AWEA Mechantronic Company Limited

Consolidated Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditors’ Report

REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of AWEA Mechantronic Company Limited as of and for the year ended December 31, 2022, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, AWEA Mechantronic Company Limited and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

AWEA Mechantronic Company Limited Chairman: YANG, TE-HUA March 13, 2023

-1-

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

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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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.

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

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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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

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.

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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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 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:

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

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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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.

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.

EnWise CPAs & Co. Taichung, Taiwan Republic of China

March 13, 2023

AWEA Mechantronic Company Limited

CONSOLIDATED BALANCE SHEETS

December 31, 2022 and 2021

31-Dec-22	In Thousands of New Taiwan Dollars % 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 31-Dec-21	In Thousands of New Taiwan Dollars % 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 31-Dec-21
Amount 1,132,171 $ 377,002 381,640 4,274 457,612 33,566 10,766 - 143 1,607,007 57,859 542,186 4,604,226 10,458 109,850 1,797,473 132,035 10,368 101,283 300 7,146 12,115 - 6,544 2,187,572 6,791,798 $	Amount 937,652 $ 172,417 247,478 3,765 526,533 13,810 9,628 174 732 1,549,646 75,973 321,502 3,859,310 16,829 96,604 1,872,994 146,084 12,043 148,210 3,964 12,931 29,673 - 8,638 2,347,970 6,207,280 $	%
		15 3 4 - 9 - - - - 25 1 5
		62
		- 3 30 2 - 2 - - 1 - -
		38
		100

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

AWEA Mechantronic Company Limited

CONSOLIDATED BALANCE SHEETS

December 31, 2022 and 2021

31-Dec-22	In Thousands of New Taiwan Dollars % 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 31-Dec-21	In Thousands of New Taiwan Dollars % 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 31-Dec-21
Amount 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 3,288,494 - 112,224 918 10,793 8,991 2,183 135,109 3,423,603 965,942 6,124 57,468 4 31,920 527,176 98,077 1,595,597 (18,699) (10,933) 3,252,676 115,519 3,368,195 6,791,798 $	Amount 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 2,825,233 62,672 121,459 12,764 11,698 12,794 4,173 225,560 3,050,793 965,942 6,124 86,447 4 31,920 513,898 98,077 1,366,883 (36,109) 4,040 3,037,226 119,261 3,156,487 6,207,280 $	%
		22 4 4 8 - 5 - 2 - 1 - - - -
		46
		1 2 - - - -
		3
		49
		16 - 1 - 1 8 2 22 (1) -
		49 2
		51
		100

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

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The years ended December 31, 2022 and 2021

In Thousands of 2022	New Taiwan Dollars, Except Earnings % Amount 100 3,630,956 $ (78) (2,951,020) 22 679,936 - 1,924 22 681,860 (6) (217,903) (4) (125,687) (2) (60,627) - (11,444) (12) (415,661) 10 266,199 1 4,226 2 35,444 4 (58,340) (1) (14,441) - 4,712 5 (28,399) 15 237,800 (4) (115,767) 11 122,033 - (1,035) - 5,303 - 207 - 24,490 - (4,898) - 24,067 11 146,100 $ 11 130,860 $ - (8,827) 11 122,033 $ 11 155,464 $ - (9,364) 11 146,100 $ 1.35 $ 1.35 $ 2021	Per Share
Amount 3,100,517 $ (2,432,617) 667,900 (4,900) 663,000 (188,205) (128,520) (61,671) 13,621 (364,775) 298,225 15,972 46,011 117,800 (26,002) 7,782 161,563 459,788 (110,501) 349,287 3,296 (13,848) (659) 23,155 (4,631) 7,313 356,600 $ 354,143 $ (4,856) 349,287 $ 360,342 $ (3,742) 356,600 $ 3.67 $ 3.65 $	Amount 3,630,956 $ (2,951,020) 679,936 1,924 681,860 (217,903) (125,687) (60,627) (11,444) (415,661) 266,199 4,226 35,444 (58,340) (14,441) 4,712 (28,399) 237,800 (115,767) 122,033 (1,035) 5,303 207 24,490 (4,898) 24,067 146,100 $ 130,860 $ (8,827) 122,033 $ 155,464 $ (9,364) 146,100 $ 1.35 $ 1.35 $	%
		100 (81)
		19 -
		19
		(6) (4) (2) -
		(12)
		7
		- 1 (2) - -
		(1)
		6 (3)
		3
		- - - 1 -
		1
		4
		3 -
		3
		4 -
		4

Please refer to notes to the individual financial reports.

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The years ended December 31, 2022 and 2021

		EquityAttributable to	EquityAttributable to	Shareholders of the Parent	Shareholders of the Parent	ew Taiwan Dollars Total Equity
Capital Stock Common Stock 965,942 $ - - - - - - - 965,942 - - - - - - - 965,942 $	Capital Surplus 172,792 $ - - (48,297) - - - - 124,495 - - (28,979) - - - - 95,516 $		Retained Earnings	Unappropriated Earnings 1,465,540 $ (38,245) (193,188) - 130,860 (828) 130,032 2,744 1,366,883 (13,278) (115,913) - 354,143 2,637 356,780 1,125 1,595,597 $	Exchange Differences on Translation of Foreign Financial Statements Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income (56,238) $ 1,481 $ - - - - - - - - 20,129 5,303 20,129 5,303 - (2,744) (36,109) 4,040 - - - - - - - - 17,410 (13,848) 17,410 (13,848) - (1,125) (18,699) $ (10,933) $ Others
		Legal Capital Reserve 475,653 $ 38,245 - - - - - - 513,898 13,278 - - - - - - 527,176 $	Special Capital Reserve 98,077 $ - - - - - - - 98,077 - - - - - - - 98,077 $		Exchange Differences on Translation of Foreign Financial Statements (56,238) $ - - - - 20,129 20,129 - (36,109) - - - - 17,410 17,410 - (18,699) $
						3,251,872 $ - (193,188) (48,297) 122,033 24,067
						146,100
						-
						3,156,487 - (115,913) (28,979) 349,287 7,313
						356,600
						-
						3,368,195 $

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

AWEA Mechantronic Company Limited

CONSOLIDATED 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, 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 $ 237,800 $ 115,080 117,382 2,965 2,406 (13,621) 11,444 26,002 14,441 (15,972) (4,226) (18,114) (1,724) (7,782) (4,712) (211) (1,499) - 48 4,900 (1,924) (1,081) (1,063) (283) (88) (2,095) - 11,149 (7,073) (134,978) 109,807 (509) (2,783) 88,299 7,459 (19,617) 32,232 2,777 (3,763) 174 (119) (57,361) (203,306) 18,114 17,707 (255) 9,169 (6,784) 2,494 19,191 5,969 4,062 (641) (124,385) 218,303 (16,520) 16,124 (77,204) 19,441 208 (4,289) (9,489) (35,024) 531 (96) (513) (11,896) 922 (719) 857 (155) (507) (578) 247,738 536,548 12,058 4,226 (37,909) (62,093) 221,887 478,681 In Thousands of New Taiwan Dollars	2022 2021 459,788 $ 237,800 $ 115,080 117,382 2,965 2,406 (13,621) 11,444 26,002 14,441 (15,972) (4,226) (18,114) (1,724) (7,782) (4,712) (211) (1,499) - 48 4,900 (1,924) (1,081) (1,063) (283) (88) (2,095) - 11,149 (7,073) (134,978) 109,807 (509) (2,783) 88,299 7,459 (19,617) 32,232 2,777 (3,763) 174 (119) (57,361) (203,306) 18,114 17,707 (255) 9,169 (6,784) 2,494 19,191 5,969 4,062 (641) (124,385) 218,303 (16,520) 16,124 (77,204) 19,441 208 (4,289) (9,489) (35,024) 531 (96) (513) (11,896) 922 (719) 857 (155) (507) (578) 247,738 536,548 12,058 4,226 (37,909) (62,093) 221,887 478,681 In Thousands of New Taiwan Dollars
		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)
		536,548 4,226 (62,093)
		478,681

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CASHFLOWS

The years ended December 31, 2022 and 2021

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

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

AWEA Mechantronic Company Limited NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

1.GENERAL

AWEA Mechantronic Company Limited (the “Company”) was incorporated on July 16, 1986. The main business of the Company is the design, manufacture and sales of special-purpose machines, automation equipment and computer-controlled machine tools.

On September 6, 2000, the Company’s shares were approved for listing by the approval letter (89) Shentzu No. 025773 of Taiwan Stock Exchange (TWSE) and started listing and trading on TWSE centralized order market on September 11, 2000.

2.DATE AND PROCEDURE FOR APPROVAL OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 13, 2023.

3.APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(1) The impact of adoption of the newly issued and revised International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission (FSC)：

Since 2022, the Company has fully adopted IFRS approved by FSC and effective since 2022 to prepare financial statements. The related new, revised or amended standards and interpretations are as below:

2022 to prepare financial statements. The related new, interpretations are as below:	revised or amended standards and
New, Revised or Amended Standards and Interpretations Amendments to IAS 16 “Property, Plant and Equipment: Proceeds Before Intended Use” Amendments to IAS 37 “Onerous Contracts: Cost of Fulfilling a Contract” Amendments to IFRS 3 “Reference to the Conceptual Framework” Annual Improvements to IFRSs 2018-2020 Cycle	Effective Date Issued by IASB
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The Company assessed that the application of the above-mentioned newly recognized IFRS will not have material impact on the consolidated financial statements.

(2) The impact of not yet applying of IFRSs endorsed by the FSC:

The table below listed the new, revised or amended standards and interpretations endorsed by the FSC with effective date starting 2023:

New, Revised or Amended Standards and Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Issued by IASB
	January 1, 2023 January 1, 2023 January 1, 2023

Disclosure of Accounting Policies

The amendment improved the disclosure of accounting policies to provide more useful information to the investors and other users of the financial statements.

Definition of Accounting Estimates

This amendment is to directly define accounting estimates, and to make other amendments for the accounting policies, changes of accounting estimates and errors to

help companies differentiate changes of accounting policies and changes of accounting estimates.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction

This amendment is to limit the scope of exemption for deferred income tax recognition in income tax, so that the exemption will not be applicable to transactions that generate the same amount of taxable and deductible temporary difference at original recognition.

The Company assessed that the above-mentioned new, revised or amended standards and interpretations will not have material impact on the consolidated financial statements.

(3) The impact of the IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC:

The table below listed the new, revised or amended standards and interpretations issued and published by IASB but not yet endorsed by FSC:

New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IAS 1 “Classification of Liabilities as Current or Noncurrent” and “Non-current Liabilities with Covenants” Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” Amendments to IAS 1 “Classification of Liabilities as Current or Noncurrent” and “Non-current Liabilities with Covenants”	Effective Date Issued by IASB
	Pending IFRS Committee decision January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

New, Revised or Amended Standards and
Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IAS 1 “Classification of
Liabilities as Current or Noncurrent” and
“Non-current Liabilities with Covenants”
Amendments to IFRS 16 “Lease Liability in a
Sale and Leaseback”
Amendments to IAS 1 “Classification of
Liabilities as Current or Noncurrent” and
“Non-current Liabilities with Covenants”

Effective Date Issued
by IASB

Pending IFRS Committee
decision
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

The Company anticipated that the above-mentioned newly published or amended standards will not have material impact to the consolidated financial statements.

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies that the consolidated financial statements adopted are listed as below. Except for the illustration of accounting changes in Note 3 and 4, all the accounting policies below are applied consistently to all periods presented in the consolidated financial statements.

(1) Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRSs”) endorsed and issued into effect by FSC.

(2) Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis, except for important items in the balance sheets listed below:

Financial assets at fair value through profit or loss;
Financial assets at fair value through other comprehensive income;
Net defined benefit liability, which is based on the fair value of pension fund asset minus the present value of defined benefit obligations.

(3) Functional Currency and Reporting Currency

The functional currency of each entity within the consolidated company is the currency of the primary economic environment in which it operates. This consolidated financial report is presented in the functional currency of the company, which is the New Taiwan Dollar (NTD). All financial information expressed in NTD is presented in thousands of New

Taiwan Dollars (NTD thousand).

(4) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of AWEA Mechantronic Company Limited and entities controlled by AWEA Mechantronic Company Limited (its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

The detail information of the subsidiaries at the end of reporting period was as follows:

Name of Investor AWEA Mechantronic Co., Ltd. AWEA Mechantronic Co., Ltd. B-Way (Cayman) Co., Ltd. Billion-Way (Cayman)Co., Ltd. Billion-Way (Cayman)Co. ,Ltd. Yih Chuan Machinery Industry Co., Ltd. AXTRON INT’L INVESTMENT CO., LTD AXTRON INT’L INVESTMENT LIMITED	Name of Subsidiaries B-Way (Cayman) Co., Ltd. Yih Chuan Machinery Industry Co., Ltd. Billion-Way (Cayman)Co., Ltd. Shanghai Zhuwei Mechantronic Co., Ltd. Awea Mechantronic (Suzhou) Ltd. AXTRON INT’L INVESTMENT CO., LTD AXTRON INT’L INVESTMENT LIMITED Yih Chuan Machinery (Jiaxing) Industry Co., Ltd.	Main Businesses and Products International investment and trade Industrial machinery manufacture and trade International investment and trade Machinery sale and installation and international trade Machinery sale and installation and international trade International investment and trade International investment and trade Machinery sale and installation and international trade	Percentage of Ownership	Percentage of Ownership
			December 31, 2022 100% 60% 100% 100% 100% 100% 100% 100%	December 31, 2021 100% 60% 100% 100% 100% 100% 100% 100%

(5) Classification of Current and Noncurrent Assets and Liabilities

Assets that meet one of the following conditions are classified as current assets, and all assets that are not current assets are classified as non-current assets:

  - (1) The asset expected to realize, or intended to be sold or consumed, during its normal operating cycle;

  - (2) The asset is held primarily for transaction purposes;

  - (3) The asset is expected to be realized within twelve months of the reporting period; or

  - (4) The asset is cash or cash equivalent unless there are other restrictions on exchanging the asset or using it to settle liabilities at least twelve months after the reporting period.

