BRIGHT — Annual Report 2022

Nov 13, 2022

TSE ： 3031

Bright LED Electronics Corp.

Consolidated financial report and accountant's audit report

Year of 2022 and 2021

Company address ： 3F, No.19, Heping Rd., Banqiao Dist., New Taipei City, Taiwan 22061 Tel ： (02)2959-1090 Official website ： http://www.brtled.com

Notice to readers:

In case of any discrepancy between the English version and the Chinese version or any difference in the interpretation of the two versions, the Chinese version shall prevail.

Table of content

Items 1、Cover 2、Table of content 3、Representation letter 4、Independent auditors’ report 5、Consolidated Balance sheet 6、Consolidated Income statement 7、Consolidated Statement of change in equity 8、Consolidated Cash flow statement 9、Notes from the consolidated financial statements (1) Company history (2) The date and procedure for the approval of the financial statements (3) Application of newly issued and revised standards and explanations (4) Summary of material accounting policies (5) Major sources of uncertainty in significant accounting judgments, estimates and assumptions (6) Explanation of important accounting items (7) Related party transactions (8) Pledged assets (9) Significant contingent liabilities and unrecognized contractual commitments (10) Loss from major disaster (11) Significant post-period matters (12) Other (13) Disclosure of Matters in Notes Information with regard to major transactions Re-investment business related information Information with regard to investment in China Major shareholders information (14) Department information

Page

1 2 8 9 10 11 12 12 12 13 26 27 51 52 52 52 52 52 53 58

Representation Letter

The entities that are required to be included in the consolidated financial statements of Bright LED Electronics Corp. as of and for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022), under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.”, which is recognized by Financial Supervisory Commission. In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Bright LED Electronics Corp. and Subsidiaries do not prepare a separate set of consolidated financial statements.

Yours Sincerely,

Bright LED Electronics Corp.

by

Tsung-Jen Liaw Chairman

March 14, 2023

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INDEPENDENT AUDITORS’ REPORT

(Consolidated Financial Statements)

The Board of Directors and Shareholders

Bright LED Electronics Corp.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2022 are stated as follows:

Inventory valuation

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For details of accounting policies, accounting estimations and assumptions, and related disclosures of inventory valuation, please refer to Notes 4 (8), 5 (2) and 6 (4) of the Company’s consolidated financial statements.

The description of key audit matter:

The BRTLED group’s amount of inventories is shown as the lower of cost and net realizable value. Because determining the slow moving inventory loss involves subjective judgment on individual assessment of each category of inventory and its idle days, inventory valuation is one of the key audit matters that we conducted.

The main audit procedures of the accountant for the above key audit items include obtaining the inventory depreciation and inventory aging data at the end of the year, comparing the difference between the actual net realizable value and the book value, and evaluating the reasonableness of the management level for the ratio of the inventory aging report which includes the implementation of the audit sampling, procedure tests for correctness of the inventory aging report, and comparison of the difference between the amount of allowance made in the previous year and the actual write-off for evaluating whether the policy of setting aside the allowance for inventory depreciation and losses of idle inventory is appropriate.

Revenue Recognition

For details of accounting policies and related disclosures of revenue recognition, please refer to Notes 4 (13) and 6 (16) of the Company’s consolidated financial statements.

The description of key audit matter:

The sources of the major operating revenue of the BRTLED group are research and development, productions, and sales of light-emitting diodes indicators and display…etc and contracts of LED display, LED lighting and related operating applications/systems’ constructions. Where the BRTLED group’s revenues generated from is the concerned factor for this report users or recipients. Hence, revenue recognition is considered as one of the key audit matters.

The main audit procedures for the above-mentioned key audit matters include complying with the requirements of the standards, understanding of operations and industry characteristics, evaluating the appropriateness of BRTLED Group's accounting policy selection; testing the design and implementation for the effectiveness of internal control systems related to revenue; understanding The form and transaction conditions of BRTLED Group's operating income, etc. The accountants evaluated whether the accounting policies for revenue recognition (including sales returns and discounts) are handled in accordance with the relevant official announcements and analyzed the income by examining major customers and new customers in order to assess whether there is any major abnormality. Also, we reviewed the new major contracts in the current period and tested the sales samples for a period

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before and after the end of the year according to their delivery conditions to assess the correctness of the revenue recognition period. The accounting project revenue is recognized according to the degree of completion of the performance obligations whether the ratio is reasonable. Through examining the list of the top ten customers and new customers, to find out the similarities and differences between their trading conditions compared to general customers. Selecting an appropriate sample size of sales invoices to confirm that all payments have been received and correct and pay attention to whether the remitter is consistent with the sales target in order to evaluate the authenticity of the income.

Account Receivables Valuation

For details of accounting policies of account receivables valuation, please refer to Notes 4 (7) financial instruments of the BRTLED group’s consolidated financial statements; for details of accounting estimates and accounting assumption of uncertainty of account receivables valuation, please refer to Notes 5 (1) of the BRTLED group’s consolidated financial statements; for details of explanation on account receivables valuation, please refer to 6 (3) of the BRTLED group’s consolidated financial statements.

The description of key audit matter:

Account receivables of BRTLED group are distributed among customers. The account receivables valuation allowance is calculated according to the expected percentage of credit losses which takes each time interval of overdue of account receivables and adjustments on prospective factors into consideration when estimating expected credit losses of account receivables. The management will, according to the report date, re-update new expected losses within each time interval of overdue and perform individual assessments on major overdue and payment disputes; hence, it involves subjective judgment from the managers and it is considered as one of the key audit matters.

The main audit procedures for the above-mentioned key audit matters include evaluating reasonableness of the percentage of expected credit losses and determining whether there is a major irregularity by comparing the turnover rate and turnover days of accounts receivables with the company’s credit policy and other related information; obtaining the aging schedule, verifying total amount from the aging schedule with general ledger and confirming integrity and accuracy of the aging schedule. Finally, ascertaining whether the bills and accounts receivables in dispute or involved in litigation have been properly handled and checking whether the customers’ receivables dues more than three months have been properly evaluated and checking whether there is a risk of transferring to other receivables.

Other Matter

We have also audited the consolidated financial statements of Bright LED Electronics Corp. as of and for the years ended December 31, 2022 and 2021 on which we have issued an unmodified opinion.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures

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that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

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

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

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

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

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

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

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adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Mr. Yu-Feng Hsu and Ms. Tzu-Hui Li.

