BESTEC — Annual Report 2022

Nov 14, 2022

Attachment 2

Stock code: 3308

Bestec Power Electronics Co., Ltd. and subsidiary

Consolidated financial

statement and independent accountant’s report Year 2022 and Year 2021

Address: No. 69, Keji 1st Road, Guishan District, Taoyuan City Tel ： (03)3286800

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§ Table of Contents §

ITEM PAGE 1. Cover Page 1 2. Contents 2 3.Declaration of Consolidated Financial Statements of Affiliated Enterprises 4 IV. Auditors' Report 5～8 5. Consolidated Balance Sheets 9 6.Consolidated Comprehensive Income Statement 10～12 7.Consolidated Statements of Changes in Equity 11~14 8. Consolidated Statements of Cash Flows 15～16 9.Notes to the Consolidated Financial Statements (1)Company History 17 (2)Date and Procedures for Approval of the Financial Statements 17 (3)Application of Newly Issued or Revised Accounting Standards and Interpretations 17～19 (4)Summary of Significant Accounting Policies 19～32 (5)Critical accounting judgments, estimates and key sources of assumption uncertainty 32 (6)Explanation of Significant Accounting Items 32～73 (7)Related Party Transactions 73～74 (8)Pledges Assets 74 (9)Significant Contingent Liabilities and Unrecognized Contractual Commitments 74 (10)Significant Losses from Disasters - (11)Significant Post-Period Events 75 (12)Others 75～78 (13)Disclosures in the Notes to the Financial Statements 1.Information on Material Transactions 77~83、86～87、 2.Information on Reinvestment in Other Companies 77~83、86～87 3.Investment Information on Mainland 78、84、85

FINANCIAL REPORTS FOOTNOTE

NO. - - - - - - - - 1. 2. 3 4 5 6 ~ 28 29 30 31 - 32 33 34 34 34

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China

4.Information of Major Shareholders 78 、 88 34 (14)Department Information 78 35

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Declaration of Consolidated Financial Statements of Affiliated Enterprises

In the fiscal year 2022 (from January 1, 2022 to December 31, 2022), the companies that are required to prepare consolidated financial statements of related companies under the "Regulations Governing the Preparation of Consolidated Financial Statements and Related Reports of Related Companies in Business Combination Reports of Related Companies" and those required to prepare consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10 are the same. Furthermore, the relevant information required to be disclosed in the consolidated financial statements of related companies has already been disclosed in the aforementioned consolidated financial statements of parent and subsidiary companies. Therefore, the preparation of separate consolidated financial statements of related companies is not required. It is hereby declared

Company name: Bestec Power Electronics Co., Ltd.

Chairman: Chen Mingzhi

March 28, 2023

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Independent accountant’s audit report

To Bestec Power Electronics Co., Ltd.,

Audit Opinion

The consolidated balance sheet of Bestec Power Electronics Co., Ltd. and its subsidiary (hereinafter referred to as "the United Power Electronics Group") as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity, and cash flows for the year ended December 31, 2022 and for the period from January 1, 2022 to December 31, 2022, as well as the accompanying notes to the consolidated financial statements (including a summary of significant accounting policies), have been audited by our auditors.

Based on our audit, the aforementioned consolidated financial statements have been prepared in accordance with the Financial Reporting Standards for Issuers of Securities and Futures Commission and the International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretive Statements approved and promulgated by the Financial Supervisory Commission. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the United Power Electronics Group as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 and for the period from January 1, 2022 to December 31, 2022 in accordance with the aforementioned accounting standards and principles.

Basis for opinion

We, as auditors, have conducted our audit work in accordance with the Regulations Governing the Audit Signatures of Certified Public Accountants and the Auditing Standards. Our responsibility as auditors under those standards is further explained in the auditor's responsibility section of our audit report on the consolidated financial statements. The personnel of the accounting firm to which this accountant belongs have maintained independence from Bestec Power Electronics Co., Ltd. in accordance with the ethical standards of the accounting profession, and fulfilled other responsibilities required by those standards. We believe that we have obtained adequate and appropriate audit evidence to form the basis of our audit opinion. Key audit matters

The key audit matters refer to the matters that, based on the auditor's professional judgment, were of most significance in the audit of Bestec Power Electronics Co., Ltd.'s consolidated financial statements for the year ended December 31, 2022. These matters were addressed during the audit of the overall consolidated financial statements and in

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the formation of our opinion. We do not express our opinion on these matters separately.

The following are the key audit matters related to the consolidated financial statements of Bestec Power Electronics Co., Ltd. for the year ended December 31, 2022: Sales revenue - sales revenue from a specific customer's authenticity

The net sales revenue of Bestec Power Electronics Co., Ltd. for the year ended December 31, 2022 was NTD 407,370 thousand, an increase of approximately 17.36% compared to NTD 347,110 thousand for the year ended December 31, 2021. Significant growth was observed in net sales revenue from a specific customer, which constitutes a significant portion of the overall net sales revenue. As a result, the authenticity of sales revenue from this specific customer was identified as a key audit matter. Sales revenue from specific customers in the year 2022 has significantly increased compared to the year 2021 and accounts for a significant portion of the net sales revenue, therefore the authenticity of the sales revenue from this specific customer is considered a key audit matter.

For accounting policies and relevant information disclosure related to revenue recognition, please refer to Note 12 and Note 22 of the consolidated financial statements.

The main audit procedures performed by the auditor in response to this key audit matter are as follows:

1. Understand the effectiveness of the main internal control system designs and implementation related to testing the authenticity of revenue recognition. Evaluate the appropriateness of the revenue recognition accounting policies adopted by management.

2. Selectively test original orders, shipping documents, and invoices to confirm the authenticity of the revenue recognition.

3. Review the collection data and the occurrence of post-sales returns and allowances to confirm if there are any abnormal circumstances.

Other Matters

Bestec Power Electronics Co., Ltd. has prepared individual financial reports for the years 111 and 110 of the Republic of China and obtained an unqualified opinion from our auditors for reference.

The responsibility of management and governance for the consolidated financial statements

The responsibility of the management is to prepare the consolidated financial statements in accordance with the Financial Reporting Standards for Issuers of Securities, International Financial Reporting Standards approved and issued by the Financial Supervisory Commission, and the interpretations and interpretations announcements that can be properly expressed, and to maintain the necessary internal controls related to the preparation of the consolidated financial statements to ensure that there are no material misstatements due to fraud or error in the consolidated financial statements.

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In preparing the consolidated financial statements, the responsibility of the management also includes assessing the ability of the Bestec Power Electronics Co., Ltd. group to continue operating, disclosing relevant matters, and adopting accounting bases for continued operations, unless the management intends to liquidate or discontinue the operations of the Bestec Power Electronics Co., Ltd. group, or there are no other viable alternatives except for liquidation or discontinuation.

The governance unit of the Bestec Power Electronics Co., Ltd. group (including the audit committee) is responsible for supervising the financial reporting process.

Responsibility of auditors in auditing the consolidated financial statements

The objective of our audit of the consolidated financial statements is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and may be material if, in the light of surrounding circumstances, the magnitude of the misstatement or misstatements, including the effects of undetected misstatements, would cause the consolidated financial statements to be misleading.

Our auditor exercised professional judgment and skepticism in accordance with the auditing standards. We also performed the following tasks:

1. We identified and assessed the risks of material misstatement of the consolidated financial statements, whether due to fraud or errors, designed and performed audit procedures according to those risks, and obtained audit evidence that can sufficiently and appropriately form the basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for the one resulting from error because fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain the necessary understanding of internal controls related to the audit, and design appropriate audit procedures based on the current situation. However, the purpose is not to express an opinion on the effectiveness of the internal controls of Bestec Power Electronics Group.

3. We evaluated the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and related disclosures made by management.

4. Based on the audit evidence obtained, we conclude on the appropriateness of the management's use of the going concern basis of accounting and whether there are events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we believe that such significant uncertainties exist, the auditor shall alert the financial statement users in the audit report to pay attention to the related disclosures in the consolidated financial statements, or revise the audit opinion if such disclosures are inappropriate. Our conclusions are based on the audit evidence obtained up to the date of this accountant’s report.

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However, future events or circumstances may arise that could lead to the loss of Bestec Power Electronics Group's ability to continue as a going concern.

1. We evaluated the overall presentation, structure and content of the consolidated financial statements (including the relevant notes), and whether the consolidated financial statements allow for the expression of relevant transactions and events.

2. Obtain sufficient and appropriate audit evidence for the financial information of the entities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the Group’s audits and are responsible for our audit opinion.

We have communicated with those charged with governance regarding the planned scope and the timing of the audit as well as material audit findings (including significant internal control shortcomings identified in the audit).

We have also provided those charged with governance the statement that the personnel of our accounting firm subject to the requirements of independence have complied with the requirements of independence of the code of professional ethics of certified public accountants and communicate with those charged with governance relationships and other matters that may influence our independence (including related preventive measures).

The auditor has identified the key audit matters for the audit of the consolidated financial statements of Bestec Power Electronics Group for the year ended2022based on matters communicated with the governance unit. We described these matters in the accountant’s report, unless the laws and regulations prohibit such disclosure or under rare condition that we decide not to communicate a given matter because the negative impact from such communication may override its public benefits under reasonable assumption.

Deloitte Taiwan

Accountant Jian-Ming Yan Accountant Hsiu-Chun Huang

Approval Number from Financial Securities and Futures Bureau Approval Supervisory Commission Number: Financial Supervisory Commission TCSC-Liu-Zi 0920123784 Approval Number: JG-Yin-Zhuan-Zi 1000028068

April 28, 2023

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Bestec Power Electronics Co., Ltd. And Subsidiaries

Consolidated Balance Sheets

As of December 31, 2022 and 2021

Unit: NT$ thousands

Code 1100 1110 1144 1170 1200 1220 1310 1320 1460 1470 11XX 1600 1755 1821 1840 1920 1975 1990 15XX 1XXX Code 2100 2170 2219 2230 2322 2399 21XX 2540 2570 2645 25XX 2XXX 3110 3210 3271 3200 3350 3410 31XX 36XX 3XXX	Assets Current Assets Cash and Cash Equivalents (Note 4 and 6) Financial assets measured at fair value through profit or loss - current (Note 4 and 7) Financial assets measured at amortized cost - current (Note 4 and 8) Net accounts receivable (Note 4 and 9) Other receivables (Note 4 and 9) Current tax assets (Note 4 and 24) Net inventory (Note 4 and 10) Construction in progress inventory (refer to notes 4, 12, 18, and 30) Assets directly related to disposal groups held for sale (Note 11) Other current assets (Note 17) Total Current Assets Non-current assets Property, plant, and equipment (Note 4, 5, 14, 18 and 21) Right-of-Use Assets (Note 4and 15) Intangible Assets (Note 4 and 16) Deferred tax assets (Note 4, 5 and 24) Deposits Received as Collateral (Note 4) Net defined benefit assets - non-current (Note 4 and 20) Other non-current assets (Note 17) Total Non-Current Assets Total Assets Liabilityand equity Current Liabilities Short-term borrowings (Note 4, 14, 18 and 30) Accounts payable Other accounts payable (Note 4 and 19) Current income tax payable Note 4 and 24) Current portion of long-term loans payable (Note 4, 14, 18 and 30) Other current liabilities (Note 13 and 19) Total current liabilities Non-current liabilities Long-term borrowings (Note 4, 14, 18 and 30) Deferred income tax liabilities (Note 4, 5 and 24) Deposits for guarantee (Note 19) Total non-current liabilities Total liabilities Equity attributable to owners of the company (refer to notes 4, 21, 24, and 26) Capital stocks Common Stock Capital surplus Share premium Employee stock options Total Capital Surplus Accumulated losses Accumulated deficits to be covered Other equity Exchange difference for conversion of financial statements of foreign operating institutions Total equity attributable to owners of the company Non-Controlling Interest (Note 13) Total equity Total liabilities and equity		December 31,2022	December 31,2022	% 40 4 3 8 - - 2 11 6 1 75 24 - - - 1 - - 25 100 9 8 2 1 13 19 52 12 - - 12 64 36 - - - - - 36 - 36 100		December 31,2021	December 31,2021
			Amount $ 781,639 76,029 51,994 154,967 4,875 182 33,465 216,950 114,643 30,306 1,465,050 470,681 - 167 1,758 13,625 7,370 - 493,601 $ 1,958,651 $ 184,000 154212 32,520 16,098 263,723 376,694 1,027,247 223,378 6,672 2,958 233,008 1,260,255 706,840 877 4,029 4,906 5,632) 7,702) 698,412 16) 698,396 $ 1,958,651				Amount $ 486,344 100,879 12,000 87,032 2,753 252 58,655 216,950 - 39,914 1,004,779 381,646 18854 879 1,884 6,178 6,004 706 416,151 $ 1,420,930 $ 184,000 138,638 21,599 16,049 34,825 38,884 433,995 319,031 985 2,150 322,166 756,161 704,909 272 4,405 4,677 26,388) 18,421) 664,777 8) 664,769 $ 1,420,930		%
		( ( (				( ( (		( (	34 7 1 6 - - 4 16 - 3 71 27 1 - - 1 - - 29 100 13 10 1 1 2 3 30 23 - - 23 53 50 - - - 2) 1) 47 - 47 100

The attached notes are an integral part of this consolidated financial statements.

Chairman: Chen Mingzhi

General manager: Chen Mingzhi

Chief Accounting Officer: Yeh Wenbin

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Bestec Power Electronics Co., Ltd. And Subsidiaries Consolidated Statements of Comprehensive Income from January 1 to December 31 in 2021 and 2022

Unit: NT$ thousands, except earnings(loss) per share in NT$

C o d e Revenue from operations (Note 4 and 22) 4110 Sales revenue 4170 Sales return 4190 Sales allowance 4000 Net operating income 5000 Operating cost (Note 4, 10, 14, 20 and 23) 5900 Operating gross profit Operating expenses (Note 4, 9, 14, 15, 16, 20, 23, 26 and 29) 6100 Selling expenses 6200 Management expense 6300 Research and development expenses. 6000 Total operating expenses 6900 Operating Profit (loss) Non-operating income and expenses 7100 Interest revenue (Note 4 and 23) 7130 Dividend income 7190 Other revenue (Note 14, 23 and 29) 7050 Finance costs (Note 18 and 23)	Year 2022	Year 2022
	Amount $ 407,416 ( 4 ) ( 42) 407,370 (312,323) 95,047 ( 626 ) ( 43,438 ) ( 6,395) ( 50,459) 44,588 7,588 381 18,458 ( 11,771 )

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Code 7235 Financial assets at fair value through profit or loss (losses)/gains (Notes 4 and 7) 7590 Miscellaneous disbursements (Note 4) 7625 Loss on disposal of Investment (Note 4 and 13) 7630 Net exchange gain (loss) of foreign currency (Note 4 and 23) 7000 Total non-operating income and expenses 7900 Profit (loss) before tax 7950 Income tax (expenses) benefits (Note 4, 5 and 24) 8000 Current Net Profit (Loss) of Continuing Operation Unit 8100 Loss from discontinued operations (Note 4 and 11) 8200 Net income (loss) for the year Other comprehensive income 8310 Items not to be reclassified into profit or loss 8311 Remeasurements of defined benefit pension plans (Note 4 and 20) 8360 Items may be subsequently reclassified to profit/loss 8361 Exchange difference for conversion of financial statements of foreign operating institutions (Note 4 and 24)	Year 2022 Amount % ( $ 7,230 ) ( 2 ) ( 5,802 ) ( 1 ) ( 9,129 ) ( 2 ) 31,905 8 24,400 6 68,988 17 ( 15,662) ( 4) 53,326 13 ( 33,818) ( 8) 19,508 5 1,240 - 13,399 3	Year 2021	Year 2021
	Amount ( $ 7,230 ) ( 5,802 ) ( 9,129 ) 31,905 24,400 68,988 ( 15,662) 53,326 ( 33,818) 19,508 1,240 13,399	Amount $ 4,083 ( 28 ) - ( 7,807) 12,491 ( 22,343 ) 17,372 ( 4,971 ) ( 21,592) ( 26,563) 217 ( 10,478 )		%
			1 - - ( 2) 3 ( 7 ) 5 ( 2 ) ( 6) ( 8) - ( 3 )

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C o d e 8399 Income tax of items that may be reclassified (Note 4 and 24) 8300 Net amount of other comprehensive income (loss) for the current year, after tax 8500 Total comprehensive income of the current year Net profit (loss) attributable to: 8610 Owner of the company 8620 Non-control equity 8600 Total comprehensive income attributable to: 8710 Owner of the company 8720 Non-control equity 8700 Earnings (loss) per share (Note 25) From continuing and discontinued operations 9750 Basic 9850 Diluted From continuing operations 9710 Basic 9810 Diluted		Year 2022	Year 2022	% - 3 3 8 5 - 5 8 - 8		Year 2021	Year 2021
		Amount $ 2,680) 10,719 11,959 $ 31,467 $ 19,516 8) $ 19,508 $ 31,475 8) $ 31,467 $ 0.28 $ 0.27 $ 0.76 $ 0.75						%
	( ( (						1 ( 2) ( 2) (10) ( 8 ) - ( 8) ( 10 ) - (10)

The attached notes are an integral part of this consolidated financial statements.

