AWEA - AGM Information 2024 | FinancialReports.eu

2024 Annual Shareholders’ Meeting Minutes of AWEA Mechantronic Co., Ltd.

Time: 9:00 a.m. on June 18, 2024 (Tuesday)

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

Participants: The total number of shares represented by the present shareholders and entrusted agents amounted to 74,396,003 shares (including 74,385,181 shares of electronic voting), which accounted for 77.01% of the total number of 96,594,171 shares issued by the Company.
Non-voting participants: Independent Director Xi-Peng Hong, Independent Director Li-Ying Luo, Independent Director Zheng-Yong Huang, Independent Director Yu-Ren Su, Director Cheng-Xuan Wang, Director Qing-Feng Yang, Director Kun-Nan Zhuang, and CPA Guei-Duan Chen from EnWise CPAs & Co.

Chairperson: Chairman De-Hua Yang

Clerk: Hong-Hong Lin

Chairperson Calls the Meeting to Order: (When the number of shares present has reached the statutory amount, and the Chairperson calls the meeting to order according to law)
Chairperson Remarks: (omitted)
Contents of Reports
(1) 2023 Business Report (see the Attachment for details), for your understanding.
(2) 2023 Audit Committee’s Audit Report (see the Attachment for details), for your understanding.
(3) Report on investment status in Mainland China (see the Meeting Handbook for details), for your understanding.
(4) Report on the distribution of 2023 employees’ and directors’ remuneration (see the Meeting Handbook for details), for your understanding.
(5) Report on loaning of funds (see the Meeting Handbook for details), for your understanding.
(6) Report on Directors’ remuneration 2023, for your understanding.
Issues Posed for Acknowledgement

Proposal 1 (Proposed by the Board of Directors)

Subject: The Company’s business report and financial statement for Year 2023. The motion is posted for acknowledgment.
Description: (1) Business Report, Balance Sheet, Statements of Comprehensive Income, Statements of Cash Flows, Statement of Changes in Shareholders’ Equity (see the Attachment for details).
(2) The Financial Statements for 2023 have been audited and endorsed by the Certified Public Accountants Guei-Duan Chen and Chang-Yun Yi of EnWise CPAs & Co., and have been submitted to the Audit Committee for audit together with the Business Report, therefore, the above Financial Statements and Business Report are hereby submitted for acknowledgment.

No shareholder raised a question on this proposal.

Resolution: Voting results of this proposal were as follows:

Number of votes of the present shareholders at the time of voting: 74,396,003 votes

Voting result	Proportion (%) in number of votes of the present shareholders at the time of voting
Affirmative votes: 74,124,920 votes (including74,114,098 electronic votes)	99.63%
Dissenting votes: 47,584 votes (including47,584 electronic votes)	0.06%
Invalid votes: 0 vote	0.00%
Abstention and un-voted votes: 223,499 votes (including223,499 electronic votes)	0.30%

Upon resolution by the present shareholders through voting, this proposal was passed as proposed.

Proposal 2 (Proposed by the Board of Directors) Subject: Proposal for distribution of 2023 earnings is submitted for acknowledgment. Description:

(1) As of December 31, 2023, the Company’s undistributed earnings at the beginning of the period was NT$1,405,254,991, and by adding the net profit after tax of NT$210,810,719 for 2023, lessing the unrealized assessment profit or loss of financial assets assessed through other comprehensive income of NT$9,038,008, lessing other comprehensive income after tax for the year - defined benefit actuarial profit and loss of NT$280,609 and the provision of legal reserve of NT$20,149,210, the total earnings available for distribution was NT$1,586,597,883, and the earnings distribution statement of the Company’s earnings for the year 2023 is hereby prepared: (see the Attachment for details)
(2) Dividends of shareholders: cash dividend per share was NT$1.5; After being approved at the annual shareholders’ meeting, the Chairman is authorized to set another base date of ex-dividend payment for distribution.
(3) The cash dividend shall be calculated according to the distribution ratio until the total amount of the cash dividend is integral NT$, the decimals shall be omitted, and the total amount of odd dividends less than NT$1 shall be adjusted from the decimal point from big to small and the account number from front to back, until meeting the total distribution amount of cash dividend.
(4) In the event of a subsequent change in the share capital of the Company, affecting the number of outstanding shares and resulting in a change in the dividend rate to shareholders, it is proposed that the annual shareholders’ meeting should authorize the Chairman to deal with the matter at his sole discretion.

No shareholder raised a question on this proposal.

Resolution: Voting results of this proposal were as follows:

Number of votes of the present shareholders at the time of voting: 74,396,003 votes

Voting result	Proportion (%) in number of votes of the present shareholders at the time of voting
Affirmative votes: 74,135,071 votes (including74,124,249 electronic votes)	99.64%
Dissenting votes: 47,656 votes (including47,656 electronic votes)	0.06%
Invalid votes: 0 vote	0.00%
Abstention and un-voted votes: 213,276 votes (including213,276 electronic votes)	0.28%

Upon resolution by the present shareholders through voting, this proposal was passed as proposed.

Items for Election:

Subject: A proposal for election of additional new directors is submitted for a vote. Description:

(1) Due to business needs, the Company is proposed to elect an additional director at this Shareholders’ Meeting by candidate nomination system.
(2) The term of office of the added director shall be the same with that of existing directors, namely from the date of election to June 6, 2026.
(3) The list of director candidates has been passed by the Board of Directors on March 5, 2024, and relevant data is hereby stated as follows:

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Director Education Shares
Work experience Current position
candidates recognitions held
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Director candidates Education recognitions Work experience Current position Shares held	Director candidates Education recognitions Work experience Current position Shares held	Director candidates Education recognitions Work experience Current position Shares held	Director candidates Education recognitions Work experience Current position Shares held	Director candidates Education recognitions Work experience Current position Shares held

Shang-Ru Yang	Master of Business Administration, National Chung Hsing University	Vice Chairman of AWEA Mechantronic Co., Ltd. President of AWEA Mechantronic Co., Ltd. Person in charge of Zonghan Investment Co., Ltd. Director of Fittech Co., Ltd. Director of Universal Microelectronics Co., Ltd. Special Assistant to President of Goodway Machine Corp. Supervisor of Hung Jiu Machine Co.,Ltd.	President of AWEA Mechantronic Co., Ltd. Person in charge of Zonghan Investment Co., Ltd. Director of Fittech Co., Ltd. Director of Universal Microelectronics Co., Ltd.	0

(4) This election was performed in accordance with the “Rules for Election of Directors”.

(5) It is hereby submitted for election.

Election results: The list of directors elected was as follows

Director

Director
Account number or ID card number	Account name	Number of elected votes
B12184****	Shang-Ru Yang	69,482,346

6. Matter for Discussion:

(Proposed by the Board of Directors)

Subject: Proposal for cancellation of the non-competition restriction on new directors is submitted for discussion.

Description:

(1) In accordance with Article 209 of the 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 an act and secure its approval.”.
(2) In order to attract excellent talents in the industry, it is proposed to submit to the Shareholders’ Meeting to approve dissolution of non-competition restriction on the added director.
(3) Concurrent status of the directors is as follows:

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Title Name Positions held concurrently at another company
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added director. Concurrent status of the directors is as follows:	added director. Concurrent status of the directors is as follows:	added director. Concurrent status of the directors is as follows:
Title Name Positions held concurrentlyat another company

Director	Shang-Ru Yang	President of AWEA Mechantronic Co., Ltd. Person in charge of Zonghan Investment Co., Ltd. Director of Fittech Co., Ltd. Director of Universal Microelectronics Co.,Ltd.