KPMG TAIWAN Republic of China

March 14, 2022

Notice to Readers

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

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

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Bright LED Electronics Corp. and Subsidiaries

Consolidated Balance Sheets

December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS： 1100 Cash and cash equivalents (Note 6 (1)) 1140 Contract assets－current(Note 6 (17)) 1170 Accounts and notes receivable, net (Note 6(3)) 1180 Accounts receivable－due from related parties, net (Note 6(3)&7) 130X Inventories (Note 6(4)) 1470 Other current assets 1476 Other financial assets－current (Note 6(8)&8) Total current assets NONCURRENT ASSETS： 1517 Financial assets at fair value through other comprehensive income－noncurrent (Note 6(2)) 1550 Investments accounted for using equity method (Note 6(5)) 1600 Property, plant and equipment (Note 6(6)&8) 1755 Right of use assets (Note 6(7)) 1840 Deferred tax assets ( Note 6(13)) 1900 Other noncurrent assets 1920 Refundable deposits Total noncurrent assets TOTAL	Dec 31, 2022 Amount % $ 877,848 25 315,553 8 429,225 12 67,745 2 200,433 6 45,487 1 234,346 7	Dec 31, 2021 Amount % 762,775 21 176,783 5 468,087 13 62,402 2 266,664 7 64,564 2 298,773 7 2,100,048 57 805,735 22 142,525 4 455,169 12 110,787 3 21,075 1 7,054 - 22,767 1 1,565,112 43 3,665,160 100 LIABILITIES CURRENT LIABILITIES： 2100 Short-term loans (Note 6(9)) 2170 Accounts and notes payable 2180 Accounts payable－due to related parties (Note 7) 2200 Other payables and other current liabilities (Note 6(10)) 2230 Income tax liabilities 2280 Lease liabilities- current (Note 6(11)) Total current liabilities NONCURRENT LIABILITIES： 2570 Deferred tax liabilities (Note 6(13)) 2580 Lease liabilities- noncurrent (Note 6(11)) 2640 Defined benefit liabilities－noncurrent (Note 6(12)) 2600 Other noncurrent liabilities Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO SHAREHOLDERS (Note 6(14)) 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity interests 3500 Treasury stock Total equity attributable to shareholders of the parent 36XX Noncontrolling interests Total equity TOTAL	Dec 31, 2022	% 2 7 - 3 1 -	Dec 31, 2021 Amount % 60,000 2 250,955 7 12,160 - 127,993 3 52,897 1 15,300 - 519,305 13 20,470 1 49,232 1 22,594 1 24,861 1 117,157 4 636,462 17 1,816,742 50 429,633 12 672,830 18 113,698 3 (126,649) (3) 2,906,254 80 122,444 3 3,028,698 83 3,665,160 100
			Amount $ 60,000 251,410 8,427 113,520 52,071 15,796		Amount 60,000 250,955 12,160 127,993 52,897 15,300
			501,224	13	519,305
	2,170,637 61		2,442 36,581 19,860 22,600	- 1 1 1	20,470 49,232 22,594 24,861
	648,479 18 161,873 5 416,146 11 97,402 3 38,794 1 7,502 - 25,115 1
			81,483	3	117,157
			582,707	16	636,462
			1,732,032 387,591 702,196 40,270 -	49 11 20 1 -	1,816,742 429,633 672,830 113,698 (126,649)
	1,395,311 39
	$ 3,565,948 100
			2,862,089	81	2,906,254
			121,152	3	122,444
			2,983,241	84	3,028,698
			$ 3,565,948	100	3,665,160

Chairman：Tsung-Jen Liaw

CEO：Tsung-Jen Liaw

Accounting Manager：Mei-Lien Lin

8

Bright LED Electronics Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

From January 1 to December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

4000 Operating revenues (Note 6(16)&7) 5000 Operating costs (Note 6(4)(6)(7)(12)(17)&7) 5900 Gross profit from operations 6000 Operating expenses (Note 6(3)(6)(7)(12)(17)(18)&7)： 6100 Marketing 6200 Management 6300 Research & development 6450 Expected credit impairment loss (or gain) Total operating expenses 6900 Operating income 7000 Non-operating income & expenses (Note 6(5)(11)(19))： 7100 Interest revenues 7010 Other revenues 7020 Other gains & losses 7050 Finance costs 7370 Share of profit (loss) of associates using equity method Total non-operating income & expenses 7900 Profit before tax 7951 Deduct：income tax expenses (Note 6(13)) Net income 8300 Other comprehensive income (Note 6(12)(13)(14))： 8310 Items that will not be reclassified subsequently to profit or loss: 8311 Re-measurement of defined benefit plans 8316 Unrealized gain or loss on financial instrument at fair value through other comprehensive income 8349 Income tax related to items that will not be reclassified subsequently Total of Items that will not be reclassified subsequently to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences arising on translation of foreign operations 8399 Income tax related to items that may be reclassified subsequently Total of Items that may be reclassified subsequently to profit or loss 8300 Other comprehensive loss for the year, net of income tax 8500 Total comprehensive income for the year Net income attributable to： 8610 Shareholders of the parent 8620 Noncontrolling interests Total comprehensive income attributable to： 8710 Shareholders of the parent 8720 Noncontrolling interests Earnings per share (Note 6(15)) 9750 Basic earnings per share (NT$) 9850 Diluted earnings per share (NT$)	2022		2021
	Amount	%	Amount
	76,539 5 - -
	76,539 5
	(67,528) (5)
	$ 127,849 8
	$ 200,380 13 (5,003) -
	$ 195,377 13
	$ 129,141 8 (1,292) -
	$ 127,849 8
	$ 1.16
	$ 1.15

Chairman：Tsung-Jen Liaw

CEO：Tsung-Jen Liaw

Accounting Manager：Mei-Lien Lin

9

Bright LED Electronics Corp. and Subsidiaries

Consolidated Statements of Changes in Equity

From January 1 to December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars, Except Dividends Per Shares)