Chairman: Chen Mingzhi General Manager: Chen Mingzhi Accounting Manager: Ye Wenbin

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Bestec Power Electronics Co., Ltd. And Subsidiaries

Consolidated Statements of Changes in Equity

For the year ended December 31, 2022 and for the year ended January 1 to December 31, 2021

Unit: In thousands of New Taiwan dollars unless otherwise stated

Code A1 January 1, 2021 balance F1 Accumulated deficits to be covered by capital decrease N1 Employee stock options issued by the company G1 Cancellation of Employee Stock Options M7 Changes in ownership interests of subsidiaries Change of Non-Controlling Interest D1 Net loss in 2021 D3 Other comprehensive income after tax in 2021 D5 Total comprehensive profit and loss in 2021 Z1 December 31, 2021 balance N1 Employee stock option exercise		EquityAttributable to the Owners of the	EquityAttributable to the Owners of the	EquityAttributable to the Owners of the	EquityAttributable to the Owners of the	Company (Note 20)			Total $ 699,048 - 500 - 178 ) - 26,427 ) 8,166) 34,593) 664,777 2,027	Non-control equity (Note 12) ( $ 50 ) - - - - 178 ( 136 ) - ( 136) ( 8 ) -		Total equity
		Share Capital Number of shares (1000 shares) Amount 98,570 $ 985,696 28,079 ) ( 280,787 ) - - - - - - - - - - - - - - 70,491 704,909 193 1931		Capital surplus Sharepremium Employee stock options $ 47 $ 4,130 - - - 500 225 ( 225 ) - - - - - - - - - - 272 4,405 562 ( 466 )		Accumulated losses ( $ 280,787 ) 280,787 - - ( 178 ) - ( 26,427 ) 217 ( 26,210) ( 26,388 ) -	Other equity Foreign currency translation adjustment Translation of Financial Statements of Foreign Operations Translation: Foreign Currency Translation Adjustment (Note 23) ( $ 10,038 ) - - - - - - ( 8,383) ( 8,383) ( 18,421 ) -
		Number of shares (1000 shares) 98,570 28,079 ) - - - - - - - 70,491 193		Sharepremium $ 47 - - 225 - - - - - 272 562
	(		(		( (	( ( ( ( (	( ( ( (	( ( ( (		( ( ( (	( ( ( (	$ 698,998 - 500 - 178 ) 178 26,563 ) 8,166) 34,729) 664,769 2,027

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T1 Employee stock options issued by the company G1 Cancellation of Employee Stock Options D1 Net income in 2022 D3 Other comprehensive income after tax in 2022 D5 Total comprehensive profit and loss in 2022 Z1 December 31, 2022 balance	- - - - - 70,684	- - - - - $ 706,840	- 43 ( - - - $ 877	133 43 ) - - - $ 4,029 (	- - 19,516 1,240 20,756 $ 5,632) (	- - - 10,719 10,719 $ 7,702)	133 - 19,516 ( 11,959 31,475 ( $ 698,412 (	- - 8 ) - 8) $ 16)	133 - 19,508 11,959 31,467 $ 698,396

The attached notes are an integral part of this consolidated financial statements.

Chairman: Chen Mingzhi

General manager: Chen Mingzhi Accounting Manager: Ye Wenbin

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Bestec Power Electronics Co., Ltd. And Subsidiaries Consolidated Statements of Cash Flows

For the year ended December 31, 2022 and for the year ended January 1 to December 31, 2021 Unit: NT$ thousands

Code Cash flows from operating activities A00010 Profit (loss) from continuing operations before income tax A00020 Pre-tax net loss from discontinued operations A10000 This year's profit (loss) before tax A20010 Revenue, expense, and loss items A20100 Depreciation expenses A20200 Amortization expense A20300 Impairment loss of Expected credit turnover benefits A20400 Net loss (gain) from financial assets at fair value through profit or loss A20900 Finance costs A21200 Interest income A21300 Dividend income A21900 Share-based compensation cost for employee stock options A22500 Income from disposal and write-off of property, plants, and equipment A23200 Realized loss on disposal of Investment A23800 Inventory impairment and obsolescence loss (recovery) A24100 Net loss (profit) of foreign exchange differences A29900 Receipts under custody A29900 Contractual liabilities A30000 Net Changes in Operating Assets and Liabilities A31115 Financial assets at fair value through profit or loss A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31240 Other Current Assets A31990 Net defined benefit assets - non-current A32150 Accounts payable A32180 Other accounts payable A32230 Other current liabilities A33000 Operating cash inflows (outflows) A33100 Interests received A33200 Dividends received

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Code			Year 2022		Year 2021
A33300	Interest paid	( $	11,585 )	( $	9,603 )
A33500	Income taxes paid (refunded)	(	12,648)		241
AAAA	Net cash inflows (outflows)
	from operating activities		374,103	(	40,749)
	Cash flow from investing activities
B00040	Obtain Financial Assets Measured at
	Amortized Cost	(	39,994 )		-
B00050	Disposal of Financial Assets
	Measured at Amortized Cost		-		3,000
B02700	Acquisition of property, plants, and
	equipment	(	225,501 )	(	427 )
B03800	Increase in guarantee deposits paid	(	7,443 )	(	5,622 )
B04500	Proceeds from disposition of
	property, plants, and equipment		26,184		-
B07100	Decrease (increase) of prepayments
	for equipment		538	(	599)
BBBB	Net cash outflows from
	investment activities	(	246,216)	(	3,648)
	Cash flows from financing activities
C00100	Increase in short-term borrowings		814,000		-
C00200	Decrease in short-term borrowings	(	814,000 )	(	20,000 )
C01600	Borrowing of long-term loans		168,000		-
C01700	Payments of long-term borrowings	(	34,755 )	(	37,423 )
C03000	Increase (decrease) in deposits
	received as guarantees		942	(	164 )
C04800	Employee stock option		2,027		-
CCCC	Net cash inflows (outflows)
	from financing activities		136,214	(	57,587)
DDDD	Effect of exchange rate changes on cash
	and cash equivalents		31,194	(	9,799)
EEEE	Increase (decrease) of cash and cash
	equivalents		295,295	(	111,783 )
E00100	Beginning cash and cash equivalents
	balance		486,344		598,127
E00200	Year-end balance of cash and cash
	equivalents	$	781,639	$	486,344
The	attached notes are an integral part of this	consolidated financial		statements.

Chairman: Chen Mingzhi General Manager: Chen Mingzhi Accounting Manager: Ye Wenbin

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Bestec Power Electronics Co., Ltd. And Subsidiaries

Notes to the Consolidated Financial Statements

Year 2022 and January 1 to December 31 of year 2021 (unless otherwise specified,

amounts are in thousands of New Taiwan Dollars).

1. Company History

Bestec Power Electronics Co., Ltd. (hereinafter referred to as "the Company") was established in February 1988 and mainly engaged in the manufacturing and selling of switching power supplies, IoT cloud server power supplies, wireless chargers, high-power, high-efficiency, high-density power supplies for gaming, and power converters.

The Company's stock has been listed on the Taiwan Stock Exchange since March 2008.

The functional currency of the Company expressed in this consolidated financial report is New Taiwan Dollars (NTD).

1. Date and procedure of approval of the financial report

This consolidated financial report was approved by the Board of Directors on March 28, 2023.

1. Application of Newly Issued and Revised Standards and Interpretations

2. (1) The initial adoption of International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), Interpretations (IFRICs), and Standing Interpretations Committee (SICs) endorsed and issued by the Financial Supervisory Commission (FSC) (referred to as "IFRSs").

The application of revised IFRSs approved and issued by the Financial Supervisory Commission (FSC) that become effective will not result in significant changes to the consolidated company's accounting policies.

• (2) IFRSs approved by the FSC applicable in 2023

RSs approved by the FSC applicable in 2023
Applicability of newly issued / revised /amended standards and interpretations Revision of IAS 1 "Disclosure of Accounting Policies" Revision of IAS 8 "Definition of Accounting Estimates" The amendment to IAS 12 "Deferred Tax	Effective date of IASB issuance
	January 1, 2023 ( Note 1 ) January 1, 2023 ( Note 2 ) January 1, 2023 ( Note 3 )

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Related to Assets and Liabilities Arising from a Single Transaction or Event".

• Note 1: This amendment applies to annual reporting periods beginning on or after January 1, 2023.

• Note 2: The amendment shall be applied to changes in accounting estimates and accounting policies that occur during the reporting period beginning on or after January 1, 2023.

• Note 3: The amendment applies to transactions occurring on or after January 1, 2022, except for temporary differences relating to leases and decommissioning obligations recognized for deferred tax purposes as of January 1, 2022.

As of the date of issuance of this consolidated financial report, the Company is still assessing the impact of the revisions to relevant accounting standards and interpretations on its financial position and performance. The related impact will be disclosed once the assessment is completed.

• (3) IFRSs issued by the IASB but not yet approved and effective by FSC

Applicability of newly issued / revised Effective dates of IASB /amended standards and interpretations publications (Note 1) Amendment to IFRS 10 and IAS 28 "Sales or Undecided Contributions of Assets between an Investor and its Associates or Joint Ventures" Amendment to IFRS 16 "Leases: Lease liability January 1, 2024 ( Note 2 ) in a sale and leaseback" IFRS 17 "Insurance Contracts" January 1, 2023 Amendment to IFRS 17 January 1, 2023 The amendment of IFRS 17 "Initial Application January 1, 2023 of IFRS 17 and IFRS 9 - Comparative Information" The amendment of IAS 1 "Classification of January 1, 2024 Liabilities as Current or Non-current" The amendment of IAS 1 "Non-current January 1, 2024 Liabilities with Contractual Maturities"

Note 1:Unless otherwise stated, the above new/revised standards or interpretations are effective for annual reporting periods beginning on or after the respective dates.

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Note 2: The seller and lessee should retrospectively apply the amendments to

IFRS 16 for sale and leaseback transactions entered into after the initial application of IFRS 16.

As of the date of approval of this consolidated financial report, the consolidated company continues to assess the impact of any related standards, interpretations, or amendments on its financial position and performance, and will disclose the related impacts once the evaluation is completed.

1. Summary of Significant Accounting Policies

2. (1) Compliance Statement

The consolidated financial statements are prepared in accordance with the Financial Reporting Standards for Issuers of Securities and Related Disclosure Requirements and the IFRSs that have been approved and issued by the Financial Supervisory Commission (FSC).

(2) Preparation Foundation

Except for financial instruments measured at fair value and the net defined benefit liability (asset) recognized by deducting the fair value of plan assets from the present value of the defined benefit obligation, which are measured at fair value, the consolidated financial statements are prepared on a historical cost basis.

Fair value measurement is classified into Level 1 to Level 3 according to the observability and significance of relevant inputs:

1. The input values of the first level refer to the quoted prices for identical assets or liabilities in active markets on the measurement date (without adjustment).

2. The input values of the second level refer to observable input values for the asset or liability, other than quoted prices included in level 1, either directly or indirectly derived from prices.

3. The input values of the third level refer to unobservable input values for the asset or liability.

4. (3) Classification of Assets and Liabilities as Current or Non-current.

5. Current assets include:

6. Primarily held for trading purposes.

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8. Assets expected to be realized within 12 months after the balance sheet date.

Cash and cash equivalents (excluding those restricted for more than 12 months after the balance sheet date for the purpose of exchanging or settling liabilities).

Current Liability includes:

1. Primarily held for the purpose of trading;

2. Liabilities due for settlement within 12 months after the balance sheet date (even if long-term refinancing or restructuring payment arrangements have been completed between the balance sheet date and the date of the financial statements), and

3. Liabilities that cannot be unconditionally postponed beyond 12 months after the balance sheet date.

Non-current assets or liabilities are classified as such if they do not meet the criteria for current assets or liabilities mentioned above.

For the construction engineering segment of the merged company, whose operating cycle is longer than one year, assets and liabilities related to construction business are classified as current or non-current based on the normal operating cycle.

• (4)Basis of consolidation

This consolidated financial statements include the financial statements of the Company and its subsidiaries, which are controlled by the Company. The consolidated statement of comprehensive income includes the operating results of the disposed subsidiary for the year up to the disposal date. The financial statements of the subsidiaries have been adjusted to conform to the accounting policies of the Company. Intercompany transactions, balances, revenues and expenses have been eliminated upon consolidation. The total comprehensive income of the subsidiary is allocated to the Company's owners and non-controlling interests, even if the non-controlling interests result in a deficit balance.

When changes in ownership interests of subsidiaries do not result in a loss of control, they are accounted for as equity transactions. The carrying amounts of the

• 20 -

Company and non-controlling interests have been adjusted to reflect their relative interests in the subsidiaries. The adjustment to non-controlling interests between the consideration paid or received and the fair value of the net assets acquired or disposed of is directly recognized in equity and attributed to the Company's owners. For details of the subsidiaries, ownership percentages, and business operations, refer to Note 13 and Schedules 4 and 5.

(5)Foreign Currency

When preparing financial reports, if a transaction occurs in a currency other than the functional currency of the entity, the transaction is recorded in the functional currency using the exchange rate on the transaction date. Foreign currency monetary items are translated into the functional currency using the closing exchange rate on each balance sheet date. Exchange differences resulting from settlement of monetary items or translation of monetary items are recognized in profit or loss for the period in which they arise.

Non-monetary items in foreign currency measured at fair value are translated using the exchange rate on the date when the fair value was determined. Exchange differences arising from such translation are recognized in profit or loss for the period, unless they relate to equity instruments recognized at fair value through other comprehensive income. In the latter case, exchange differences are recognized in other comprehensive income. Foreign currency non-monetary items that are measured at historical cost are translated into the functional currency using the exchange rate on the transaction date and are not re-measured.

In preparing the consolidated financial statements, the assets and liabilities of overseas operating entities of the consolidated companies (including subsidiaries whose operating countries or currencies used are different from those of the parent company) are converted into New Taiwan Dollars based on the exchange rate on each balance sheet date. Revenue and expense items are translated using the average exchange rate for the period, and the resulting exchange differences are recognized in other comprehensive income and attributed to the owners of the parent company and non-controlling interests, respectively.

• 21 -

If a merged company disposes of the equity of a foreign operating entity, all accumulated exchange differences related to the foreign operating entity will be reclassified to profit or loss.

(6)Inventories

Inventories consist of raw materials, materials, finished goods, and work in progress. Inventories are measured at the lower of cost and net realizable value, and when comparing cost and net realizable value, individual items are used as the basis except for inventories of the same type. Net realizable value refers to the estimated selling price under normal circumstances less the estimated costs of completion and estimated costs necessary to make the sale. The cost of inventories is determined using the weighted average method.

• (7)Property, Plant, and Equipment

Property, plant, and equipment are recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment losses.

The cost of property, plant, and equipment under construction is recognized at the amount after deducting accumulated impairment losses. The cost includes professional service fees and borrowing costs that meet the capitalization criteria. These assets are measured at the lower of cost and net realizable value before they are expected to be used, and any sales proceeds and costs are recognized in the income statement. Once these assets are completed and expected to be used, they are classified into the appropriate category of property, plant, and equipment and depreciation is provided on a straight-line basis over their estimated useful lives.

Except for land owned by the company, depreciation is provided on a straight-line basis over the estimated useful lives of other property, plant, and equipment. Significant components are separately depreciated. The company reviews the estimated useful lives, residual values, and depreciation methods at least annually and defers the impact of changes in accounting estimates.

When real estate, factories, and equipment are disposed of, the difference between the net proceeds and the book value of the asset shall be recognized in the income statement.

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(8) Intangible Assets

1. Individually acquired

Intangible assets with limited useful lives acquired individually are initially measured at cost, and subsequently measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets are amortized on a straight-line basis over their useful lives. The Company reviews the estimated useful lives, residual values, and amortization methods at least annually, and defers the impact of accounting estimate changes.