No shareholder raised a question on this proposal.

Resolution: Voting results of this proposal were as follows:

Number of votes of the present shareholders at the time of voting: 74,396,003 votes

Voting result	Proportion (%) in number of votes of the present shareholders at the time of voting
Affirmative votes: 73,974,675 votes (including73,963,853 electronic votes)	99.43%
Dissenting votes: 210,217 votes (including210,217 electronic votes)	0.28%
Invalid votes: 0 vote	0.00%
Abstention and un-voted votes: 211,111 votes (including211,111 electronic votes)	0.28%

Upon resolution by the present shareholders through voting, this proposal was passed as proposed.

Questions and motions: After consultation by the Chairperson with all present shareholders no provisional motion was proposed.
Adjournment: At 9:29 am on the same day, the Chairperson announced the meeting closed, which was approved by all shareholders present without objection.

Chairperson: De-Hua Yang

Clerk: Hong-Hong Lin

[Contents of Reports]

1. 2023 Business Report

To all shareholders concerned:

Thank you to all you shareholders for taking the time to attend the 2024 Annual Shareholders’ Meeting, and for your continuous support and care for the management team of AWEA. The results of the Company’s business performance in the 2023 and the the Company’s business plan in 2024 are summarized and reported as follows:

(1) Report on Results of the Company’s business performance in the 2023:
A. Operating revenue: Net operating revenue of the Company in 2023 was NT$1,572,321 thousand, with a decrease of NT$711,337 thousand and a decrease rate of 31.15%, compared with the NT$2,283,658 thousand in 2022.
B. Profit and loss: Net profit before tax of the Company in 2023 was NT$240,987 thousand, with a decrease of NT$198,870 thousand and a decrease rate of 45.21%, compared with the NT$439,857 thousand in 2022; net profit after tax of the Company in 2023 was NT$210,811 thousand (NT$2.18 per share), with a decrease of NT$143,332 thousand and a decrease rate of 40.47%, compared with the NT$354,143 thousand (NT$3.67 per share) in 2022.
C. Comparison of earnings in 2023 and 2022 was as follows: (Parent Company Only)

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Unit: NT$ thousand
Amount in Increase
Items 2023 2022
increase/decrease (decrease) %
Net operating revenues 1,572,321 2,283,658 (711,337) (31.15%)
Operating costs (1,331,564) (1,825,556) (493,992) (27.06%)
Gross profit 240,757 458,102 (217,345) (47.44%)
Realized (Unealized) gain
3,553 (4,904) 8,457 172.45%
among associated companies
Net operating profit 22,476 212,519 (190,046) (89.43%)
Net profit before tax 240,987 439,857 (198,870) (45.21%)
Net profit after tax 210,811 354,143 (143,332) (40.47%)
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(Consolidated)

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Amount in Increase
Items 2023 2022
increase/decrease (decrease) %
Net operating revenues 2,361,917 3,100,517 (738,600) (23.82%)
Operating costs (2,002,794) (2,432,617) (429,823) (17.67%)
Gross profit 359,123 667,900 (308,777) (46.23%)
Realized (Unealized) gain
(210) (4,900) 4,690 95.71%
among associated companies
Net operating profit 33,000 298,225 (265,225) (88.93%)
Net profit before tax 235,099 459,788 (224,689) (48.87%)
Net profit after tax 190,306 349,287 (158,981) (45.52%)
Attributable to parent
210,811 354,143 (143,332) (40.47%)
company
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D. The budget execution status and the financial revenues in 2023 are as follows:

In accordance with stipulations in “Regulations Governing the Publication of Financial Forecasts of Public Companies”, the Company did not need to disclose its financial forecast information for 2023, therefore, there was no data on its budget execution status in 2023.

E. Breakthrough in operation management:
(A) Breakthrough in product development

AWEA products developed with optimized functions in the direction of large-scale, composite, five-axis, high-speed and intelligence, etc.

a. Gantry type high-speed five-axes machining center AG (linear motor drive) and RG (linear screw drive) series, which met the five-axis and high-speed machining needs for mold and aerospace industry.
b. Various horizontal/ horizontal five-axis machining centers, which provided machining needs for mass-production line.
c. The full range of bridge milling models can be matched with AWEA’s inhouse made high-speed spindle, to meet the needs of the customers’ mold processing industry.
d. MEGA5 series of high-performance large-scale five-axis machining center, which met the high-speed, and high-precision machining needs of the aerospace industry.
e. FCV800S milling machine 5 axes machining center series, which met the customers’ needs for compounding machining.
f. The full range of bridge milling models with the new generation of milling head series, which could comprehensively improve the performance and function, and provide the customers with more choices.
g. Large bridge type milling machine with AWEA homemade automatic universal head, which could meet the customers’ processing needs at different angles.
h. Large moving cross rail machining center MVP series and super traveling column machining center MCP series and new moving cross rail moving column MVCP models, which could provide the customers with large processing range, large processing stroke and meet their needs for processing convenience.
i. Brand-new long-stroke high-speed aluminum cutting machining center, which could provide ultra-high-speed cutting feed to meet the customers' need for high-speed aluminum cutting.
j. Intelligent information control system AiLINC new product was published, which enabled the machine matched with AiLINC to be upgraded to intelligent

machine, to docking with intelligent manufacturing.

  - (B) Breakthrough in production and sales layout

     - a. Its sales volume of niche market products increased, and its export proportion of bridge machines increased.

     - b. Breakthrough in sales volume in mature markets - Italy, Germany, North America, Turkey, etc.

     - c. Development of new markets - Eastern Europe, Northern Europe, ASEAN and India, etc.

     - d. Development and marketing of new products - new large-scale gantry machine, European-standard attachment head integration application, etc.

     - e. It provided diversified controllers for selection, with rapid supply.

  - (C) Breakthrough in improvement of corporate management

     - a. It established corporate culture, to improve the corporate competitiveness.

     - b. It made effective control of accounts receivable and ending balance of inventory.

     - c. It promoted precision production, made effective control of cost, and enhanced the product competitiveness.

     - d. It made reasonable use of general and administrative expenses, and reduced unnecessary expenditures.

(2) Summary of the business plan for 2024
A. 2024 Trading strategy
- (A) Market strategy: To make full use of the information platform, establish complete marketing documents and sales system, coordinate agents in different regions to support each other in machine sales, reduce stock volume and improve delivery speed; cooperate with exhibitions using the group image both at home and abroad, make market promotion, and reduce sales resistance.
- (B) Sales strategy: Enhance brand recognition between the agents and the customers.
- (C) Management strategy: Reduce the error rate, and improve the working quality.
B. Business objective for 2024

Estimated sales volume in 2024: 96 bridge machines, and 405 C-type machines.

(3) Production and marketing policies

Important long-term direction:

A. Continue to make diversion of market: Making diversification of the market is conducive to avoiding the risk of market concentration, which is a long-term policy of the Company, and is conducive to the stable development of the Company.
B. Improve customer satisfaction by service: After service is an important link for maintaining customers, and the Company could obtain repeat orders only with a good

after-sales service, therefore, in the future, the Company will struggle toward the objective of rapid service and inexpensive but excellent support.

