6
247,478
4
-
3,765
-
7
526,533
9
-
13,810
-
-
9,628
-
-
174
-
-
732
-
24
1,549,646
25
1
75,973
1
8
321,502
5
68
3,859,310
62



-
16,829
-
2
96,604
3
26
1,872,994
30
2
146,084
2
-
12,043
-
1
148,210
2
-
3,964
-
-
12,931
-
1
29,673
1
-
-
-
-
8,638
-
32
2,347,970
38
100 $ 6,207,280
100		 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
17 $ 937,652
15
5
172,417
3
6
247,478
4
-
3,765
-
7
526,533
9
-
13,810
-
-
9,628
-
-
174
-
-
732
-
24
1,549,646
25
1
75,973
1
8
321,502
5
68
3,859,310
62



-
16,829
-
2
96,604
3
26
1,872,994
30
2
146,084
2
-
12,043
-
1
148,210
2
-
3,964
-
-
12,931
-
1
29,673
1
-
-
-
-
8,638
-
32
2,347,970
38
100 $ 6,207,280
100
Amount % Amount %
1100
1110

1150
1160
1170
1180
1200
1210
1220
130x
1410
1470
11xx
1517
1550
1600
1755
1780
1840
1915
1920
1931
1937
1990
15xx
1xxx		 $ 1,132,171
377,002
381,640
4,274
457,612
33,566
10,766
-
143
1,607,007
57,859
542,186		 17
5
6
-
7
-
-
-
-
24
1
8		 $ 937,652
172,417
247,478
3,765
526,533
13,810
9,628
174
732
1,549,646
75,973
321,502		 15
3
4
-
9
-
-
-
-
25
1
5
4,604,226 68 3,859,310 62

10,458
109,850
1,797,473
132,035
10,368
101,283
300
7,146
12,115
-
6,544

-
2
26
2
-
1
-
-
1
-
-

16,829
96,604
1,872,994
146,084
12,043
148,210
3,964
12,931
29,673
-
8,638
-
3
30
2
-
2
-
-
1
-
-
2,187,572 32 2,347,970 38
$ 6,791,798 100 $ 6,207,280 100

Please refer to the accompanying notes to the consolidated financial reports.

31

==> picture [67 x 51] intentionally omitted <==

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited CONSOLIDATED BALANCE SHEETS December 31, 2022 and 2021

Code Items
Notes
CURRENT LIABILITIES
Short-term loans
6 and 8
Short-term notes and bills payable
6
Current contract liabilities
4 and 6
Notes payable
Notes payable to related parties
7
Accounts payable
Accounts payable to related parties
7
Other accounts payable
6
Other payables to related parties
7
Current tax liabilities
4
Current provisions
4 and 6
Current lease obligations payable
4, 6, and 7
Advance receipts
7
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings
6 and 8
Deferred tax liabilities
4 and 6
Non-current lease liabilities
4, 6, and 7
Long-term deferred revenue
Non-current net defined benefit liability
4 and 6
Guarantee deposits
Total non-current liabilities
Total Liabilities
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT
Share capital
6
Ordinary share
Capital surplus
6
Capital surplus, additional paid-in capital
arising from ordinary share
Capital surplus, additional paid-in capital
arising from bond conversion
Capital surplus, gain on sale of fixed assets
Other additional paid-in capital
Retained earinings
6
Legal reserve
Special reserve
Unappropriated earnings
Other equity interest
6
Exchange differences on translation of
foreign financial statements
Unrealised gains (losses) from financial
assets measured at fair value through other
comprehensive income
Total equity attributable to shareholders of
parent
Non-controlling interests
6
Total equity
Total liability and equity		 December 31,2022 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
29 $ 1,335,781
22
4
259,907
4
3
220,951
4
6
518,234
8
-
17,034
-
3
278,516
5
-
591
-
2
139,559
2
-
1,476
-
1
27,390
1
-
12,934
-
-
11,606
-
-
12
-
-
1,242
-
48
2,825,233
46