2. Disposal

When intangible assets are derecognized, any difference between the net disposal proceeds and the carrying amount is recognized in the statement of income for the period.

• (9)Impairment of Property, Plant and Equipment, Right-of-use assets, and Intangible Assets

The Company assesses, at each reporting date, whether there is any indication that property, plant and equipment, right-of-use assets, and intangible assets may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If the recoverable amount of an individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of the fair value less costs of disposal and the value in use. When the recoverable amount of an individual asset or cash-generating unit is lower than its carrying amount, the carrying amount of the asset or cash-generating unit shall be reduced to its recoverable amount. Impairment losses are recognized in profit or loss.

When an impairment loss is reversed in a subsequent period, the carrying amount of the asset or cash-generating unit is increased to the revised recoverable amount, but not exceeding the carrying amount that would have been determined had no impairment loss been recognized in prior years (net of

• 23 -

depreciation or amortization). The reversal of impairment losses is recognized in profit or loss.

(10)Held for sale for non-current assets

When the carrying amount of a non-current asset (or a disposal group) is expected to be recovered primarily through a sale transaction rather than through continuing use, it is classified as held for sale. Non-current assets (or disposal groups) that meet this classification must be available for immediate sale in their current condition, and the sale must be highly probable. When the appropriate level of management commits to a plan to sell the asset and the sale transaction is expected to be completed within one year from the date of classification, it meets the criteria for being highly probable.

When the committed sale plan involves disposing of all or part of an investment in an associate or a joint venture, only the equity interest that meets the held-for-sale criteria is reclassified as held for sale, and equity method accounting is discontinued for that portion. Any equity interest not classified as held for sale continues to be accounted for using the equity method. If the disposal of the held-for-sale equity interest will result in a significant change in the level of influence or joint control over the investment, any equity interest not classified as held for sale should be accounted for in accordance with the accounting policy for financial instruments at the time of disposal. Classification as held for sale for non-current assets (or disposal groups) is determined by comparing their carrying amount and fair value less cost to sell, and selecting the lower of the two amounts.

(11) Financial Instruments

Financial assets and financial liabilities are recognized in the consolidated balance sheet when the contractual terms of the instrument are met by the consolidating entity.

When financial assets or financial liabilities are not measured at fair value through profit or loss at initial recognition, they are measured at fair value with the transaction costs directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs directly attributable to

• 24 -

the acquisition or issue of financial assets or financial liabilities measured at fair value through profit or loss are recognized immediately in profit or loss. 1.Financial Assets

The customary transaction for financial assets is recognized and derecognized on the transaction date.

• (1) Types of measurement

The types of financial assets held by the consolidated company are financial assets measured at fair value through profit or loss and financial assets measured at amortized cost.

• A. Financial assets measured at fair value through profit or loss Financial assets measured at fair value through profit or loss include those that are mandatorily measured at fair value through profit or loss. Mandatorily measured financial assets at fair value through profit or loss include equity instruments investments not designated as measured at fair value through other comprehensive income and debt instrument investments that do not qualify for classification as measured at amortized cost or measured at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are measured at fair value, and their dividends, interest, and revaluation gains or losses are recognized in profit or loss. Please refer to Note 27 for the determination of fair value.

• B. Financial assets measured at amortized cost

If a financial asset held by the consolidated company meets the following two conditions at the same time, it shall be classified as a financial asset measured at amortized cost:

• a. It is held under a business model whose objective is to hold the financial asset in order to collect contractual cash flows; and

• b.The cash flows generated by the contractual terms on a specific date are entirely for the payment of principal and interest on the outstanding principal amount.

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Financial assets, including cash and cash equivalents, financial assets measured at amortized cost, accounts receivable, other receivables, and deposits received as collateral, are measured at amortized cost using the effective interest method after initial recognition. The total carrying amount is determined by subtracting any amortized cost impairment losses from the total carrying amount determined by the effective interest method. Any foreign exchange gains or losses are recognized in the income statement.

Except for the following two situations, interest income is calculated by multiplying the total carrying amount of financial assets by the effective interest rate:

a.For credit-impaired financial assets purchased or originated, interest income is calculated using the credit-adjusted effective interest rate multiplied by the amortized cost of the financial asset.

b.For financial assets that were not credit-impaired at acquisition or origination, but subsequently become credit-impaired, interest income is calculated using the effective interest rate multiplied by the amortized cost of the financial asset after the recognition of the credit loss in the next reporting period.

Cash equivalents include fixed-term deposits that have a maturity of no more than three months from the date of acquisition, are highly liquid, can be readily converted to known amounts of cash, and are subject to insignificant risk of changes in value. These cash equivalents are held to satisfy short-term cash commitments.

(2) Impairment of Financial Assets

Bestec Power Electronics Co., Ltd. recognizes impairment losses for financial assets (including accounts receivable) measured at amortized cost on each balance sheet date based on expected credit losses assessment.

The allowance for credit losses on accounts receivable is recognized based on expected credit losses over the remaining period of their

• 26 -

existence. For other financial assets, the credit risk is first assessed for a significant increase since the initial recognition. If no significant increase is identified, a 12-month expected credit loss is recognized. If a significant increase is identified, a lifetime expected credit loss is recognized.

Expected credit losses are the weighted average of credit losses with default risks as the weight. The 12-month expected credit losses represent the expected credit losses from possible defaults within 12 months after the reporting date, while the lifetime expected credit losses represent the expected credit losses from all possible defaults over the expected remaining life of the financial asset.

The impairment loss for all financial assets is recognized by reducing their carrying amounts through the allowance accounts. (3) De-recognition of financial assets

Bestec Power Electronics Co., Ltd. shall only de-recognize financial assets when the contractual rights to receive cash flows from the financial assets have expired or have been transferred and the ownership of the financial assets' risks and rewards have been substantially transferred to another enterprise.

When financial assets measured at amortized cost are de-recognized in their entirety, the difference between the carrying amount and the consideration received shall be recognized in profit or loss.

2.Equity instruments

Equity instruments issued by Bestec Power Electronics Co., Ltd. are recognized at the amount of proceeds received, net of directly attributable issuance costs.

Equity instruments reacquired by Bestec Power Electronics Co., Ltd. itself are recognized and deducted from equity. Transactions involving the purchase, sale, issuance, or cancellation of equity instruments by Bestec Power Electronics Co., Ltd. itself are not recognized in profit or loss.

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3.Financial liabilities

(1) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

When a financial liability is derecognized, the difference between the carrying amount and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(12) Revenue recognition

After identifying the performance obligations in customer contracts, the merger company allocates the transaction price to each performance obligation and recognizes revenue when each performance obligation is satisfied.

Revenue from the sale of goods

Revenue from the sale of power supplies and converters is recognized at the point in time of delivery or transfer of the product to the customer's specified location, as the customer has established the price and has the right to use the product and assumes the primary obligation for resale and the risk of obsolescence of the product. The merger company recognizes revenue and accounts receivable at that point in time.

(13) Lease

When a merger company is established, it evaluates whether the contract is a lease (or includes a lease).

1. If the merger company is the lessor

When the lease terms transfer almost all risks and rewards related to the ownership of the asset to the lessee, it is classified as a finance lease. All other leases are classified as operating leases.

Under an operating lease, lease payments are recognized as revenue on a straight-line basis over the lease term. The original direct costs incurred in obtaining the operating lease are added to the carrying amount of the asset and recognized as an expense on a straight-line basis over the lease term.

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2. The merged company is the lessee.

Except for the lease payments of low-value leased assets and short-term leases that qualify for recognition exemption, lease payments for all other leases are recognized as expenses on a straight-line basis over the lease term. The right-of-use assets are recognized on the lease commencement date for all other leases.

The right-of-use assets are initially measured at cost and subsequently measured at an amount equal to cost less accumulated depreciation.

The right-of-use assets are initially measured at cost and subsequently measured at an amount equal to cost less accumulated depreciation. (14) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized as part of the cost of that asset until almost all necessary activities for the asset to be ready for its intended use or sale are completed.

Investment income earned on specific borrowings that are used for capital expenditure before almost all necessary activities for the asset to be ready for its intended use or sale are completed is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in profit or loss in the period in which they are incurred, except for those mentioned above.

(15) Government Grants

Government grants are recognized only when it is reasonable to believe that the merged company will comply with the conditions attached to the grant and that the grant will be received.

If a government grant is intended to compensate for expenses or losses that have already occurred, or to provide immediate financial support to the merged company with no future related costs, it is recognized in profit or loss during the period in which it can be received.

(16) Employee benefits

• 1.Short-term employee benefits

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The liability for short-term employee benefits is measured as the expected non-discounted amount to be paid for services rendered by employees.

2.Post-employment benefits

The retirement benefits determined to be provided by the retirement plan are recognized as expenses for the retirement benefits that should be set aside during the period when the employees provide services.

The determined benefit costs of the defined benefit retirement plan (including service costs, net interest, and re-measurement amounts) are calculated using the projected unit credit method. The service cost (which is the current service cost) and the net defined benefit liability (asset) net interest are recognized as employee benefit expenses when they occur. The re-measurement amount (including actuarial gains and losses and plan asset returns after deducting interest) is recognized in other comprehensive income when it occurs and included in retained earnings, and it is not reclassified to income statement in subsequent periods.

The net defined benefit liability (asset) is the provision shortfall (surplus) of the defined benefit retirement plan. The net defined benefit asset should not exceed the present value of the plan assets returned or future reduction of the plan assets to be set aside.

(17) Stock-based compensation - Employee stock options

Employee stock options are recognized as an expense over the vesting period based on the fair value of the equity instruments granted and the best estimate of expected awards. The expense is recognized on a straight-line basis during the vesting period and capital surplus - employee stock options is adjusted accordingly. If the options are immediately vested on the grant date, the entire expense is recognized on that date.

The estimated number of employee stock options granted is revised on each balance sheet date for the consolidated company. Any revision to the estimated number of options granted is recognized as an adjustment to

• 30 -

income, reflecting the revised estimate, and a corresponding adjustment is made to capital surplus - employee stock options.

(18) Income taxes

The income tax expense is the sum of current and deferred income taxes.

1. Current income taxes

The current income tax is calculated based on the income (loss) determined in accordance with the regulations established by the respective tax jurisdictions in which the consolidated company operates, and is used to calculate the income tax payable (recoverable).

The income tax surcharge calculated in accordance with the Taiwan Income Tax Act on the undistributed earnings is recognized annually upon resolution by the shareholders' meeting.

Adjustments to income taxes payable from prior years are included in current income taxes.

1. Deferred income tax

Deferred income tax is calculated based on the temporary differences between the carrying amounts of assets and liabilities and the tax bases used to calculate taxable income.

Deferred income tax liabilities are generally recognized for all temporary differences that result in taxable income, while deferred income tax assets are recognized when it is more likely than not that there will be taxable income available in the future to reduce temporary differences and losses to be offset against such deductions.

All temporary differences related to investments in subsidiaries are recognized as deferred income tax liabilities, except for those temporary differences that the consolidated company can control the timing of the reversal and are unlikely to reverse in the foreseeable future. Temporary differences related to such investments that are likely to be deductible are recognized as deferred income tax assets only when it is more likely than not that there will be sufficient taxable income

• 31 -

available to realize the temporary differences within the foreseeable future.

The carrying amounts of deferred income tax assets are reviewed at each balance sheet date and adjusted to reduce the carrying amount for any portion that is unlikely to be realized. Any deferred income tax assets that were not previously recognized are also reviewed at each balance sheet date and adjusted to increase the carrying amount for any portion that is likely to be realized in the future.

Deferred income tax assets and liabilities are measured using the tax rates that are expected to apply when the assets are recovered or liabilities are settled, based on the tax rates and laws that have been enacted or substantively enacted as of the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequences that would result from the manner in which the consolidated company expects to recover or settle the carrying amounts of its assets and liabilities as of the balance sheet date.

3.Current and Deferred Income Tax for the Year

Current and deferred income tax are recognized in the income statement, except for those related to items recognized in other comprehensive income, which are recognized in other comprehensive income.

• 5.Key Sources of Significant Accounting Judgments, Estimates, and Assumptions Uncertainties

In adopting accounting policies, the management of the consolidated company must make judgments, estimates, and assumptions based on historical experience and other relevant factors for those items for which relevant information is not readily available from other sources. Actual results may differ from these estimates.

The management will continue to review the estimates and underlying assumptions. If the revision of the estimates affects the current period only, then the revision is recognized in the current period. If the revision affects both the current and future periods, then the revision is recognized in the current and future periods.

• 32 -

Key Sources of Uncertainties in Estimates and Assumptions

(1)Impairment of Property, Plant, and Equipment

In the assessment of asset impairment, the management relies on subjective judgment and determines independent cash flows, asset useful lives, and the future benefits and expenses that may arise from specific asset groups based on asset usage patterns and industry characteristics. Any changes in estimates arising from changes in economic conditions or company strategy may result in significant impairment in the future.

(2)Income Tax

The carrying amounts of deferred income tax assets related to unused tax losses as of December 31, 2022 and 2023 were NT$1,758 thousand and NT$1,884 thousand, respectively. Due to the unpredictability of future profits, the consolidated company had NT$697,640 thousand and NT$688,710 thousand of tax losses not recognized as deferred income tax assets as of December 31, 2022 and 2023, respectively. The reliability of deferred income tax assets depends primarily on whether there will be sufficient profits or temporary taxable differences in the future. If actual profits generated in the future are less than expected, there may be significant reversals of deferred income tax assets, which will be recognized in the income statement when they occur.

6. Cash and cash equivalents

6. Cash and cash equivalents
Cash in Treasury and Petty Cash Current account deposits at banks Cash equivalents (investments with original maturities of three months or less) Bank time deposits	December 31, 2022 $ 3,391 214432 563,816 $ 781,639	December 31, 2021
			$ 3,283 309,761 173,300 $ 486,344

The interest rate range of bank deposits as of the balance sheet date is as follows:

• 33 -

December 31, 2022 Current account deposits at banks 0.001%~1.15% Bank time deposits 0.81%~4.89% ancial Instruments at Fair Value through Profit or Loss December 31, 2022 Financial Assets-current Mandatorily measured at fair value through profit or loss Non-derivative financial assets - Listed (OTC) domestic stocks $ 64,831 - Unit trusts held for trading 11,198 $ 76,029	December 31, 2021	December 31, 2021
	0.001%~0.35% 0.18%~0.52% December 31, 2021
		$ 87,176 13,703 $ 100,879

7. Financial Instruments at Fair Value through Profit or Loss

8. Decision- Financial assets measured at amortized cost

cision-Financial assets measured at amortized cost
December 31, 2022 Current Domestic Investment Fixed deposits with original maturities exceeding 3 months $ 51,994 Interest rate range is as follows: December 31, 2022 Time deposit with original maturity exceeding three months 0.935%~4.580% count receivable and other receivables December 31, 2022 Accounts receivable Measurement at amortized cost	December 31, 2021
	$ 12,000 December 31, 2021
	0.520% December 31, 2021

9. Account receivable and other receivables

• 34 -

Total carrying amount Less: Allowance for Doubtful Accounts ( Other Receivable Other Receivable Accounts receivable	$ 154,972 5) ( $ 154,967 $ 4,875	$ 88,364 1,332) $ 87,032 $ 2,753

The merged company's average credit period for product sales is 90 days, and accounts receivable are not subject to interest. In order to reduce credit risk, the merged company's management has assigned a dedicated team to be responsible for determining credit limits, approving credit, and other monitoring procedures to ensure appropriate action is taken to recover overdue accounts receivable. In addition, the merged company reviews the recoverable amount of accounts receivable one by one on the balance sheet date to ensure that appropriate impairment losses have been recognized for accounts receivable that cannot be recovered. Therefore, the management of this company believes that the credit risk of the merged company has been significantly reduced.

The merged company recognizes the allowance for doubtful accounts of accounts receivable based on the expected credit losses over the remaining period. The expected credit losses over the remaining period are calculated using a reserve matrix that considers customers' past default records, current financial status, and industry and economic conditions. Since the merged company's historical experience with credit losses shows that there is no significant difference in loss patterns among different customer groups, the reserve matrix does not further distinguish between customer groups and only sets the expected credit loss rate based on the number of days the accounts receivable are outstanding.

If there is evidence that the counterparty is facing serious financial difficulties and the merged company cannot reasonably expect to recover the amount, such as the counterparty is undergoing liquidation, the merged company will directly write off the related accounts receivable. However, the merged company will continue to pursue collection activities, and the amount collected through such activities will be recognized in the income statement.