Liabilities that meet one of the following conditions are classified as current liabilities, and all liabilities that are not current liabilities are classified as non-current liabilities:
- (1) The liability is expected to be settled within normal operating cycle;
- (2) The liability is held primarily for transaction purposes;
- (3) The liability is expected to be settled within twelve months after the reporting period; or
- (4) The liability without an unconditional right to defer settlement for at least twelve months after the reporting period. The terms of the liability, which may, at the option of the counterparty, result in its liquidation through the issuance of equity instruments do not affect its classification.
(6) Foreign Currencies

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

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in foreign currencies are recognized at the rates of exchange prevailing at the dates of the transactions.

The exchange differences are recognized as profit or loss in the reporting period in which they occurred.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated inequity.

(7) Cash and Cash Equivalents

Cash includes cash on hand and demand deposits. Cash equivalents are investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the aforementioned definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes are listed in cash equivalents.

(8) Financial Instruments

Accounts receivable are originally recognized when incurred. All the other financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments. Financial assets (other than trade receivables that do not contain a significant financial component) or financial liabilities not measured at fair value through profit or loss are or Derecognition of financial liabilities

iginally measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of them. Accounts receivable that does not contain significant financial

components are measured at transaction prices.

Financial Assets

At the time of original recognition, financial assets are classified into financial assets measured at amortized cost, financial assets at FVTPL, and financial assets at FVTOCI. Only when the Company changes its business model for managing financial assets will it reclassify all affected financial assets from the first day of the next reporting period.

(1) Financial assets measured at amortized cost
Financial assets that meet both of the following conditions and are not designated as measured at fair value through profit or loss are measured at amortized cost:
- A.The financial asset is held under the business model for the purpose of
- collecting contractual cash flow.
- B.The contractual terms of the financial asset generate cash flows on specified dates that are exclusively for the payments of principal and interest on the principal amount outstanding.

Subsequent amortization of these assets is measured at the original recognized amount plus or minus the cumulative amortization amount calculated using the effective interest method and adjusting any allowance for losses. Interest income, foreign exchange gain or losses, and impairment loss are recognized in profit or loss. In case of delisting, the gain or loss is recognized in profit or loss.

(2) Financial assets at FVTPL
Financial assets that are neither measured at amortized cost as above nor at fair value through other comprehensive income are measured at fair value through profit or loss, including derivative financial assets. In order to eliminate or significantly reduce the improper accounting ratio at the time of original recognition, the Company may irrevocably designate financial assets that meet the conditions of measuring at amortized cost or at fair value through other comprehensive income as at fair value through profit or loss. These assets are subsequently measured at fair value, and the net profit or loss are recognized as profit or loss.
(3) Financial assets at FVTOCI

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI. This decision is made on an instrument-by-instrument basis.

Debt instruments are subsequently measured at fair value. Interest income calculated using the effective interest method, and foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed. Investments in equity instruments are subsequently measured at fair value. Dividend income, unless clearly represents a recovery of part of the cost of the investment, is recognized in profit or loss. The remaining net gain or loss is recognized in other comprehensive income and is not reclassified to profit or loss.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss at the date when the Company’s right to receive the dividends is established, normally means the ex-dividend date.

(4) Impairment of financial assets

A loss allowance for expected credit loss is recognized by the Company for financial assets measured at amortized cost, including cash and cash equivalents, financial assets measured at amortized cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, and other financial assets. The following financial assets are measured at an amount equal to expected credit loss within 12 months, the rest are measured at an amount equal to lifetime expected credit losses:

A. Debt securities are considered to have low credit risk on reporting date; and
B. the credit risk on other debt securities and bank deposits (i.e., the risk of default during the expected life of the financial instrument) has not increased significantly since initial recognition.

The allowance for losses on accounts receivable and contract assets is measured at an amount equal to lifetime expected credit losses.

When determining whether the credit risk has increased significantly since the original recognition, the Company considers reasonable and substantiated information (obtainable without undue cost or investment), including qualitative and quantitative information, and based on the Company's historical experience, credit ratings, and analysis from forward-looking information.

The expected credit loss during the lifetime refers to the expected credit loss arising from all possible default events during the expected duration of the financial instrument.

Twelve-month expected credit losses refer to the expected credit losses arising from possible default events of a financial instrument within 12 months after the reporting date (or a shorter period if the expected lifetime of the financial instrument is shorter than 12 months).

The longest period for measuring expected credit losses is the longest contractual period over which the Company is exposed to credit risk. Expected credit loss is the probability-weighted estimate of credit loss during the expected lifetime of a financial instrument. Credit losses are measured as the present value of all cash shortfalls, which is the difference between the cash flows that the Company can receive under the contract and the cash flows that the Company expects to receive. Expected credit losses are discounted at the financial asset's effective interest rate.

The Company assesses whether financial assets measured at amortized cost and debt securities measured at fair value through other comprehensive income are credit-impaired at each reporting date. A financial asset is credit-impaired when one or more events that have an adverse effect on the estimated future cash flows of the financial asset have occurred. Evidence that the financial asset is credit-impaired includes below item’s observable information:

A. Significant financial difficulties of the borrower or issuer;
B. Default, such as delay or overdue more than 90 days;
C. Concessions granted by the Company to the borrower that would not have been considered by the Company for economic or contractual reasons related to the borrower's financial difficulties;
D. Borrower is likely to file for bankruptcy or other financial restructuring; or
E. Absence of an active market for the financial asset due to financial difficulties.

An allowance for loss of financial asset measured at amortized cost is deducted from the book value of the asset. An allowance for a debt instrument investment at fair value through other comprehensive income is recognized in other

comprehensive income (without reducing the book value of the asset), and the amount of the recognition or reversal of the allowance is recognized in profit or loss.

When the Company cannot reasonably expect to recover all or part of the financial assets, it directly reduces the total book value of its financial assets. The Company analyzes the timing and the number of write-offs individually on the basis of whether it is reasonably expected to be recoverable. The Company does not anticipate a material reversal of the amount written off. However, written-off financial assets are still enforceable to comply with the Company's procedures to recover overdue amounts.

(5) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity, or when it neither transfers substantially all the risks and rewards of ownership nor retain controls of the financial asset.

If the Company makes a transaction to transfer financial assets and it retains all or substantially all the risks and rewards of ownership of the transferred assets, the assets will continue to be recognized in the balance sheets.

(9) Financial Liabilities and Equity Instruments
Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 2.Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

3.Financial liabilities
Financial liabilities are not held for transactions and are not designated to be subsequently measured as at fair value through profit or loss, including notes payable, accounts payable and other payables. When originally recognized, it is measured at fair value plus directly attributable transaction costs. The subsequent evaluation adopts the effective interest rate method to measure at amortized cost, and the interest expenses not capitalized as asset costs are included in the non-operating income and expenses.
Derecognition of financial liabilities
The merging Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled or they expire.

When derecognizing financial liability, the difference between its book value and total amount paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized as profit or loss, and listed under non-operating income and expenses.

Offset of financial assets and liabilities Financial assets and liabilities are offset and listed on the balance sheets in net amount only when the merging company has legal rights to offset them and intends to settle net or to realize assets and liquidate liabilities at the same time.
(10) Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the

reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

(11) Investments Accounted for Using Equity Method
Investments accounted for using the equity method include investments in subsidiaries, associates, and joint ventures.
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence refers to the power to participate in the investee's financial and operating policy decisions, but not the power to control or jointly control such policy decisions.

A joint venture means that the Company and other entities engage in economic activities under joint control through contractual agreement, meaning that strategic financial and operational decisions related to the joint venture must obtain the unanimous consensus of the shared controllers. If another entity is established in accordance with the joint venture agreement, and each joint venture controller has the interests in it, the entity is a jointly controlled entity.

Except for assets classified as held for sale, the operating results and assets and liabilities of associate companies and joint ventures are included in the financial statements using the equity method. With the equity method, investments in associate companies and joint ventures are initially recognized at cost in the balance sheets and are subsequently adjusted according to changes in the Company's share of the investee's net assets. When the Company's share of losses from associate companies and joint ventures exceeds its equity in the associate companies, additional losses are recognized only within the scope of the Company's statutory obligations, constructive obligations, or payments made on behalf of the associate companies.

The portion of the acquisition cost exceeding the net fair value share of the Company's identifiable assets and liabilities of the associated companies and joint ventures on the acquisition date is recognized as goodwill and is included in the book value of the investment. If the share of the net fair value of identifiable assets and liabilities of associated companies and joint ventures on the acquisition date exceeds the acquisition cost, it will be recognized as profit immediately after reassessment.

When assessing impairment, the Company regards the overall book value of the investment including goodwill as a single asset and compares the recoverable amount (the higher of the value in use or the fair value minus the cost of sale) with the book value to conduct an impairment test. The recognized impairment loss will be included in the book value of the investment. A reversal of any impairment loss is recognized to the extent of subsequent increases in the recoverable amount of the investment.

If the Company does not subscribe to additional shares issued by associates or joint ventures according to existing ownership proportion, which leads to changes of shareholding percentage and results in changes of equity net worth, the increased or decreased amount will be adjusted to capital surplus and investments using equity methods. However, if the ownership interest in the associates is reduced by not subscribing or obtaining shares according to the shareholding ratio, the amount recognized in other comprehensive profit and loss related to the associates will be reclassified according to the reduced proportion, and the basis of accounting should be the same as if the associates directly disposed the related assets or liabilities.

When there are transactions between the consolidated entities and related companies or joint ventures, unrealized gains and losses are eliminated proportionally upon consolidation.

(12) Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and

accumulated impairment. Costs include any costs that are directly attributable to the construction, acquisition of the item of property, plant and equipment, any other directly attributable costs of bringing the asset to a usable condition for its intended purpose, and costs of dismantling, relocation, and restoration of original location. The aforementioned costs include renewal costs for replacing part of the plant and equipment and necessary interest expenses arising from the construction contract.

Property, plant and equipment in construction are carried at cost less any recognized impairment loss. The cost includes professional service fees. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other identical categories of property, plant and equipment, commences when the assets are available for their intended use.

Self-owned land is not recognized for depreciation.

When a major item of property, plant and equipment needs to be restored periodically, the Company treats the item as an individual asset and recognizes it as depreciation with a specific useful life and specific depreciation method. Major overhaul cost will be considered as replacing cost and listed as part of the book value of property, plant and equipment if meeting the recognition condition. Other repairing and maintenance fees are listed in profit or loss. If meeting the conditions, the present value of decommissioning cost after the asset is used will be included in the cost of the asset.

If the cost of each part of property, plant and equipment is significant relative to the total cost of the item, each part is depreciated separately and treated as a separate item (significant component) of property, plant and equipment.

An item or material part of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Depreciation is recognized in profit or loss over the estimated useful lives of each component of an item of property, plant and equipment on a straight-line method as it best reflects the expected pattern of consumption of the asset's future economic effects. Depreciation is computed using the straight-line method mainly over the following estimated useful lives:

ated useful lives:
Buildings	5 to 51 years
Machinery	2 to 16 years
Mold	2 to 3 years
Transportation equipment	2 to 6 years
Computer communication equipment	4 years
Office equipment	3 to 5 years
Business equipment	2 to 7 years
Lease improvement	5 years
Other equipment	2 to 11 years

Depreciation is recognized to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method over the estimated useful lives. Estimated useful life, residual value and depreciation method are reviewed at the end of each reporting period, and the effect of any change in estimate is treated on a

deferred basis.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(13) Leases
Lease judgement
- The Company assess whether the contract is or contains a lease on the date of establishment of the contract.
2.The Company as lessor

The Company recognizes the right-of-use asset and lease liability on the lease commencement date. The right-of-use asset is measured at cost, which includes the original measurement amount of the lease liability, adjusting any lease payments made on or before the lease commencement date, and adding all Original direct costs incurred and estimated costs of dismantling, removing, and restoring the site or the subject asset, less any lease incentives received.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. In addition, the Company regularly assesses whether the right-of-use asset has been impaired and deals with any impairment loss that has occurred and adjusts the right-of-use asset when the lease liability is remeasured.

The lease liability is initially measured at the present value of the unpaid lease payments at the start date of the lease. If the implied interest rate of the lease is easy to determine, the discount rate will be the interest rate; if it is not easy to determine, the Company's incremental borrowing rate will be used. Normally, the Company uses its incremental borrowing rate as discount rate.

Lease payments that are included in lease liability includes:

(1) Fix payment, including substantiative fix payment;
(2) Changing lease payment that depends on an index or rate using the index or rate on the leasing start date for original measurement.

Lease liability interests are recognized with effective interest method and will be reevaluate when below situations happened:

(1) Index or rate which is for deciding lease payment changes that leads to changes in future lease payments;
(2) Estimation for whether to extend or end the option is changed and therefore changes the lease duration estimation;
(3) Payment amount changes to expected guarantee for residual;
(4) Estimation for options of target assets to purchase is changed;
(5) Leasing target, scope or other terms changed.

When the lease liability is remeasured due to the aforementioned changes in the index or rate used to determine the lease payment, changes in the residual value guarantee amount, and changes in the evaluation of the purchase, extension or termination options, the book value of the right-of-use asset is adjusted accordingly, and when the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in profit or loss.

For lease modifications that reduce the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect partial or full termination of the lease, and the difference between this and the remeasurement amount of the lease liability is

recognized in profit or loss.

The Company expresses the right-of-use assets and lease liabilities that do not meet the definition of investment real estate as separate line items in the balance sheet. For the short-term lease of business equipment and other equipment leases and the lease of low-value underlying assets, the Company chooses not to recognize the right-of-use assets and lease liabilities but recognizes the relevant lease payments as expenses on a straight-line basis during the lease period.