Equity Attributable to Shareholders of the Parent

Balance, January 1, 2021 Net income Other comprehensive income Total comprehensive income Legal reserve Special reserve Cash dividend Changes in other capital reserves: Gain/loss on sales of equity instruments at fair value through other comprehensive income Overdue dividend Treasury stock transferred to employees Balance, December 31, 2021 Net income Other comprehensive income Total comprehensive income Legal reserve Cash dividend Treasury stock written off Changes in ownership interests of related subsidiaries Overdue dividend Balance, December 31, 2022	Capital Stock Capital Surplus	Noncontrolling interests Total Equity Retained earnings Others Treasury Stock Totalattributable to shareholders of the parent Legal reserve Specialreser ve Unappropriated earnings Total Exchange Differences on translations Unrealized gain/loss on assets at fair value through other comprehensive income Total
	$1,816,742 421,959 282,123 1,413 274,877 558,413 (194,802) 246,451 51,649 (149,507) 2,699,256 120,308 2,819,564
	- - - - 249,233 249,233 - - - - 249,233 3,563 252,796 - - - - 2,218 2,218 (34,274) 96,628 62,354 - 64,572 (1,427) 63,145
	- - - - 251,451 251,451 (34,274) 96,628 62,354 - 313,805 2,136 315,941
	- - 12,582 - (12,582) - - - - - - - - - - - (1,413) 1,413 - - - - - - - - - - - - (137,339) (137,339) - - - - (137,339) - (137,339) - - - - 305 305 - (305) (305) - - - - - 21 - - - - - - - - 21 - 21 - 7,653 - - - - - - - 22,858 30,511 - 30,511
	1,816,742 429,633 294,705 - 378,125 672,830 (229,076) 342,774 113,698 (126,649) 2,906,254 122,444 3,028,698
	- - - - 200,380 200,380 - - - - 200,380 (5,003) 195,377 - - - - 2,189 2,189 72,828 (146,256) (73,428) - (71,239) 3,711 (67,528)
	- - - - 202,569 202,569 72,828 (146,256) (73,428) - 129,141 (1,292) 127,849
	- - 25,176 - (25,176) - - - - - - - - - - - - (173,203) (173,203) - - - - (173,203) - (173,203) -84,710 (41,939) - - - - - - - 126,649 - - - - (131) - - - - - - - - (131) - (131) - 28 - - - - - - - - 28 - 28
	$1,732,032 387,591 319,881 - 382,315 702,196 (156,248) 196,518 40,270 - 2,862,089 121,152 2,983,241

Chairman：Tsung-Jen Liaw

CEO：Tsung-Jen Liaw

Accounting Manager：Mei-Lien Lin

10

Bright LED Electronics Corp. and Subsidiaries

Consolidated Statements of Cash Flows

From January 1 to December 31, 2022 and 2021

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES： Income before tax Adjustments： Depreciation and amortization expenses Expected credit impairment losses Interest expenses Interest income Dividend income Share-based payment Adjustment of recognized losses on other equity for all equity changes in affiliated companies Share of profit/loss of associates accounted for using equity method Loss on disposal or retirement of property, plant and equipment (profit) Loss on modification of lease Total adjustments Changes in operating assets and liabilities: Decrease (increase) in contract assets Decrease in notes and accounts receivable (including related parties) (increase) Decrease (increase) in inventories Decrease in other current assets Decrease in other financial assets-current (increase) Increase in notes and accounts payable (including related parties) (decrease) Increase in other payables and other current liabilities (decrease) Increase in defined benefit liabilities (decrease) Total Cash generated from operations Interest received Interest paid Income tax paid Net cash generated by operating activities CASH FLOWS FROM INVESTING ACTIVITIES： Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Refund of capital reduction of financial assets measured at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Decrease in other financial assets－current (increase) Increase in other assets－noncurrent Dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Principal repayment of lease Increase (decrease) in other noncurrent liabilities Cash dividends paid Costs of treasury stock buyback Treasury stock transferred to employees Net cash used in financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR		2022		2021 304,202 73,617 2,889 4,383 (5,310) (64,569) 7,721 - (31,789) (171) - (69,363) 53,137 (51,290) 24,990 (8,620) (52,210) 6,298 11 (110,276) 193,926 5,310 (4,383) (31,411) 163,442 (933) 2,821 - (26,993) 834 4,659 (152,098) (9,616) 77,568 (103,758) (14,342) 10,656 (137,339) 22,790 (118,235) (14,342)
		$ 211,564
		64,649 (11) 4,325 (7,605) (49,717) - 22 (28,597) (995)
		79
		(138,770) 33,530 66,231 19,077 6,151 (3,278) (14,445) 2
		(49,352)
		162,212 7,257 (4,325) (53,307)
		111,837
		- - 11,000 (4,833) 2,492 (448) 58,624 (2,433) 60,575
		124,977
		(15,456) (2,261) (173,203) - (190,920)
		(15,456)
		69,179		(35,983)
		115,073		(94,534) 857,309 762,775
		762,775
		$ 877,848

Chairman：Tsung-Jen Liaw

CEO：Tsung-Jen Liaw

Accounting Manager：Mei-Lien Lin

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Bright LED Electronics Corp. and Subsidiaries Notes from consolidated financial statements

Year 2022 and 2021

(Unless otherwise specified, all amounts are in units of NT $thousand)

1. Company history

Bright LED Electronics Corp. (hereinafter referred to as the "Company") was established in June 1981. The company and its subsidiaries (hereinafter also referred to as "consolidated company") are principally engaged in the manufacturing and sales of light-emitting diode, indicator lights, displays and other extended products and undertaking engineering projects that provide indicator lights, displays and related supporting engineering projects.

2. The date and procedure for the approval of the financial statements

This consolidated financial statement was approved by the board of directors on March 14, 2023.

3. Application of newly issued and revised standards and explanations

• (1) The impact of the newly issued and revised standards and interpretations approved by the Financial Regulatory Commission has been adopted

• The company has applied the following newly revised International Financial Reporting Standards since January 1, 2022 and has no significant impact on parent company only financial report.

  • Amendment to International Accounting Standards (IAS) No. 16 " Property, Plant and Equipment: Proceeds before Intended Use"

• Amendments to International Accounting Standard (IAS) No.37 " Onerous Contracts—Cost of Fulfilling a Contract".

  • Annual Improvements to International Financial Reporting Standard (IFRS) 2018–2020.

  • Amendment to International Financial Reporting Standard (IFRS) No. 3 " Reference to the Conceptual Framework"

• (2) The impact of the International Financial Reporting Standards that has not yet adopted but recognized by the Financial Supervisory:

   - The consolidated company assesses that the following newly revised international financial reporting standards that have been effective from January 1, 2023 will not have significant impacts on the consolidated financial report.
  