• 35 -

The merged company measures the allowance for doubtful accounts of accounts receivable according to the reserve matrix as follows:

December 31, 2022

December 31, 2022
Expected Credit Loss Rate Total carrying amount Allowance for Credit Losses (Expected Credit Losses during the Remaining Lifetime of the Asset) Amortized cost	0～9 0 days		91～180days		181～ 270days		271 ～ 360days		More than 361 days			Total
		- $ 154,965 - $ 154,965		5% $ 2 - $ 2		10% $ - - $ -		20% $ - - $ -	(	100% $ 5 5) $ -	(	$ 154,972 5) $ 154,967

December 31, 2021

December 31, 2021
Expected Credit Loss Rate Total carrying amount Allowance for Credit Losses (Expected Credit Losses during the Remaining Lifetime of the Asset) Amortized cost	0～90 days		91 ～ 180 days		181 ～ 270 days		271 ～ 360 days		More than 361 days			Total
		- $ 85,787 - $ 85,787	(	5% $ 1,311 66) $ 1,245		10% $ - - $ -		20% $ - - $ -	(	100% $ 1,266 1,266) $ -	(	$ 88,364 1,332) $ 87,032

Changes in the allowance for loss for accounts receivables:

Beginning balance Add:Provision for impairment losses for the current year Deduct: Reversal of impairment losses for the current year Differences of Foreign Currency Translation Ending balance 10. Inventory Finished goods Work in process Raw materials	Year 2022 $ 1,332 - ( 1,350 ) 23 $ 5 December 31, 2022 $ 6,994 12,947 13,524 $ 33,465		Year 2021
		$ 1,279 63 - ( 10) $ 1,332 December 31, 2021
			$ 25,293 3,924 29,438 $ 58,655

The sales cost related to inventory for the fiscal years 2022 and 2021 were NT$312,323,000 and NT$317,742,000, respectively. The sales cost includes inventory write-downs and obsolete inventory losses of NT$36,000,000, and inventory write-down reversals and recoveries of NT$32,051,000. The recovery of

• 36 -

inventory write-down was due to the sale of some inventory previously written down in the prior fiscal years during the current fiscal year.

1. Discontinued operations held for sale

2. (1) Discontinued operation

On April 28, 2022, the board of directors of Bestec Power Electronics Co., Ltd. (the Company) passed a resolution to dispose of the 100% equity interest of Bestec Power Electronics (Dongguan) Co., Ltd. (Dongguan Bestec) held by Ninty-Nine Electronics Co., Ltd. (Ninty-Nine) for RMB 1,212,000,000. In addition, on December 29, 2022, the board of directors passed a resolution to transfer the remaining RMB 800,000,000 to Ninty-Nine in accordance with the original agreement price, subject to the estimated cost of related expenses that may need to be paid to complete the equity transfer agreement of Dongguan Bestec (refer to Note 13). However, as of the end of the reporting period (December 31, 2022), the relevant procedures of the equity transaction agreement are still in progress, and the substantial control transfer has not been completed. Therefore, the received RMB 800,000,000 is classified as other advances received.

As the above transaction meets the requirements of IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations," the disposed assets are reclassified as assets held for sale and discontinued operations, which meet the definition of a discontinued operation. In order to comply with the expression of the discontinued operation in the consolidated statement of comprehensive income for the fiscal year 2022, the Company reclassified the profit or loss items of the discontinued operation in the fiscal year 2021, so that the information of the two periods of comprehensive income is more relevant.

Details of income (loss) and cash flows of discontinued operations are as follows

lows
Operating revenue Operating cost Gross loss from operations	Year 2022 $ 664 (18,811) ( 18,147 )	Year 2021
		$ 31,191 (47,962) ( 16,771 )

• 37 -

Selling expenses	(	1,554 )	(	3,475 )
Management expense	(	10,212)	(	7,847)
Net loss from operations	(	29,913 )	(	28,093 )
Interest income		128		123
Other revenue		12,120		8,365
Miscellaneous
disbursements	(	14,344 )		-
Net (Loss) Gain on Foreign
Currency Exchange	(	2,652 )		1987
Gains on disposal of
property, plants, and
equipment		843		-
Pre-tax net loss	(	33,818 )	(	21,592 )
Income tax expense		-		-
Current Period Loss	(	33,818)	(	21,592)
Loss from Suspended
Operations	($ 33,818)		($	21,592)
The loss from discontinued
operations is attributed to:
Owner of the company	( $ 33,818 )		( $	21,592 )
Non-control equity		-		-
	($ 33,818)		($	21,592)
Cash flow
Operating Activities	($	30,388)	($	8,522)

There is no income tax loss or gain incurred due to discontinued operations.

• (2) Held-for-sale Group

ld-for-sale Group
December 31, 2022 Held-for-sale Group $ 114,643 The major categories of assets held-for-sale are as follows: December 31, 2022 Property, plant, and equipment $ 95,671 Right-of-use Assets 18,972 Total of Assets Held-for-sale $ 114,643	December 31, 2022
		$ 95,671 18,972 $ 114,643

• 38 -

As the expected selling price is higher than the net carrying amount of the related assets, no impairment loss is recognized upon the classification of the units as held-for-sale.

12. Construction in Progress

struction in Progress
Land under construction Construction in progress	December 31, 2022 $ 209,377 7,573 $ 216,950	December 31, 2021
			$ 209,377 7,573 $ 216,950

In August 2011 Baotai Construction Co., Ltd. (Baotai Construction) purchased a plot of land in the Tamsui District of New Taipei City for construction and development purposes. Baotai Construction has provided the land under construction as collateral for bank borrowings, please refer to Notes 18 and 30.

13. Subsidiaries

The entities included in these consolidated financial statements are as follows:

Investor	Subsidiary	Nature of Business	% shareholding	% shareholding	Descr iption
			Year 2022 December 31	Year 2021 December 31
The Company The Company The Company The Company The Company The Company The Company The Company Ninety-Nine Electronic Limited., Ltd. Ninety-Nine Electronic Limited Bestec Power Electronics (Dongguan) Co Bestec Inv, Inc.	Lianyao Investment Co., Ltd. Ninety-Nine Electronic Limited., Ltd. Wan Jhih Electronic Limited Chien Chih Electronic Co., Ltd. Bestec Power International Ltd. Baotai Construction Co., Ltd. Bestec Biotechnology Co., LTD. Bestec Inv, Inc. Bestec Power Electronics (Dongguan) Co., Ltd. Bestec Power Electronics (Suzhou) Co., Ltd. Bestec Electronics (Dongguan) Co APX Power Technology, LLC	Investment related business Investment related business Trading of various technological products Manufacturing and trading of electronic parts such as casings and cables. Trading of various technological products Real estate development and trading Pet food-related business Investment related business Manufacturing and production of power supply and power converter, etc. Manufacturing and production of power supply and power converter, etc. Manufacturing and production of power supply and power converter, etc. Sales of uninterruptible power supply systems and power protectors	100% 100% 100% - 100% 100% 100% 100% 100% - 100% 96%	100% 100% 100% 100% 100% 100% 100% 100% 100% - 100% 96%	(2) (1) － (4) － － － (3) (1) (1) (5) (3)

• 39 -

• (1) The company invested USD 13,510 thousand in Ninety-Nine Electronic Limited., Ltd (Ninety-Nine), and obtained approval from the Investment Commission of the Ministry of Economic Affairs to invest through Ninety-Nine in Bestec Power Electronics (Suzhou) Co., Ltd.. (Suzhou Bestec) with USD 2,692 thousand, Bestec Power Electronics (Dongguan) Co., Ltd (Dongguan Bestec) with HKD 13,082 thousand and USD 8,293 thousand. Suzhou United Luck completed the liquidation process and remitted USD 1,885 thousand in capital back to the company in the fiscal year 2021.

To revitalize assets and improve shareholder return on equity, the board proposed on March 25, 2022 to adjust the business, operating scale and costs of Ninty-Nine or Dongguan Bestec, including but not limited to releasing shares, giving up cash increases in these companies to introduce strategic investors, selling or renting assets, etc., depending on market conditions. On April 28, 2022, the board passed a resolution to dispose of 100% equity in Dongguan Bestec for RMB 1,212 thousand. Another resolution was passed on December 29, 2022, to transfer RMB 800 thousand to Ninty-Nine after estimating the related cost of the equity transfer agreement might still need to be paid. However, as of the end of the reporting period (December 31, 2022), the relevant procedures of the equity transfer agreement are still in progress, and the delivery of substantial control transfer has not been completed. Therefore, the RMB 800 thousand received has been accounted for under other prepayments. The consolidated company will recognize the disposal benefits of the equity transfer agreement only after all the conditions of the agreement are fully fulfilled and after the consolidated company has lost control over Dongguan Bestec.

Dongguan Bestec is subject to inquiry by the local tax bureau regarding the "Implementation Measures for Special Tax Adjustment of the State Administration of Taxation of China." As the amount of tax and deferred tax interest payable cannot be reliably estimated, no provision for this tax liability has been recognized as of the reporting date.

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• (2) On November 13, 2015, the company passed a resolution through the board to invest NT$10,000 thousand by transferring through Lianyao Investment Co., Ltd.to establish Fishman Co., Ltd. (Fishman), which was primarily engaged in the catering business. On July 12, 2016, the company increased its investment by NT$20,000 thousand. Fishman was dissolved and registered with the Taipei City Government on July 10, 2020, and the remaining capital of NT$11,591 thousand was remitted on February 5, 2021.

• (3) On May 11, 2017, our company decided to establish Bestec Inv, Inc. with a capital of USD 1,000 thousand, and invested USD 950 thousand through Bestec Inv, Inc. to acquire a 95% stake in APX Power Technology, LLC. The remaining 5% of the equity was obtained through a non-monetary transaction with APX Power Technology, LLC, by using its required assets as consideration, with a value of USD 50,000. On September 21, 2018, our company further decided to increase the capital of Bestec Inv, Inc. by USD 500 thousand, and invested USD 494 thousand through Bestec Inv, Inc. to APX Power Technology, LLC. The funds were actually remitted on September 28, 2018. The remaining 4% of the equity was obtained through a non-monetary transaction with APX Power Technology, LLC, by using its required assets as consideration, with a value of USD 26,000. On March 27, 2019, and January 20, 2021, our company further decided to increase the capital of Bestec Inv, Inc. by USD 200 thousand and USD 150 thousand, respectively, and invested the funds through Bestec Inv, Inc. to APX Power Technology, LLC. The funds were actually remitted on November 29, 2019, and February 23, 2021, respectively. After the capital increase, our company's shareholding in APX Power Technology, LLC was 96%.

• (4) On November 12, 2021, our company's board of directors passed a resolution to dissolve and liquidate Chien Chih Electronic Co., Ltd.. The funds of USD 1,922 thousand were remitted back to our company on March 7, 2022, and a disposal loss of USD 9,129 thousand was recognized.

• (5) Our subsidiary , Dongguan Bestec, disposed of its subsidiary, Bestec Electronics (Dongguan) Co, (Dongguan Wanlin) on August 31, 2022. Our company repurchased Dongguan Wanlin through its subsidiary, Lianyao

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Investment Co., Ltd., on January 29, 2023. As the substantial control over Dongguan Wanlin was not transferred to the merged entity, it was still included in the consolidated financial statements of our company for the year 2022.

1. Property, plant and equipment

year 2022. Property, plant and equipment
Self-use Business rental leasing Self-use	December 31, 2022 $ 439,874 30,807 $ 470,681	December 31, 2021
			$ 351,871 29,775 $ 381,646

se
Cost January 1, 2022 balance Reclassified as assets held for sale Add Disposal Internal transfer Net exchange gain/loss Balance Accumulated depreciation and impairment January 1, 2022 balance Reclassified as Assets Held for Sale Depreciation expenses Disposal Internal transfer Net exchange gain/loss Balance on December 31, 2022 Net amount on December 31, 2022 Cost January 1, 2021 balance Add Disposal Internal: transfer Net exchange gain/loss Balance		Land	Buildings and structures	Machinery and equipment	Transportat ion Equipment	Leasehold improveme nts Non-curren t Assets	Office equipment	Other equipment		Work in progress	Total
		$ 121,223 - 210,230 - - - 331,453 - - - - - - - $ 331,453 $ 121,223 - - - - 121,223	$ 410,500 ( 192,638 ) - - ( 7,987 ) 2,797 212,672 209,286 ( 96,967 ) 9,798 - ( 4,164 ) 1,385 119,338 $ 93,334 $ 412,752 - - ( 809 ) ( 1,443) 410,500	$ 337,984 - 14,475 ( 326,507 ) - 5,687 31,639 317,774 - 2,420 ( 308,061 ) - 5,380 17,513 $ 14,126 $ 339,801 123 - 481 ( 2,421) 337,984	$ 5,235 - - ( 174 ) - 3 5,064 5,232 - - ( 171 ) - 3 5,064 $ - $ 5,236 - - - ( 1) 5,235	$ 38,618 - - ( 39,009 ) - 688 297 30,909 - 1,936 ( 33,215 ) - 553 183 $ 114 $ 38,618 289 - - ( 289) 38,618	$ 25,618 - 76 ( 10,982 ) - 194 14,906 25,233 - 236 ( 10,926 ) - 191 14,734 $ 172 $ 26,001 - ( 297 ) - ( 86) 25,618	$ 29,822 - 720 ( 30,365 ) - 532 709 28,695 - 152 ( 29,326 ) - 513 34 $ 675 $ 30,032 15 - - ( 225) 29,822	$ - - - - - - - - - - - - - - $ - $ 38 - - ( 38 ) - -		$ 969,000 ( 192,638 ) 225,501 ( 407,037 ) ( 7,987 ) 9,901 596,740 617,129 ( 96,967 ) 14,542 ( 381,699 ) ( 4,164 ) 8,025 156,866 $ 439,874 $ 973,701 427 ( 297 ) ( 366 ) ( 4,465) 969,000

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(Continued from previous page)

	Land	Buildings and structures	Machinery and equipment	Machinery and equipment	Transportat ion Equipment	Transportat ion Equipment	Leasehold improveme n t s Non-curren t Assets	Leasehold improveme n t s Non-curren t Assets	Office equipment	Other equipment	Other equipment		Work in progress	Total
	$ - - - - - - $ 121,223	$ 195,837 14,518 - ( 397 ) ( 672) 209,286 $ 201,214		$ 313,503 6,498 - - ( 2,227) 317,774 $ 20,210		$ 5,231 2 - - ( 1) 5,232 $ 3		$ 23,637 7,445 - - ( 173) 30,909 $ 7,709	$ 24,601 1,009 ( 297 ) - ( 80) 25,233 $ 385		$ 28,444 464 - - ( 213) 28,695 $ 1,127		$ - - - - - - $ -	$ 591,253 29,936 ( 297 ) ( 397 ) ( 3,366) 617,129 $ 351,871

During this period, we acquired land for 210,230 thousand NT dollars through a bidding process with the government. For further details, please refer to Note 30.

Depreciation expenses are recognized on a straight-line basis over the following useful lives:

g useful lives:
Buildings and structures
Factory buildings	and
main office buildings		20 - 50 years
Electrical and mechanical
equipment		8 - 10 years
Engineering systems		5 - 15 years
Machinery and equipment		3 - 6 years
Transportation equipment		5 years
Leasehold improvements		2 - 5 years
Office equipment		3 - 8 years
Other equipment		2 - 5 years

The amount of self-used real estate, factory buildings, and equipment set as collateral for borrowings is described in Footnote 18 and 30.

(2) Rental income from operating leases

(2) Rental income from operating leases
Cost January 1, 2022 balance Internal transfer December 31, 2022 balance Accumulated depreciation and impairment January 1, 2022 balance Depreciation expenses Internal transfer	Buildings and structures
		$ 70,431 7,987 78,418 40,656 2,791 4,164

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47,611 $ 30,807

December 31, 2022 balance

Net at December 31, 2022

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(Continued from previous page)

Buildings and structures

Cost January 1, 2021 balance Internal transfer December 31, 2021 balance Accumulated depreciation and impairment January 1, 2021 balance Depreciation expenses Internal transfer December 31, 2021 balance Net at December 31, 2021	$ 69,622 809 70,431 37,663 2,596 397 40,656 $ 29,775

The merger company leases real estate and building assets through operating leases for a lease term of 2-3 years. At the end of the lease term, the lessee does not have a preferential purchase right to the assets.