A sale and leaseback transaction are assessed in accordance with IFRS 15 to assess whether the transfer of assets to the buyer-lessor meets the requirements for sale. If it is judged to be treated as a sale, the asset will be delisted and the part of the rights that have been transferred to the buyer and lessor will be recognized in the relevant profit or loss. The accounting treatment model of the lessee is applicable to the leaseback transaction, and the right-of-use asset is measured according to the original account amount of the leased back part. If it is judged not qualified as sale, the transferred asset shall continue to be recognized and the consideration received shall be recognized as a financial liability.

3.The Company as lessee
In transactions where the Company is the lessee; lease contract is classified according to whether it transfers almost all the risks and rewards of the ownership of the underlying asset on the date of establishment of the lease. If yes, then it’s classified as a finance lease, otherwise it is classified as operating lease.

When evaluating, the Company considers relevant specific indicators including whether the lease period covers the main part of the economic life of the underlying asset.

If the Company is a sublease lessor, it handles master lease and sublease transactions separately, and evaluates the classification of sublease transactions based on the right of use generated by the master lease. If the head lease is a short-term lease and the recognition exemption applies, the sub-lease transaction should be classified as an operating lease.

(14) Intangible Assets
Goodwill

Goodwill arising on the acquisition of a subsidiary is measured at cost less accumulated impairment losses.

Other intangible assets
Intangible assets acquired by the Company with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses.
Amortization is recognized using the straight-line method over the following estimated useful lives:
Computer software The economic life or contract

period

The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

(15) Impairment of Non-financial Assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets (excluding inventory, contractual assets, and deferred tax assets), to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated.

For the purposes of impairment testing, a group of assets whose cash inflows are largely independent of those of other individual assets or groups of assets is the smallest

identifiable group of assets. Goodwill acquired in a business combination is allocated to each cash-generating unit or group of cash-generating units that are expected to benefit from the benefits of the combination.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than it carrying amount, an impairment loss is recognized.

Impairment losses are recognized immediately in profit or loss for the current period, and firstly reduce the carrying amount of the cash-generating unit's apportioned goodwill, and then reduce the carrying amount of each asset in proportion to the carrying amount of other assets in the unit.

An impairment loss recognized for goodwill is not reversed in subsequent periods. Non-financial assets other than goodwill are reversed only to the extent that the asset's book value (less depreciation or amortization) would have been determined had no impairment loss been recognized in prior years.

(16) Provision

Provisions are recognized due to the current obligations from past events, resulting in that the Company will have high possibilities to flow out resources with economic benefits to pay off the obligation in the future, and the amount of the obligation can be reliably estimated.

The amount recognized as a liability provision is the best estimate of the expenditures required to settle the obligation at the end of the reporting period, considering the risks and uncertainties of the obligation. If the liability provision is measured by the estimated cash flows required to settle the present obligation, its book value is the present value of those cash flows.

(17) Revenue Recognition

Revenue is measured by the consideration to which goods or services are transferred and to which they are expected to be entitled. The Company recognizes revenue when performance obligations are satisfied.

Sale of Goods

The Company recognizes revenue when control of the product is transferred to the customer. Control of product is considered transferred when the product has been delivered to the customer, the customer can fully decide the sales channel and price of the product, and there is no unfulfilled obligation that will affect the customer's acceptance of the product. Delivery happened when the product is delivered to specific locations, and the risks of obsolete and loss is transferred to the customer, and when the customer has accepted the product according to sales contract, the terms of acceptance have expired, or the Company has the objective evidence supporting that all terms of acceptance are met.

The Company recognizes accounts receivable when the goods are delivered, because the Company has the unconditional right to receive the consideration at that point in time.

Financial Composition

The Company expects that the time interval between the time point of all customer contracts to transfer goods or services to the customer and the time point when the customer pays for the goods or services will not exceed one year. Therefore, the Company does not adjust the time value of money of the transaction price.

(18) Government Subsidy

The Company will comply with the conditions attached to the government grant and will recognize it only when the grant can be received.

(19) Employee Benefits

Defined contribution plan
- Contribution obligations that are part of defined contribution pension plans are recognized as an expense during the period of service performed by the employee. Prepaid appropriations are recognized as an asset to the extent that they will result in a return of cash or a reduction in future payments.
Defined benefit plan
- The Company's net obligation to the defined benefit plan is calculated by converting the number of future benefits earned by the employee's service in the current or previous period into the present value and deducting the fair value of the plan assets. The defined benefit obligation is actuarial zed annually by a qualified actuary using the projected unit benefit method. When the calculation result is likely to be beneficial to the Company, the recognized asset is limited to the present value of any economic benefit that can be obtained in the form of returning the allocation from the plan or reducing future allocations to the plan. The calculation of the present value of economic benefits considers any minimum funding requirements. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. The Company determines the net interest expense (income) of the net defined benefit liability (asset) using the net defined benefit liability (asset) and discount rate determined at the beginning of the annual reporting period. Net interest expense and other expenses for defined benefit plans are recognized in profit or loss. Changes in benefits associated with prior service costs or curtailment benefits or losses arising from program modifications or curtailments are recognized immediately in profit or loss. The Company recognizes the liquidation profit and loss of the defined benefit plan when the liquidation occurs.
Short-term employee benefits
- Short-term employee benefit obligations are recognized as expenses when services are rendered. If the Company has a current statutory or constructive payment obligation due to the past service provided by the employee, and the obligation can be reliably estimated, the amount is recognized as a liability.
(20) Borrowing Cost

Borrowing costs directly attributable to the acquisition of an asset are included as part of the cost of the asset until substantially all activities necessary to bring the asset to its intended state for use or sale have been completed.

Aside from the aforementioned, all other borrowing costs are recognized as profit or loss within the year in which it occurred.

(21) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Current income tax including the income tax payable or tax refund receivable, which is calculated based on the taxable income (loss) of the current year, and any adjustments of tax payable and tax refund receivable in previous years whose amount is the best estimate of the amount expected to be paid or received based on the statutory tax rate or substantive legislative tax rate on the reporting date.

Deferred income tax is recognized by measuring the temporary difference between the

carrying amount of assets and liabilities at the financial reporting date and their tax base. Unused tax losses, unused income tax credits carried forward, and deductible temporary differences are recognized as deferred tax assets to the extent that future taxable income is likely to be available for use, and will be reevaluate at every reporting date where relevant income tax benefits will be adjusted to the extent that it is not likely to be realized, or reverse the original reduced amount within the scope that it is likely to have sufficient taxable income.

The Company only allows offsets of deferred tax asset and deferred tax liability when both conditions below are met:

  1. Has the statutory enforcement power to offset current income tax assets and current income tax liabilities; and

  2. Deferred tax asset and liabilities are related to one of the following taxpayers who are levied income tax by the same tax authority：

     - (1) Same tax entity; or

     - (2) Different tax entity, but each subject intends to settle current income tax liabilities and assets on a net basis, or realize assets and settlement simultaneously, in each future period in which significant amounts of deferred income tax assets are expected to be recovered and deferred income tax liabilities are expected to be settled.

(22) Earnings per share
The Company presents basic and diluted earnings per share attributable to equity holders of the Company's common stock. The Company's basic earnings per share is calculated by dividing the profit or loss attributable to the Company's common stockholders by the weighted average number of common shares outstanding in the current period. Diluted earnings per share is calculated by adjusting the profit and loss attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding, respectively, after adjusting the impact of all potential dilutive ordinary shares.
(23) Operating Segment Information

An operating segment is the part of the consolidated Company that is engaged in activities that may generate revenue and incur expenses, including those related to transactions between other parts within the consolidated Company. The operating results of all operating segments are regularly reviewed by the chief operating decision-maker of the consolidated Company to make decisions on allocating assets to the divisions and evaluating their performance. Consolidated financial information is available for each operating segment.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

The Company has considered the economic implications of COVID-19, Ukrainian-Russian conflict, and inflation on critical accounting estimates and the management will continue to review estimates and underlying assumptions, and changes in accounting estimates will be recognized in the period of change and in the affected future periods.

In preparing this separate financial report, management must make judgements, estimates and assumptions. It will affect the adoption of accounting policies and the reported amounts of assets, liabilities, income and expenses. The actual result may be different with estimations.

For the uncertainty of assumptions and estimates, there are major risks that will cause major adjustments in the next year. The relevant information is as follows.

Uncertainty in the following assumptions and estimates has a material risk of causing a material adjustment to the carrying amount of assets and liabilities in the next financial year

and has already reflected the impact of the COVID-19 pandemic. See below:

(1) Allowance for Losses on Accounts Receivable
The allowance for loss of the Company's accounts receivable is estimated based on the assumptions of default risk and expected loss rate. The Company considers historical experience, current market conditions and forward-looking estimates on each reporting date to determine the assumptions to be used and the input values selected when calculating the impairment. Please refer to Note 6(4) for details on related assumptions and input value.
(2) Valuation of Inventory
Inventories are stated at the lower of cost or net realizable value, and the Company estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon, therefore major changes may occur due to rapid changes in the industry.
(3) Impairment of investment using equity method
When there is any indication of impairment that an investment using the equity method may have been impaired and the carrying amount cannot be recovered, the Company immediately assesses the impairment of the investment. The Company assesses the impairment based on the future cash flow forecast of the invested company, including the sales growth rate and capacity utilization rate estimated by the internal management of the invested company, and analyzes the rationality of the relevant assumptions.
(4) Impairment of Tangible Assets and Intangible Assets Other than Goodwill In the process of evaluating the potential impairment of tangible assets and intangible assets other than goodwill, the Company determines the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any change in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.
(5) Recognition and Valuation of Provisions
The provision for product warranty liabilities is estimated when the product sales revenue is recognized and is estimated based on the quantity of products that are still in the warranty repair period, the historical and expected repair rate of such products, and the estimated unit repair cost. The Company continues to review the estimation basis and revise it when appropriate. Any change in the above estimation basis may have a significant impact on the estimation of product warranty liability reserves.
(6) Realization of Deferred Income Tax Assets
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available for deductible temporary differences in the future. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.
(7) Measurement of Defined Benefit Obligations
The defined benefit costs and net defined benefit liabilities (assets) that should be recognized in the defined benefit retirement plan are actuarially evaluated using the projected unit benefit method, and the actuarial assumptions adopted include discount rate, employee turnover rate and future salary increase rate, etc. Changes in these assumptions due to changes in market and economic conditions may materially affect the amount of expenses and liabilities recognized. Please refer to Note 6 (17) for the description of the

major actuarial assumptions and sensitivity analysis adopted by the actuarial. 6.ILLUSTRATION OF IMPORTANT ACCOUNTING ITEMS (1) Cash And Cash Equivalents

December 31, 2022 Cash $ 2,873 Deposits in banks 1,129,298 $ 1,132,171 Financial Assets at Fair Value Through Profit or Loss Current: Mandatorily measured at FVTPL December 31, 2022 Domestic listed (counter) stocks $ 380,865 Adjustments (3,863) $ 377,002 Non-Current: Mandatorily measured at FVTPL December 31, 2022 Domestic listed (counter) stocks $ 27 Adjustments (27) $ - 1. Profit and loss of financial assets measured at FVTPL Mandatorily measured at FVTPL 2022 Evaluation (loss) profit $ (11,149) Profit of disposal $ 2,095 Dividend income $ 16,926	December 31, 2021	December 31, 2021
	$ 3,029 934,623
	$ 937,652
		December 31, 2021
		$ 165,131 7,286
		$ 172,417
		December 31, 2021 $ 27 (27) - 2021
$ (11,149)		$ 7,073
$ 2,095		$ -
$ 16,926		$ 1,437

(2) Financial Assets at Fair Value Through Profit or Loss

2.The Company has not pledged financial assets at fair value through profit or loss.
3.Aforementioned equity instrument are held for trading purposes, so they are measured at fair value through profit or loss.
4.The Company invested FRF5,000 (around NT$27 thousand) in French agent AUTECH EUROPE in 1990, whose total capital is FRF100,000. In 1996, the value of the invested company had been reduced, and there was little hope of recovery, the total investment amount was transferred as a loss.

(3) Non-current Financial Assets at Fair Value Through Other Comprehensive Income

Measured at FVTOCI Domestic listed (counter) stocks Adjustments	December 31, 2022 $ 21,391 (10,933) $ 10,458	December 31, 2021
		$ 12,789 4,040
		$ 16,829

1.The Company holds theses equity instruments for long-term strategic investments, therefore designated the investments as measured at FVTOCI.
2.The Company disposed equity investments with fair value of NT$3,808 (in thousands) and NT$8,578(in thousands), respectively, in 2022 and 2021, with the accumulated disposal benefits of NT$1,125(in thousands) and NT$2,744 (in thousands) , respectively. The Company has transferred the accumulated disposal benefits from other interests to retained earnings.
Profit and loss of financial assets measured at FVTOCI:

Measured at FVTOCI Dividend income recognized as profit or loss Hold at the end of the period Delisted within the period Changes in fair value at other comprehensive income (loss) Accumulated interest transferred to retained earnings due to delisting	2022 $ 1,188 - $ 1,188 $ (13,848) $ 1,125	2021
		$ 287 -
		$ 287
		$ 5,303
		$ 2,744

4.The Company has not pledged financial assets at fair value through other comprehensive income.

(4) Notes and Accounts Receivable

Notes and Accounts Receivable
Notes receivable Less: Loss allowance Net Accounts receivable Less: Loss allowance Net	December 31, 2022 $ 386,323 (4,683) $ 381,640 December 31, 2022 $ 468,846 (11,234) $ 457,612	December 31, 2021
		$ 251,345 (3,867)
		$ 247,478
		December 31, 2021
		$ 557,144 (30,611)
		$ 526,533

The payment term granted to customers is due 30 - 90 days from the invoice date, and the account receivable are not interest-bearing.

The Company adopts the simplified approach of IFRS 9 to recognize the allowance loss of accounts receivable based on the expected credit loss during the duration.