C. Develop products as required by the market: To strengthen the interaction and understanding of the market, develop products according to market demand, and improve the market share of products.
(4) Impact from external competition environment, regulatory environment and overall operation environment

The Company’s development in the future is subject to impact from the following adverse factors:

A. The NTD exchange rate fluctuates greatly, which has an impact on order-receiving and production costs, as well as adverse impact on operation.
B. The domestic labor laws and regulations are rigid, which is easy to cause employee-employer conflicts, increase the operating costs, and have adverse impact on development of the industry.
(5) Future Development Strategies
A. Marketing strategies:
- (A) To adjust the sales market proportion and strategy in response to COVID-19 epidemic, China-United States trade war and inflation impact.
- (B) To demonstrate advantages of the Company’s products in aerospace and wind power green energy, and expand the market supply and share.
- (C) To invest more resources for development since the trend of intelligent products with industry 4.0 is becoming increasingly obvious.
- (D) To integrate and develop all kinds of five-axis application technologies, and expand sales of five-axis machine.
- (E) To actively improve all kinds of high-end five-axis products in active markets of five-axis machines.
- (F) To actively expand the international market, and integrate the demonstration, sales, service and repair sites
- (G) To actively introduce talents, make industry-university cooperation, and deeply improve the Company’s long-term development competitiveness.
- (H) To make use of the information tool and platform, and integrate exhibitions, advertising and publicity, to enhance marketing channels.
B. Procurement strategy
- (A) To strengthen supply chain links to shorten lead times of raw materials and reduce stock inventory, and improve the delivery speed and mobility.
- (B) To make group procurement and price negotiation, make regular assessment of the suppliers, and implement ISO assessment of the suppliers’ quality, delivery and price, and coach the suppliers to enhance their competitiveness, thus enhancing

the competitiveness of the Company.

C. Development orientation of product
(A) To cooperate with the domestic green energy, wind power, shipbuilding and other industrial policies to develop new-generation products, so as to make a preparation for competitive advantages in the future.
(B) To construct a complete product line, and coordinate with the Goodway Parent Company, to make respective development in the field of professional milling machine machining and turning machining technologies.
(C) To make research and development of high value-added new products, such as gantry-type\ floor-type moving column gantry machine, floor-type moving column moving cross rail gantry machine, high-efficiency mass production machine, high-speed five-axis machine, and horizontal boring machine, etc.
(D) To deepen the development of intelligent and automated new products at the high-tech level.
(E) To actively promote and expand products in aerospace machining markets in cooperation with the development trend of aerospace industry in the world.
(F) To develop new-generation products in compliance with the global trend of energy-saving, carbon-reduction and green manufacturing.
D. Production strategies
(A) To improve the self-production rate, and strengthen the precision machining equipment and self-assembly capacity, so as to improve the product quality.
(B) To commence construction of Dapumei Phase II plant, the completion of which can improve production capacity of small vertical machines, achieving rapid supply.
(C) To put Phase II plants of Wujiang Plant into mass production, with key precision components supported by the parent factory, so as to improve production capacity in Mainland China.

In the post-epidemic era in 2023, confronted with global high inflation, the FED continued to maintain a high interest rate to suppress inflation, and the global capital expenditure was comprehensively depressed under such environment, having an indirect impact on recovery of the tool industry. Fortunately, as of November 2023, the capital market expected that the U.S. Federal Reserve has completed this cycle of raising interest rate. At present, the world is waiting with bated breath, and it’s expected that the fall of the inflation data and the return of expansion of manufacturing capital expenditure demand could bring the opportunity of the next industrial recovery for the tool machine industry.

The management team of AWEA has always been following a dedicated attitude and making all-round preparation, and we believe that this year, with the continuous support of all you shareholders, we have the confidence to overcome all kinds of adverse internal and external factors, so as to make the Company continue to grow steadily in the sluggish environment, to repay you shareholders’ trust in the management team of AWEA. Thanks again to all shareholders for your support and recognition. At last, I wish all of you:

A good health, and all the best wishes for you!

AWEA Mechantronic Co., Ltd.

President: Shang-Ru Yang

Chairman: President: Accounting Supervisor: De-Hua Yang Shang-Ru Yang Hong-Bin Syu

2. 2023 Audit Committee’s Audit Report

AWEA Mechantronic Co., Ltd.

Audit Committee’s Audit Report

The Business Report, Financial Statements, Proposal for Earnings Distribution and such papers for Year 2023 of the Company have been duly worked out by the Board of Directors. Among the papers, the Financial Statements has been duly audited and verified by Certified Public Accountants Guei-Duan Chen and Chang-Yun Yi of EnWise CPAs & Co. as appointed by the Board of Directors, and the CPA firm has also duly issued the Audit Report.

Upon audit by the Audit Committee, it was deemed that the above Business Report, Financial Statements, Proposal for Earnings Distribution were in compliance with relevant laws and regulations of the Company Act, the report above was made in accordance with the provisions of Article 219 of the Company Act.

It is hereby submitted for examination and approval.

AWEA Mechantronic Co., Ltd. Audit Committee Convener

Li-Ying Luo

March 6, 2024

Appendix 1 Independent Auditors’ Report

To AWEA Mechantronic Co., Ltd.:

Audit Opinion

We have audited the accompanying parent company only balance sheets of AWEA Mechantronic Co., Ltd., as at December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of AWEA Mechantronic Co., Ltd. as of December 31, 2023 and 2022 and for the years then ended, and its individual financial performance and its individual cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers based on our audit results and the audit reports of other certified public accountants (CPAs) (refer to the section of “Other matters”).

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 Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We are convinced that we have acquired enough and appropriate audit evidence to serve as the basis of audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2023 of AWEA Mechantronic Co., Ltd. These matters were addressed in the context of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Key audit matters for the Company’s individual financial statements for the year ended December 31, 2023 are stated as follows:

Revenue recognition

The main source of revenue for AWEA Mechantronic Co., Ltd. is the sales of machining centers. In 2023, the recognized revenue was NT$1,301,851 thousand, which accounted for about 83% of the total operating revenue. Since the sales locations include Taiwan, Mainland China, Italy and the United States, the sales terms vary by customers, the risks of ownership and the time of compensation transfer shall be determined in accordance with the terms of the customer’s orders or contracts, and the time and amount of revenue recognition can have a significant impact on the financial statements. Therefore, we have identified revenue recognition as one of the key audit matters.

For the accounting policies related to revenue recognition, please refer to Note IV to the parent company only financial statements.

We evaluated the reasonableness of the sales revenue recognition, performed the cut-off point test, and performed internal control tests to understand the design and implementation of the sales revenue recognition process and the related control system of AWEA Mechantronic Co., Ltd. In addition, we conducted related control tests on the sales and collection cycles, sampled and checked the sales contracts to confirm the correctness of the information in the accounting system, performed reconciliations between the general ledger system and the sales system, and assessed whether the time of revenue recognition was in accordance with the relevant reporting regulations.

Evaluation of inventories

AWEA Mechantronic Co., Ltd. mainly engages in the design, manufacture and sales of special machines, automation equipment and computer-controlled tool machines. As of December 31, 2023, the total inventories, allowance for market value decline and loss on obsolete and slow-moving inventories were NT$1,365,995 thousand and NT$356,980 thousand, respectively. Inventories of AWEA Mechantronic Co., Ltd. are measured at cost and net realizable value. Allowance for market value decline and loss on obsolete and slow-moving inventories are allocated for inventories aged over a certain period of time or individually identified as obsolete. Due to the intense competition in the spare parts market and the varying speeds of obsolescence of different products, the risks of loss on decline in the market value or obsolete inventories are

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relatively high. The net realizable values used for obsolete inventories and their evaluation usually involve subjective judgment and are therefore highly uncertain. Considering the significant impact of inventories and their allowance for market value decline and loss on obsolete and slow-moving inventories on financial statements, we have identified allowance for market value decline and loss on obsolete and slow-moving inventories as one of the key audit matters.