The total future lease payments to be received from the operating leases are as follows:

are as follows:
The first year The second year The third year The fourth year	December 31, 2022 $ 9,877 3,720 4,092 4,092 $ 21,781	December 31, 2021
			$ 8,727 5,688 - - $ 14,415

Depreciation expenses are recognized on a straight-line basis over the following useful lives:

g useful lives:	g useful lives:
Buildings and structures
Factory buildings	and main
office buildings		20 - 50 years
Electrical and	mechanical
equipment		8 - 10 years
Engineering systems		5 - 15 years

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Please set the business lease of real estate, plants, and equipment used as collateral for borrowing, please refer to Notes 18 and 30.

15. Lease Agreement

• (1) Right-to-use Assets

December 31, December 31, 2022 2021 Carrying amount of Right-of-Use Assets Land use right (see - Note 11) $ $ 18,854 Year 2022 Year 2021 Depreciation expense of Right-of-Use Assets Land use rights (classified as loss from discontinued operations) $ 480 $ 628

(2) Other lease information

Please refer to Note 14 for the agreements of operating leases of the Company's own properties, factories and equipment.

mpany's own properties, factories	and equipment.
Short-term lease expense Lease expenses for low-value assets The total cash outflow for leases	Year 2022 $ 27 $ 17 ($ 44)	Year 2021
	(	(	$ 18 $ 18 $ 36)

The consolidated company chooses to apply exemptions to short-term leases of buildings and structures, and to certain office equipment leases that meet the low-value asset criteria. The related right-of-use assets and lease liabilities for those leases are not recognized. Please refer to Note 15 for details of lease agreements for operating lease of self-owned properties, factories and equipment.

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16. Intangible Assets

ngible Assets
Cost Balance on January 1, 2022 and December 31, 2022 Accumulated amortization and impairment. January 1, 2022 balance Amortization expense December 31, 2022 balance Net at December 31, 2022 Cost Balance on January 1 and December 31, 2021 Accumulated amortization and impairment. January 1, 2021 balance Amortization expense December 31, 2021 balance Net at December 31, 2021	Cost of computer s o f t w a r e
	$ 4,646 3,767 712 4,479 $ 167 Cost of computer software
		$ 4,646 2,863 904 3,767 $ 879

Depreciation expenses are recognized on a straight-line basis and calculated based on the following estimated useful lives: Cost of computer software 5 years

17. Other Assets

er Assets
Current Offset against business tax payable Advance payments Prepaid and accounts payable	December 31, 2022 $ 25,713 2,595 1,998 $ 30,306	December 31, 2021
			$ 37,705 1,437 772 $ 39,914

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Long-term prepaid expenses $ - $ 706

18 、 Borrowings

• (1)Short-term borrowings.

ort-term borrowings.
Secured borrowings (see Note 30) Taiwan SME Bank (1) Unsecured loans Bank loans (2) Short-term borrowings	December 31, 2022 $ 24,000 160,000 $ 184,000	December 31, 2021
			$ 24,000 160,000 $ 184,000

• 1.The bank loan is secured by the company's triple land, buildings and structures (see Note 30). The loan's final maturity date is April 30, 2023. As of December 31, 2021 and 2020, the effective annual interest rates were 2.052% and 1.380%, respectively.

• 2.The interest rates for revolving bank loans were 1.910% to 2.375% and 1.410% to 1.600% as of December 31, 2021 and 2020, respectively.

• (2) Long-term Loans

ong-term Loans
Pledged loan (refer to Note 30) Co-operative Bank loan (1) Taiwan SME Bank (2) Chang Hwa Commercial Bank, Ltd. (3) Subtotal Unsecured loans Taiwan SME Bank (4) Less: Portion due within one year Long-term borrowings	December 31, 2022 $ 252,400 61,034 168,000 481,434 5,667 487,101 (263,723) $ 223,378	December 31, 2021
	(	(	$ 276,400 - 67,789 344,189 9,667 353856 34,825) $ 319,031
1. The bank loan is secured by the land, buildings, and structures of our
Hwaya Industrial Park (refer to Note 30). The principal is amortized on a
monthly basis, and the loan is due on September 20, 2023. As of December
31, 2021 and 2020, the effective annual interest rates were 2.101% and

• 48 -

1.600%, respectively, and subject to adjustment. According to the loan agreement, our collateral must be insured against property damage, and we must maintain its current value and pledge not to transfer ownership of the land.

1. The bank loan is secured by the land under construction owned by Powertech Construction Co., Ltd. (refer to Note 30). The loan is due on October 31, 2119, and as of December 31, 2021 and 2020, the effective annual interest rates were 3.295% and 2.670%, respectively, and subject to adjustment.

2. The bank loan is secured by the land designated for future industrial use in our Machouhou Industrial Park (refer to Note 30). The loan is due on October 5, 2023, and as of December 31, 2021, the effective annual interest rate was 1.750%, subject to adjustment. (As of December 31, 2020: None)

3. The principal of the bank loan is amortized on a monthly basis, and the loan is due on May 29, 2023. As of December 31, 2021 and 2020, the effective annual interest rates were 2.175% and 1.550%, respectively.

4. Other Liability

Current Other accounts payable Accrued salaries and bonuses Expense payable Accounts payable for value-added tax Interests payable Accrued vacation pay Accounts payable for equipment Others Other liability Contractual liabilities Other advances from customers (refer to note 11) Temporary and Collect-on-Delivery Payments Non-current Guarantee deposits received	December 31, 2022 $ 18,907 10,400 1,555 631 145 - 882 $ 32,520 $ 9,010 351,814 15,870 $ 376,694 $ 2,958	December 31, 2021 $ 7,691 12,713 - 420 198 80 497 $ 21,599 $ 9,196 - 29,688 $ 38,884 $ 2,150

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20. Retirement Benefit Plan

(1) Determination of Allocation Plan

The retirement pension system applicable to the merger company under the "Labor Pension Act" is a government-managed defined contribution retirement plan, in which 6% of the employee's monthly salary is allocated to the individual account of the Labor Insurance Bureau for retirement benefits.

(2) Determination of Welfare Plan

The retirement pension system implemented by the merger company under the "Labor Standards Act" is a government-managed defined benefit retirement plan. The payment of employee retirement benefits is calculated based on the length of service and the average monthly salary of the six months before the approved retirement date. The merger company allocates 2% of the employee's total monthly salary to the retirement pension, which is deposited into an account at Taiwan Bank under the name of the Labor Pension Fund Supervisory Committee. If the estimated balance of the account is not sufficient to pay the employees who meet the retirement conditions in the next year, the difference will be allocated at once before the end of the current year, and the account is managed by the Labor Fund Bureau of the Ministry of Labor. The merger company has no right to affect the investment management strategy.

The determined welfare plan amount to be included in the consolidated balance sheet is listed as follows:

ce sheet is listed as follows:
Present value defined benefit obligation Fair value of plan assets Remaining Allocations Net Defined Benefit Assets	December 31, 2022 $ 5,671 (13,041) ( 7,370) ($ 7,370)	December 31, 2021
	( ( (	( ( (	$ 5,896 11,900) 6,004) $ 6,004)

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Changes in Net Defined Benefit Assets are as follows:

Defined Benefit Obligation January 1, 2022 $ 5,880 Service Cost Current service costs 49 Interest Expense (Income) 22 Recognized in income statement 71 Re-measurement Amount Plan Asset Return (excluding the amount included in net interest) - Actuarial Gain - Experience Adjustments ( 55) Recognized in other comprehensive income (loss) ( 55) Employer Contributions - December 31, 2021 5,896 Service Cost Current service costs 50 Interest expense (income) 37 Recognized in income statement 87 Re-measurement Amount Plan Asset Return (excluding the amount included in net interest) - Actuarial Loss - Financ Assumptions ( 252 ) Actuarial Gain - Experience Adjustments ( 60) Recognized in other comprehensive income (loss) ( 312) Employer Contributions - December 31, 2022 $ 5,671	Plan Assets Fair Value ($ 11,557) - ( 43) ( 43) ( 162 ) - ( 162) ( 138) ( 11,900) - ( 75) ( 75) ( 928 ) - - ( 928) ( 138) ($ 13,041)	Net Defined Benefit Assets
		($ 5,677) 49 ( 21) 28 ( 162 ) ( 55) ( 217) ( 138) ( 6,004) 50 ( 38) 12 ( 928 ) ( 252 ) ( 60) ( 1,240) ( 138) ($ 7,370)

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The merged company is exposed to the following risks regarding the retirement plan system under the "Labor Standards Act":

1. Investment risk: The Labor Pension Fund Supervisory Committee invests the labor retirement fund in domestic and foreign equities, debt securities, bank deposits, etc. through self-operation and commissioned management. However, the distribution of the plan assets for the merged company is based on the yield calculated at no less than the local bank's 2-year fixed deposit rate.

2. Interest rate risk: The decrease in government bond interest rates will increase the present value of the determined welfare obligation, but the return on debt investments of the plan assets will also increase, which partially offsets the impact on the net determined welfare liability.

3. Salary risk: The calculation of the present value of the determined welfare obligation is based on the future salaries of the plan members. Therefore, an increase in the salaries of the plan members will increase the present value of the determined welfare obligation. The present value of the merged company's determined welfare obligation is calculated by a qualified actuary, with the following significant assumptions being taken into account:

	December	31,	December	31,
	2022		2021
Discount Rate	1.250%		0.625%
Expected Salary Increase
Rate	2.000%		2.000%

If a significant actuarial assumption were to be changed while all other assumptions remained constant, the increase (decrease) in the present value of the defined benefit obligation would be as follows:

Discount Rate Increase of 0.25% Decrease of 0.25% Expected Salary Increase Rate Increase of 0.25% Decrease of 0.25%	December 31, 2022 ($ 97) $ 99 $ 97 ($ 95)	December 31, 2021	December 31, 2021
	( (	( (	$ 109) $ 112 $ 108 $ 106)

Due to the potential correlation of actuarial assumptions, the sensitivity analysis above may not reflect the actual changes in the present value of the benefit obligation with only one assumption change.

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Expected contribution amount within one year Weighted average remaining contractual term of the defined benefit obligation	December 31, 2022 $ 141 6.9 years	December 31, 2021	December 31, 2021
			$ 141 7.4 years

21. Equity

• (1)Capital of Common Share

pital of Common Share
Number of authorized shares (in thousands) Authorized capital stock Number of issued and fully paid shares (in thousands) Issued capital stock pital surplus Available for compensating deficits, cash dividends, or increasing capital stock (1) Stocks from employee stock options that have expired Issuance premium (2) Issuance premium from the exercise of employee stock options (Note 3) Not available for any purposes Employee stock options	December 31, 2022 160,000 $ 1,600,000 70,684 $ 706,840 December 31, 2022 $ 315 562 4,029 $ 4,906	December 31, 2021
		160,000 $ 1,600,000 70,491 $ 704,909 December 31, 2021
			$ 272 - 4,405 $ 4,677

• (2) Capital surplus

Note 1: This type of capital surplus can be used to offset losses or to distribute cash dividends or allocate to capital when the company has no losses.

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• Note 2: This type of capital surplus is generated from the issuance of employee stock options and will be adjusted when the options expire.

• Note 3: This type of capital surplus is generated from the exercise of employee stock options.

(3)Retained Earnings and Dividend Policy

According to the profit distribution policy specified in the Company's bylaws, if there are profits in the annual financial statements, the company shall pay taxes and fees, make up for accumulated losses, and set aside 10% as legal reserve. The remaining amount shall be set aside or reversed in accordance with legal regulations and set aside as special reserve for earnings. If there is still a balance, it shall be combined with the accumulated undistributed earnings, and the Board of Directors shall propose a profit distribution resolution to the shareholders' meeting for approval of shareholder dividends. For the employee and director compensation distribution policy specified in the Company's bylaws, please refer to Notes 2 3(6), respectively.

The Company will consider the company's environment and growth stage, respond to future fund needs and long-term financial planning, and meet shareholders' demands for cash inflows. The Company will distribute more than 50% of the profit as dividends to shareholders, among which the cash dividend shall not be less than 30% of the total dividends. However, the type and ratio of profit distribution can be adjusted by the shareholders' meeting based on the actual profit and financial conditions of the year.

Statutory earnings surplus reserves shall be appropriated until they reach the total amount of the company's paid-in capital. The statutory earnings surplus reserves may be used to offset losses. When the company has no losses, the portion of the statutory earnings surplus reserves exceeding 25% of the total amount of the paid-in capital may be distributed in cash after setting aside for capitalization.

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The Company has made provisions and reversals of special earnings surplus reserves in accordance with the regulations such as the letter numbered 1010012865 issued by the Financial Supervisory Commission and the "Questions and Answers on the Application of Special Earnings Surplus Reserves after Adopting International Financial Reporting Standards (IFRSs)."

The Company held shareholder meetings on June 29, 111 and August 27, 110, respectively, and passed the proposals for appropriation of losses for the fiscal years 110 and 109 as follows:

Beginning of the year deficit to be offset Less: Reduction of capital to offset the deficit this year Plus: After-tax deficit this year Plus: Other comprehensive income after tax for this year Add: Adjustment of retained earnings due to changes in ownership equity of subsidiaries End of the year deficit to be offset	Year 2021 ( $ 280,787 ) 280,787 ( 26,427 ) 217 ( 178) ($ 26,388)	Year 2020
		( $ 193,736 ) - ( 87,340 ) 289 - ($ 280,787)

Bestec Power Electronics Co., Ltd., the merged company, passed a resolution to reduce capital and offset losses at the shareholder meeting on August 27, 2021, to improve the equity structure. The actual paid-in capital before the merged company's capital reduction to offset losses was NTD 985,696 thousand, divided into 98,570 thousand shares with a par value of NTD 10 per share. The capital reduction was carried out for NTD 280,787 thousand, resulting in the cancellation of 28,079 thousand issued shares, with a capital reduction ratio of 28.486%. The actual paid-in capital after the capital reduction to offset losses was NTD 704,909 thousand, and the number of shares was adjusted to 70,491 thousand. This capital reduction to offset

• 55 -

losses was approved by the competent authority on October 12, 2021, and the record date was set as November 15, 2021.

To revitalize assets and reduce debts to improve the financial structure, the merged company passed a resolution to dispose of the land and building of the merged company at the shareholder meeting on August 27, 2021. The merged company plans to dispose of the land and building located at No. 69, Keji 1st Rd., Guishan Dist., Taoyuan City at an appropriate price based on the operating situation. The subsequent operations, such as the acquisition or disposal of assets processing procedure and related regulations, will be handled in accordance with the merged company's regulations.

To respond to the government's policy of returning investment to Taiwan and the needs of business development, the merged company passed a resolution to purchase land at the board meeting on May 10, 2021. The merged company plans to participate in the bidding for land at the Machu Industrial Park in Chiayi County. The subsequent operations, such as the acquisition or disposal of assets processing procedure and related regulations, will be handled in accordance with the merged company's regulations. The merged company paid a bid deposit of NTD 5,643 thousand for the Machu Industrial Park land on October 20, 2021. On January 21, 2022, the board of directors approved the establishment of a factory in Chiayi to produce power-related products, targeting niche markets such as gaming and wireless charging. The merged company paid the first and second installment of the land price, NTD 42,002 thousand and NTD 168,015 thousand, respectively, on March 16 and June 22, 2022. The payment was completed in June 2022, and the transfer of land and related professional service fees of NTD 213 thousand were completed in July 2022, totaling NTD 210,230 thousand transferred to real estate, factory buildings, and equipment.

Bestec Power Electronics Co., Ltd. proposed a plan to reduce capital and offset losses in the board of directors meeting on March 28, 112. The proposed amount of capital reduction to offset losses is 5,632 thousand NT dollars. In addition, it is also proposed to carry out a cash reduction plan

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after offsetting the losses, with a reduction amount of 101,208 thousand NT dollars. It is expected to cancel 10,121 thousand shares that have already been issued, with a reduction ratio of 14.43%. After the capital reduction, the expected paid-in capital will be 600,000 thousand NT dollars, with a total of 60,000 thousand shares.

Regarding the proposal to offset losses and the proposal for cash reduction in the 2022 fiscal year, the decision will be made at the shareholders' meeting scheduled for June 20, 2023.