• Amendment to International Accounting Standards (IAS) No. 1 “Disclosure of Accounting Policies”

• Amendment to International Accounting Standards (IAS) No. 8 “Definition of Accounting

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Estimates”

• Amendment to International Accounting Standards (IAS) No. 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

• (3) Newly issued or revised standards and interpretations that are endorsed by Financial Supervisory Commission.

The standards and interpretations that have been newly issued or amended by the International Accounting Standards Board, but have not yet been approved by Financial Supervisory Commission are as follows:

Newly issued/ revised

standards

Amendments to International Financial Reporting Standards (IFRS) No. 10 and International Accounting Standards (IAS) No. 28 "Sales or investment of assets between investors and their affiliates or joint ventures"

Amendments to International Accounting Standards (IAS) No. 1 “Classification of Liabilities as Current or Non-current”

Main content

Clarified that when an investor transfers its subsidiary to an affiliated enterprise or a joint venture, if the assets sold or invested constitute a business, the investor is deemed to have lost control of the business, and all profits or losses should be recognized. If it does not constitute a business, the unrealized profit or loss shall be calculated according to the shareholding ratio, and part of the profit or loss shall be deferred and recognized.

The current IAS 1 stipulates that liabilities for which the enterprise does not have an unconditional right to defer settlement for at least twelve months after the reporting period shall be classified as current. The amendment deletes the requirement that the right should be unconditional and instead requires that the right must exist and be substantive at the end of the reporting period.

Effective date Pending

2024.1.1

The amendment clarifies how an enterprise should

classify liabilities that are paid off by issuing its

own equity instruments (such as convertible

corporate bonds).

Amendments to International Accounting Standards (IAS) No. 1 “Non-current liabilities with contractual terms”

After reconsidering certain aspects of the 2020 2024.1.1 IAS1 amendments, the new amendment clarifies that only contractual terms in compliance on or before the reporting date affect the classification of a liability as current or non-current.

The contractual terms to which a business is bound after the reporting date (that is, future terms) do not affect the classification of liabilities at that date. However, when non-current liabilities are subject to future contractual terms, such companies need to disclose information to help users of financial

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statements understand the risk that such liabilities may be repaid within twelve months of the reporting date

The consolidated company continuously evaluates the impact of the above standards and interpretations on the company's financial status and operating results. The relevant impact will

be

disclosed when the evaluation is completed.

• (4) The consolidated company expects that the following other newly issued or revised standards that have not yet been approved will not have a significant impact on the consolidated financial reports

• Amendments to International Financial Reporting Standards No. 10 and International Accounting Standards No. 28 "Sales or investment of assets between investors and their affiliates or joint ventures"

• Amendments to International Financial Reporting Standards (IFRS) No. 17 “Insurance Contracts" and its revision”

• Amendments to International Accounting Standards No. 12 “Deferred tax related to assets and liabilities arising from a single transaction”

4. Summary of material accounting policies

A summary of the material accounting policies adopted in this consolidated financial report is as follows. The following accounting policies have been consistently applied to all presentation periods in this consolidated financial report.

• (1) Compliance statement: This consolidated financial report is prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the Financial Regulatory Commission approved and issued effective International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretation Notice (hereinafter referred to as "International Financial Reporting Standards Recognized by the Financial Regulatory Commission").

• (2) Preparation basis:

• Basis of measurement: Except for the following important items in the balance sheet, the rest items in consolidated financial report is prepared on the basis of historical cost:

• Financial assets measured at fair value through profit and loss measured at fair value;

• Financial assets at fair value measured by fair value through other comprehensive gains and losses

• The net defined benefit liability is measured by subtracting the present value of defined benefit obligations from the fair value of pension plan assets.

• Functional currency and presentation currency: Each entity of the consolidated company

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uses the currency of their main economic environment in which its operations are located as its functional currency. This consolidated financial report is expressed in the company’s functional currency, New Taiwan Dollar. All financial information expressed in New Taiwan Dollars is in thousands of New Taiwan Dollars.

• (3) Consolidation basis:

• Principles for preparing consolidated financial reports

The preparation of the consolidated financial report includes the company and entities controlled by the company (ie, subsidiaries).

Starting from the day when control of the subsidiary is obtained, its financial report shall be included in the consolidated financial report until the day when control is lost. The transactions, balances, and any unrealized gains and expenses between the merged companies have been completely eliminated when preparing the consolidated financial report. The total consolidated profit and loss of the subsidiary is attributable to the owners and non-controlling interests of the company, even if the non-controlling interests become the loss balance.

The financial report of the subsidiary company has been adjusted appropriately to make its accounting policy consistent with the accounting policy used by the consolidated company.

Changes in the ownership and equity of the subsidiary by the consolidated company that did not result in the loss of control of the subsidiary are treated as an equity transaction with the owner. The difference between the adjustment amount of the non-controlling equity and the fair value of the consideration paid or received is directly recognized in the equity and attributed to the owner of the company.

1. Subsidiaries included in this consolidated financial statement

Investment company name Subsidiaries’ company name Nature of businesses	% of equity held
	2022/12/31 2021/12/31
The company Wanhui Enterprise Co., Ltd. (HK) Investment holding and trading and selling of LED components, displays and electronic parts The company KoBrite Corp. (KoBrite) Investment holding The company Lisheng International Industrial Co., Ltd. (Lisheng International) Investment holding	100% 100% 93% 93% 60% 60%

5

Wanhui	DongGuan Bright LED Electronics	Manufacturing and	100%		100%
Enterprise Co.,		assembling LED
Ltd. (HK)		components and
		extended products
KoBrite	KoBrite DongGuan corporation	producing and	100%		100%
	(DongGuan)	processing LED die
KoBrite	KoBrite Taiwan corporation	producing and	100%		100%
	(Taiwan)	processing LED die
KoBrite	Bright Crystal Company Limited	Investment holding	80%		80%
	(HK)
HK Bright	HeNan Bright Crystal Company	Production and sales of	100%		100%
Crystal	(HeNan Bright Crystal)	high-quality artificial
		crystals and finished
		LED lighting and import
		and export business
Lisheng	DongGuan Bright Rise Electronic	PCB processing	100%	-	100%
International	Co. Ltd.
	(DongGuan Bright Rise
	Electronics)

1. Subsidiaries not included in the consolidated financial statement: N/A

(4) Foreign currency

1. Foreign currency transaction

Foreign currency transactions are converted into functional currencies at the exchange rate on the transaction date. At the end of each subsequent reporting period (hereinafter referred to as the reporting day), foreign currency monetary items are converted into functional currencies at the exchange rate on that day. Foreign currency non-monetary items measured at fair value are converted to functional currency at the exchange rate on the day when the fair value is measured, and foreign currency non-monetary items measured at historical cost are converted at the exchange rate on the transaction date. Foreign currency exchange differences are usually recognized in income, but the following situations are recognized in other comprehensive gain and loss:

1. Designated as equity instruments measured at fair value through other comprehensive gains and losses;

2. Financial liabilities designated as net investment hedging by foreign operating institutions are within the effective scope of hedging; or

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1. Qualified cash flow hedging is within the effective range of hedging.