The expected credit loss during the duration is calculated using the provision matrix, which considers the customer's past default record, current financial situation, and industrial economic situation. As the Company's historical credit loss experience shows that there is no significant difference in the loss patterns of different customer groups, the provision matrix does not further distinguish customer groups, and only determines the expected credit loss rate based on the number of days overdue of accounts receivable. If there is evidence that the counterparty is facing serious financial difficulties and the Company cannot reasonably expect the recoverable amount, the Company will write off

the relevant accounts receivable directly, but will continue to pursue, and the recovered amount due to the pursuit activities will be recognized in profit or loss.

The Company measures loss allowance for notes and accounts receivable according to below provision matrix:

below provision matrix:
Not past due Past due within 30 days Past due within 31-180 days Past due within 181-365 days Past due more than a year Total		December 31, 2022
	Total book value $ 811,590 12,382 15,109 5,603 10,485 $ 855,169	Loss allowance (expected credit loss in the duration) $ (6,104) (248) (388) (1,352) (7,825) $ (15,917)	Cost after amortization
			$ 805,486 12,134 14,721 4,251 2,660
			$ 839,252

December 31, 2021 Total book value Loss allowance (expected credit loss in the duration) Cost after amortization Not past due $ 719,421 $ (6,338) $ 713,083 Past due within 30 days 10,338 (265) 10,073 Past due within 31-180 days 14,999 (308) 14,691 Past due within 181-365 days 44,568 (11,607) 32,961 Past due more than a year 19,163 (15,960) 3,203 Total $ 808,489 $ (34,478) $ 774,011 The Company’s expected credit loss rate for abovementioned intervals (excluding abnormal payments whose loss are rated 100%) are: not past due and past due within 90 days is within 1%, past due within 365 days is within 5%, and past due more than 365 days will be 5% - 80%.		December 31, 2021
			Cost after amortization
			$ 713,083 10,073 14,691 32,961 3,203
			$ 774,011

Movements of loss allowance for notes and account receivables:

Balance, beginning of Provision (Reversal) Write off Exchange rate impacts Balance, end of year	2022 $ 34,478 2,172 (20,803) 70 $ 15,917	2021
		$ 20,027 14,485 - (34)
		$ 34,478

(5) Inventories

December 31,2022 December 31,2021 Products $ 5,242 $ 4,432 Raw materials 579,565 526,494 Work in process 916,835 854,587 Finished goods 105,365 164,133 $ 1,607,007 $ 1,549,646 1. Expenses related to inventories within the year 2022 2021 Cost of goods sold $ 2,362,128 $ 2,878,255 Inventory depreciation and obsolete loss 41,547 42,580 Inventory scrap 2,352 6,533 Inventory loss 2,294 1,664 Income from sale of scrap (1,205) (1,175) Costs related to idle capacity 25,501 23,163 $ 2,432,617 $ 2,951,020 2. The Company has not pledged inventories on December 31, 2022 and 2021. (6) Investments Accounted for Using Equity Method December 31, 2022 December 31, 2021 Associates $ 109,850 $ 96,604 Associates consisted of the following: Associates Principal Activities Place of Incorporation and peration Carrying amount % of Ownership and Voting Rights Held by the Company December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 YAMA SEIKI USA,INC. Design and production of CNC machine tools with linkage of more than three axes, CNC systems, servo devices and related components, and maintenance and sales of precision CNC machine tools US $ 101,849 $ 89,149 28.58% 28.58% Huahan Leasing Co., Ltd. Rental of machinery Taiwan 8,001 7,455 13.33% 13.33% $ 109,850 $ 96,604	December 31,2022 December 31,2021 Products $ 5,242 $ 4,432 Raw materials 579,565 526,494 Work in process 916,835 854,587 Finished goods 105,365 164,133 $ 1,607,007 $ 1,549,646 1. Expenses related to inventories within the year 2022 2021 Cost of goods sold $ 2,362,128 $ 2,878,255 Inventory depreciation and obsolete loss 41,547 42,580 Inventory scrap 2,352 6,533 Inventory loss 2,294 1,664 Income from sale of scrap (1,205) (1,175) Costs related to idle capacity 25,501 23,163 $ 2,432,617 $ 2,951,020 2. The Company has not pledged inventories on December 31, 2022 and 2021. (6) Investments Accounted for Using Equity Method December 31, 2022 December 31, 2021 Associates $ 109,850 $ 96,604 Associates consisted of the following: Associates Principal Activities Place of Incorporation and peration Carrying amount % of Ownership and Voting Rights Held by the Company December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 YAMA SEIKI USA,INC. Design and production of CNC machine tools with linkage of more than three axes, CNC systems, servo devices and related components, and maintenance and sales of precision CNC machine tools US $ 101,849 $ 89,149 28.58% 28.58% Huahan Leasing Co., Ltd. Rental of machinery Taiwan 8,001 7,455 13.33% 13.33% $ 109,850 $ 96,604	December 31,2022 December 31,2021 Products $ 5,242 $ 4,432 Raw materials 579,565 526,494 Work in process 916,835 854,587 Finished goods 105,365 164,133 $ 1,607,007 $ 1,549,646 1. Expenses related to inventories within the year 2022 2021 Cost of goods sold $ 2,362,128 $ 2,878,255 Inventory depreciation and obsolete loss 41,547 42,580 Inventory scrap 2,352 6,533 Inventory loss 2,294 1,664 Income from sale of scrap (1,205) (1,175) Costs related to idle capacity 25,501 23,163 $ 2,432,617 $ 2,951,020 2. The Company has not pledged inventories on December 31, 2022 and 2021. (6) Investments Accounted for Using Equity Method December 31, 2022 December 31, 2021 Associates $ 109,850 $ 96,604 Associates consisted of the following: Associates Principal Activities Place of Incorporation and peration Carrying amount % of Ownership and Voting Rights Held by the Company December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 YAMA SEIKI USA,INC. Design and production of CNC machine tools with linkage of more than three axes, CNC systems, servo devices and related components, and maintenance and sales of precision CNC machine tools US $ 101,849 $ 89,149 28.58% 28.58% Huahan Leasing Co., Ltd. Rental of machinery Taiwan 8,001 7,455 13.33% 13.33% $ 109,850 $ 96,604
	December 31, 2022	December 31, 2021
	28.58% 13.33%	28.58% 13.33%

(1) The Company invested $1,700 thousand USD in YAMA SEIKI USA, INC. through the resolution of the Board of Directors on December 23, 2010, engaging in the operation of parts and accessories of machine tools, sales and installation of mechanical appliances, and international trade.
(2) The Company invested NT$7,333 thousand in Huahan Leasing Co., Ltd. through the resolution of the Board of Directors on August 2021, engaging in machinery rental business.

(3) The Company's portion of profit and loss and other comprehensive income and loss of associates subsidiaries that adopted the equity method in 2022 and 2021 were recognized based on the financial reports of the associates audited by accountants during the same period.

(7) Property, plant and equipment

Self-owned land Buildings Machinery equipment Tooling equipment Transportation Equipment Computer communication equipment Business equipment Lease Improvement Other equipment Equipment to be checked and construction in progress Self-owned land January 1, 2022 Additions Cost Self-owned land $ 536,761 $ - Buildings 1,592,374 - Machinery equipment 413,581 1,892 Tooling equipment 51,161 3,560 Transportation Equipment 67,279 5,362 Computer communication equipment 12,578 7,313 Office equipment 8,357 707 Business equipment 17,802 1,010 Lease Improvement 749 - Other equipment 50,376 1,045 Equipment to be checked and construction in progress 9,459 60 $ 2,760,477 $ 20,949	December 31, 2022 December 31, 2021 $ 536,761 $ 536,761 1,045,193 1,094,808 149,012 178,880 6,304 5,885 15,187 15,221 8,833 2,968 1,463 1,321 5,989 8,282 - 21 19,195 19,388 9,536 9,459 $ 1,797,473 $ 1,872,994 Disposals Reclassifica tion Ex-rate impact December 31, 2022 $ - $ - $ - $ 536,761 - - 6,371 1,598,745 (19,896) (10,210) 3,057 388,424 (412) - 59 54,368 (1,846) - 211 71,006 (309) - 121 19,703 (3,124) - 50 5,990 - - - 18,812 - - - 749 (1,083) 10,210 372 60,920 - - 17 9,536 $ (26,670) $ - $ 10,258 $ 2,765,014	December 31, 2022 December 31, 2021 $ 536,761 $ 536,761 1,045,193 1,094,808 149,012 178,880 6,304 5,885 15,187 15,221 8,833 2,968 1,463 1,321 5,989 8,282 - 21 19,195 19,388 9,536 9,459 $ 1,797,473 $ 1,872,994 Disposals Reclassifica tion Ex-rate impact December 31, 2022 $ - $ - $ - $ 536,761 - - 6,371 1,598,745 (19,896) (10,210) 3,057 388,424 (412) - 59 54,368 (1,846) - 211 71,006 (309) - 121 19,703 (3,124) - 50 5,990 - - - 18,812 - - - 749 (1,083) 10,210 372 60,920 - - 17 9,536 $ (26,670) $ - $ 10,258 $ 2,765,014
		$ 536,761 1,598,745 388,424 54,368 71,006 19,703 5,990 18,812 749 60,920 9,536
		$ 2,765,014

Depreciation $ 54,359 25,761 3,159 5,386 1,464 574 3,303 21 5,529 $ 99,556 Depreciation	Ex-rate impact	December 31, 2022
	$ 1,627 1,522 41 155 81 40 - - 178	$ 553,552 239,412 48,064 55,819 10,870 4,527 12,823 749 41,725
	$ 3,644	$ 967,541
	Ex-rate impact	$ 1,797,473
		December 31, 2021 $ 536,761 1,592,374 413,581 51,161 67,279 12,578 8,357 17,802 749 50,376 9,459 $ 2,760,477
$ - - 2,684 3,540 6,469 667 176 96 - 3,901 39,948	$ - (1,732) (1,533) (34) (111) (58) (24) - - (167) (1,324)
$ 57,481	$ (4,983)

			January 1, 2021	January 1, 2021	Depreciation	Depreciation	Disposals	Disposals	Reclassifica tion	Reclassifica tion	Reclassifica tion		Ex-rate impact	December 31, 2021	December 31, 2021
Accumulated
depreciation
Buildings		$		450,143	$	48,170	$	-	$		-	$	(747)	$	497,566
Machinery equipment				205,341		28,558		(2,202)			4		3,000		234,701
Tooling equipment				40,950		5,219		(868)			-		(25)		45,276
Transportation Equipment				52,275		6,430		(6,559)			-		(88)		52,058
Computer
communication				8,389		1,418		(159)			-		(38)		9,610
equipment
Office equipment				6,323		733		-			-		(20)		7,036
Business equipment				5,763		3,757		-			-		-		9,520
Lease Improvement				670		58		-			-		-		728
Other equipment				27,026		4,353		(311)			-		(80)		30,988
		$		796,880	$	98,696	$	(10,099)	$		4	$	2,002	$	887,483
Net		$		1,923,220										$	1,872,994
	1. Please refer to Note 8 for property, plant and equipment											pledged for borrowing.
	2.		On December 31,			2022 and	2021, the Company's				land	was partly agricultural land,
		and the amount			temporarily registered in the name						of another person was NT$88,529
		thousand. The Company has					obtained a certificate of other						rights for the land.
(8) Lease Arrangement
	1. Right-of-use assets
								December		31,	2022		December 31,2021
			Land					$		129,803			$		141,490
		Buildings									2,232				4,594
								$		132,035			$		146,084
			January 1, 2022 Depreciation				Disposals		Reclassifica tion				Ex-rate impact		December 31, 2022
Cost
Land		$		182,835 $		603	$	-	$	25,080		$	2,357	$	210,875
Buildings				5,334		694		(1,634)			-		-		4,394
		$		188,169 $		1,297	$	(1,634)	$	25,080		$	2,357	$	215,269
			January 1, 2022 Depreciation				Disposals		Reclassifica tion				Ex-rate impact		December 31, 2022
Accumulated
depreciation
Land		$		41,345 $		14,102	$	-	$	25,080		$	545	$	81,072
Buildings				740		1,422		-			-		-		2,162
		$		42,085 $		15,524	$	-	$	25,080		$	545	$	83,234
Net		$		146,084										$	132,035

January 1, 2021 Depreciation Cost Land $ 183,858 $ - Buildings 23,088 5,334 Transportati on equipment 308 - $ 207,254 $ 5,334 January 1, 2021 Depreciation Accumulated depreciation Land $ 27,669 $ 13,734 Buildings 8,668 4,952 Transportati on equipment 308 - $ 36,645 $ 18,686 Net $ 170,609 2. Lease liabilities Current Non-current	Disposals Reclassifica tion $ - $ - (23,088) - (308) - $ (23,396) $ - Disposals Reclassifica tion $ - $ - (13,116) 236 (308) - $ (13,424) $ 236 December31,2022 $ 11,420 918 $ 12,338	Disposals Reclassifica tion $ - $ - (23,088) - (308) - $ (23,396) $ - Disposals Reclassifica tion $ - $ - (13,116) 236 (308) - $ (13,424) $ 236 December31,2022 $ 11,420 918 $ 12,338	Ex-rate impact December 31, 2021 $ (1,023) $ 182,835 - 5,334 - - $ (1,023) $ 188,169 Ex-rate impact December 31, 2021 $ (58) $ 41,345 - 740 - - $ (58) $ 42,085 $ 146,084 December31,2021 $ 11,606 12,764 $ 24,370
			$
			$

		$ 11,420 918
		$ 12,338

3. Material terms of right-of-use assets

The Company leases many assets with lease terms of 3 to 10 years. The Company does not have purchase options to acquire the assets at the end of the lease terms.

The Company leases land in the People's Republic of China for product manufacturing for a period of 50 years. The lease payment is paid in one lump sum when the contract is signed, and the Company does not have the right to purchase the land at the end of the lease terms.