22. Revenue

nue
					Year 2022		Year 2021
Sales	revenue
office power supply					$ 364,454		$ 346,575
unlimited charging					42,962		27,866
	uninterruptible	power
	supply				-		2,367
power converter					664		2,093
	Total				408,080		378,901
Sales return				(	4 )	(	10 )
Sales allowance				(	42 )	(	590 )
Less:	Attributable	to	the
	Discontinued Operation
	(Note 11)			(	664)	(	31,191)
	Net Sales Revenue				$ 407,370		$ 347,110

23 .Continuing Operations Net Income (Loss)

(1) Interest revenue

est revenue
Bank deposit Financial assets measured at fair value through profit or loss. Less: Attributable to the Discontinued Operation (Note 11)	Year 2022 $ 4,319 3,397 7,716 ( 128) $ 7,588	Year 2021
	(	(	$ 893 2,437 3,330 123) $ 3,207

(2)Other revenue

Year 2022

Year 2021

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Rental income (see Note 14 and 29) Conversion of collection on behalf to other income Liquidation income from subsidiary Conversion of contract liabilities to other income Others Less: Attributable to the Discontinued Operation (Note 11) ce costs Interest of bank loans eciation and Amortization Property, plant, and equipment Intangible Assets Right-of-use Assets Less: Attributable to the Discontinued Operation (Note 11) Depreciation expenses aggregated by function Operating cost Operating expenses Less: Attributable to the Discontinued Operation (Note 11) Amortization expense aggregated by function Operating expenses Less: Attributable to the	$ 12,329 17,383 - - 866 (12,120) $ 18,458 Year 2022 $ 11,771 Year 2022 $ 17,333 712 480 18,525 ( 3,430) $ 15,095 $ 5,390 11,943 17,333 ( 2,950) $ 14,383 $ 1,192 ( 480)	$ 8,726 8,309 12,138 1,174 536 ( 8,365) $ 22,518 Year 2021	$ 8,726 8,309 12,138 1,174 536 ( 8,365) $ 22,518 Year 2021
		$ 9,578 Year 2021
	( ( (	( ( (	$ 32,532 904 628 34,064 13,070) $ 20,994 $ 19,223 13,309 32,532 12,442) $ 20,090 $ 1,532 628)

(3) Finance costs

(4) Depreciation and Amortization

• 58 -

Discontinued Operation (Note 11) oyee benefits Post-retirement benefits (Note 20) Defined benefit plan - expenses Plan of present value of defined benefit obligation - expense Salary expense Health and labor insurance expense Other employee expenses Total Employee benefits expense Less: Attributable to the Discontinued Operation (Note 11) Functional Consolidation: Operating cost Operating expenses Less: Attributable to the Discontinued Operation (Note 11)	$ 712 Year 2022 $ 2,777 12 2,789 55,008 1,021 3,312 62,130 ( 5,890) $ 56,240 $ 34,747 27,383 62,130 ( 5,890) $ 56,240	$ 904 Year 2021	$ 904 Year 2021
	( (	( (	$ 4,898 28 4,926 53,564 1,941 2,810 63,241 2,381) $ 60,860 $ 32,290 30,951 63,241 2,381) $ 60,860

(5) Employee benefits

(6)Employee compensation and director compensation

The company sets aside employee compensation and director compensation at a rate of not less than 5% and not more than 4% of the pre-tax profit before deducting employee and director compensation, respectively, in accordance with the company's articles of association. However, when the company has accumulated losses, the amount needed to offset the losses shall be reserved in advance, and then employee compensation and director compensation shall be set aside according to the above ratio.

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If there is still a change in the amount after the consolidated financial statements for the year have been approved and published, it shall be handled according to accounting estimates and adjusted in the next year's accounts.

In the 2022 and 2021 fiscal years, the board of directors did not decide to allocate employee compensation and director remuneration due to the company's outstanding losses and operating losses. Therefore, there is no difference between the financial statements for those years and the non-allocation of employee compensation and director remuneration.

For information regarding the employee compensation and director remuneration approved by the board of directors in the 111 and 110 fiscal years, please refer to the "Public Information Observation Station" of the Taiwan Stock Exchange.

(7)Foreign exchange gain/loss - net amount

Total amount of foreign exchange gains Foreign exchange loss Less: Attributable to the Discontinued Operation (Note 11) Net loss	Year 2022 $ 65,341 ( 36,088 ) 2,652 $ 31,905	Year 2021
		$ 26,333 ( 36,127 ) 1,987 ($ 7,807)

24. Income Tax of Continuing Operation Unit

(1) Income tax recognized in income statement

The main components of income tax expense (benefit) are as follows:

Current income tax Generated in the current year Adjustments for prior years Deferred income tax. Generated in the current year Income tax expense (benefit) recognized in profit or loss (profit)	Year 2022 $ 12,540 ( 11) 12,529 3,133 $ 15,662	Year 2021
	(	( $ 18,251 ) - ( 18,251 ) 879 ($ 17,372)

• 60 -

The reconciliation of accounting income and income tax expense (benefit) is as follows:

lows:
Profit (loss) before tax Income tax benefit calculated at statutory tax rate on pretax income Expenses not deductible for tax purposes Exempt income Unrecognized temporary differences Loss carryforward (utilization) Adjustments for prior years Income tax expense (benefit) recognized in profit or loss (profit)	Year 2022 $ 68,989 $ 15,849 2,077 ( 90 ) 5,342 ( 7,505 ) ( 11) $ 15,662	Year 2021
		($ 43,935) ( $ 22,916 ) ( 3,933 ) ( 1,054 ) 442 10,089 - ($ 17,372)

(2) Recognition of Income Tax in Other Comprehensive Income

cognition of Income Tax in Other Comprehensive Income
Year 2022 Deferred income tax. Generated in the current year - Foreign Operations Translation $ 2,680 rrent Income Tax Assets and Liabilities December 31, 2022 Current tax assets Income tax refund receivable $ 182 Current income tax payable Income tax payable $ 16,098	Year 2021
	($ 2,095) December 31, 2021
		$ 252 $ 16,049

• (3) Current Income Tax Assets and Liabilities

(4) Deferred Income Tax Assets and Liabilities

Changes in Deferred Income Tax Assets and Liabilities are as follows:

Year 2022

Beginning Recognized Recognized Ending balance in income in others balance

• 61 -

				statement	statement	Comprehe	Comprehe	Comprehe
							nsive
						income
Deferred tax assets
Inventory allowance
for obsolete	or
slow-moving items		$	5	$	7	$		-	$	12
Unrealized exchange
losses			1,746		-			-		1,746
Allowance for doubtful
accounts			133	(	133)			-		-
		$	1,884	($	126)	$		-	$	1,758
Deferred income tax
liabilities
Unrealized exchange
gain		$	-	$	3,007	$		-	$	3,007
Exchange differences
on translation of
foreign financial
statements			985		-		2,680			3,665
		$	985	$	3,007	$	2,680		$	6,672
Year 2021
						Recognized
						in others
				Recognized		Comprehe
		Beginning		in	income		nsive		Ending
		balance		statement		income			balance
Deferred tax assets
Inventory allowance
for obsolete or
slow-moving items		$	788	( $	783 )	$		-	$	5
Unrealized exchange
losses			1,790	(	44 )			-		1,746
Allowance for doubtful
accounts			185	(	52)			-		133
		$	2,763	($	879)	$		-	$	1,884
Deferred income tax
liabilities
Exchange differences
on translation of foreign financial		$	3,080	$	-				$	985
statements						($	2,095)

• 62 -

• (5) Unrecognized deferred tax assets for temporary differences and unused tax loss carryforwards in consolidated balance sheet

Loss deduction Expires in 2022 Expires in 2023 Expires in 2024 Expires in 2025 Expires in 2026 Expires in 2027 Expires in 2028 Expires in 2029 Expires in 2030 Expires in 2031 Expires in 2032 Deductible temporary differences	December 31, 2022 $ - 1,343 17,226 19,273 70,625 86,928 18,491 1,378 44,507 50,445 18,415 $ 328,631 $ 369,009	December 31, 2021	December 31, 2021
			$ 31,654 4,356 17,955 20,072 70,625 86,928 18,491 1,378 44,507 50,445 - $ 346,411 $ 342,299

(6) The income tax settlements and declarations

As of the end of fiscal year 2020, the corporate income tax settlements and declarations of Bestec Power Electronics Co., Ltd., Lianyao Investment Co., Ltd., Baotai Construction Co., Ltd. and Bestec Biotechnology Co., LTD. have been verified by the tax authorities.

25. Earnings (loss) per share

ings (loss) per share
Basic earnings (loss) per share From continuing operations From discontinued operations Diluted earnings (loss) per share From continuing operations From discontinued operations		Unit: per share in USD Year 2022 Year 2021 $ 0.76 ( $ 0.07 ) 0.48) ( 0.31) $ 0.28 ($ 0.38) $ 0.75 ( $ 0.07 ) 0.48) ( 0.31) $ 0.27 ($ 0.38)
	( (

• 63 -

The net income (loss) and weighted average number of ordinary shares used in computing earnings (loss) per share are as follows:

Net income (loss) for the year

income (loss) for the year
Net income (loss) attributable to owners of the Company Add:Discontinued operations' net loss used to calculate per share loss from discontinued Net income (loss) from continuing operations used to calculate earnings (loss) per share Number of shares (in thousands) Number of shares (in thousands) Effects of dilutive potential common shares: Employee stock options		Year 2022 $ 19,516 33,818 $ 53,334 Year 2022 70,618 517 71,135	Year 2021
			( $ 26,427 ) 21,592 ($ 4,835) Year 2021
				70,491 - 70,491

If a merged company can choose to pay employee compensation in stock or cash, when calculating diluted earnings per share, it is assumed that the employee compensation will be paid in stock and included in the weighted average number of outstanding shares when the potential common stock has a dilutive effect. When calculating diluted earnings per share before deciding the number of shares to be issued for employee compensation in the following year, the dilutive effect of such potential common stock shall continue to be considered.

The diluted loss per share for the year 2021 was not calculated by including the employee stock options as they had an anti-dilutive effect.

26.Stock-based compensation agreements

Employee Stock Option Plan

The Company's Employee Stock Option Plan ("ESOP") was approved by the board of directors on March 30, 2017. The ESOP allows for the issuance of 8,000 units

• 64 -

of employee stock options, with each unit granting the option to purchase 1,000 common shares of the Company. The options were granted to full-time employees of the Company and its subsidiaries. The exercise period is 5 years, and the option holder can exercise a certain proportion of the options granted after two years of the issuance of the ESOP certificate. The exercise price of the options is the closing price of the Company's common shares on the date of issuance. If there is a change in the number of common shares of the Company after the issuance of the ESOP, the exercise price of the options will be adjusted according to a prescribed formula.

The following is the relevant information for the Company's employee stock options:

ns:
Employee stock options Outstanding at beginning of year Exercised During the Period Expired/Forfeited during the year Outstanding at end of year Exercisable at end of year Weighted average fair value of employee stock options granted during the year (NTD)	Year 2022 Unit(1,000) Weighted average Exercise price (NTD) 1,875 $ 10.50 ( 193)10.50 ( 17 ) 10.50 1,665 10.50 1,665 $ -	Year 2021
	Unit(1,000) 1,875 ( 193) ( 17 ) 1,665 1,665 $ -	Unit(1,000) 1,975 - ( 100 ) 1,875 1,406 $ -	Weighted average Exercise price (NTD)
	( (	(	$ 7.51 7.51 10.50

As of the balance sheet date, the information related to outstanding employee stock options is as follows:

options is as follows:
Range of exercise price (NTD) Weighted average remaining contractual life (years)	December 31, 2022
	$ 10.50 0.41 years

• 65 -

The Black-Scholes pricing model was used to value the employee stock options granted by the Company in May 2018. The input values used in the pricing model were as follows:

as follows:
Stock Price of Grant Date Exercise price Expected volatility Expected term Expected interest rates No-risk interest rates	Mayof 2018
	NTD 7.51 NTD 7.51 39.42%～43.15% 3.5 to 4.5 years - 0.66%～0.71%

27. Capital Risk Management

The capital management of the merged company aims to optimize debt and equity balances to maximize shareholder returns while ensuring continued operations.

The capital structure management strategy of the merged company is based on the industry scale, future growth prospects, and product development plans of the business. It sets an appropriate market share for the merged company and plans the necessary production capacity and corresponding capital expenditures. Based on the industry characteristics, it calculates the required working capital and cash to plan the overall scale of assets needed for the long-term development of the merged company. Finally, considering the estimated product contribution, operating profit margin, and cash flow based on the competitive strength of the merged company's products, as well as risk factors such as industry cyclicality and product life cycle, the appropriate capital structure of the merged company is determined.

The management of the merged company regularly reviews the capital structure, taking into account the costs and risks associated with different capital structures. Generally, a prudent risk management strategy is adopted by the merged company.

1. Financial Instruments

2. (1) Information on Fair Value - Financial Instruments Measured at Other Than Fair Value.

3. 66 -

The management of the merged company believes that the carrying amounts of financial assets and financial liabilities measured at other than fair value in the consolidated financial statements approximate their fair values.

(2) Information on Fair Value - Financial Instruments Measured at Fair Value on a Recurring Basis

Fair Value Hierarchy

December 31, 2022

ecember 31, 2022
Financial assets measured at fair value through profit or loss. Mandatorily measured at fair value through profit or loss Domestic listed and emerging market stocks Fund Beneficiary Certificates		Level 1 $ 64,831 11,198 $ 76,029		Level 2 $ - - $ -		Level 3 $ - - $ -		Total
								$ 64,831 11,198 $ 76,029

December 31, 2021

ecember 31, 2021
Financial assets measured at fair value through profit or loss. Mandatorily measured at fair value through profit or loss Domestic listed and emerging market stocks Fund Beneficiary Certificates		Level 1 $ 87,176 13,303 $ 100,479		Level 2 $ - - $ -		Level 3 $ - - $ -		Total
								$ 87,176 13,303 $ 100,479

• 67 -

There was no transfer between Level 1 and Level 2 fair value measurements in 2022 and 2021.

• (3) Types of Financial Instruments

es of Financial Instruments
Financial Assets Measured at fair value through profit or loss Mandatorily measured at fair value through profit or loss Financial assets measured at amortized cost Financial liabilities Amortized cost measurement (Note 2)	December 31, 2022 $ 76,029 1,007,100 860,792	December 31, 2021
		$ 100,879 594,307 700,243

Note 1: Balance includes financial assets measured at amortized cost, such as cash and cash equivalents, financial instruments, accounts receivable, other receivables, and deposits paid, etc.

Note 2: Balance includes financial liabilities measured at amortized cost, such as long-term and short-term loans (including those due within one year), accounts payable, other payables, and deposits received, etc.

(4)Objectives and policies for financial risk management

The main financial instruments of Bestec Power Electronics Co., Ltd. include accounts receivable, accounts payable, and borrowing. The financial management department provides services to various business units, coordinating and supervising the company's operations in the domestic and international financial markets based on the analysis of internal risk reports on the degree and scope of risks. These risks include market risk (including exchange rate risk and interest rate risk), credit risk, and liquidity risk.

1. Market risk

The main financial risks that Bestec Power Electronics Co., Ltd. faces due to its operations are foreign exchange rate risk (see (1) below) and interest rate risk (see (2) below)).

• 68 -

There have been no changes in the company's risk exposure to financial instruments in relation to market risk, nor the management and measurement of such risks.

(1) Exchange rate risk

Several of the company's subsidiaries engage in sales and purchases denominated in foreign currencies, resulting in foreign exchange rate exposure for Bestec Power Electronics Co., Ltd.

For non-functional currency denominated monetary assets and monetary liabilities on the balance sheet date, including non-functional currency denominated monetary items already offset in the consolidated financial statements, please refer to Note 33.

Sensitivity analysis

The merger company is mainly affected by fluctuations in the exchange rates of the US dollar, Chinese yuan, and Japanese yen.

The sensitivity analysis of the merger company is detailed in the table below, which explains the impact on the company's sensitivity when the exchange rate of the New Taiwan dollar (the functional currency) increases or decreases by 5% against the relevant foreign currencies. The 5% ratio is used by the management to report the exchange rate risk within the group and represents the management's assessment of the reasonable possible range of fluctuations in foreign exchange rates. The sensitivity analysis only includes foreign currency monetary items that are circulating outside and adjusts their year-end conversion by 5% exchange rate fluctuations. The positive numbers in the table indicate that when the relevant currencies appreciate by 5% against the New Taiwan dollar, it will increase or decrease the pre-tax net profit/loss. When the relevant foreign currencies depreciate by 5% against the New Taiwan dollar, the impact on pre-tax net profit/loss will be the same negative amount.

The impact of foreign exchange rate fluctuations on the pre-tax net profit/loss of the merger company in 2022 and 2021 is summarized below.