2. Foreign operating institution

The assets and liabilities of foreign operating institutions, including the goodwill and

fair

value adjustments generated during the acquisition, are converted into New Taiwan dollars based on the exchange rate on the reporting date; income and expense items are converted into New Taiwan dollars based on the current average exchange rate. The resulting exchange differences are recognized as other comprehensive gains and losses.

When disposing a foreign operating institution which results in loss of control, joint control or significant influence, the accumulated exchange differences related to

the

foreign operating institution are fully reclassified as gains or loss. When partly disposing investments in affiliated companies or joint ventures involving foreign operating institution, the relevant accumulated exchange differences will be reclassified to other comprehensive gains and loss on a pro rata basis.

For monetary receivables or payables from foreign operating institutions, if there is no settlement plan and it is impossible to repay them in the foreseeable future, the foreign currency exchange gains and losses shall be regarded as the net investment of

the

foreign operating institution and is classified in other comprehensive gains and losses.

• (5) Classification criteria for distinguishing between current and non-current assets

• and liabilities

Assets that meet one of the following conditions are classified as current assets, and all others are classified as non-current assets:

1. Expect to realize the asset in its normal business cycle, or intend to sell or consume;

2. Hold the asset primarily for trading purposes;

3. Expected to be realized within twelve months after the reporting period; or

4. Asset is cash or cash equivalents unless there are other restrictions on the asset being exchanged or used to settle a liability at least twelve months after the reporting period.

Liabilities that meet one of the following conditions are classified as current liabilities, and all others are classified as non-current liabilities:

1. Expect to settle the liability during the normal operating cycle;

2. Hold the liability primarily for trading purposes;

3. Expect to repay the liability that is due within twelve months after the reporting period; or

4. Liability that does not have the right to unconditionally defer the settlement period to at least twelve months after the reporting period. The terms of the liability, which may be settled by the issuance of equity instruments based on the choice of the counterparty,

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does not affect its classification.

• (6) Cash and cash equivalent

• Cash includes cash on hand and demand deposits. Cash equivalent refers to a short-term and highly liquid investment that can be converted into fixed cash at any time with little risk of value changes. Term deposits that meet the aforementioned definition and whose holding purpose is to meet short-term cash commitments rather than investment or other purposes are listed in cash equivalents.

• (7) Financial instrument

• Financial assets:

Financial assets at initial recognition are classified as: financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive gain or loss, and financial assets measured at fair value through profit or loss. The company only reclassifies all affected financial assets from the first day of the next reporting period when changing the business model for managing financial assets.

1. Financial assets measured at amortized cost

When financial assets meet the following conditions at the same time and are not

designated to be measured at fair value through profit and loss, they are measured at amortized cost:

• The financial asset is held under the business model for the purpose of collecting contractual cash flow.

• The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

These assets are subsequently measured by adding or subtracting the accumulative amortization amount calculated using the effective interest method to the originally recognized amount, and adjusting the amortized cost of any allowance loss. Interest income, foreign currency exchange gains and losses, and impairment losses are recognized in profit and loss. When delisting, the profit or loss is included into income.

1. Financial assets measured at fair value through other comprehensive gains and losses

2. When debt instrument for investment meets the following conditions at the same time and is not designated as measured at fair value through income, it is measured at fair value through other comprehensive gains and losses:

3. The financial asset is held under the business model for the purpose of collecting contractual cash flow and selling.

4. The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

5. At the time of initial recognition, the company can make an irrevocable choice which

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is

to report subsequent changes in the fair value of equity instrument investments that are not

held for trading in other comprehensive income. The aforementioned choices are made on

a tool-by-tool basis.

Investments, which are equity instruments, are subsequently measured at fair value. Dividend income (unless it clearly represents the recovery of part of the investment cost) is recognized in income. The remaining net gains or losses are recognized as other comprehensive gains and losses and are not reclassified to income. Dividend income from equity investments is recognized on the date when the

company

has the right to receive dividends (usually the ex-dividend date).

1. Financial assets measured at fair value through income.

Financial assets other than those measured at amortized cost or at fair value through other comprehensive gains and losses are measured at fair value through income, including derivative financial assets. The company intends to sell accounts receivable immediately or in the near future, which is measured at fair value through profit and loss, but is included under accounts receivable. At the time of initial recognition, in order to eliminate or significantly reduce the improper accounting ratio, the company has to irrevocably designate financial assets that could meet the criteria for measuring at amortized cost or at fair value through other comprehensive gains and losses as at fair value through income.

These assets are subsequently measured at fair value, and their net profit or loss (including any dividends and interest income) is recognized as profit or loss.

1. Impairment of financial assets

The company focuses on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized cost, notes receivable and accounts receivable, other receivables, deposit deposits and other financial assets). Assets, etc.), debt instrument investments measured at fair value through other comprehensive gains and losses, and expected credit losses of contract assets to recognize allowance losses.

The following financial assets are measured by the amount of expected credit losses for twelve months, and the rest are measured by the amount of expected credit losses during the duration:

• •The credit risk of the judgment debt securities at the reporting date is low; and

• •The credit risk of other debt securities and bank deposits (that is, the risk of default in the expected lifetime of financial instruments) has not increased significantly since

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initial recognition.

The allowance for losses on accounts receivable and contract assets is measured by the amount of expected credit losses during the duration.

When determining whether the credit risk has increased significantly since the initial recognition or not, the company considers reasonable and verifiable information (which can be obtained without excessive cost or investment), including qualitative and quantitative information, and based on the company’s historical experience, credit assessment and forward-looking information for analysis.

If the contract payment is overdue, the company assumes that the credit risk of financial assets has increased significantly.