For the accounting policies related to inventories, please refer to Note IV to the parent company only financial statements; for significant accounting estimates and assumptions used in the evaluation of inventories, please refer to Note V to the parent company only financial statements.

We understood, evaluated, and tested the design and implementation of the internal control system related to inventory management, obtained the evaluation data on the lower of cost or net realizable value of inventories compiled by management authority, sampled and estimated the selling price information to the most recent sales records, and assessed the basis of management authority’s estimate of net realizable value and its reasonableness; obtained an inventory aging statement, and assessed the appropriateness of the policy on provision for allowance for market value decline and loss on obsolete and slow-moving inventories.

Other Matters - References to the Audits of Other CPAs

In the above parent company only financial statements, the financial statements of YAMA SEIKI USA, INC. and Huahan Leasing Co., Ltd., which are investments accounted for using equity method, were not audited by us, but were audited by other CPAs entrusted by the Company. For the years ended December 31, 2023 and 2022, the balances of investments accounted for using equity method were NT$116,713 thousand and NT$109,850 thousand, respectively, which both accounted for 2% of the Company’s total assets. For the years ended December 31, 2023 and 2022, the share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method were NT$7,178 thousand and NT$7,782 thousand, respectively, which accounted for 3% and 2% of the Company's net profit before tax, respectively.

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

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

In preparing the parent company only financial statements, management is responsible for assessing AWEA Mechantronic Co., Ltd.’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 AWEA Mechantronic Co., Ltd. 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 AWEA Mechantronic Co., Ltd.’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatement may arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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

I. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting

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a material misstatement resulting from fraud is higher than the one resulting from error.

II. 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 AWEA Mechantronic Co., Ltd.’s internal control.
III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management level.
IV. 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 AWEA Mechantronic Co., Ltd.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause AWEA Mechantronic Co., Ltd. to cease to continue as a going concern.
V. Evaluate the overall presentation, structure and content of the parent company only financial statements, including relevant notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
VI. Obtain sufficient appropriate audit evidence regarding the financial information of the investee company accounted for using equity method to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit of such investee company. We remain solely responsible for our audit opinion on the parent company only financial statements.

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.

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EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of AWEA Mechantronic Co., Ltd. for the year ended December 31, 2023 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.

EnWise CPAs & Co.

CPA Guei-Duan Chen

CPA Chang-Yun Yi

Approval number of the Securities and Approval number of the Securities and Futures Management Committee, Futures Management Committee, Ministry of Finance Ministry of Finance (1990) Tai-Cai-Zheng (I) No. 27495 (2003) Tai-Cai-Zheng (VI) No. 121986

March 5, 2024

Notice to Readers

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

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

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Independent Auditors’ Report

To AWEA Mechantronic Co., Ltd.:

Audit Opinion

We have audited the accompanying consolidated balance sheets of AWEA Mechantronic Co., Ltd. and its Subsidiaries as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of AWEA Mechantronic Co., Ltd. and its subsidiaries as of December 31, 2023 and 2022 and for the years then ended, and its consolidated financial performance and its consolidated cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China, based on our audit results and the audit reports of other certified public accountants (CPAs).

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 of our report. We are independent of the Company and its subsidiaries 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 are convinced that we have acquired enough and appropriate audit evidence to serve as the basis of audit opinion.

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023 of AWEA Mechantronic Co., Ltd. and its subsidiaries. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the consolidated financial statements for the year ended December 31, 2023 of AWEA Mechantronic Co., Ltd. and its subsidiaries are stated as follows:

Revenue recognition

The main source of revenue for AWEA Mechantronic Co., Ltd. and its subsidiaries is the sales of machining centers. In 2023, the recognized revenue was NT$2,241,199 thousand, which accounted for about 95% of the total operating revenue. Since the sales locations include Taiwan, Mainland China, Italy and the United States, the sales terms vary by customers, the risks of ownership and the time of compensation transfer shall be determined in accordance with the terms of the customer's orders or contracts, and the time and amount of revenue recognition can have a significant impact on the financial statements. Therefore, we have identified revenue recognition as one of the key audit matters.

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

We evaluated the reasonableness of the sales revenue recognition, performed the cut-off point test, and performed internal control tests to understand the design and implementation of the sales revenue recognition process and the related control system of AWEA Mechantronic Co., Ltd. and its subsidiaries. In addition, we conducted related control tests on the sales and collection cycles, sampled and checked the sales contracts to confirm the correctness of the information in the accounting system, performed reconciliations between the general ledger system and the sales system, and assessed whether the time of revenue recognition was in accordance with the relevant reporting regulations.

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Evaluation of inventories

AWEA Mechantronic Co., Ltd. and its subsidiaries mainly engage in the design, manufacture and sales of special machines, automation equipment and computer-controlled tool machines. As of December 31, 2023, the total inventories, allowance for market value decline and loss on obsolete and slow-moving inventories were NT$1,950,844 thousand and NT$502,070 thousand, respectively. Inventories of AWEA Mechantronic Co., Ltd. and its subsidiaries are measured at cost and net realizable value. Allowance for market value decline and loss on obsolete and slow-moving inventories are allocated for inventories aged over a certain period of time or individually identified as obsolete. Due to the intense competition in the spare parts market and the varying speeds of obsolescence of different products, the risks of loss on decline in the market value or obsolete inventories are relatively high. The net realizable values used for obsolete inventories and their evaluation usually involve subjective judgment and are therefore highly uncertain. Considering the significant impact of inventories and their allowance for market value decline and loss on obsolete and slow-moving inventories on financial statements, we have identified allowance for market value decline and loss on obsolete and slow-moving inventories as one of the key audit matters.

For the accounting policies related to inventories, please refer to Note IV to the consolidated financial statements; for significant accounting estimates and assumptions used in the evaluation of inventories, please refer to Note V to the consolidated financial statements.

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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Other Matters

In the above consolidated financial statements, the financial statements of YAMA SEIKI USA, INC. and Huahan Leasing Co., Ltd., which are investments accounted for using equity method, were not audited by us, but were audited by other CPAs entrusted by the Company. For the years ended December 31, 2023 and 2022, the balances of investments accounted for using equity method were NT$116,713 thousand and NT$109,850 thousand, respectively, which both accounted for 2% of the Company's total assets. For the years ended December 31, 2023 and 2022, the share of profit or loss of associates and joint ventures accounted for using equity method were NT$7,178 thousand and NT$7,782 thousand, respectively, which accounted for 3% and 2% of the Company's net profit before tax, respectively.

The Company has prepared the parent company only financial statements for 2023 and 2022, and we have issued an audit report containing our unqualified opinion plus the audit report issued by other CPAs as in the section of “Other matters” 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing AWEA Mechantronic Co., Ltd.’s and its subsidiaries’ 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 AWEA Mechantronic Co., Ltd. and its subsidiaries 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 AWEA Mechantronic Co., Ltd.’s and its subsidiaries’ financial reporting

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

I. 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. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error.
II. 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 AWEA Mechantronic Co., Ltd.’s and its subsidiaries’ internal control.
III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management level.
IV. 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 AWEA Mechantronic Co., Ltd.’s and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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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 AWEA Mechantronic Co., Ltd. and its subsidiaries to cease to continue as a going concern.