• 69 -

Impact of US Dollar (Note 1) Impact of RMB (Note 2)	Year 2022 $ 24,146 6,499	Year 2021
		$ 25,160 13,370

• Note 1: Mainly derived from the US dollar-denominated cash and cash equivalents, accounts receivable, other receivables, accounts payable, and other payables that were outstanding and not hedged against cash flow on the balance sheet date.

• Note 2: Mainly derived from the Renminbi-denominated cash and cash equivalents, accounts receivable, accounts payable, and other payables that were outstanding and not hedged against cash flow on the balance sheet date.

(2) Interest Rate Risk

The interest rate risk arises from individual entities within the merged company borrowing funds at both fixed and floating interest rates, resulting in potential fluctuations in interest rates. The merged company manages interest rate risk by maintaining an appropriate mix of fixed and floating interest rates. The financial assets and liabilities subject to interest rate risk as of the balance sheet date of the merged company are presented below.

Fair value measurement with interest rate risk: - Financial assets - Financial Liability Fair value with cash flow rate risk - financial assets - Financial Assets - Financial Liability	December 31, 2022 $ 615,810 - 214,432 671,101	December 31, 2021
		$ 185,301 84,000 309,760 453,856

• 70 -

Sensitivity analysis

The sensitivity analysis below is based on the interest rate risk as derived and non-derived instruments on the balance sheet date. For floating-rate assets/liabilities, the analysis assumes that the amounts of outstanding assets/liabilities on the balance sheet date remain outstanding throughout the reporting period. The variable rate used by the internal reporting to the key management is assumed to increase or decrease by 50 basis points, which also represents the reasonable range of interest rate changes evaluated by the management.

If the interest rate increases/decreases by 50 basis points, and all other variables remain constant, the pre-tax profit/loss of the consolidated company for the years 2022 and 2021 will increase/decrease by NTD 2,283 thousand and NTD 720 thousand, respectively, mainly due to the interest rate risk of the consolidated company's variable-rate borrowing.

2.Credit risk

Credit risk refers to the risk of financial loss to the Group caused by the counterparty's failure to fulfill contractual obligations. As of the balance sheet date, the maximum credit risk exposure that the consolidated company may incur due to the counterparty's non-performance of obligations and the financial guarantees provided by the consolidated company mainly comes from the carrying amount of financial assets recognized on the consolidated balance sheet.

The policy adopted by the consolidated company is to transact with counterparties with excellent reputations and to obtain sufficient guarantees when necessary to mitigate the risk of financial loss resulting from default. The consolidated company rates its major customers based on publicly available and non-public financial information and transaction records. The consolidated company continuously monitors credit risk and the credit ratings of counterparties, and diversifies the total transaction amount among customers with qualified credit ratings. The credit risk is controlled through the credit limit approved and reviewed annually by the Risk Management Committee.

• 71 -

The credit risk of the consolidated company is mainly concentrated on specific customers of the consolidated company. As of December 31, 2022 and 2021, the total amount of accounts receivable from the aforementioned customers accounted for 95% and 94%, respectively.

3. Liquidity risk

The merger company manages and maintains sufficient cash and cash equivalents to support the group's operations and reduce the impact of cash flow fluctuations. The management of the merger company supervises the use of bank borrowing facilities and ensures compliance with the loan contract terms.

Bank borrowing is an important source of liquidity for the merger company. For the years ended December 31, 2022, and December 31, 2021, please refer to the explanation of the unused borrowing facilities in (2) below.

• (1)Liquidity and interest rate risk table for non-derivative financial liabilities

The analysis of the remaining contract maturity of non-derivative financial liabilities is prepared based on the earliest possible date that the merger company may be required to repay, using the undiscounted cash flows of financial liabilities (including principal and estimated interest). Therefore, bank borrowings that may be immediately repayable by the merger company are listed in the earliest period in the table below, without considering the probability of the bank immediately exercising that right. Other non-derivative financial liabilities are prepared based on the agreed repayment date.

The undiscounted interest amount paid at a floating rate of interest cash flow is derived based on the interest rate curve on the balance sheet date.

December 31, 2022

Non-derivative financial liabilities:	Weighted average effective interest rate(%)	Maturity within: 1 month or less	1-3 months	3 months to 1year	1 - 5years	More than 5years

• 72 -

Short-term borrowings. 2.105 $ 84,418 $ 70,265 $ 30,328 Long-term borrowings 2.157 3,987 6,799 257,637 $ 88,405 $ 77,064 $ 287,965 December 31, 2021 Weighted average effective interest rate(%) Maturity within: 1 month or less 1-3 months 3 months to 1year Non-derivative financial liabilities: Short-term borrowings. 1.499 $ 397 $ 184,315 $ 249 Long-term borrowings 1.797 3,241 5,909 26,590 $ 3,638 $ 190,224 $ 26,839 t limit December 31, 2022 Unsecured bank loans Amounts Used $ 165,667 Amounts Unused 114,333 $ 280,000 Secured Bank Borrowing Limit Amounts Used $ 505,434 Amounts Unused 84,266 $ 589,700	$ 30,328 257,637 $ 287,965 3 months to 1year	$ 30,328 257,637 $ 287,965 3 months to 1year	$ - 202,169 $ 202,169 1 - 5years	$ - 202,169 $ 202,169 1 - 5years	$ - 25,225 $ 25,225 More than 5years
				$ 169,667 110,333 $ 280,000 $ 368,189 53,511 $ 421,700

(2) Credit limit

29. Related Party Transactions

All transactions, account balances, income, and expenses between the Company and its subsidiaries (related parties) were fully eliminated upon consolidation and are therefore not disclosed in these notes. Except as disclosed in other notes, the transactions between the consolidated companies and related parties are as follows:

(1) Related Party Names and Relationships

Relationship with the Consolidated Type/Name of Related Party Company FORFUNE INTERNATIONAL CO., LTD Corporate shareholder of the Company

• (2) Lease Agreement

Business Lease

• 73 -

The consolidated company leased an office to the corporate shareholder of the Company through a business lease. The lease period is two years, with a monthly rent of NTD 5,000. Lease income of NTD 57,000 was recognized in 2022. (No such lease income was recognized in 2021.)

(3) Key Management Personnel Compensation

Short-term employee benefits Share-based payment Post-Employment Benefits	Year 2022 $ 8,482 114 77 $ 8,673	Year 2021	Year 2021
			$ 8,726 1,390 90 $ 10,206

Directors and other key management personnel's remuneration is determined by the remuneration committee based on individual performance and market trends.

30. Assets Pledged or Mortgaged

Assets pledged as collateral for financing loans include the following:

Inventory - Land under construction Buildings and structures Land	December 31, 2022 $ 209,377 124,143 339,674 $ 673,194	December 31, 2021	December 31, 2021
			$ 209,377 135,389 121,223 $ 465,989

As of December 31, 2022 and December 31, 2021, the amount of construction inventory used as collateral for bank loans was NT$209,377 thousand, which was inventory minus land under construction.

As of the same dates, the book value of the company's own land and buildings provided as collateral for loans was NT$463,817 thousand and NT$256,612 thousand, respectively. These properties have been pledged as collateral for bank loans, and the company may not use them as collateral for other loans or sell them to other companies.

31 、 Significant contingencies and unrecognized contractual commitments

• 74 -

Significant contingencies and unrecognized contractual commitments as of the balance sheet date of the consolidated company are disclosed in Note 13(1). 32 、 Subsequent events of significance

In July 2022, Dongguan Bestec, a subsidiary of the consolidated company, sold the equity of its subsidiary, Bestec Electronics (Dongguan) Co, to an unrelated third party. For more information, please refer to Note 13(5).

33 、 Information on significant foreign currency assets and liabilities

Information on significant foreign currency assets and liabilities is presented below in summary form, translated into the functional currency of the consolidated company at the exchange rates disclosed.

December 31, 2022

Foreign Currency Assets Monetary items US Dollar US Dollar Hong Kong Dollar RMB Foreign Currency Liabilities Monetary items US Dollar US Dollar RMB	Foreign currency $ 16,817 4,160 804 337 4,571 681 29,826	Exchange rate NTD equivalent to USD 30.710 CNY equivalent to USD 6.967 NTD equivalent to HKD 3.938 4.408（Renminbi: NT dollars） 30.710 (US dollars: Taiwan dollars) 6.967 (US dollars:RMB) 4.408（Renminbi: NT dollars）		Carrying amount
				$ 516,438 127,765 3,165 1,486 $ 648,854 $ 140,369 20,911 131,472 $ 292,752

• 75 -

December 31, 2021

Foreign Currency Assets Monetary items US Dollar US Dollar US Dollar Hong Kong Dollar RMB RMB Foreign currency liabilities Monetary items US Dollar US Dollar Hong Kong Dollar RMB RMB	Foreign currency $ 17,342 1,924 3,169 806 338 91,088 3,177 1,079 46 29,826 43	Exchange rate 27.680 (US Dollar: New Taiwan Dollar) 7.799 (US Dollar: Hong Kong Dollar) 6.372 (US Dollar: Renminbi) 3.549 (Hong Kong Dollar: New Taiwan Dollar) 4.344（Renminbi: NT dollars） 1.224 (RMB: HKD) 27,680 (US dollars: NT$) 6,372 (US dollars: RMB) 0.817 (CNY: HKD) 4.344（Renminbi: NT dollars） 1.244 (CNY: HKD)		Carrying amount
				$ 480,026 53,257 87,727 2,862 1,468 395,685 $ 1,021,025 $ 87,942 29,863 163 129,563 186 $ 247,717

For the years ended December 31, 2022 and 2021, the consolidated company had foreign exchange gains (realized and unrealized) of NT$31,905 thousand and

losses of NT$7,807 thousand, respectively. Due to the diverse functional currencies of foreign currency transactions and individual entities within the group, it is not possible to disclose the exchange gains and losses by significant foreign currency.

1. Supplementary disclosure

2. (1) This refers to significant transaction events and (2) information related to investments in subsidiaries.

   1. Loans to others: None.

3. 76 -

4. Endorsement guarantees for others: None.

5. Summary of year-end holdings of securities (excluding investments in subsidiaries): See Schedule 1.

6. Cumulative purchases or sales of the same security reaching NT$300 thousand or 20% of the paid-in capital: None.

7. Acquisition of real estate amounting to NT$300 thousand or 20% of the paid-in capital: See Schedule 2.

8. Disposal of real estate amounting to NT$300 thousand or 20% of the paid-in capital: None.

9. Sales or purchases with related parties reaching NT$100 thousand or 20% of the paid-in capital: See Schedule 3.

10. Receivables from related parties reaching NT$100 thousand or 20% of the paid-in capital: None.

11. Derivatives trading: None.

12. Other: Business relationships and significant transactions between parent and subsidiary companies and between subsidiaries, including amounts involved: See Schedule 7.

13. Information on invested companies: See Schedule 4.

14. (2)Information on investment in Mainland China:

15. 1.Names of companies invested in Mainland China, their main business activities, paid-in capital, investment methods, inward and outward fund flows, shareholding ratios, investment gains and losses, year-end investment balance, repatriated investment gains and losses, and investment limit for investment in Mainland China: please refer to Table 5.

16. 2.Significant transaction details, prices, payment terms, and unrealized gains and losses in the following transactions with companies invested in Mainland China directly or indirectly through third-party regions:

17. (a)Purchase amount and percentage, year-end balance of relevant accounts payable and percentage: please refer to Table 6.

18. (b)Sales amount and percentage, year-end balance of relevant accounts receivable and percentage: please refer to Table 6.

19. 77 -

    • (c) Property transaction amount and the resulting gains and losses: None.

    • (d)End-of-year balance and purpose of bill endorsement guarantee or provided collateral: None.

    • (e)Maximum balance and year-end balance of fund transfers, interest rate range, and total interest expense for the current year: None.

    • (f) Other significant transaction details that have a material impact on current year's income statement or financial condition, such as the provision or receipt of services: None.

20. (3)Information on major shareholders: Names of shareholders with a shareholding ratio of 5% or more, shareholding amount and percentage: please refer to Table 8.

21. Department information

22. (1) Information of operations department

The decision-makers for operations are allocated resources and evaluated based on the overall financial information of the company. In accordance with International Financial Reporting Standard No. 8 "Operating Segments," although the consolidated company has multiple operating departments, some operating departments' relevant financial information does not meet the quantitative threshold conditions, and thus there is no need to disclose financial information for those operating departments.

• (2)Product information

The consolidated company is mainly engaged in the design, manufacturing, processing, and sales of power supplies and power converters, which fall under a single product category. Therefore, there is no need to disclose product information.

(3) Regional information

The income from external customers and non-current assets from the region where the customers or assets are located are presented below:

Revenue from external customers Year 2022 Year 2021	Non-current assets
	Year 2022 Year 2021 December 31 December 31

• 78 -

Asia Taiwan Europe China America Less: Discontin ued operations (	$ 329,058 64,081 14,895 - - 664) $ 407,370	$ 255,727 84,904 4,139 - 2,340 - ( $ 347,110	$ - 468,988 - 130,128 - 114,643) $ 484,473	$ - 264,407 - 143,856 - - $ 408,263

Non-current assets do not include financial instruments, deferred tax assets, and net defined benefit assets.

(4) Major customer information

The following are customers of the Group that account for 10% or more of the total consolidated revenue from a single customer:

Customers Company A Company B	Year 2022 Amount % $ 328,319 80.46 42,960 10.53	Year 2021	Year 2021
	Amount $ 328,319 42,960	Amount $ 252,882 64,368	%
			66.85 17.02

• 79 -

Bestec Power Electronics Co., Ltd. And Subsidiaries

Details of held-to-maturity securities at the end of the year:

As of December 31, 2022

Appendix 1

Unit: In thousands of New Taiwan dollars unless otherwise stated The companies listed are those held by the reporting company.

	Type and Name of Marketable Securities	Relationship with the issuer of securities	Account		Ending	Ending		Remarks
				Number of shares / units	Carrying amount	Percentage of ownership (%)	Fair value
Lianyao Investment Co., Ltd. Wan Jhih Electronic Limited	Domestic listed (OTC) and emerging market stocks China Steel Corporation Sheng Yu Co., Ltd. Taiwan Semiconductor Manufacturing Co., Ltd. Beneficiary certificates SHS-MB-CREDIT SUISSE NOVA (LUX) SICAV-GLOBAL SENIOR LOAN FUND CAPITALISATION UNITS-F-AXA IM FIXED INCOME INVESTMENT STRATEGIES FCP-US SHORT DURATION HIGH YIELD CAPITALISATION CONTINGENT CONVERTIBLE NOTES BARCLAYS PLC 2018-WITHOUT FIXED MATURITY GLOBAL FIXED / FLOATING RATE Rating: S&P B+ NOTES DEUTSCHE BANK AG 2014-WITHOUT FIXED MATURITY SUBORD FLTG RT Rating: S&P B+ 6.35% MEDIUM TERM NOTES PETROLEOS MEXICANOS PEMEX 2018-12.02.48 GTD GLOBAL SERIES C	None None None None None None None None	Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current	20,000 30,000 22,000 269.157 2,101.282 500,000.000 600,000.000 500,000.000	$ 596 735 9,867 11,946 10,419 14,626 18,062 9,778	- - - - - - - -	$ 596 735 9,867 11,946 10,419 14,626 18,062 9,778	－ － － － － － － －

• 80 -

Bestec Power Electronics Co., Ltd. And Subsidiaries

Acquisition of real estate amounting to NTD 300 thousand or more than 20% of paid-in capital

January 1 to December 31, 2022

Table 2

Unit: In thousands of New Taiwan dollars unless otherwise stated The companies listed are those held by the reporting company.

Company acquiring the property	Property name	Occurrence of the fact	Transaction amount	Payment status of the transaction	Counterparty	Relation	If the counterparty is a related party, information on theprevious transferprice	If the counterparty is a related party, information on theprevious transferprice	If the counterparty is a related party, information on theprevious transferprice	If the counterparty is a related party, information on theprevious transferprice	determinati on basis of the price	Purpose of acquisition and usage	Other agreements Details
							Owner	relationshi p with the issuer	Transfer date	Amount
The Company	Land	111.07.22 (Note 3)	$ 210,017 (Note 4)	Payment was made according to the progress payment in the real estate purchase contract (already fully paid).	Chiayi County Government	None	-	-	-	$ -	Governme nt tender for production and operation use	Used for production and operation	None

Note 1: If assets acquired are required to be appraised by regulations, the appraisal result should be indicated in the "Reference Basis for Price Determination" column. Note 2: The paid-in capital refers to the paid-in capital of the parent company. For issuers whose stocks have no par value or per share value is not NT$10, the transaction amount for 20% of the paid-in capital shall be calculated based on 10% of the equity attributed to the parent company owner on the balance sheet.