If the borrower is unlikely to perform its credit obligations and pay the full amount to the company, the company considers that the financial asset has breached the contract. Expected credit loss during the lifetime refers to the expected credit loss arising from all possible defaults during the expected lifetime of a financial instrument.

Twelve-month expected credit losses refer to expected credit losses arising from possible defaults of financial instruments within twelve months after the reporting date (or a shorter period, if the expected duration of the financial instrument is shorter than twelve

months).

The company’s longest period for expected credit losses is the company’s longest contract period during which the company is exposed to credit risk.

Expected credit loss is the probability-weighted estimate of the credit loss during the expected life of the financial instrument. Credit loss is measured by the present value of all short-term cash receipts, that is, the difference between the cash flow that the company can receive in accordance with the contract and the cash flow that

the company expects to receive. Expected credit losses are discounted at the effective interest rate of financial assets.

On each reporting date, the company evaluate whether there is credit impairment for financial assets measured at amortized cost and debt securities measured at fair value through other comprehensive gains and losses. When one or more events that have an adverse effect on the estimated future cash flow of a financial asset have occurred, the financial asset has been credit-impaired. Evidence that financial assets have been credit-impaired includes observable information about the following matters:

• •Major financial difficulties of the borrower or issuer

• •Breach of contract, such as delay or overdue

• •Due to economic or contractual reasons related to the borrower’s financial difficulties, the company gives the borrower a concession which the company woudn’t considered;

• •The borrower is likely to file for bankruptcy or other financial reorganization; or

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• •Due to financial difficulties, the active market for this financial asset disappears.

The allowance loss for financial assets measured at amortized cost is deducted from the

asset’s book value. Through other comprehensive gains and losses, the fair value of the debt instrument for investment is measured by adjusting the income and recognized in other comprehensive gains and losses (without reducing the asset's book value).

When the company cannot reasonably expect the recovery of financial assets as a whole

or part of it, the company directly reduces the total book value of its financial assets. For corporate accounts, the company individually analyzes the timing and amount of write-off based on whether it is reasonably expected to be recoverable. The company expects that the amount of written-off will not be materially reversed. However,

financial

assets that have been written off can still be enforced to comply with the company's procedures for recovering overdue amounts.

1. Delisting of financial assets

The company only terminates the contractual rights from the cash flow of the asset, or the financial asset has been transferred and almost all the risks and rewards of the asset ownership have been transferred to other companies, or almost no ownership has been transferred or retained and not kept under the control of the financial asset, the financial asset is delisted.

If the company signs a transaction to transfer financial assets that still retains all or almost all risks and rewards of ownership of the transferred assets, it will continue to be recognized on the balance sheet.

1. Financial liabilities and equity instruments:

2. Classification of liabilities or equity

The debt and equity instruments issued by the company are classified as financial liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

1. Equity transaction

An equity instrument refers to any contract that recognizes the remaining equity of the consolidated company after deducting all its liabilities from its assets. The equity instruments issued by the company are recognized at the amount obtained after deducting the cost of direct issuance.

1. Treasury stock

When repurchasing the equity instruments recognized by the company, the consideration paid (including directly attributable costs) is recognized as a reduction in equity. The repurchased shares are classified as treasury stock. The received amount of

11

subsequent sales or re-issuance of treasury stocks is recognized as an increase in equity and the surplus or loss incurred by the transaction will be recognized as capital reserve or retained surplus (if the capital reserve is insufficient to offset).

1. Financial liabilities

Financial liabilities are classified as amortized cost or measured at fair value through profit and loss. If financial liabilities are held for trading, derivatives, or designated at the time of initial recognition, they are classified as measured at fair value through income. Financial liabilities measured at fair value through income are measured at fair value, and its related net profits and losses, including any interest expenses, are recognized in income.

Other financial liabilities are subsequently measured at the cost after amortization using the effective interest method. Interest expenses and gains and losses from exchange are recognized in income. Any profit or loss at the time of exclusion is also recognized in income.

1. Delisting of financial liabilities

The company delists financial liabilities when contractual obligations have been fulfilled, cancelled or expired. When the financial liability terms are modified and there is a significant difference in the cash flow of the liabilities after the modification, the original financial liabilities will be delisted and the new financial liabilities will be recognized at fair value based on the modified terms.

When delisting financial liabilities, the difference between its book value and the total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) is recognized as income.

1. Offset between financial assets and liabilities

Financial assets and financial liabilities are only offset when the company currently has legally enforceable rights to offset and intends to settle on a net amount or realize assets and liquidate liabilities at the same time. Such offset will be expressed on the balance sheet as a net amount.

• (8) Inventory

Inventory is measured by the lower of cost and net realizable value. Cost includes the acquisition, production or processing costs and other costs incurred to bring inventory to the available location and status. Such inventory is calculated by the weighted average method. The cost of finished goods and work-in-progress inventory includes manufacturing expenses that are amortized in proportion to normal production capacity.

Net realizable value refers to the estimated selling price under normal operations minuses the

estimated costs required to complete the project and the estimated costs required to complete the sale.

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• (9) Investment-related enterprises

Affiliated companies are those companies that have significant influence over their financial and operating policies but are not controlled or jointly controlled.

The consolidated company shall adopt the equity method to deal with the equity of the related companies. Under the equity method, the original acquisition is recognized based on cost, and the investment cost includes the cost of the transaction. The carrying amount of an investment-related enterprise includes the goodwill identified at the time of the original investment, less any accumulated impairment losses.

The consolidated financial statement includes from the date of significant influence to the date of loss of significant influence. After adjustments to the consistency of the consolidated company's accounting policies, the consolidated company recognizes the profit and loss of the investment-related enterprise and other amount of comprehensive profit and loss. When the related company's equity changes in non-profit and loss and other comprehensive profit and loss do not affect the shareholding ratio of the consolidated company, the consolidated company will be recognized as a capital reserve according to the shareholding ratio.

The unrealized benefits and losses arising from the exchange between the consolidated company and the affiliated company shall be recognized in the enterprise's financial statements only within the scope of the non-related investor's interest in the affiliated enterprise.

When the consolidated company should recognise the proportion of the affiliated company’s loss equal to or exceeds its equity in the affiliated company, it will stop recognizing its loss, but only when statutory obligations, deductions or payments have been made on behalf of the invested company within the scope, recognize additional losses and related liabilities.