-
62,672
1
2
121,459
2
-
12,764
-
-
11,698
-
-
12,794
-
-
4,173
-
2
225,560
3
50
3,050,793
49
14
965,942
16
-
6,124
-
1
86,447
1
-
4
-
-
31,920
1
8
513,898
8
1
98,077
2
24
1,366,883
22
-
(36,109)
(1)
-
4,040
-
48
3,037,226
49
2
119,261
2
50
3,156,487
51
100$6,207,280
100		 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
29 $ 1,335,781
22
4
259,907
4
3
220,951
4
6
518,234
8
-
17,034
-
3
278,516
5
-
591
-
2
139,559
2
-
1,476
-
1
27,390
1
-
12,934
-
-
11,606
-
-
12
-
-
1,242
-
48
2,825,233
46



-
62,672
1
2
121,459
2
-
12,764
-
-
11,698
-
-
12,794
-
-
4,173
-
2
225,560
3
50
3,050,793
49
14
965,942
16
-
6,124
-
1
86,447
1
-
4
-
-
31,920
1
8
513,898
8
1
98,077
2
24
1,366,883
22
-
(36,109)
(1)
-
4,040
-
48
3,037,226
49
2
119,261
2
50
3,156,487
51
100$6,207,280
100		 In Thousands of New Taiwan Dolloars

December 31,2022
%
Amount
%
29 $ 1,335,781
22
4
259,907
4
3
220,951
4
6
518,234
8
-
17,034
-
3
278,516
5
-
591
-
2
139,559
2
-
1,476
-
1
27,390
1
-
12,934
-
-
11,606
-
-
12
-
-
1,242
-
48
2,825,233
46



-
62,672
1
2
121,459
2
-
12,764
-
-
11,698
-
-
12,794
-
-
4,173
-
2
225,560
3
50
3,050,793
49
14
965,942
16
-
6,124
-
1
86,447
1
-
4
-
-
31,920
1
8
513,898
8
1
98,077
2
24
1,366,883
22
-
(36,109)
(1)
-
4,040
-
48
3,037,226
49
2
119,261
2
50
3,156,487
51
100$6,207,280
100
Amount % Amount %
2100
2110
2130
2150
2160
2170
2180
2200
2220
2230
2250
2280
2310
2399
21xx
2540
2570
2580

2630
2640
2645
25xx
2xxx

3100
3110
3200
3211
3213
3240
3280
3300
3310
3320
3350
3400
3410

3420
31xx
36xx

3xxx
 $ 1,954,949
289,641
225,013
393,849
514
201,312
799
128,889
2,007
64,623
12,445
11,420
934
2,099		 29
4
3
6
-
3
-
2
-
1
-
-
-
-		 $ 1,335,781
259,907
220,951
518,234
17,034
278,516
591
139,559
1,476
27,390
12,934
11,606
12
1,242		 22
4
4
8
-
5
-
2
-
1
-
-
-
-
3,288,494 48 2,825,233 46

-
112,224
918
10,793
8,991
2,183

-
2
-
-
-
-

62,672
121,459
12,764
11,698
12,794
4,173
1
2
-
-
-
-
135,109 2 225,560 3
3,423,603 50 3,050,793 49
965,942
6,124
57,468
4
31,920
527,176
98,077
1,595,597
(18,699)
(10,933)		 14
-
1
-
-
8
1
24
-
-		 965,942
6,124
86,447
4
31,920
513,898
98,077
1,366,883
(36,109)
4,040		 16
-
1
-
1
8
2
22
(1)
-
3,252,676
115,519		 48
2		 3,037,226
119,261		 49
2
3,368,195 50 3,156,487 51
$6,791,798 100 $6,207,280 100

Please refer to the accompanying notes to the consolidated financial reports.

32

==> picture [67 x 51] intentionally omitted <==

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The years ended December 31, 2022 and 2021 In Thousands of New Taiwan Dollars, Except Earnings Per Share

Code Items
NET REVENUE
COST OF REVENUE
GROSS PROFIT
(Un)Realized profit on sales
Gross profit, net
OPERATING EXPENSES
Marketing
Management
Research and development
Expected credit loss (gain)
Total operating expenses
INCOME FROM OPERATIONS
NON-OPERATING INCOME AND
EXPENSES
Interest income
Other income
Other gains and losses
Finance cost
Share of Profit or Loss of Associates &
Joint Ventures Accounted for Using
Equity Method
Total non-operating income and
expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE
NET INCOME
OTHER COMPREHENSIVE INCOME
(LOSS)
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined benefit
obligation
Unrealized gain on investments in
equity instruments at fair value through
other comprehensive income
Income tax benefit (expense) related
to items that will not be reclassified
subsequently
Items that may be reclassified
subsequently to profit or loss:
Exchange differences arising on
translation of foreign operations
Income tax benefit (expense) related
to items that may be reclassified
subsequently
Other comprehensive income (loss),
net of income tax
TOTAL COMPREHENSIVE INCOME
NET INCOME (LOSS)
ATTRIBUTABLE TO:
Shareholders of the parent
Non-controlling interests