V. Evaluate the overall presentation, structure and content of the consolidated financial statements, including relevant notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
VI. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of such the Group. We remain solely responsible for our audit opinion on the consolidated financial statements.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of AWEA Mechantronic Co., Ltd. and its subsidiaries for the year ended December 31, 2023 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.

EnWise CPAs & Co. 9F-1, No. 130, Taiyuan North Road, Taichung City TEL:(04)2296-6234 Fax:(04)2296-0607/2297-6918

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EnWise CPAs & Co.

CPA Guei-Duan Chen

CPA Chang-Yun Yi

Approval number of the Securities and Futures Management Committee, Ministry of Finance (1990) Tai-Cai-Zheng (I) No. 27495

Approval number of the Securities and Futures Management Committee, Ministry of Finance (2003) Tai-Cai-Zheng (VI) No. 121986

March 5, 2024

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese- language independent auditors' report and consolidated financial statements shall prevail.

AWEA Mechantronic Co., Ltd.

Parent Company Only Balance Sheets

December 31, 2023 and 2022

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Unit: NT$ thousand
December 31, 2023 December 31, 2022
Code Items Notes Amount % Amount %
Current assets
1100 Cash and cash equivalents IV and VI $ 618,201 11 $ 979,024 16
1110 Financial assets at FVTPL - current IV and VI 536,929 10 377,002 6
1150 Notes receivable, net IV and VI 51,118 1 254,096 4
1160 Notes receivable due from related parties, net IV and VII 858 - 1,060 -
1170 Accounts receivable, net IV and VI 304,590 6 419,852 7
1180 Account receivables due from related parties, net IV and VII 121,722 2 68,917 1
1200 Other receivables 9,660 - 10,629 -
1210 Other receivables - related parties VII 61,626 1 70,042 1
1220 Current tax assets IV - - - -
130X Inventories IV and VI 1,009,015 19 1,021,279 17
1410 Prepayments VII 7,398 - 6,734 -
1470 Other current assets VIII 344,421 6 541,959 9
11XX Total current assets 3,065,538 56 3,750,594 61
Non-current assets
1517 Financial assets at FVOCI - non-current IV and VI 1,991 - 10,458 -
Financial assets measured at amortized cost -
1535 IV, VI and VIII 10,137 - - -
non-current
1550 Investments accounted for using equity method IV and VI 952,269 17 1,002,016 16
IV, VI, VII and
1600 Property, plant and equipment 1,378,679 25 1,395,401 22
VIII
1755 Right-of-use assets IV and VI 910 - 12,276 -
1780 Intangible assets IV and VI 5,813 - 6,794 -
1840 Deferred tax assets IV and VI 84,620 2 54,214 1
1915 Prepayments for equipment 3,200 - 300 -
1920 Guarantee deposits paid 1,838 - 3,914 -
1931 Long-term notes receivable, net IV 7,413 - 12,115 -
1937 Overdue receivables IV and VI - - - -
15XX Total non-current assets 2,446,870 44 2,497,488 39
1XXX Total assets $ 5,512,408 100 $ 6,248,082 100
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Please refer to the accompanying notes to the financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd.

Parent Company Only Balance Sheets

December 31, 2023 and 2022

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Unit: NT$ thousand
December 31, 2023 December 31, 2022
Code Items Notes Amount % Amount %
Current liabilities
2100 Short-term borrowings VI and VIII $ 1,465,000 27 $ 1,880,000 30
2110 Short-term notes and bills payable VI 79,987 1 289,641 5
2130 Current contract liabilities IV and VI 57,348 1 73,324 1
2150 Notes payable 261,961 5 393,505 6
2160 Notes payable - related parties VII 2,387 - 11,770 -
2170 Accounts payable 83,494 2 72,828 1
2180 Accounts payable - related parties VII 1,559 - 1,489 -
2200 Other payables VI 86,952 2 89,106 1
2220 Other payables - related parties VII 1,209 - 1,677 -
2230 Current tax liabilities IV 49,866 1 47,627 1
2250 Current provisions IV and VI 11,032 - 11,055 -
2280 Current lease liabilities IV, VI and VII 638 - 11,420 -
2310 Advance receipts VII 190 - 42 -
2399 Other current liabilities 1,075 - 2,070 -
21XX Total current liabilities 2,102,698 39 2,885,554 45
Non-current liabilities
2570 Deferred income tax liabilities IV and VI 108,177 2 99,315 2
2580 Non-current lease liabilities IV, VI and VII 280 - 918 -
2640 Net defined benefit liability - non-current IV and VI 6,973 - 8,991 -
2645 Guarantee deposits received 428 - 628 -
25XX Total non-current liabilities 115,858 2 109,852 2
2XXX Total Liabilities 2,218,556 41 2,995,406 47
Equity attributable to owners of the parent
3100 Share capital VI
3110 Common stock 965,942 18 965,942 15
3200 Capital surplus VI
3211 Capital surplus - additional paid-in capital arising 6,124 - 6,124 -
from ordinary share
Capital surplus - Conversion premium of convertible
3213 57,468 1 57,468 1
bonds
3240 Capital surplus - Gains from disposal of assets 4 - 4 -
3280 Capital surplus - others 31,920 1 31,920 1
3300 Retained earnings VI
3310 Legal reserve 562,966 10 527,176 8
3320 Special reserve 98,077 2 98,077 2
3350 Unappropriated earnings 1,606,748 28 1,595,597 26
3400 Other equity VI
3410 Exchange difference on translation of financial (32,016) (1) (18,699) -
statements of foreign operations
Unrealised gains (losses) on valuation of financial
3420 assets measured at fair value through other (3,381) - (10,933) -
comprehensive income
3XXX Total equity 3,293,852 59 3,252,676 53
Total liability and equity $ 5,512,408 100 $ 6,248,082 100
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Please refer to the accompanying notes to the financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd.

Parent Company Only Statements of Comprehensive Income

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand, except earnings per share

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2023 2022
Code Items Notes Amount % Amount %
4000 Operating revenue VI and VII $ 1,572,321 100 $ 2,283,658 100
5000 Operating costs VI and VII (1,331,564) (85) (1,825,556) (80)
5900 Gross profit 240,757 15 458,102 20
5920 Realized (Unealized) gain from sale 3,553 - (4,904) -
5950 Gross profit, net 244,310 15 453,198 20
Operating expenses VII
6100 Selling and marketing expenses (125,086) (8) (145,146) (6)
6200 General and administrative expenses (50,884) (3) (49,140) (2)
6300 Research and development expenses (53,729) (3) (61,294) (3)
6450 Expected credit impairment gains (losses) 7,865 1 14,901 1
6000 Total operating expenses (221,834) (13) (240,679) (10)
6900 Operating profit (loss) 22,476 2 212,519 10
Non-operating income and expenses
7100 Interest income 30,000 2 16,006 1
7010 Other income VI and VII 50,951 3 31,373 1
7020 Other gains and losses VI and VII 132,191 8 104,081 5
7050 Finance costs VI (28,704) (2) (19,897) (1)
Share of profit or loss of subsidiaries, associates and
7070 34,073 2 95,775 4
joint ventures accounted for using equity method
7000 Total non-operating income and expenses 218,511 13 227,338 10
7900 Net profit before tax 240,987 15 439,857 20
7950 Income tax income (expense) IV and VI (30,176) (2) (85,714) (4)
8200 Profit for the year 210,811 13 354,143 16
Other comprehensive income
Items that will not be reclassified subsequently to
8310
profit or loss
8311 Remeasurement of defined benefit plan (351) - 3,296 -
Unrealized gains (losses) from investment in equity
8316 instrument measured at fair value through other (1,486) - (13,848) (1)
comprehensive income
8349 Income taxes related to the items not reclassified 70 - (659) -
Items that may be reclassified subsequently to profit
8360
or loss
Exchange difference on translation of financial
8361 (16,647) (1) 21,763 1
statements of foreign operations
8399 Income tax related to items that may be reclassified 3,330 - (4,353) -
8300 Other comprehensive (loss) income for the year (15,084) (1) 6,199 -
8500 Total comprehensive income $ 195,727 12 $ 360,342 16
Earnings per share
9750 Basic earnings per share $ 2.18 $ 3.67
9850 Diluted earnings per share $ 2.17 $ 3.65
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Please refer to the accompanying notes to the financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd.