4. Other lease information

4. Other lease information	4. Other lease information
Expenses relating to short-term and low-value assets leases Total cash outflow for leases (9) Intangible Assets Goodwill $ Software $		2022 $ 1,199 $ 11,410 111.12.31 642 9,726 10,368	2021 $ 2,239 $ 14,914 110.12.31
	$		$ 642 11,401
	$		$ 12,043

January 1, 2022 Depreciation Disposals Reclassificat ion Ex-rate impact December 31, 2022 Cost Goodwill $ 642 $ - $ - $ - $ - $ 642 Software 23,494 1,246 - - 81 24,821 $ 24,136 $ 1,246 $ - $ - $ 81 $ 25,463 January 1, 2022 Depreciation Disposals Reclassificati on Ex-rate impact December 31, 2022 Accumulated amortization Software $ 12,093 $ 2,965 $ - $ - $ 37 $ 15,095 $ 12,093 $ 2,965 $ - $ - $ 37 $ 15,095 Net $ 12,043 $ 10,368 January 1, 2021 Depreciation Disposals Reclassificati on Ex-rate impact December 31, 2021 Cost Goodwill $ 642 $ - $ - $ - $ - $ 642 Software 23,112 4,639 (4,211) - (46) 23,494 $ 23,754 $ 4,639 $ (4,211) $ - $ (46) $ 24,136 January 1, 2021 Depreciation Disposals Reclassificati on Ex-rate impact December 31, 2021 Accumulated amortization Software $ 13,871 $ 2,406 $ (4,163) $ - $ (21) $ 12,093 $ 13,871 $ 2,406 $ (4,163) $ - $ (21) $ 12,093 Net $ 9,883 $ 12,043 (10) Net Overdue Receivables December 31, 2022 December 31, 2021 Overdue receivables $ 9,732 $ 19,424 Less: Allowance for uncollectible accounts (9,732) (19,424) $ - $ - (11) Other current financial assets December31,2022 December31,2021 Repatriated Offshore Funds $ 353,397 $ 317,381 Restricted assets – bank deposits 188,170 3,758 $ 541,567 $ 321,139	Disposals	Reclassificat ion $ - - $ -	Ex-rate impact $ - 81 $ 81	December 31, 2022 $ 642 24,821 $ 25,463
	$ - -
	$ -
	Disposals
	$ -
	$ -
	Disposals

The repatriated offshore funds of the Group approved by National Taxation Bureau, Ministry of Finance according to Regulations Governing the Management Repatriated Offshore Funds will be submitting an investment plan to the Ministry of Economic Affairs within one year of the day when the funds are deposited into the designated foreign exchange deposit account in accordance with Article 8 of the regulation. The investment plan was approved by approval letter no. 111020433960 on September 23, 2021.

(12) Short-Term Loans

(12) Short-Term Loans
			December		31, 2022		December		31, 2021
Secured loans			$		509,949		$		310,781
Credit loans					1,445,000				1,025,000
			$		1,954,949		$		1,335,781
Interest interval			1.3123%-4.9000%				0.5451%-5.0025%
Please refer to Note 8	for guarantees.
(13) Short-term Notes Payable
			December		31,2022		December		31,2021
Short-term notes payable			$		290,000		$		260,000
Less: Discounts on notes payable					(359)				(93)
			$		289,641		$		259,907
Interest interval			1.30%-1.78%				0.60%-0.63%
(14) Other Payables
			December		31, 2022		December		31, 2021
Other expenses payable			$		101,697		$		116,916
Employee compensation payable					16,000				12,000
Compensation due to directors and supervisors					1,800				1,800
Dividends payable					491				491
Payable on equipment and projects					2,379				3,769
Others					6,522				4,583
			$		128,889		$		139,559
(15) Current provisions
			December		31,2022		December		31,2021
Warranty			$		5,272		$		4,355
Employee benefits					7,173				8,579
			$		12,445		$		12,934
January 1, 2022		Additions		Reversals			Ex-rate impact	December 31, 2021
Warranty $	4,355	$	917	$	-	$	-	$	5,272
Employee benefits	8,579		18		(1,448)		24		7,173
$	12,934	$	935	$	(1,448)	$	24	$	12,445

Warranty Employee benefits	January 1, 2022 $ 7,927 16,914 $ 24,841	Additions $ - 154 $ 154	Reversals $ (3,572) (8,478) $ (12,050)	Ex-rate impact $ - (11) $ (11)	December 31, 2021
					$ 4,355 8,579
					$ 12,934

The provision for warranty is based on the sales contract, and the management of the Company makes the best estimate based on the historical experience of the product.
Provision for employee benefit refers to the Company's current legal or constructive payment obligations due to past service provided by employees, and when the obligations can be reliably estimated, the amount is recognized as liabilities.

(16) Long-term Loans

Nature of loan Secured loans Sum Less: due within a year Total Interest interval	Year due 118	December31,2022 $ - - - $ - -	December31,2021 $ 62,672 62,672 - $ 62,672 0.3800~3.9000%

Please refer to Note 8 for guarantees provided.

(17) Employee Benefits

Defined benefit plans
The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

The present value of defined benefit obligation is calculated by a qualified actuary. The main assumptions of the actuarial on the measurement date are listed below:

(1) Assumptions of the actuarial on the measurement date:

	December31,	2022	December31,2021	December31,2021
Discount rate	1.400%			0.750%
Expected salary adjustment rate	2.500%			2.500%
(2) The amount of pension expenses	recognized in the consolidated			comprehensive
income statement for the defined	benefit plan is listed as		follows:
	2022			2021
Current service cost	$	235	$	288
Net interest expense		273		147
Interest income from plan assets		(180)		(106)
Recognized in profit or loss		328		329
Remeasurement
Actuarial loss arising from experience adjustments		743		1,002

Actuarial loss arising from changes in demographic assumptions Actuarial gain arising from changes in financial assumptions Return on plan assets Recognized in other comprehensive income Total	- (1,858) (2,181) (3,296) $ (2,968)	1,974 (1,517) (424) 1,035 $ 1,364

The pension costs of the aforementioned defined benefit plans were recognized in profit or loss by the following categories:

		2022	2021	2021
Cost of revenue	$	624	$	654
Marketing expenses		71		93
General and administrative		62		87
expenses
Research and development		70		72
expenses
Others		(499)		(577)
	$	328	$	329
(3) The amounts arising from the defined benefit obligation			of the Company were
recognized in the consolidated balance sheets by the following categories:
	December 31, 2022		December 31, 2021
Present value of defined benefit obligation	$	28,824	$	36,351
Fair value of plan assets		(19,833)	(23,557)
Net defined benefit liability	$	8,991	$	12,794
(4) Movements in the present value	of the defined benefit obligation			were as
follows:
		2022	2021
Balance, beginning of year	$	36,351	$	43,218
Current service cost		235		288
Interest expense, net		273		147
Remeasurement:
Actuarial loss arising from experience adjustments		743		1,002
Actuarial loss arising from
changes in demographic		-		1,974
assumptions

Actuarial gain arising from
changes in financial		(1,858)		(1,517)
assumptions
Benefits paid from plan assets		(6,920)		(8,761)
Balance, end of year	$	28,824	$	36,351
(5) Movements in the fair value of the plan		assets were as follows:
		2022		2021
Balance, beginning of year	$	23,557	$	30,881
Interest income		180		106
Remeasurement:
Return on plan assets		2,181		424
Contributions from employer		835		907
Benefits paid from plan assets		(6,920)		(8,761)
Balance, end of year	$	19,833	$	23,557

The Company expected to allocate NT$835 thousand within a year after December 31, 2022.

Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

Shanghai Zhuwei Mechantronic Co., Ltd., Awea Mechantronic (Suzhou) Ltd., and Yih Chuan Machinery Industry (Jiaxing) Co., Ltd. adopted defined contribution plan, in which the companies allocate pension fund monthly to employees’ personal pension insurance accounts. The accounts are completely separate from the companies and will transfer with employee when they leave the companies. The amount that should be allocated is listed as the current expense. B-Way (Cayman) 、、 Co., Ltd Billion-Way (Cayman) Co., Ltd AXTRON INT’L INVESTMENT CO.,

LTD and AXTRON INT’L INVESTMENT LIMITED do not have full time employee, therefore there is no respective pension plans.

Accordingly, the Company recognized expenses of NT$20,276 thousand and NT$16,699 thousand for the years ended December 31, 2022 and 2021, respectively.

(18) Capital Stock

On December 31, 2022, the authorized common stock capital is NT$1,000,000 thousand, the paid-in capital is NT$965,942 thousand, with a par value of NT$10 per share, divided into 96,594,171 shares.

(19) Capital Surplus

According to the provisions of the Company Law, the capital surplus shall not be used except for making up for the Company's losses and appropriating capital. If the Company does not use the surplus reserve to make up for capital losses and if there is still a deficiency, it may not use the capital reserve to make up for it.
In accordance with the provisions of the Company Law, the premium obtained from the issuance of stocks exceeding the par value and the capital surplus obtained from the receipt of gifts may be used to make up for losses. Replenishment of capital is limited to a certain percentage of paid-in capital every year. In addition, changes in

ownership interests in subsidiaries are recognized to offset losses.

(20) Retained Earnings

The statutory surplus reserve shall be appropriated until its total amount reaches the total paid-in capital. The legal capital reserve may be used to offset a deficit or be distributed as dividends in cash or stocks for the portion more than 25% of the paid-in capital if the Company incurs no loss.

The Company recognize and reverse special reserve according to No. 1090150022 letter issued from FSC and “Applicable questions and answers for the provision of special surplus reserve after the adoption of IFRSs”. If there is a subsequent reversal of the balance of the deduction of other shareholders' equity, the surplus may be distributed based on the reversal.

According to the Company's Articles of Incorporation, the Company's net profit after the annual final accounts, in addition to paying taxes and making up for previous years' losses according to law, should set aside 10% as a legal reserve and a special reserve according to law, then adding the undistributed earnings of the previous year to its balance and retaining part of the balance for the funds needed for enterprise growth, the Board of Directors will draw up a earning distribution proposal and submit it to the shareholders' meeting for resolution on distribution.

The Company's shareholders' regular meeting passed resolutions of earning distribution plans on June 15, 2022 and August 18, 2021, respectively, as follows:

Legal reserve Distribution: Capital surplus Cash dividends	Earning distribution plan 2021 2020 $ 13,278 $ 38,245 28,979 48,297 115,913 193,188	Cash dividends per share ~~NT$~~	Cash dividends per share ~~NT$~~
	2021 $ 13,278 28,979 115,913	~~()~~ 2021 2020 $ 0.3 $ 0.5 1.2 2.0
			$ 0.5 2.0

Aforementioned earning distribution is no different from the board resolutions of the Company on March 15, 2022 and March 17, 2021.

For the distribution of profits proposed by the Board of Directors and resolutions of the shareholders' meeting, please visit the "Market Observation Post System" of Taiwan Stock Exchange.

The appropriations of 2022 yearly earnings approved by the Company’s Board of Directors’ resolution on March 13, 2023 is as below:

Legal reserve Distribution: Cash dividends	Earning distribution plan 2022 $ 35,790 154,551	Cash dividends per share (NT$)
		2022

		1.6

The earning distribution plan of 2022 is still waiting for shareholders’ meeting resolution expected on June 7, 2023.

(21) Others

The exchange difference in the translation adjustment of foreign operations’ financial

statements refers to the relevant exchange differences arising from the translation of the functional currency to the Company’s expression currency (i.e., New Taiwan Dollars) of foreign operations’ net assets, and is listed directly under other comprehensive income. The other comprehensive income recognized in the year ended December 31, 2022 and 2021 are NT$18,524 thousand and NT$19,592 thousand, respectively.

(22) Non-controlling Interest

Balance, beginning of year Portions of non-controlling interest Net income (loss) Other comprehensive income Balance, end of year (23) Operating Income Total operating income Less: sales returns and discounts Sale of product Maintenance and other income 1.Revenue breakdown Major sales market by geography: Domestic Foreign Asia America Europe Other countries	2022 $ 119,261 (4,856) 1,114 $ 115,519 2022 $ 3,108,963 (8,446) $ 3,100,517 2022 $ 2,957,565 142,952 $ 3,100,517 2022 $ 806,651 1,483,083 377,286 427,914 5,583 $ 3,100,517	2021
		$ 128,625 (8,827) (537)
		$ 119,261
		2021
		$ 3,641,711 (10,755)
		$ 3,630,956
		2021
		$ 3,417,479 213,477
		$ 3,630,956
		2021
		$ 1,019,178 1,921,006 281,598 401,651 7,523
		$ 3,630,956

2. Contract balance

(1) The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment.