TOTAL COMPREHENSIVE INCOME
(LOSS) ATTRIBUTABLE TO:
Shareholders of the parent
Non-controlling interests

EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share		 Notes
6 and 7
6 and 7
6
4 and 6
6
4 and 6		 2022 2021
Amount
%
$ 3,100,517
100
(2,432,617) (78)
667,900
22
(4,900)
-
663,000
22
(188,205)
(6)
(128,520)
(4)
(61,671)
(2)
13,621
-
(364,775) (12)
298,225
10
15,972
1
46,011
2
117,800
4
(26,002)
(1)
7,782
-
161,563
5
459,788
15
(110,501)
(4)
349,287
11
3,296
-
(13,848)
-
(659)
-
23,155
-
(4,631)
-
7,313
-
$ 356,600
11
$ 354,143
11
(4,856)
-
$ 349,287
11
$ 360,342
11
(3,742)
-
$ 356,600
11
$ 3.67
$ 3.65		 Amount
%
$ 3,630,956
100
(2,951,020) (81)
679,936
19
1,924
-
681,860
19
(217,903)
(6)
(125,687)
(4)
(60,627)
(2)
(11,444)
-
(415,661) (12)
266,199
7
4,226
-
35,444
1
(58,340)
(2)
(14,441)
-
4,712
-
(28,399)
(1)
237,800
6
(115,767)
(3)
122,033
3
(1,035)
-
5,303
-
207
-
24,490
1
(4,898)
-
24,067
1
$146,100
4
$ 130,860
3
(8,827)
-
$122,033
3
$ 155,464
4
(9,364)
-
$146,100
4
$1.35
$1.35
4000
5000
5900
5920
5950
6100
6200
6300
6450
6000
6900
7100
7010
7020
7050
7060
7000
7900
7950
8200
8310
8311
8316
8349
8360
8361
8399
8300
8500
8600
8610
8620
8700
8710
8720
9750
9850

Please refer to notes to the individual financial reports.

33

==> picture [67 x 51] intentionally omitted <==

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [90 x 60] intentionally omitted <==

==> picture [766 x 359] intentionally omitted <==

Please refer to the accompanying notes to the consolidated financial statements.

34

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CASHFLOWS

The years ended December 31, 2022 and 2021In Thousands of New Taiwan Dollars

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustment for:
Depreciation expense
Amortization expense
Expected credit losses recognized (reversal) on investments in
debt instruments
Interest expense
Interest income
Dividend revenue
Share of profit (loss) of associates and joint ventures accounted
for using equity method,
Gain on disposal or retirement of property, plant and equipment
Loss on disposal or retirement of intangible assets
Unrealized (realized) gain from sale
Other income
Profit from lease modification
Gains on disposals of investments
Loss (gain) on valuation of financial asset
Changes in operating assets and liabilities:
Notes receivable
Notes receivable from related parties
Account receivables
Account receivables from related parties
Other receivables
Other receivables from related parties
Inventories
Prepayments
Other current assets
Overdue receivables
Long-term notes receivable
Contractual liabilities
Notes payable
Notes payable from related parties
Accounts payable
Accounts payable from related parties
Other payables
Other payables from related parties
Provisions
Advance receipts
Other current liabilities
Net defined benefit liability
Cash generated from operations
Interest received
Income tax paid
Net cash generated by operating activities
(Continued)		 2022 2021
$ 459,788
115,080
2,965
(13,621)
26,002
(15,972)
(18,114)
(7,782)
(211)
-
4,900
(1,081)
(283)
(2,095)
11,149
(134,978)
(509)
88,299
(19,617)
2,777
174
(57,361)
18,114
(255)
(6,784)
19,191
4,062
(124,385)
(16,520)
(77,204)
208
(9,489)
531
(513)
922
857
(507)		 $ 237,800
117,382
2,406
11,444
14,441
(4,226)
(1,724)
(4,712)
(1,499)
48
(1,924)
(1,063)
(88)
-
(7,073)
109,807
(2,783)
7,459
32,232
(3,763)
(119)
(203,306)
17,707
9,169
2,494
5,969
(641)
218,303
16,124
19,441
(4,289)
(35,024)
(96)
(11,896)
(719)
(155)
(578)
247,738
12,058
(37,909)		 536,548
4,226
(62,093)
221,887 478,681