Note 3: The transaction date refers to the earlier date of the actual occurrence, such as the contract signing date, payment date, commission transaction date, transfer date, board resolution date, or any other date sufficient to determine the transaction object and amount.

Note 4: The transaction amount, including professional service fees, is NT$210,230,000.

• 81 -

Bestec Power Electronics Co., Ltd. And Subsidiaries

Transaction amount of sales and purchases with related parties exceeding NT$100 thousand or 20% of the paid-in capital.

January 1 to December 31, 2022

Table 3

Unit: NT$ thousands

The company that purchased (sold) goods	Counterparty	Relation		Transaction condition	Transaction condition		Different conditions compared to a normal transaction and the reason for that	Different conditions compared to a normal transaction and the reason for that	Accounts and notes receivable (payable)	Accounts and notes receivable (payable)	Remark s
			Goods purchased (sold)	Amount	Percentage of the total purchases (sales)	Credit period	Unit price ($)	Credit period	Balance	Percentage of the total notes receivable (payable), accounts receivable (payable)
Bestec Power Electronics Co., Ltd. Bestec Power Electronics (Dongguan) Co Bestec Power Electronics Co., Ltd. Bestec Electronics (Dongguan)Co	Bestec Power Electronics (Dongguan) Co Bestec Power Electronics Co., Ltd. Bestec Electronics (Dongguan) Co Bestec Power Electronics Co.,Ltd.	Subsidiary The Company Subsidiary The Company	Purchase Sale Purchase Sale	$ 240,981 ( 240,981 128,310 ( 128,310	65% ( 100% ) 35% ( 62% )	Note 1 Note 2 Note 1 Note 2	$ - - - -	－ － － －	( $ 25,316 ) 25,316 ( 114,740 ) 114,740	( 18% ) 100% ( 81% ) 100%	－ － － －

Note 1: The payment terms for purchases from related parties are based on the group's internal fund arrangements and are executed based on the available funds. Other transaction terms are not significantly different from those with unrelated parties.

Note 2: The payment terms for sales to related parties are based on the group's internal fund arrangements and are executed based on the available funds. Other transaction terms are not significantly different from those with unrelated parties.

Note 3: All transactions have been fully offset in the preparation of the consolidated financial statements.

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Bestec Power Electronics Co., Ltd. And Subsidiaries

Name and location of invested companies, etc.

January 1 to December 31, 2022

Table 4

Unit: In thousands of New Taiwan dollars unless otherwise stated The companies listed are those held by the reporting company.

Investment Company name	Name of Investee	Location	Primary business items	Original Investment Amount	Original Investment Amount	End-of-Period Holdings	End-of-Period Holdings	End-of-Period Holdings	Investee Current Period (Loss) Income (Note 2 and 4)	Investment Gains or Losses Current Period Recognized Investment (Loss) Income (Note 2 and 4)	Remarks
				E n d i n g o f t h i s reporting period	Ending of last reporting period	Number of shares	Percentage (%)	Carrying amount
Bestec Power Electronics Co., Ltd. Bestec Inv, Inc.	Wan Jhih Electronic Limited Ninety-Nine Electronic Limited Baotai Construction Co., Ltd. Chien Chih Electronic Co., Ltd. Lianyao Investment Co., Ltd. Bestec Power International Ltd. Bestec Biotechnology Co., LTD. Bestec Inv, Inc. APX Power Technology, LLC	60 Market Square, P.O. Box 364,Belize City, Belize Suite 802,St James Corurt St Denis Street, Port Louis, Maurtius 3F, No.25, Lane 20, Sec. 4, Sanhe Rd., Sanchong Dist., New Taipei City, Taiwan Suite 802, St James Court St Denis Street, Port Louis, Manritius Level3, Alexander House, 35 Cybercity Ebene, Mauritius 2035 Sunset Lake Road Suite B-2, Newark, DE 19702 10 N. Martingale Rd, Suite 400, Schaumburg ,IL,60173, USA.	Trading of various technological products Investment related business Real estate sales Manufacturing and trading of electronic parts such as casings and cables. Investment related business Trading of various technological products Pet food-related business Investment related business Sale of uninterrupted power supply systems and power protectors	$ 1,486 (USD 50,000) 346,740 (USD 11,666,000) 200,000 - 80,000 59,440 (2,000,000 US dollars) 20,000 54,982 (1,850,000 US dollars) 53,318 (1,794,000 US dollars)	$ 1,486 (USD 50,000) 346,740 (USD 11,666,000) 200,000 99,651 $3,353,000 (USD) 80,000 59,440 (2,000,000 US dollars) 20,000 54,982 53,318 (1,644,000 US dollars)	50,000 1,356,181 20,000,000 - 8,000,000 2,000,000 2,000,000 9,250 -	100 100 100 - 100 100 100 100 95.94	$ 123,764 152,616 168,504 - 76,713 112,758 10,645 949 ( 369 ) (-12,000 US dollars)	$ 696 1,832 (USD 61,000) ( 2,320 ) 309 (86,000 Hong Kong dollars) ( 3,758 ) 5,690 ( 18 ) ( 211 ) (-7,000 US dollars) ( 179 ) (-6,000 US dollars)	$ 696 1,832 ( 2,320 ) 665 ( 3,758 ) 5,690 ( 18 ) ( 211 ) ( 172 ) (-6,000 US dollars)	Note 1 Note 1 Note 1 Note 1, 3 and 5 Note 1 Note 1 Note 1 Note 1 Note 1

Note 1: Unless otherwise noted, the NT dollar amounts in this table are converted at the exchange rate as of December 31, 2022. Note 2: Foreign currency amounts are converted to NT dollars at the average exchange rate for 2022.

Note 3: The difference between the current period profit or loss of the investee and the investment income recognized in the current year is a realized gain of NT$356,000 arising from the side-stream transaction of selling materials by Chien Chih Electronic Co., Ltd. (Chien Chih)to Bestec Power Electronics(Dongguan) Co., Ltd..

Note 4: The profit or loss is recognized based on the financial statements of the investee that have been audited by the certified public accountant during the same period.

Note 5: The Company dissolved and liquidated Chien Chih on November 12, 2021. As the amount receivable from its subsidiary, Dongguan Chien Chih, for the processing of materials was not collected,

the loss of NT$401,690,000 (RMB 90,839,000) recognized in 2022 was offset against the accounts payable to Dongguan Chien Chih and was not included in the consolidated financial statements. The remaining subscription proceeds of NT$1,922,000,000 were remitted back on March 7, 2022.

Note 6: For information related to the Mainland China investee companies, please refer to Annex Table 5.

Note 7: The balances have been fully offset in the preparation of the consolidated financial statements.

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Table 5

Bestec Power Electronics Co., Ltd. And Subsidiaries

Investment in mainland China

January 1 to December 31, 2022

Unit: In thousands of New Taiwan dollars unless otherwise stated

Investee in mainland China Company name	Primary business items	Paid-in capital	Paid-in capital	Investment method	Investment amount at the beginning of the period Investment amount accumulated from Taiwan	Investment amount at the beginning of the period Investment amount accumulated from Taiwan	Investment amount in the current period exported or withdrawn Investment amount	Investment amount in the current period exported or withdrawn Investment amount	Ending of this reporting period Investment amount accumulated from Taiwan	Investee Companies Income or Loss for the Period	Direct or indirect shareholdin g ratio of the company's investment	Current period recognized amount investment income or loss	Period end investment book value	As of the end of the period, Inflows from investment returns
							Remitted out	Recovered
Bestec Power Electronics (Dongguan) Co Dongguan Shijie Jianzhi Electronics Factory Bestec Electronics (Dongguan) Co	Production and sales of power supplies, power converters, and circuit board components Manufacture of electronic components such as casings and wires Production and domestic sales of power supplies and power converters	$ 306,195 (HKD 13,082,000 and USD 8,293,000) (Note 2) - 17,632 (Chinese Yuan 4,000,000) (Note 2)		Indirect investment through Jiuh Der Electronics (Mauritius) Co., Ltd. Establishment of a processing plant for incoming materials through Chien Chih Electronic Co., Ltd. Indirect investment through Bestec Power Electronics (Dongguan) Co., Ltd.	$ 306,195 (HKD 13,082,000 and USD 8,293,000) (Note 2) 102,971 (USD 3,353,000) (Note 2) -		$ - - -	$ - 59,025 (USD 1,922,000) -	$ 306,195 (HKD 13,082,000 and USD 8,293,000) (Note 2) 43,946 (USD 1,431,000) (Note 2) -	$ 3,959 (CNY 895,000) (Note 4) ( 401,690 ) (CNY-90,839,000) (Note 4) 37,454 (CNY8,470,000) (Note 4)	100% 100% 100%	$ 3,959 (CNY 895,000) (Note 4) ( 401,690 ) (CNY -90,839,000) (Note 4) 37,454 (CNY 8,470,000) (Note 4)	$ 154,250 (USD 5,023,000) (Note 2) - (Note 6) 43,996 (CNY 9,981,000) (Note 7)	$ - - -
Cumulative amount of investment in Mainland China exported from Taiwan duringtheperiod-end(Note 2)			Approved investment amount			by Investment Commission, Ministry of Economic Affairs(Note 2)
$ 350,141 (US$9,724,000 and HK$13,082)			$ 512,912 (US$15,024,000 and HK$13,084,000)			$ 317,350

Note 1: The calculation is based on 60% of the net worth of the audited financial report as of December 31, 2022 (the net worth of the Company as of December 31, 2022 was NT$528,916,000). Note 2: The amounts in this table are converted into New Taiwan Dollars based on the exchange rate as of December 31, 2022. Note 3: The investment cases of Bestec Power Electronics (Dongguan) Co approved and on record on March 18, 2003, May 26, 2003, July 21, 2003, June 4, 2004, June 1, 2005, July 12, 2006, and January 23, 2014, respectively, under Approval Letters No. 091048706, No. 092017118, No. 092022439, No. 093015037, No. 094014017, No. 09500187450, and No. 10300000550. The investment case of Dongguan Shijie Jianzhi Electronic Factory was approved and on record on October 13, 2008, under Approval Letter No. 09700365750.

Note 4: Converted based on the average exchange rate of RMB to New Taiwan Dollars for the year 2022, which is 4.422. Note 5: Recognized based on the audited financial reports of the investee companies by the Company's auditor for the same period. Note 6: The Company's board of directors approved the dissolution and liquidation of Dongguan Shijie Chien Chih Electronic Factory, a raw material processing factory of Chien Chih Electronics Co., Ltd., on November 12, 2021. The recognized profit of NT$401,690,000 (RMB90,839,000) for the outstanding payable to Chien Chih Electronics Co., Ltd. has been offset against the Company's receivable from Chien Chih Electronics Co., Ltd. Therefore, it has not been included in the consolidated financial statements and the dissolution and liquidation process was completed on March 7, 2022.

Note 7:Bestec Electronics (Dongguan) Co., Ltd. completed the sale of Bestec Electronics (Dongguan) Co., Ltd. on August 31, 2022. The Company repurchased the company through its subsidiary, Lianyao Investment Co., Ltd., in January 2023. The Company's substantive control has not been transferred, therefore, it is still included in the consolidated financial statements. Note 8: Fully offset in the preparation of the consolidated financial statements.

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Bestec Power Electronics Co., Ltd. And Subsidiaries

The significant transactions with Mainland China invested companies directly or indirectly through third-party areas, including their prices, payment terms, unrealized gains or losses, and other related information.

January 1 to December 31, 2022

Table 6

Unit: Unless otherwise specified, amounts are in thousands of New Taiwan Dollars (NTD).

Investee in mainland China	Type of transaction	Sales (purchases) and disposal price	Sales (purchases) and disposal price	Price	Transaction terms	Transaction terms	Accounts and notes receivable (payable)	Accounts and notes receivable (payable)	Unrealized gains and losses	Remarks
		A m o u n t	%		Payment terms	Comparison with regular transactions	Amount	%
Bestec Power Electronics Co., Ltd. Bestec Power Electronics (Dongguan) Co Bestec Power Electronics Co., Ltd. Bestec Electronics (Dongguan) Co	Purchase of goods Sales Purchase of goods Sales	$ 240,981 ( 240,981 ) 128,310 ( 128,310 )	65% ( 100% ) 35% ( 62% )	No material departure. No material departure. No material departure. No material departure.	Open account 90 days Open account 90 days Open account 90 days Open account 90 days	No material departure. No material departure. No material departure. No material departure.	( $ 25,316 ) 25,316 ( 114,740 ) 114,740	( 18% ) 100% ( 81% ) 100%	$ - - - -	- - - -

Note 1: All transactions have been fully offset in the preparation of the consolidated financial statements.

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Bestec Power Electronics Co., Ltd. And Subsidiaries

Business relationships, significant transactions, and amounts between parent companies, subsidiaries, and affiliates

January 1 to December 31, 2022

Table 7

Number (Note 1)	Name of transaction party	Counterparty	Relationship with counterparty (Note 2)	Details of transactions	Details of transactions	Details of transactions
				Item	Amount (Note 6)	Transaction terms	Ratio to total consolidated revenue or total assets (Note 3) (Note 3)
0 0 0 0 0 0 1 2 3 3 3	Bestec Power Electronics Co., Ltd. Bestec Power Electronics Co., Ltd. Bestec Power Electronics Co., Ltd. Bestec Power Electronics Co., Ltd. Bestec Power Electronics Co., Ltd. Bestec Power Electronics Co., Ltd. Bestec Power International Ltd. Wanzhi (Belize) Co., Ltd. Bestec Power Electronics (Dongguan) Co., Ltd. Bestec Power Electronics (Dongguan) Co., Ltd. Bestec Power Electronics (Dongguan)Co.,Ltd.	Bestec Power Electronics (Dongguan) Co Bestec Power Electronics (Dongguan) Co Bestec Electronics (Dongguan) Co Bestec Electronics (Dongguan) Co Bestec Electronics (Dongguan) Co APX Power Technology, LLC Ninety-Nine Electronic Limited Dongguan Shijie LianDe Electronics Factory Bestec Electronics (Dongguan) Co., Ltd. Bestec Electronics (Dongguan) Co., Ltd. Bestec Electronics (Dongguan) Co., Ltd.	1 1 1 1 1 1 3 3 3 3 3	Accounts payable Purchase of goods Other accounts receivable Accounts payable Purchase of goods Other accounts receivable Other accounts receivable Other accounts payable Purchase of goods Rental income Other revenue	$ 25,316 240,981 164 114,740 128,310 597 145 131,472 77,435 182 4,736	Note 5 Note 5 － Note 5 Note 5 Note 5 － － Note 5 － －	1% 59% - 6% 31% - - 7% 19% - 1%

Note 1: Translation: Information on transactions between the parent company and its subsidiaries should be marked in the numbering column as follows:

1. The parent company should fill in 0.

2. The subsidiaries should be sequentially numbered starting from 1 according to their company code.

Note 2: There are three types of relationships with the trading parties, and only the type needs to be indicated: parent company to subsidiary

subsidiary to parent company

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subsidiary to subsidiary

Note 3: The calculation of the ratio of transaction amount to consolidated total revenue or total assets is as follows: for balance sheet items, the ratio is calculated as the ending balance divided by the consolidated total assets; for income statement items, the ratio is calculated as the cumulative amount for the period divided by the consolidated total revenue. Note 4: The disclosure of important transaction information in this table may be determined by the company based on the principle of materiality. Note 5: The disclosure of important transaction information in this table may be determined by the company based on the principle of materiality. Note 6: It has already been fully offset in the preparation of the consolidated financial statements.

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Bestec Power Electronics Co., Ltd. Major Shareholder Information As of December 31, 2022

Table 8

Major Shareholder Name	Shareholdings	Shareholdings
	Number of Shares Held	Percentage of shareholding
FORFUNE INTERNATIONAL CO., LTD Chen Yiwen Chen Songzhe Chen Mingzhi Li Huiyu	16,255,614 6,648,679 6,494,231 5,683,557 5,044,460	22.99% 9.40% 9.18% 8.04% 7.13%

• Note 1: The information on major shareholders in this table is calculated by Taiwan Depository & Clearing Corporation based on the total number of ordinary shares and preferred shares (including treasury stocks) held by shareholders who have completed the delivery without physical registration at the end of the last business day of the quarter, and the total must be 5% or more. The number of shares recorded in the individual financial statements of the Company may differ from the actual number of shares completed without physical registration delivery due to differences in calculation bases.

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