December 31, 2022 December 31, 2021 Contract liabilities $ 225,013 $ 220,951 (2) Revenue of the year from the beginning balance of contract liability: 2022 2021 Sales revenue $ 201,348 $ 205,408 (24) Other Income 2022 2021 Rental income $ 11,570 $ 11,237 Dividend income 18,114 1,724 Other income 16,327 22,483 $ 46,011 $ 35,444 (25) Other Gain or Loss 2022 2021 Foreign exchange gain (loss) $ 127,208 $ (66,718) Net gain or loss on disposals of property, plant and equipment 211 1,499 Proceeds from disposal of financial assets 2,095 - Net (loss) gain on financial instruments at FVTPL (11,149) 7,073 Others (565) (194) $ 117,800 $ (58,340) (26) Finance Cost 2022 2021 Interest expense from bank loans $ 25,834 $ 14,106 Interest expense from lease liabilities 168 335 $ 26,002 $ 14,441 (27) Employee Benefits, Depreciation and Amortization Expense 2022 Recognized in cost of revenue Recognized in operating expenses Total Employee benefits expense Salary expense $ 221,718 $ 149,619 $ 371,337 Labor and health insurance expense 20,787 12,855 33,642 Pension expense 13,174 7,929 21,103 Director's remuneration - 2,440 2,440 Other employee benefit 7,324 6,471 13,795	December 31, 2022 December 31, 2021 Contract liabilities $ 225,013 $ 220,951 (2) Revenue of the year from the beginning balance of contract liability: 2022 2021 Sales revenue $ 201,348 $ 205,408 (24) Other Income 2022 2021 Rental income $ 11,570 $ 11,237 Dividend income 18,114 1,724 Other income 16,327 22,483 $ 46,011 $ 35,444 (25) Other Gain or Loss 2022 2021 Foreign exchange gain (loss) $ 127,208 $ (66,718) Net gain or loss on disposals of property, plant and equipment 211 1,499 Proceeds from disposal of financial assets 2,095 - Net (loss) gain on financial instruments at FVTPL (11,149) 7,073 Others (565) (194) $ 117,800 $ (58,340) (26) Finance Cost 2022 2021 Interest expense from bank loans $ 25,834 $ 14,106 Interest expense from lease liabilities 168 335 $ 26,002 $ 14,441 (27) Employee Benefits, Depreciation and Amortization Expense 2022 Recognized in cost of revenue Recognized in operating expenses Total Employee benefits expense Salary expense $ 221,718 $ 149,619 $ 371,337 Labor and health insurance expense 20,787 12,855 33,642 Pension expense 13,174 7,929 21,103 Director's remuneration - 2,440 2,440 Other employee benefit 7,324 6,471 13,795	December 31, 2021	December 31, 2021
		$ 220,951
		$	205,408
			2021
		$	11,237 1,724 22,483
		$	35,444
			2021
		$	(66,718) 1,499 - 7,073 (194)
		$	(58,340)
			2021
		$	14,106 335
		$	14,441

Recognized in cost of revenue $ 221,718 20,787 13,174 - 7,324	Recognized in operating expenses		Total
	$ 149,619 12,855 7,929 2,440 6,471		$ 371,337 33,642 21,103 2,440 13,795

expenses Depreciation expense Amortization expense Employee benefits expense Salary expense Labor and health insurance expense Pension expense Director's remuneration Other employee benefit expenses Depreciation expense Amortization expense	87,623 517	27,457 2,448 2021	115,080 2,965
	Recognized in cost of revenue $ 235,637 20,182 10,913 - 7,493 89,227 228	Recognized in operating expenses $ 136,226 12,559 6,692 3,715 6,598 28,155 2,178	Total
			$ 371,863 32,741 17,605 3,715 14,091 117,382 2,406

On December 31, 2022 and 2021, the Company has 594 and 637 employees, respectively, and 5 of which are non- part-time employee directors.

According to the Company’s Articles of Incorporation, the Company shall allocate profit sharing of no less than 3% - 8% to employees and no more than 2% to directors. The Company's subordinate employees who meet certain conditions may be allocated the above-mentioned employee remuneration, and the conditions and methods shall be determined by the Board of Directors. However, if the Company still has accumulated losses, it shall reserve the compensation amount in advance.

The Company estimated employee remuneration at NT$16,000 thousand and directors and supervisors' remuneration at NT$1,800 thousand for the year ended December 31, 2022. The basis of the estimation is based on the experience of actual distribution, considering the net profit of the current period and the ratio stipulated in Company’s Articles of Incorporation, and recognized as the operating cost or operating expenses of the year. If there is a discrepancy between the actual distribution amount and the estimated amount in the next year, it shall be treated as a change in accounting estimate, and the difference shall be recognized as profit or loss for the next year. Related information can be found on Market Observation Post System.

The Company recognized employee remuneration at NT$12,000 thousand and directors and supervisors' remuneration at NT$1,800 thousand for the year ended December 31, 2021. Related information can be found on Market Observation Post System. Actual amount distributed is no different from the estimation.

The Company’s salary policies (including directors, supervisors, managers, and employees) are as below:

Directors’ compensation

The Company's general directors and independent directors' compensation policy is determined according to their responsibilities, risks, invested time and other factors. According to the Company’s Articles of Incorporation, the compensation of the chairman, vice chairman and directors of the Company shall be determined by the Board of Directors according to the degree of participation in the operation of the Company and the value of their contribution, as well as the average level of domestic

and foreign industries. The Company’s Articles of Incorporation also stipulate that directors' compensation shall not exceed 2% of the annual profit.

Compensation to the supervisors

The Company replaced supervisor system with the audit committee since June 2020.

Compensation to the managers
Compensation to the managers is determined by the position, contribution, company’s operation performance of the Company of the year, and considers future risk. It is reviewed by Compensation Committee and sent to Board of Directors for resolution.
Compensation to the employees Compensation to the employees includes monthly payment and unscheduled performance bonus, year-end bonus, and employee compensation based on the Company’s profitability. The Company’s Articles of Incorporation stipulate that employees’ compensation should be no less than 3% - 8% of annual profit. The competitive compensation to the employees of subsidiaries (oversea) is determined not only according to local labor market, but also distribute annual bonus according to local regulations, industry practice, and each subsidiary’s performance as a whole, to encourage employee’s contribution and their growth with the Company.

(28) Income Tax

Income tax expense

Income tax expense of the year ended December 31, 2022 and 2021 consisted of the following:

Current income tax expense: Recognized in the current year Income Tax on Repatriation of Overseas Surplus Adjustments on prior years Deferred income tax expense: The origination and reversal of temporary differences Income tax expense (1) Income tax expense recognized in 2022 and 2021 was as follows: Income before tax Income tax expense at the statutory rate Tax effect of adjusting items: Non-included items in determining taxable income Effect of different applicable tax rates of the parent company and the subsidiaries Tax-exempt income Income tax on repatriation of overseas Surplus Adjustments on prior years Net change in deferred income tax Temporary differences	2022 2021 $ 75,692 $ 54,663 - 43,030 735 3,813 34,074 14,261 $ 110,501 $ 115,767 profit or loss of the year ended December 31, 2022 2021 $ 459,788 $ 237,800 $ 91,957 $ 47,560 28,042 999 (27,560) 17,722 (16,747) (11,618) - 43,030 735 3,813 34,074 14,261	2021
		$ 54,663 43,030 3,813 14,261
		$ 115,767
		$ 237,800
		$ 47,560 999 17,722 (11,618) 43,030 3,813 14,261

(1) Income tax expense recognized in profit or loss of the year ended December 31, 2022 and 2021 was as follows:

Income tax expense recognized in profit or loss

$ 110,501 $ 115,767

(2) Income tax expense recognized in other comprehensive income and loss of the year ended December 31, 2022 and 2021 was as follows:

Items are not reclassified to profit or loss subsequently Remeasurement of defined benefit plan Items may be reclassified to profit or loss subsequently Exchange difference on translation of financial statements of foreign operations	2022 $ 659 $ 4,631	2021
		$ (207)
		$ 4,898

The analysis of deferred income tax assets and liabilities was as follows:

Allowance for bad debts exceeded Unrealized exchange losses Unrealized loss on inventories Unrealized sales profit Unrealized no vacation bonus Unrealized warranty expense Loss write-off Pension exceeded and actuarial loss Exchange difference on translation of financial statements of foreign operations Investment offset - resource poor areas Others Subsidiaries, associates and joint venture profit and loss share	Deferred income tax assets	Deferred income tax assets
	December 31, 2022 December 31, 2021 $ 3,285 $ 8,734 (21,495) 8,580 82,583 74,935 6,765 5,784 1,309 1,522 1,054 871 18,625 18,977 1,785 2,544 7,302 11,933 - 14,250 70 80 $ 101,283 $ 148,210 Deferred income tax liabilities	December 31, 2021
		$ 8,734 8,580 74,935 5,784 1,522 871 18,977 2,544 11,933 14,250 80
		$ 148,210
	December 31, 2022 $ 112,224 $ 112,224	December 31, 2021
		$ 121,459
		$ 121,459

Recognized in profit or loss	Recognized in other comprehensive income	Ex-rate impact	Balance, end of the year
$ (5,885) (30,075) 6,418 981 (219) 183 (352) (100) - (14,250) (10)	$ - - - - - - - (659) (4,631) - -	$ 436 - 1,230 - 6 - - - - - -	$ 3,285 (21,495) 82,583 6,765 1,309 1,054 18,625 1,785 7,302 - 70
$ (43,309)	$ (5,290)	$ 1,672	$ 101,283
$ (9,497) 262	$ - -	$ - -	$ 111,962 262
$ (9,235)	$ -	$ -	$ 112,224

Balance, beginning of the year	Recognized in profit or loss	Recognized in other comprehen sive income	Ex-rate impact	Balance, end of the year
$ 6,716 7,257 67,795 6,564 3,200 1,585 16,372 2,477 16,831 21,761 3,935 91	$ 2,177 1,323 4,706 (780) (1,695) (714) 2,605 (116) - (7,511) (3,935) (11)	$ - - - - - - - 183 (4,898) - - -	$ (159) - 2,434 - 17 - - - - - - -	$ 8,734 8,580 74,935 5,784 1,522 871 18,977 2,544 11,933 14,250 - 80
$ 154,584	$ (3,951)	$ (4,715)	$ 2,292	$ 148,210
$ 111,149 24	$ 10,310 -	$ - (24)	$ - -	$ 121,459 -
$ 111,173	$ 10,310	$ (24)	$ -	$ 121,459

Investment offset related information:

The Company chooses to apply Article 10-1.1 of the Statute for Industrial Innovation for investment credits in research and development expenses and offsets current year income tax payable within the limit of 15% of the amount of research and development expenses declared in the current year that comply with the relevant regulations.

The Company chooses to apply investment credits related to company or limited partnership investment in smart machines, 5th-generation mobile networks, and cyber security products and offset current year income tax payable within 5% of the expenditure amount of cyber security products declared.

On December 31, 2022, according to the Statute for Upgrading Industries, estimated tax amount that can be deducted from income tax of the Company has been fully deducted this year.
The Company's income tax settlement declaration as of 2019 has been approved by the competent taxation agency.

(29) Earnings Per Share

ings Per Share
Basic EPS Net profit attributable to ordinary shareholders of the parent company Diluted EPS Net profit attributable to ordinary shareholders of the parent company Effects of all dilutive potential common shares – employee compensation Net income available to common shareholders plus effects of potential common shares Basic EPS Net profit attributable to ordinary shareholders of the parent company Diluted EPS Net profit attributable to ordinary shareholders of the parent company Effects of all dilutive potential common shares – employee compensation Net income available to common shareholders plus effects of potential common shares	Year ended December 31, 2022
	Amount Weighted average number of shares outstanding (thousand shares) EPS (in NT dollars) $ 354,143 96,594 $ 3.67 $ 354,143 96,594 - 516 $ 354,143 97,110 $ 3.65 Year ended December 31, 2021
	Amount $ 130,860 $ 130,860 - $ 130,860	Weighted average number of shares outstanding (thousand shares) EPS (in NT dollars) 96,594 $ 1.35 96,594 361 96,955 $ 1.35

If the Company can choose to distribute compensate to employees with stock or cash, when calculating diluted EPS, employee compensation in the form of stock will be

calculating diluted EPS with the weighted average number of outstanding shares that includes the potential common stocks when they have a dilutive effect. When calculating diluted EPS, the net value of the potential common stock on the balance sheet date is used as the basis for judging the number of issued shares. When calculating the diluted EPS before the next year's shareholders' meeting resolution on the number of shares issued for employee compensation, the dilution effect of these previous ordinary shares should continue to be considered.

(30) Capital Management

In consideration of the industry dynamics, the future development of the Company, and the environmental changes, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs and dividend payments to maintain its existing operations and give back to shareholders while taking into account the interests of other stakeholders, and maintain an optimal capital structure to enhance shareholder value in the long run.

The management of the Company regularly reviews the capital structure and considers the possible costs and risks involved. In general, the Company adopts a prudent risk management strategy.

(31) Additional Cash Flow Information

Investment activities with only partial cash payments:

Additions of property, plant and equipment Add: Payable on equipment, beginning of the year 加： Interest capitalization Less: Payable on equipment, end of the year Cash paid in the year	2022 $ 20,949 3,769 - (2,378) $ 22,340	2021
		$ 57,481 4,392 - (3,769)
		$ 58,104

7. RELATED PARTY TRANSACTIONS

(1) Parent Company and the ultimate controlling party

Goodway Machine Corp. is the ultimate controlling party of the group that the Company is in.

(2) Related party name and Relationship

Related Party Name Goodway Machine Corp. YAMA SEIKI USA,INC. Goodway Machine Corp. (Wujiang) Huahan Leasing Co., Ltd. Allrich Cnc, Ltd. HUNG JIU MACHINE CO., LTD.	Relationship with the Company
	Ultimate parent company Associates Associates Associates Substantial related parties Substantial related parties

Yang Wenxu Charity Foundation	Substantial related parties
Turvo International Co., Ltd.	Other related parties
Boldwin Bio Co., Ltd.	Other related parties
AXTRON INVESTMENT CO., LTD	Other related parties
FITTECH CO., LTD.	Other related parties

(3) Significant transactions with the related parties

The transactions, balance income and expenses between the Company and its subsidiaries are all written off when consolidated. Therefore, they are not disclosed in the Notes. Transaction between the Company and other related parties:

Sales

Sales
Parent Associates Substantial related parties Other related parties	2022 $ 1,396 296,207 - 1 $ 297,604	2021
		$ 4,648 179,715 - 39,610
		$ 223,973

The specifications of the products sold by the Company to related parties are different, so there are no other customers for comparison. The Company's sales to related parties and general customer collection conditions are determined in accordance with the contract.