35

建智聯合會計師事務所 EnWise CPAs & Co. 台中市 404 太原北路 130 號 9 樓之 1 TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

==> picture [67 x 51] intentionally omitted <==

==> picture [90 x 60] intentionally omitted <==

(Continued)

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CASHFLOWS

The years ended December 31, 2022 and 2021In Thousands of New Taiwan Dollars

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of financial assets at fair value through profit or
loss
Proceeds from disposal of financial assets at fair value through
profit or loss
Acquisitions of financial assets at fair value through other
comprehensive income
Proceeds from disposal of financial assets at fair value through
other comprehensive income
Acquisitions of investments accounted for using equity method
Acquisitions of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisitions of intangible assets
Decrease in prepayments for business facilities
Decrease (increase) in guarantee deposits paid
Decrease (increase) in other non-current assets
Dividends received
Increase in other financial assets
Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans
Increase (decrease) in short-term notes payable
Increase (decrease) in long-term borrowings
Repayment of the principal portion of lease liabilities
Increase (decrease) in guarantee deposits received
Cash dividends paid
Interest paid
Net cash generated (used) in financing activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR		 2022 2021
(236,175)
22,536
(11,268)
3,791
-
(22,340)
3,740
(1,246)
3,664
5,785
2,094
18,114
(220,429)		 (159,812)
-
(11,549)
8,540
(7,333)
(58,104)
3,519
(4,639)
3,228
(1,686)
(3,097)
1,724
(42,719)
(431,734) (271,928)
619,168
29,734
(62,672)
(11,410)
(1,990)
(25,793)
(144,890)		 227,313
(229,893)
61,405
(14,914)
1,688
(13,894)
(241,485)
402,147 (209,780)
2,219 32,871
194,519
937,652		 29,844
907,808
$ 1,132,171 $ 937,652

Please refer to the accompanying notes to the consolidated financial statements.

36

Appendix Two

AWEA MECHANTRONIC CO. LTD.

2022 PROFIT DISTRIBUTION TABLE

Unit: New Taiwan Dollars

Item Amount Amount Note
Subtotal Total
Balance at the beginning at the year
Adjustment：
Add: 2022 Net profit after tax
Add: Other comprehensive income
Add: Disposal of equity instruments measured at
fair value through other comprehensive income.
Minus: Appropriation to legal reserve
Distributable net profit
Distribution item：
Shareholders' dividend - Cash (NTD
1.6 per share)
Unappropriated retained earnings at the end of the
year		 354,142,189
2,636,547
1,124,154
(35,790,289)


(154,550,674)

 $1,237,693,064


1,559,805,665


$1,405,254,991
Note 1

Chairman ： De-Hua Yang Chief Executive Officer ： Cheng-Jyun Yang Accounting Supervisor: Hong-Bin Hsu

Note ：

Note 1 ： According to the regulations in the company's articles of association, 10% of after-tax net profits will be appropriated as legal reserve.

  • $357,902,890*10%=$35,790,289

Note 2 ：

  • (1) Shareholder dividend: distribute cash dividend of NT$1.6 per share; after approval by the shareholder's meeting, authorize the chairman to set the ex-dividend date for distribution.

  • (2) The cash dividend is calculated up to the nearest NT$1. Any amount less than NT$1 will be rounded down and the total amount of the small odd amount less than one dollar will be adjusted by decimal point numbers from large to small and by account numbers from front to back until it matches the total cash dividend distribution.

  • (3) In the event of any future changes to the company's capital stock which may affect the number of outstanding shares and consequently result in a variation to the shareholder's dividend rate, the Chairman will be authorized by the shareholder's meeting to take full responsibility for addressing the matter.

37

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