• (10) Property, plant, and equipment

• Recognition and measurement

Property, plant and equipment items are measured by cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the major components of property, plant and equipment have different durability, they are treated as separate items (main components) of property, plant and equipment.

• The property, plant and equipment gains or loss by disposal is recognized in income.

• 1. Follow-up costs

Subsequent expenditures are only capitalized when their future economic benefits are likely to flow into the consolidated company.

1. Amortization

Depreciation is calculated based on the cost of assets minus the residual value, and the straight-line method is recognized in profit or loss within the estimated useful life of each component.

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The land is not subject to depreciation.

The estimated service life of the current period and the comparative period is as follows:

• (1) Housing and construction: 2 ~ 55 years

• (2) Machine equipment: 2 ~ 8 years

• (3) Others: Except that lease improvements are listed according to the lease term, the rest are 2 to 8 years.

The consolidated company reviews the depreciation method, durability, and residual value on each reporting day and makes appropriate adjustments when necessary.

• (11) Lease

• Lease judgment

The consolidated company evaluates whether the contract is a lease or contains a lease on

the

establishment date. If the contract transfers control over the use of the identified asset for a period of time in exchange for consideration, the contract is a lease or contains a lease. In order to evaluate whether the contract is a lease, the company evaluates the following items:

• (1) The contract involves the use of an identified asset. The identified asset is specified in the contract or implied by the time when it is available for use. Its entity can distinguish or represent substantially all of its production capacity. If the supplier has substantive rights to replace the asset, the asset is not an identified asset; and

• (2) The customer has the right to obtain almost all economic benefits from the use of the identified assets throughout the period of use; and

• (3) The client obtains the right to lead the use of identified assets when one of the following conditions is met:

• ‧ The customer has the right to lead the use and purpose of the identified assets

• throughout the use period; or

• ‧ The relevant decisions about the use method and purpose of the asset are determined in

• advance, and:

– The customer has the right to operate the asset during the entire use period, and the supplier does not have the right to change the operation instructions; or

– The way the customer designs the asset has pre-determined the way and purpose of use for the entire period of use.

2. Lessee

The company recognizes the right-of-use asset and lease liability on the lease start date. The right-of-use asset is originally measured at cost, which includes the original measured amount of the lease liability, adjusts any lease payments paid on or before the lease start date, and adds the original direct cost incurred and the estimated cost of dismantling, removing the underlying asset and restoring its location or underlying asset, and deducting

14

any leasing incentives received.

The right-of-use asset is subsequently depreciated on a straight-line basis between the start of the lease and the end of the end-of-life of the right-of-use asset or the end of the lease period. In addition, the consolidated company periodically assesses whether the right-of-use asset is impaired and processes any impairment loss that has occurred, and cooperates to adjust the right-of-use asset when the lease liability is re-measured.

Lease liabilities are originally measured by the present value of the lease payments that have not been paid on the lease start date. If the implied interest rate of the lease is easy to determine, the discount rate is that rate. If it is not easy to determine, the incremental borrowing rate of the consolidated company is used. Generally speaking, the consolidated company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of lease liabilities include:

• (1) Fixed payment, including substantial fixed payment;

• (2) The lease payment depends on the change of an index or fee rate, the original measurement is based on the index or rate of the lease start date;

• (3) The guaranteed amount of residual value expected to be paid; and

• (4) When reasonably determined that the purchase option or lease termination option will be exercised, the exercise price or the penalty payable.

The lease liability is subsequently accrued by the effective interest method, and its amount is measured when the following occurs:

• (1) Changes in the index or rate used to determine lease payments result in changes in the

future lease payments;

• (2) The guaranteed amount of residual value expected to be paid has changed;

• (3) The evaluation of the underlying asset purchase option has changed;

• (4) The estimate of whether to exercise the extension or termination option has changed, and the assessment of the lease period has been changed;

• (5) Modification of lease subject, scope or other terms.

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

For lease modifications that reduce the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect the partial or full termination of the lease, and the difference between the lease and the re-measured amount of the lease liability is recognized in profit or loss.

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The consolidated company expresses the right-of-use assets and lease liabilities that do not meet the definition of investment real estate as separate line items in the balance sheet.

1. Lessor

The transaction of the company as the lessor is to classify the lease contract according to whether it transfers almost all the risks and rewards attached to the ownership of the underlying asset on the date of the lease establishment. If it is classified as a financial lease, otherwise it is classified as an operating lease. At the time of evaluation, the consolidated company considers whether it covers the relevant specific indicators such as whether it covers the main part of the economic life of the underlying asset during the lease period.

If the agreement includes lease and non-lease components, the consolidated company uses IFRS 15 to distribute the consideration in the contract.

• (12) Impairment of non-financial assets

The company assesses on each reporting day whether there is any indication that the carrying amount of non-financial assets (other than inventory, contract assets, deferred income tax assets) may be impaired. .

For the purpose of impairment testing, a group of assets whose cash inflows are largely independent of the cash inflows of other individual assets or asset groups is used as the smallest identifiable asset group.

The recoverable amount is the higher of the fair value of individual assets or cash-generating units minus the cost of sales and its use value. When assessing value in use, the estimated future cash flow is converted to the present value at a pre-tax discount rate, which should reflect the current market assessment of the time value of money and the specific risks of the asset or cash-generating unit. If the recoverable amount of an individual asset or

cash-generating unit is lower than the carrying amount, an impairment loss is recognized. Impairment losses are recognized immediately in the current profit and loss.

• (13) Revenue recognition

• Revenue from customer contracts

• Revenue is measured by the consideration expected to be obtained for the transfer of goods or services. The consolidated company recognizes revenue when the control of goods or services is transferred to the customer and the performance obligations are met. The company is explained as follows according to the main income items:

• (1) Selling goods

The company recognizes revenue when the control of the product is transferred. The transfer of control of the product means that the product has been delivered to the customer, the customer can fully determine the sales channel and price and there is no unfulfilled obligation that will affect the customer's acceptance of the product.

16

Delivery occurs when the product is shipped to a specific location, its obsolescence and risk of loss have been transferred to the customer, and the customer has accepted the

product in accordance with the sales contract, the acceptance terms have lapsed, or the company has objective evidence that all acceptance conditions have been met. The company’s average credit period is 90 days, which is consistent with the

industry’s practice, so it does not include financing elements.