Purchases

Purchases
Parent Associates Substantial related parties	2022 $ 396 247 3,573 $ 4,216	2021
		$ 15,139 8,206 4,889
		$ 28,234

Transition price of purchase from related parties are close to general transactions. 3. Net notes receivable

Net notes receivable
Parent Associates Other related parties	December 31, 2022 $ 1,030 3,244 - $ 4,274	December 31, 2021
		$ 1,623 - 2,142
		$ 3,765

4. Net accounts receivable

4. Net accounts receivable
Parent Associates 5. Other receivables Parent 6. Notes payable Parent Substantial related parties 7. Accounts payable Parent Substantial related parties 8. Other payables Parent Associates Other related parties 9. Prepayments Parent Other related parties	December 31, 2022 $ 170 33,396 $ 33,566 December 31, 2022 $ - December 31, 2022 $ 146 368 $ 514 December 31, 2022 $ 40 759 $ 799 December 31, 2022 $ 1,178 819 10 $ 2,007 December 31, 2022 $ 29 48 $ 77	December 31, 2021
		$ 240 13,570
		$ 13,810
		December 31, 2021
		$ 174
		December 31, 2021
		$ 16,848 186
		$ 17,034
		December 31, 2021
		$ 101 490
		$ 591
		December 31, 2021 $ 1,023 442 11 $ 1,476 December 31, 2021 $ 1,050 48 $ 1,098

10. Advance receipts

10. Advance receipts
	December 31,	2022	December 31,	2021
Parent	$	1,045	$	160
Associates		9,550		426
	$	10,595	$	586
11. Current lease liabilities
	December 31,	2022	December 31,	2021
Parent	$	1,190	$	1,770
12. Non-current lease liabilities
	December 31,	2022	December 31,	2021
Parent	$	499	$	2,833
13. Property transactions
(1) Acquisition of property,	plant and equipment
	2022		2021
Parent	$	-	$	148
Other related parties		-		4,069
	$	-	$	4,217

(2) Disposal of property, plant and equipment

2022	2022	2022
Proceeds Gains $ 23 $ 8 2021		Gains
		$ 8
		Gains
		$ 1,095
		2021
		960
	$ $	2021
		840 3,104
		3,944

15. Others

Others
Other income Parent Associates Interest income Substantial related parties Manufacturing expenses Parent Associates Substantial related parties Other related parties Marketing expense Parent Associates Other related parties Management expense Parent Associates Substantial related parties Research and development expense Other related parties	2022 $ 461 84 $ 545 2022 $ - 2022 $ 770 7 - 66 $ 843 2022 $ 2,392 10 77 $ 2,479 2022 $ 44 5,691 - $ 5,735 2022 $ -	2021
		$ 628 60
		$ 688
		2021
		$ 5
		2021
		$ 1,753 - 880 81
		$ 2,714
		2021
		$ 1,109 288 65
		$ 1,462
		2021
		$ - 5,092 146
		$ 5,238
		2021
		$ 15

Compensation of key management personnel

Short-term employee benefits Post-employment benefits	2022 $ 15,382 400 $ 15,782	2021
		$ 17,874 515
		$ 18,389

The compensation to directors and other key management personnel were determined by the Compensation of the Company in accordance with the individual performance and the Company performance.

8.PLEDGED ASSETS

Detailed list of pledged assets of the Company is as below:

Assets Property, plant and equipment – land Property, plant and equipment – buildings Other current assets – restricted bank deposits Right-of-use assets - land use rights	December 31, 2022 $ 377,341 754,425 188,170 94,032 $ 1,413,968	December 31, 2021
		$ 377,341 791,593 - 95,929
		$ 1,264,863

9.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

COMMITMENTS

Significant contingent liabilities and unrecognized commitments of the Company as of the end of the reporting period were as follows:

(1) The endorsement guarantee notes issued by the Company are NT$6,699 thousand.
(2) The endorsement guarantee notes received from customers are NT$84,656 thousand.
(3) The endorsement guarantee note received by the Company from the manufacturer for leasing solar photovoltaics is NT$21,180 thousand.
(4) The Company received endorsement guarantee notes of NT$80,000 thousand for loan from its subsidiary – Yih Chuan Machinery Industry Co., Ltd.
(5) The Company entrusted First Commercial Bank to open performance guarantee of NT$2,000 for the imported goods to be released first and then pay tax to the Customs.
(6) The Company entrusted First Commercial Bank to open performance guarantee of $233USD thousand mainly for commodity import.

10. LOSSES FROM MAJOR DISASTERS: None

11. MAJOR SUBSEQUENT EVENTS: None

12. OTHERS

Financial instruments

(1) Fair value of financial instruments

Book value of financial instruments not measured by fair value (including cash equivalent, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term loans, short-term notes payable, notes payable, accounts payable, other payables, bonds payable, long-term loans and guarantee deposits received) is a reasonable approximation of fair value. Bonds payable (including put option due or execute within one year) and long-term loans’ interest rates are close to market rate, so the carrying amount should be a reasonable basis for estimating fair value. Please refer to Note 12 (6) for fair value of financial instrument measured by fair value.

(2) Financial risk management objectives

The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance. The plans for material treasury activities are reviewed by the Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Company must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

(3) Market risks

The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates, interest rates and equity investment prices. A portion of these risks is hedged.

1. Foreign currency risk

Part of the Company's cash inflows and outflows are in foreign currency, so there is a natural hedging effect. The Company's exchange rate risk management is for the purpose of avoiding risks, not for the purpose of profit.

The management strategy for exchange rate risk is to examine the net positions of assets and liabilities in various currencies periodically and conduct risk management to the net positions.

At the reporting date, the book value of the Company’s monetary assets and liabilities denominated in foreign currencies were as follows:

In thousands of New Taiwan Dollar and foreign currencies

			In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies
Financial assets Monetary items USD EUR RMB AUD Non-monetary items USD Financial liabilities Monetary items USD JPY RMB Non-monetary items USD			December 31, 2022
	Foreign currencies 57,809 3,014 8,906 1 - 150 2,869 90 1,551	Exchange rate (Note) 30.66 32.52 4.383 20.73 - 30.66 0.2304 4.383 30.66	NT Dollar 1,772,424 98,015 39,035 21 - 4,599 661 394 47,554	Sensitivity analysis
				Rate of change 5% 5% 5% 5% - 5% 5% 5% -	Profit or loss impact 88,621 4,901 1,952 1 - 230 33 20 -	Equity impact
						- - - - - - - - -

In thousands of New Taiwan Dollar and foreign currencies

			In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies	In thousands of New Taiwan Dollar and foreign currencies
Financial assets Monetary items USD EUR RMB AUD Non-monetary items USD Financial liabilities Monetary items USD EUR JPY RMB Non-monetary items USD RMB			December 31, 2021
	Foreign currencies 43,608 4,332 27,166 1 2,006 817 1 7,866 119 2,022 290	Exchange rate (Note) 27.63 31.12 4.319 19.98 27.63 27.63 31.12 0.2385 4.319 27.63 4.319	NT Dollar 1,204,889 134,812 117,330 20 55,426 22,574 31 1,876 514 55,868 1,253	Foreign currencies
				Rate of change 5% 5% 5% 5% - 5% 5% 5% 5% - -	Profit or loss impact 60,244 6,741 5,867 1 - 1,129 2 94 26 - -	Equity impact
						- - - - - - - - - - -

Note. Using exchange rate of the balance sheets date.

Interest rate risk

Interest rate risk refers to the risk of changes in the fair value of financial instruments due to changes in market interest rates. The Company is exposed to interest rate risks primarily in relation to its bank loans.

Assuming that the floating rate loan at the end of the reporting period is held throughout the reporting period, when the interest rate increases by 1%, the Company's net profit will decrease by NT$22,446 thousand.

Other price risk
The Company is exposed to equity price risk arising from financial assets at FVTPL and at FVTOCI.

Assuming a decrease of 10% in prices of the equity investments at the end of the reporting period for the years ended December 31, 2022 and 2021, the profit and loss would have decreased by NT$38,746 thousand and NT$18,925 thousand, respectively.

(4) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risks from operating activities, primarily accounts receivable, and from investing activities like deposits with banks. Credit risk is managed separately for business related and financial related exposures.

Business related credit risk

The Company has established the procedures to maintain the quality of accounts

receivable and conduct management and credit risk analysis for each new customer in accordance with the internally specified credit policy. Internal risk control is to evaluate customer credit quality by considering its financial status, past experience and other factors.

The risk assessment of an individual customer is based on the consideration of the customer's financial status, credit rating agency rating, the Company's internal credit rating, historical transaction records and current economic conditions, and many other factors that may affect the customer's ability to pay. The Company will also use certain credit enhancement tools, such as credit insurance, at appropriate times to reduce the credit risk of specific customers.

As of December 31, 2022 and 2021, the Company’s ten largest customers accounted for 60% and 54% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

Financial credit risk

The credit risk of bank deposits is measured and monitored by the financial department of the Company. Since the Company's transaction partners and other parties to the contract are all credit-worthy banks, financial institutions with investment grade and above, and government agencies, there are no major concerns about the performance of the contract, and therefore major credit risk observed.

(5) Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient cash and cash equivalents and sufficient lines of credit to fund its business operations and maintain adequate financial flexibility.

The table below summarizes the maturity profile of the Company’s financial liabilities based on expiry date and contractual undiscounted payments:

	December 31, 2022	December 31, 2022	December 31, 2022
1 to 3 months $ 1,556,298 289,641 315,393 200,289 130,896 12,445 2,845 - 2,183 $ 2,509,990	4 to 6 months $ 256,038 - 78,970 282 - - 2,851 - - $ 338,141	7 months to 1 year $ 142,613 - - 234 - - 5,724 - - $ 148,571	More than a year $ - - - 1,306 - - 918 - - $ 2,224	Total
				$ 1,954,949 289,641 394,363 202,111 130,896 12,445 12,338 - 2,183
				$ 2,998,926

	December 31, 2021
		Total
		$ 1,335,781 259,907 535,268 279,107 141,035 12,934 24,370 62,672 4,173

(6) Fair value of financial instruments
Please refer to Note 12(1) for financial assets and liabilities not measured by fair value.
Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:
(1) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market refers to markets that meets all the following conditions: the commodities traded in the market are homogeneous, and willing buyers and sellers can be found in the market at any time and price information is available to the public.
(2) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
(3) Level 3 fair value measurements are not based on inputs for the asset or liability that are based on observable market data.
- There is no transition between level 1 and 2 during the year ended December 31, 2022 and 2021.
- There is no transition into or out of level 3 during the year ended December 31, 2022 and 2021.
The method and assumption that the Company applied to measure fair value are as below:
- (1) Fair value of financial assets and liabilities with standard terms and conditions and are traded in active market is determined by referencing market quotations.
- (2) Fair value of other financial liabilities is determined by the generally accepted evaluation model based on discounted cash flow analysis.

Fair value hierarchy

 - The following table presents the Company’s financial assets and liabilities measured at fair value:

	December 31, 2022	December 31, 2022
Level 1 $ 377,002 10,458 $ 387,460	Level 2 Level 3 $ - $ - - - $ - $ - December 31, 2021		Total
			$ 377,002 10,458
			$ 387,460

Level 1 $ 172,417 16,829 $ 189,246	Level 2 $ - - $ -	Level 3 $ - - $ -	Total
			$ 172,417 16,829
			$ 189,246

13. ADDITIONAL DISCLOSURES

(1) Significant transactions:

Financings provided: See Table 1 attached;
Endorsement/guarantee provided: None;
Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): See Table 2 attached;
Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None;
Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None;
Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None;
Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: See Table 3 attached;
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;
Information about the derivative financial instruments’ transaction: See Note 12;
The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 4.
(2) Information on reinvestment business: See Table 5 attached;
(3) Information on investment in mainland China：See Table 6 attached.
(4) Information of major shareholder : See Table 7 attached.

Table 1：FINANCINGS PROVIDED

December 31, 2022	December 31, 2022	December 31, 2022							Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise
No. (Note 1)	Financing Company	Counterparty	Financial Statement Account	Relate d Party	Maximum Balance for the Period (Note 3)	Ending Balance (Note 4)	Amount Actually Drawn	Interest Rate	Nature for Financing	Transactio n Amounts	Reason for Financing	Allowance for Bad Debt	Collateral		Financing Limits for Each Borrowing Company (Note 2)	Financing Company’s Total Financing Amount Limits (Note 2)
													Item	Value
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	Other receivables from related	Yes	230,000	80,000	70,000	1.8% ~ 1.925%	The need for short-term financing	7,911	Operating capital	-	promiss ory note	80,000	325,268	1,301,070
1	Shanghai Zhuwei Mechantronic Co., Ltd.	Awea Mechantronic (Suzhou) Ltd.	Other receivables from related	Yes	87,680	87,680	87,660	3.8%	The need for short-term financing	-	Operating capital	-	-	-	145,953	145,953
1	Shanghai Zhuwei Mechantronic Co., Ltd.	Yih Chuan Machinery (Jiaxing) Industry Co., Ltd.	Other receivables from related parties	Yes	7,451	7,451	7,451	3.65%	The need for short-term financing	-	Operating capital	-	-	-	145,953	145,953

Note 1: information of the numbering column:

(1)Issuer is No. 0.

(2)Invested companies are listed in order from No.1.

Note 2: financing limit to individual counterparty is no more than 10% of net value of the current period, and the total amount of financing should be no more than 40% of net value of the current period.

Note 3: Maximum balance of financing for the period.

Note 4: The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

Table 2: MARKETABLE SECURITIES HELD (excluding investments in subsidiaries, associates and joint ventures)

December 31, 2022 Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		December 31, 2022	December 31, 2022
				Share units	Carrying Value	Percentage of Ownership	Fair Value (Note 1)
AWEA Mechantronic CompanyLimited	Stock - AUTECH EUROPE	-	Non-Current financial asset at FVTPL	50	- (Note 2)	5.00%	-
AWEA Mechantronic CompanyLimited	Stock - P-DUKE TECHNOLOGY CO., LTD.	-	Current financial asset at FVTPL	1,063,852	91,917	1.36%	91,917
AWEA Mechantronic CompanyLimited	Stock - TURVO INTERNATIONAL CO., LTD.	Other related parties	Current financial asset at FVTPL	2,607,000	263,307	4.32%	263,307
AWEA Mechantronic CompanyLimited	Stock - EAGLE COLD STORAGE ENTERPRISE CO.,LTD.	-	Current financial asset at FVTPL	675,000	14,850	0.57%	14,850
AWEA Mechantronic CompanyLimited	Stock - TSMC	-	Current financial asset at FVTPL	10,000	4,485	-	4,485
AWEA Mechantronic CompanyLimited	Stock - Zeng Hsing Industrial Co., Ltd.	-	Current financial asset at FVTPL	20,534	2,443	0.03%	2,443
AWEA Mechantronic CompanyLimited	Stock - FITTECH CO., LTD	Other related parties	Non-Current financial asset at FVTOCI	118,846	10,458	0.16%	10,458

Note 1: If the invested company has no public market price, it shall be listed according to the net equity value.