Parent Company Only Statement of Changes in Equity

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand

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Share capital Retained earnings Other equity items
Unrealised gains (losses)
Exchange difference on
on valuation of financial
Unappropriated translation of financial
Items Common stock Capital surplus Legal reserve Special reserve assets measured at fair Total equity
earnings statements of foreign
value through other
operations
comprehensive income
Balance at January 1, 2022 $ 965,942 $ 124,495 $ 513,898 $ 98,077 $ 1,366,883 $ (36,109) $ 4,040 $ 3,037,226
Appropriation and distribution of retained earnings:
Legal reserve - - 13,278 - (13,278) - - -
Special reserve - - - - - - - -
Cash dividends of common stock - - - - (115,913) - - (115,913)
Cash dividends of shares from capital surplus - (28,979) - - - - - (28,979)
2022 Net profit - - - - 354,143 - - 354,143
Other comprehensive income for 2022 - - - - 2,637 17,410 (13,848) 6,199
Total comprehensive income of 2022 - - - - 356,780 17,410 (13,848) 360,342
Disposal of investments in equity instruments at fair - - - - 1,125 - (1,125) -
value through other comprehensive income
Balance at December 31, 2022 965,942 95,516 527,176 98,077 1,595,597 (18,699) (10,933) 3,252,676
Appropriation and distribution of retained earnings:
Legal reserve - - 35,790 - (35,790) - - -
Special reserve - - - - - - - -
Cash dividends of common stock - - - - (154,551) - - (154,551)
Cash dividends of shares from capital surplus - - - - - - - -
2023 Net profit - - - - 210,811 - - 210,811
Other comprehensive income for 2023 - - - - (281) (13,317) (1,486) (15,084)
Total comprehensive income of 2023 - - - - 210,530 (13,317) (1,486) 195,727
Disposal of investments in equity instruments at fair - - - - (9,038) - 9,038 -
value through other comprehensive income
Balance at December 31, 2023 $ 965,942 $ 95,516 $ 562,966 $ 98,077 $ 1,606,748 $ (32,016) $ (3,381) $ 3,293,852
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Please refer to the accompanying notes to the financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd.

Parent Company Only Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand

Cash flows from operating activities Net profit before tax Adjustments Depreciation Amortisation Expected credit impairment gains Interest expense Interest income Dividend revenue Share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method (Gains) losses from evaluation of financial assets Gain (loss) on disposal or retirement of property, plant and equipment Lease modification benefit Gains on disposals of investments Unrealized (Realized) gain from sale Changes in operating assets and liabilities Notes receivable Notes receivable - related parties Account receivables Account receivables - related parties Other receivables Other receivables - related parties Inventories Prepayments Other current assets Overdue receivables Long-term notes receivable Current contract liabilities Notes payable Notes payable - related parties Accounts payable Accounts payable - related parties Other payables Other payables - 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)	2023 240,987 $ 71,296 1,741 (7,865) 28,704 (30,000) (23,308) (34,073) (123,694) (343) - (2,841) (3,553) 200,603 202 116,040 (52,805) 236 (1,584) 12,264 (664) 182 8,784 5,380 (15,975) (131,544) (9,383) 10,666 70 (2,419) (468) (23) 148 (995) (2,369) 253,397 30,733 (46,558) 237,572	2022 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) 216,712 12,091 (19,885) 208,918

AWEA Mechantronic Co., Ltd.

Parent Company Only Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand

		Unit: NT$ thousand
(Continued from previous page) Cash flows from investing activities Acquisitions of financial assets at fair value through profit or loss Disposal price of financial assets at fair value through profit or loss Acquisitions of financial assets at fair value through other comprehensive income Disposal price of financial assets at fair value through other comprehensive income Acquisition of financial assets measured at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in guarantee deposits paid Decrease (Increase) in other receivables - related parties Acquisitions of intangible assets Decrease (Increase) in other financial assets Decrease (Increase) in prepayments for equipment Dividends received Net cash inflow (outflow) from investing activities Cash flows from financing activities Increase (decrease) in short-term borrowings Increase (Decrease) in short-term notes and bills payable Decrease in long-term borrowings Decrease in guarantee deposits received Repayment of principal of lease liabilities Cash dividends paid Interest paid Net cash inflow (outflow) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year	2023 (49,014) 15,622 - 6,981 (10,137) (44,082) 343 2,076 10,000 (760) 197,356 (2,900) 94,511 219,996 (415,000) (209,654) - (200) (11,420) (154,551) (27,566) (818,391) (360,823) 979,024 618,201 $	2022
		(236,175) 22,536 (11,268) 3,790 - (20,297) 2,272 223 (5,000) (800) (223,962) 3,664 165,665 (299,352) 590,000 29,734 (2,206) (2,013) (11,410) (144,890) (19,727) 439,488 349,054 629,970 979,024 $

Please refer to the accompanying notes to the financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Balance Sheets

December 31, 2023 and 2022

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Unit: NT$ thousand
December 31, 2023 December 31, 2022
Code Items Notes Amount % Amount %
Current assets
1100 Cash and cash equivalents IV and VI $ 866,173 15 $ 1,132,171 17
1110 Financial assets at FVTPL - current IV and VI 536,929 9 377,002 5
1150 Notes receivable, net IV and VI 157,100 3 381,640 6
1160 Notes receivable due from related parties, net IV and VII 858 - 4,274 -
1170 Accounts receivable, net IV and VI 350,642 6 457,612 7
1180 Account receivables due from related parties, IV and VII 43,741 1 33,566 -
net
1200 Other receivables 11,698 - 10,766 -
1210 Other receivables - related parties VII - - - -
1220 Current tax assets IV 26 - 143 -
130x Inventories IV and VI 1,448,774 24 1,607,007 24
1410 Prepayments VII 42,490 1 57,859 1
1470 Other current assets VIII 344,423 6 542,186 8
11xx Total current assets 3,802,854 65 4,604,226 68
Non-current assets
1517 Financial assets at FVOCI - non-current IV and VI 1,991 - 10,458 -
Financial assets measured at amortized cost -
1535 IV, VI and VIII 10,137 - - -
non-current
1550 Investments accounted for using equity method IV and VI 116,713 2 109,850 2
1600 Property, plant and equipment IV, VI, VII and VIII 1,741,772 29 1,797,473 26
1755 Right-of-use assets IV, VI and VIII 114,477 2 132,035 2
1780 Intangible assets IV and VI 12,656 - 10,368 -
1840 Deferred tax assets IV and VI 140,108 2 101,283 1
1915 Prepayments for equipment 3,200 - 300 -
1920 Guarantee deposits paid 3,965 - 7,146 -
1931 Long-term notes receivable, net IV 7,413 - 12,115 1
1937 Overdue receivables IV and VI - - - -
1990 Other non-current assets - others 6,605 - 6,544 -
15xx Total non-current assets 2,159,037 35 2,187,572 32
1xxx Total assets $ 5,961,891 100 $ 6,791,798 100
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Please refer to the accompanying notes to the consolidated financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Balance Sheets