Note 2: During the year of 1996, due to the value of the invested company has been impaired and there is little hope of recovery, the amount has been transferred fully to loss.

Table 3: TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

December 31, 2022 Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

Company Name	Related Party	Nature of Relationships		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction (Note 1)	Abnormal Transaction (Note 1)	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase s/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending balance	% to Total
AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	Indirect subsidiary	Sales	$ 287,814	12.60%	3 months after shipped	-	-	$35,351	4.71%	-
AWEA Mechantronic Company Limited	YAMA SEIKI USA,INC.	Subsidiary	Sales	$ 240,190	10.52%	3 months after shipped	-	-	$33,396	4.45%	-

Note 1: The products sold by the Company to related parties Awea Mechantronic (Suzhou) and YAMA SEIKI have different functions, so there are no other customers for comparison. The payment conditions, like for general customers, are determined in accordance with the contract.

Table 4. INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

December 31, 2022	December 31, 2022			Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise	Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise
No. (Note 1)	Company Name	Counterparty	Relationship with the Company (Note 2)		Intercompany Transactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 4)
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Sales revenue	7,911	(Note 3)	0.3%
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Purchases	22,603	(Note 3)	0.7%
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Notes receivable	29	(Note 3)	-
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Other receivables	70,042	(Note 3)	1.0%
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Notes payable	11,256	(Note 3)	0.2%
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Accounts payable	709	(Note 3)	-
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Interest income	1,004	(Note 3)	-
0	AWEA Mechantronic Company Limited	Yih Chuan Machinery Industry Co., Ltd.	1	Operating cost- after-sales service fee	75	(Note 3)	-
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Sales revenue	287,814	(Note 3)	9.3%
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Accounts receivable	35,350	(Note 3)	0.5%
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Other payables	489	(Note 3)	-
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Manufacturing -repair expense	229	(Note 3)	-
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Sales -warranty expense	659	(Note 3)	-

0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Sales -repair expense	232	(Note 3)	-
0	AWEA Mechantronic Company Limited	Awea Mechantronic (Suzhou) Ltd.	1	Sales -other expense	175	(Note 3)	-
1	Awea Mechantronic (Suzhou) Ltd.	Shanghai Zhuwei Mechantronic Co., Ltd.	3	Other payables	87,660	(Note 3)	1.3%
1	Awea Mechantronic (Suzhou) Ltd.	Shanghai Zhuwei Mechantronic Co., Ltd.	3	Advance payment	26,298	(Note 3)	0.4%
1	Awea Mechantronic (Suzhou) Ltd.	Shanghai Zhuwei Mechantronic Co., Ltd.	3	Interest expense	1,390	(Note 3)	-
2	Shanghai Zhuwei Mechantronic Co., Ltd.	Yih Chuan Machinery (Jiaxing) Industry Co., Ltd.	3	Other receivables	7,451	(Note 3)	0.1%
3	Yih Chuan Machinery Industry Co., Ltd.	Yih Chuan Machinery (Jiaxing) Industry Co., Ltd.	3	Sales revenue	168	(Note 3)	-

Note 1: information of the numbering column:

Parent company is No. 0.
Subsidiaries are listed in order from No.1.

Note 2：There are 3 types of transactions with related party, and just mark the number as below:

Parent to subsidiary
Subsidiary to parent
Subsidiary to subsidiary

Note 3: Made according to the contract.

Note 4: The important transactions in this form can be determined by the Company based on the principle of materiality.

Table 5: NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES (Excluding Information on Investment in Mainland China) December 31, 2022 Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

Investor Company	Investee Company	Location	Maian business	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Net Income (Losses) of the Investee	Share of Profits/ Losses of Investee (Note 1)	Note
				December 31, 2022	December 31, 2021	Shares	Percentage of Ownership	Carrying Value
AWEA Mechantronic Company Limited AWEA Mechantronic Company Limited AWEA Mechantronic Company Limited AWEA Mechantronic Company Limited B-Way (Cayman) Co., Ltd. Yih Chuan Machinery Industry Co., Ltd. AXTRON INT’L INVESTMENT CO.,TLD	B-Way (Cayman) Co., Ltd. YAMA SEIKI USA,INC. Yih Chuan Machinery Industry Co., Ltd. Huahan Leasing Co., Ltd. Billion-Way (Cayman) Co., Ltd. AXTRON INT’L INVESTMENT CO., LTD AXTRON INT’L INVESTMENT LIMITED	Cayman Islands USA Taiwan Taiwan Cayman Islands Marshall Islands, USA Hong Kong	International investment and International trade Machinery sales and installation, International trade Machinery sales and retail、product design Rental of machinery and equipment International investment and International trade international investment and International trade International investment and International trade	$ 332,212 53,968 264,592 7,333 USD 12,830 (NTD 393,368) 200,000 HKD 10 (NTD 39)	$ 332,212 53,968 264,592 7,333 USD 12,830 (NTD 393,368) 200,000 HKD 10 (NTD 39)	10,665,029 584,192 5,914,800 666,667 12,829,840 50,000 10,000	100.00% 28.58% 60.00% 13.33% 100.00% 100.00% 100.00%	$ 718,246 101,849 173,920 8,001 733,801 230,394 230,394	$ 95,283 22,916 (12,140) 4,097 85,859 (7,257) (7,257)	$ 95,278 7,236 (7,284) 546 85,859 (7,257) (7,257)	(Note 1) - (Note 1) - (Note 1) (Note 1) (Note 1)

Note 1: already written-off

Table 6: INFORMATION ON INVESTMENT IN MAINLAND CHINA

December 31, 2022 Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise 1. Chinese Invested Company Name, Primary Business Activities, Paid-in Capital, Investment Method, Inflow and Outflow of Funds,

Ownership Percentage, Investment Book Value, and Repatriation of Investment Gain/Loss:

Investee Company	Main Businesses	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2022	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2022	Net Income (Losses) of the Investee Company	Percentage of Ownership	Share of Profits/ Losses (Note 2)	Carrying Amount as of Balance as of December 31, 2022	Accumulated Inward Remittance of Earnings as of December 31, 2022
					Outflow	Outflow
Shanghai Zhuwei Mechantronic Co., Ltd.	Machinery sales and installation, business management consultation, and International trade	USD 2,500 (NTD 76,650) (Note 3)	2	USD 2,494 (NTD 76,466) (Note 3)	-	-	USD 2,494 (NTD 76,466) (Note 3)	$ 3,148	100%	$ 3,667	$143,541	USD 15,438 (NTD 458,016) (Note 3)
Awea Mechantronic (Suzhou) Ltd.	Machinery sales and installation, and International trade	USD 11,400 (NTD 349,524) (Note 3)	2	USD 10,400 (NTD 318,864) (Note 3)	-	-	USD 10,400 (NTD 318,864) (Note 3)	81,807	100%	81,807	583,296	USD 2,306 CNY 49,580 (NTD 285,977)
Yih Chuan Machinery (Jiaxing) Industry Co., Ltd.	Machinery sales, manufacturing and installation, and International trade	USD 2,510 (NTD 76,957) (Note 3)	2	USD 2,510 (NTD 76,957) (Note 3)	-	-	USD 2,510 (NTD 76,957) (Note 3)	(7,257)	100%	(7,257)	230,394	-

2. Upper Limit for reinvestment in Mainland China:

Investee Company	Accumulated Outflow of Investment from Taiwan as of December 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
The Company	$ 395,330 (Note 3) (USD 12,894)	$ 426,174 (Note 3) (USD 13,900)	$ 1,951,606 (Note 5)
Yih Chuan Machinery Industry Co., Ltd.	$ 76,957 (Note 3) (USD 2,510)	$ 76,957 (Note 3) (USD 2,510)	$ 173,278(Note 5)

Note 1: The investment methods are divided into the following three types, just indicate the type:

(1) Directly go to Mainland China to invest

(2) Reinvest in mainland China through companies in third regions

(3) Other methods

Note 2: investment profit or loss is recognized based on financial reports audited of the same period.

Note 3: Amount in New Taiwan Dollar is exchanged according to the exchange rate on balance sheet date.

Note 4: Dawea Mechantronic (Suzhou) Ltd. merged with Awea Mechantronic (Suzhou) Ltd. in September 2020, and Awea Mechantronic (Suzhou) Ltd. is the existing company after the merger. This merger case has been approved and put on record by the Investment Commission, MOEA in July 2021 through letter No. 11000165350.
Note 5: The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company’s consolidated net worth. 3. Significant transaction items with direct or indirect investees in Mainland China: see Table 4.

Table 7: INFORMATION ON MAJOR SHAREHOLDERS December 31, 2022

December 31, 2022
Major Shareholders	Total Shares Owned	Ownership Percentage
GOODWAY MACHINE CORP.	47,912,311	49.60 %
YANG, TE-HUA	9,031,403	9.34 %
JIAJIN INVESTMENT CO., LTD.	6,256,388	6.47 %
FUBON LIFE INSURANCE CO., LTD.	5,406,500	5.59 %

14. OPERATING SEGMENTS INFORMATION

(1) The operating segments information for the years ended December 31, 2022 and 2021 are as below:

	December 31, 2022	December 31, 2022	December 31, 2022
Awea Taiwan $ 1,987,934 295,724 16,006 95,775 19,897 74,288 439,857	Awea (Suzhou) Other segments Adjustment s and write-offs $ 942,995 $ 169,588 $ - 1,159 22,847 (319,730) 809 1,550 (2,393) - - (87,993) 4,717 3,781 (2,393) 32,516 13,450 (2,209) 108,716 (791) (87,994) December 31, 2021			Total
				$ 3,100,517 - 15,972 7,782 26,002 118,045 459,788
Awea Taiwan $ 2,064,750 427,680 1,247 50,549 9,642 80,496 181,729	Awea (Suzhou) $ 1,102,489 1,685 1,916 - 46 24,772 155,990	Other segments $ 463,717 25,031 1,503 - 5,197 16,966 (54,600)	Adjustment s and write-offs $ - (454,396) (440) (45,837) (444) (2,445) (45,319)	Total
				$ 3,630,956 - 4,226 4,712 14,441 119,789 237,800

The total amount of inter-segment transactions that should be written off of the reporting revenue of operating segments for the years ended December 31, 2022 and 2021 are NT$319,730 thousand and NT$454,396, respectively.
The total amount of profit and loss excluding income tax of operating segments for the years ended December 31, 2022 and 2021 are NT$110,501 thousand and

NT$115,767 thousand, respectively.

There are 2 operating segments should be reported: Awea Taiwan and Awea Suzhou. The main business of Awea Taiwan is the design, manufacture and sales of special machines, automation equipment and computer-controlled machine tools. Awea Suzhou is engaged in the manufacturing and sales of mechanical appliances and the installation of mechanical appliances.

The Company has not apportioned income tax expenses to the reportable segments. The reported amount is consistent with the report used by the operating decision makers. The accounting policies of the operating segments are the same as the summary of important accounting policies described in Note 4. The profit and loss of the operating segments of the Company is based on the net profit before tax as the basis for evaluating performance. The Company regards the sale and transfer between segments as a transaction with a third party and measures it at the current market price.

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AWEA — Annual Report 2022

51853_rns_2022-11-11_16053f09-dcb4-41b4-8bf4-6335d22f790d.pdf

AWEA Mechantronic Company Limited

REPRESENTATION LETTER

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Other Items

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

AWEA Mechantronic Company Limited

CONSOLIDATED BALANCE SHEETS

AWEA Mechantronic Company Limited

CONSOLIDATED BALANCE SHEETS

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CASHFLOWS

AWEA Mechantronic Company Limited

CONSOLIDATED STATEMENTS OF CASHFLOWS

AWEA Mechantronic Company Limited NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

1.GENERAL

2.DATE AND PROCEDURE FOR APPROVAL OF FINANCIAL STATEMENTS

3.APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

(2) The impact of not yet applying of IFRSs endorsed by the FSC:

Disclosure of Accounting Policies

Deferred Tax related to Assets and Liabilities arising from a Single Transaction

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Functional Currency and Reporting Currency

(4) Basis of Consolidation

(18) Government Subsidy

(19) Employee Benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

major actuarial assumptions and sensitivity analysis adopted by the actuarial. 6.ILLUSTRATION OF IMPORTANT ACCOUNTING ITEMS (1) Cash And Cash Equivalents

(2) Financial Assets at Fair Value Through Profit or Loss

(3) Non-current Financial Assets at Fair Value Through Other Comprehensive Income

(4) Notes and Accounts Receivable

(5) Inventories

(7) Property, plant and equipment

3. Material terms of right-of-use assets

4. Other lease information

(12) Short-Term Loans

(16) Long-term Loans

(17) Employee Benefits

(18) Capital Stock

(19) Capital Surplus

(20) Retained Earnings

(21) Others

(22) Non-controlling Interest

2. Contract balance

(28) Income Tax

(29) Earnings Per Share

(30) Capital Management

(31) Additional Cash Flow Information

7. RELATED PARTY TRANSACTIONS

4. Net accounts receivable

10. Advance receipts

(2) Disposal of property, plant and equipment

15. Others

8.PLEDGED ASSETS

9.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

COMMITMENTS

10. LOSSES FROM MAJOR DISASTERS: None

11. MAJOR SUBSEQUENT EVENTS: None

12. OTHERS

1. Foreign currency risk

13. ADDITIONAL DISCLOSURES

(1) Significant transactions:

Table 1：FINANCINGS PROVIDED

Table 3: TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

Table 4. INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

Note 1: information of the numbering column:

Table 6: INFORMATION ON INVESTMENT IN MAINLAND CHINA

Ownership Percentage, Investment Book Value, and Repatriation of Investment Gain/Loss:

2. Upper Limit for reinvestment in Mainland China:

Table 7: INFORMATION ON MAJOR SHAREHOLDERS December 31, 2022

AWEA Annual Report 2022