December 31, 2023 and 2022

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Unit: NT$ thousand
December 31, 2023 December 31, 2022
Code Items Notes Amount % Amount %
Current liabilities
2100 Short-term borrowings VI and VIII $ 1,576,852 26 $ 1,954,949 29
2110 Short-term notes and bills payable VI 79,987 1 289,641 4
2130 Contract liabilities IV and VI 172,215 3 225,013 3
2150 Notes payable 262,181 4 393,849 6
2160 Notes payable - related parties VII 566 - 514 -
2170 Accounts payable 165,270 3 201,312 3
2180 Accounts payable - related parties VII 350 - 799 -
2200 Other payables VI 112,178 2 128,889 2
2220 Other payables - related parties VII 1,339 - 2,007 -
2230 Current tax liabilities IV 52,116 1 64,623 1
2250 Current provisions IV and VI 12,935 - 12,445 -
2280 Current lease liabilities IV, VI and VII 638 - 11,420 -
2310 Advance receipts VII 1,066 - 934 -
2399 Other current liabilities - others 1,077 - 2,099 -
21xx Total current liabilities 2,438,770 40 3,288,494 48
Non-current liabilities
2570 Deferred income tax liabilities IV and VI 116,831 2 112,224 2
2580 Non-current lease liabilities IV, VI and VII 280 - 918 -
2630 Long-term deferred revenue 9,533 - 10,793 -
2640 Net defined benefit liability - non-current IV and VI 6,973 - 8,991 -
2645 Guarantee deposits received 1,911 - 2,183 -
25xx Total non-current liabilities 135,528 2 135,109 2
2xxx Total Liabilities 2,574,298 42 3,423,603 50
Equity attributable to owners of the parent
3100 Share capital VI
3110 Common stock 965,942 16 965,942 14
3200 Capital surplus VI
3211 Capital surplus - additional paid-in capital 6,124 - 6,124 -
arising from ordinary share
Capital surplus - Conversion premium of
3213 57,468 1 57,468 1
convertible bonds
3240 Capital surplus - Gains from disposal of 4 - 4 -
assets
3280 Capital surplus - others 31,920 1 31,920 -
3300 Retained earnings VI
3310 Legal reserve 562,966 9 527,176 8
3320 Special reserve 98,077 2 98,077 1
3350 Unappropriated earnings 1,606,748 28 1,595,597 24
3400 Other equity VI
3410 Exchange difference on translation of (32,016) (1) (18,699) -
financial statements of foreign operations
Unrealised gains (losses) on valuation of
3420 financial assets measured at fair value (3,381) - (10,933) -
through other comprehensive income
Total equity attributable to owners of the
31xx 3,293,852 56 3,252,676 48
parent
36xx Non-controlling interests VI 93,741 2 115,519 2
3xxx Total equity 3,387,593 58 3,368,195 50
Total liability and equity $ 5,961,891 100 $ 6,791,798 100
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Please refer to the accompanying notes to the consolidated financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand, except earnings per share

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2023 2022
Code Items Notes Amount % Amount %
4000 Operating revenue VI and VII $ 2,361,917 100 $ 3,100,517 100
5000 Operating costs VI and VII (2,002,794) (85) (2,432,617) (78)
5900 Gross profit 359,123 15 667,900 22
5920 Realized (Unealized) gain from sale (210) - (4,900) -
5950 Gross profit, net 358,913 15 663,000 22
Operating expenses
6100 Selling and marketing expenses (149,424) (6) (188,205) (6)
6200 General and administrative expenses (129,974) (6) (128,520) (4)
6300 Research and development expenses (53,729) (2) (61,671) (2)
6450 Expected credit impairment gains (losses) 7,214 - 13,621 -
6000 Total operating expenses (325,913) (14) (364,775) (12)
6900 Operating profit 33,000 1 298,225 10
Non-operating income and expenses
7100 Interest income 30,129 1 15,972 1
7010 Other income VI 65,466 4 46,011 2
7020 Other gains and losses IV and VI 132,086 6 117,800 4
7050 Finance costs VI (32,760) (1) (26,002) (1)
7060 Share of profit or loss of associates and joint ventures 7,178 - 7,782 -
accounted for using equity method
7000 Total non-operating income and expenses 202,099 10 161,563 5
7900 Net profit before tax 235,099 11 459,788 15
7950 Income tax income (expense) IV and VI (44,793) (2) (110,501) (4)
8200 Profit for the year 190,306 9 349,287 11
Other comprehensive income
8310 Items that will not be reclassified subsequently to profit or
loss
8311 Remeasurement of defined benefit plan (351) - 3,296 -
Unrealized gains (losses) from investment in equity
8316 instrument measured at fair value through other (1,486) - (13,848) -
comprehensive income
8349 Income taxes related to the items not reclassified 70 - (659) -
Items that may be reclassified subsequently to profit or
8360
loss
8361 Exchange difference on translation of financial (18,238) (2) 23,155 -
statements of foreign operations
8399 Income tax related to items that may be reclassified 3,648 (1) (4,631) -
8300 Other comprehensive (loss) income for the year (16,357) (3) 7,313 -
8500 Total comprehensive income $ 173,949 6 $ 356,600 11
8600 Net profit (loss) attributable to:
8610 Owners of the parent company (net profit/ loss) $ 210,811 9 $ 354,143 11
8620 Non-controlling interests (net profit/ loss) (20,505) - (4,856) -
$ 190,306 9 $ 349,287 11
8700 Total comprehensive income attributable to:
8710 Owners of the parent company (comprehensive income) $ 195,727 7 $ 360,342 11
8720 Non-controlling interests (comprehensive income) (21,778) - (3,742) -
$ 173,949 7 $ 356,600 11
Earnings per share
9750 Basic earnings per share $ 2.18 $ 3.67
9850 Diluted earnings per share $ 2.17 $ 3.65
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Please refer to the accompanying notes to the consolidated financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd. and its Subsidiaries Consolidated Statement of Changes in Equity

Unit: NT$ thousand

For the Years Ended December 31, 2023 and 2022

Equity attributable to owners of the parent

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Share capital Retained earnings Other equity items
Exchange
Unrealised gains
difference on
(losses) on valuation Total equity
translation of
Unappropriated of financial assets attributable to Non-controlling
Items Common stock Capital surplus Legal reserve Special reserve financial Total equity
earnings measured at fair value owners of the interests
statements of
through other parent
foreign
comprehensive income
operations
Balance at January 1, 2022 $ 965,942 $ 124,495 $ 513,898 $ 98,077 $ 1,366,883 $ (36,109) $ 4,040 $ 3,037,226 $ 119,261 $ 3,156,487
Appropriation and distribution of retained
earnings:
Legal reserve - - 13,278 - (13,278) - - - - -
- - - - - - -
Cash dividends paid (115,913) (115,913) (115,913)
Cash dividends to shareholders from capital - - - - - - -
(28,979) (28,979) (28,979)
surplus
2022 Net profit - - - - 354,143 - - 354,143 (4,856) 349,287
Other comprehensive income for 2022 - - - - 2,637 17,410 (13,848) 6,199 1,114 7,313
Total comprehensive income of 2022 - - - - 356,780 17,410 (13,848) 360,342 (3,742) 356,600
Disposal of investments in equity instruments
at fair value through other comprehensive - - - - 1,125 - (1,125) - - -
income
Balance at December 31, 2022 965,942 95,516 527,176 98,077 1,595,597 (18,699) (10,933) 3,252,676 115,519 3,368,195
Appropriation and distribution of retained
earnings:
Legal reserve - - 35,790 - (35,790) - - - - -
- - - - - - -
Cash dividends paid (154,551) (154,551) (154,551)
surplus Cash dividends to shareholders from capital - - - - - - - - - -
2023 Net profit - - - - 210,811 - - 210,811 (20,505) 190,306
- - - -
Other comprehensive income for 2023 (281) (13,317) (1,486) (15,084) (1,273) (16,357)
Total comprehensive income of 2023 - - - - 210,530 (13,317) (1,486) 195,727 (21,778) 173,949
Disposal of investments in equity instruments
at fair value through other comprehensive - - - - (9,038) - 9,038 - - -
income
Balance at December 31, 2023 $ 965,942 $ 95,516 $ 562,966 $ 98,077 $ 1,606,748 $ (32,016) $ (3,381) $ 3,293,852 $ 93,741 $ 3,387,593
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Please refer to the accompanying notes to the consolidated financial statements.

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousand

Cash flows from operating activities Net profit before tax Adjustments Depreciation Amortisation Expected credit impairment (gains) losses Interest expense Interest income Dividend revenue Share of profit or loss of associates and joint ventures accounted for using equity method Gains on disposal and discard of property, plant and equipment Unrealized (Realized) gain from sale Other income Lease modification benefit Gains on disposals of investments (Gains) losses from evaluation of financial assets Changes in operating assets and liabilities Notes receivable Notes receivable - related parties Account receivables Account receivables - related parties Other receivables Other receivables - related parties Inventories Prepayments Other current assets Overdue receivables Long-term notes receivable Contract liabilities Notes payable Notes payable - related parties Accounts payable Accounts payable - related parties Other payables Other payables - 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)	2023 235,099 $ 111,786 2,752 (7,214) 32,760 (30,129) (23,308) (7,178) (61) 210 (1,075) - (2,841) (123,694) 222,165 3,416 107,200 (10,175) (1,665) - 158,233 15,369 407 8,784 5,380 (52,798) (131,668) 52 (36,042) (449) (15,683) (668) 522 132 (1,022) (2,088) 456,509 30,862 (87,932) 399,439	2022 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) 247,738 12,058 (37,909) 221,887

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

(Continued from previous page) Cash flows from investing activities Acquisitions of financial assets at fair value through profit or loss Disposal price of financial assets at fair value through profit or loss Acquisitions of financial assets at fair value through other comprehensive income Disposal price of financial assets at fair value through other comprehensive income Acquisition of financial assets measured at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisitions of intangible assets Decrease (Increase) in prepayments for equipment Decrease in guarantee deposits paid Decrease (Increase) in other non-current assets Dividends received Decrease (Increase) in other financial assets Net cash inflow (outflow) from investing activities Cash flows from financing activities Increase (decrease) in short-term borrowings Increase (Decrease) in short-term notes and bills payable Decrease in long-term borrowings Repayment of principal of lease liabilities Decrease in guarantee deposits received Interest paid Dividends paid Net cash inflow (outflow) from financing activities Effect of changes in foreign exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year	2023 (49,014) 15,622 - 6,981 (10,137) (51,642) 1,779 (5,079) (2,900) 3,181 (61) 23,308 197,356 129,394 (378,097) (209,654) - (11,420) (272) (31,622) (154,551) (785,616) (9,215) (265,998) 1,132,171 866,173 $	Unit: NT$ thousand 2022
		(236,175) 22,536 (11,268) 3,791 - (22,340) 3,740 (1,246) 3,664 5,785 2,094 18,114 (220,429) (431,734) 619,168 29,734 (62,672) (11,410) (1,990) (25,793) (144,890) 402,147 2,219 194,519 937,652 1,132,171 $

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

Chairman: De-Hua Yang Managerial officer: Shang-Ru Yang Accounting Supervisor: Hong-Bin Syu

Appendix 2 AWEA Mechantronic Co., Ltd.

Statement of Earnings Distribution 2023

Unit: NT$

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Amount
Items Remark
Subtotal Total
Opening balance $1,405,254,991
Adjustments:
210,810,719
Add: Net profit tax for 2023
Less: Unrealised gains (losses) on valuation of financial
assets measured through other comprehensive
income (9,038,008)
Less: Other comprehensive income after tax for 2023 -
(280,609)
gains/losses from actuary of defined benefit
Less: Legal reserve (20,149,210) Note 1
Earnings allocable 1,586,597,883
Items of distribution:
Shareholders’ dividend - Cash (NT$1.5/share) (144,891,257)
Unappropriated retained earnings at the end of the term $1,441,706,626
Chairman: Managerial officer: Accounting Supervisor:
De-Hua Yang Shang-Ru Yang Hong-Bin Syu
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Note: Note 1: As stipulated by the Articles of Incorporation, 10% of the net profit after tax shall be set aside as legal reserve.

$201,492,102*10%=$20,149,210

Note 2: The amount of earnings distribution this time shall come from the earnings of 2023 in priority.

AI assistant

AWEA — AGM Information 2024

51853_rns_2024-06-27_45af39e4-bf7c-469c-b4c4-ca9b1fe63762.pdf

2024 Annual Shareholders’ Meeting Minutes of AWEA Mechantronic Co., Ltd.

Director

6. Matter for Discussion:

[Contents of Reports]

1. 2023 Business Report

(Consolidated)

2. 2023 Audit Committee’s Audit Report

AWEA Mechantronic Co., Ltd.

Audit Committee’s Audit Report

Appendix 1

Independent Auditors’ Report

Audit Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Evaluation of inventories

Other Matters - References to the Audits of Other CPAs

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

Independent Auditors’ Report

Audit Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Evaluation of inventories

Other Matters

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

CPA Chang-Yun Yi

March 5, 2024

Notice to Readers

AWEA Mechantronic Co., Ltd.

Parent Company Only Balance Sheets

Parent Company Only Balance Sheets

AWEA Mechantronic Co., Ltd.

Parent Company Only Statements of Comprehensive Income

AWEA Mechantronic Co., Ltd.

AWEA Mechantronic Co., Ltd.

Parent Company Only Statements of Cash Flows

Parent Company Only Statements of Cash Flows

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Balance Sheets

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Balance Sheets

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Statements of Comprehensive Income

AWEA Mechantronic Co., Ltd. and its Subsidiaries

Consolidated Statements of Cash Flows

Consolidated Statements of Cash Flows

Appendix 2

AWEA Mechantronic Co., Ltd.

Statement of Earnings Distribution 2023

More from AWEA

AWEA AGM Information 2024