The company recognizes the accounts receivable when delivering the goods, because the company has the right to receive the consideration unconditionally at that time. (2) Construction contract

The company is engaged in public construction business. Since the assets are controlled by customers at the time of construction, the revenue is gradually recognized over time based on the proportion of the engineering costs incurred so far to the estimated total contract costs. The contract includes fixed and variable consideration. The customer pays a fixed amount according to the agreed time. Some changes in the consideration are estimated using the accumulated experience in the past as the expected value; other changes in the consideration are estimated based on the most likely amount. Considering that the construction progress of public works is influenced by factors that are not under the control of the consolidated company, the rewards for early completion are usually limited. The consolidated company only recognizes revenue within the scope of the cumulative income height that is unlikely to undergo a major turnaround. If the amount of the recognized income has not been requested, it is recognized as a contract asset. When there is an unconditional right to the consideration, the contract asset is transferred to the accounts receivable.

If it is not possible to reasonably measure the degree of completion of the performance obligations of the engineering contract, contract revenue is recognized only within the range of expected recoverable costs.

When the company anticipates that the inevitable cost of fulfilling the obligations of a construction contract exceeds the expected gains from the contract, the liability provision for the lossy contract is recognized.

If the situation changes, the estimates of income, cost, and degree of completion will be revised, and during the period when the management is informed of the change in the situation, the resulting changes will be reflected in income.

The company provides standard warranty for public construction that conforms to the agreed specifications and has recognized warranty liability for this obligation.

(3) Financial components

The company expects that the time between the transfer of all customer contracts for goods or services to the customer and the time for the customer to pay for the goods or

17

services will not exceed one year. Therefore, the company does not adjust the monetary time value of the transaction price.

• (14) Cost of customer contract

• The incremental cost of obtaining a contract

If the company expects to recover the incremental cost of obtaining a customer contract, the cost is recognized as an asset. The incremental cost of obtaining a contract is the cost incurred in obtaining a customer contract and not incurred if the contract is not obtained. The cost of obtaining a contract that will occur regardless of whether the contract is obtained is recognized as an expense when incurred, unless such cost is clearly chargeable to the customer regardless of whether the contract has been obtained.

The company adopts the standard practical expedient method. If the incremental cost of obtaining a contract is recognized as an asset and the amortization period of the asset is within one year, it is recognized as an expense when the incremental cost occurs.

1. The cost of fulfilling the contract

If the costs incurred in fulfilling the customer's contract are not within the scope of other standards (International Accounting Standard No. 2 "Inventory", International Accounting Standard No. 16 "Real Estate, Plant and Equipment" or International Accounting Standard No. 38 "Intangible Assets" "), The consolidated company will only begin when these costs are directly related to the contract or clearly identifiable expected contract, will generate or strengthen resources that will be used to meet (or continue to meet) performance obligations in the future, and are expected to be recovered. Such costs are recognized as assets.

General and administrative costs, wasted raw materials used to fulfill the contract but are not reflected in the contract price, labor or other resource costs, costs related to fulfilled (or partially fulfilled) performance obligations, and inability to distinguish between unsatisfied and unsatisfied performance. Costs related to obligations or fulfilled (or partially fulfilled) performance obligations are recognized as expenses when incurred.

• (15) Government subsidy

When the consolidated company can receive government subsidies related to salary expenditures, the unconditional subsidies are recognized as other income. For other asset-related subsidies, when the company can reasonably be sure that it will comply with the conditions attached to the government subsidy and will receive the subsidy, such subsidies will be recognized as deferred income at fair value and recognize the deferred income as other income on a systematic basis within the useful life of the asset. For compensating the consolidated company's expenses or losses, such subsidies are recognized in income on a systematic basis and its related expenses as well are recognized in income.

• (16) Employee benefits

• Determine the withdrawal plan

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The obligation to determine the pension plan is recognized as an expense during the service period of the employee.

1. Determine the welfare plan

The company's net obligation to determine the benefit plan is calculated for each benefit plan based on the present value of the employee's future benefits earned during the current or previous period of service, and the fair value of any plan assets is deducted.

The determination of welfare obligations is carried out annually by a qualified actuary based on the expected unit welfare method. When the calculation result may be beneficial to the company, the recognized asset is limited to the present value of any economic benefits that may be obtained in the form of refunding the withdrawal from the plan or reducing the future withdrawal from the plan. When calculating the present value of economic benefits, any minimum funding requirements are considered.

The re-measured amount of net-determined welfare liabilities, including actuarial gains and losses, planned asset compensation (excluding interest), and any changes in the asset ceiling effect (excluding interest) are immediately recognized in other comprehensive profit and loss and accumulated in retained earnings . The company determines the net interest expense (income) of the net determined benefit liability (asset), using the net determined benefit liability (asset) and discount rate determined at the beginning of the annual reporting period. The net interest expense and other expenses that determine the benefit plan are recognized in profit or loss.

When the plan is revised or reduced, the number of changes in welfare related to previous service costs or reduced benefits or losses is immediately recognized as profit or loss. When liquidation occurs, the company recognizes and determines the liquidation profit and loss of the welfare plan.

1. Short-term employee benefits

Short-term employee benefit obligations are recognized as expenses when services are provided. If the company has current statutory or presumptive payment obligations due to employees providing services in the past, and the obligation can be reliably estimated, the amount is recognized as a liability.

• (17) Share-based payment transaction

The share-based payment agreement for equity settlement is based on the fair value of the payment date. During the vesting period of the reward, the expense is recognized and the relative equity is increased. The recognized expense is adjusted according to the expected amount of rewards that meet the service conditions and non-market-priced vested conditions; and the final recognized amount is measured on the basis of the amount of rewards that meet the service requirements and non-market-priced vested conditions on the vesting day.

The non-vested conditions for the share-based payment of rewards have been reflected in the measurement of the daily fair value of the share-based payment and the difference

19

between the expected and actual results does not need to be verified and adjusted.

The fair value of amount payable to employees for cash-delivered share appreciation rights is to recognize expenses and increase relative liabilities during the period when employees can obtain unconditional remuneration. The liability is remeasured on the basis of the fair value of the share appreciation rights on each reporting date and settlement date, and any changes in it are recognized as income.

(18) Income tax

Income tax includes current and deferred income tax. Except for those related to business consolidations or related items recognized directly in equity or other comprehensive gains or loss, current income tax and deferred income tax should be recognized in income.

Current income tax includes the estimated income tax payable or tax receivable payable based on the taxable income (loss) of the current year and any adjustments to income tax payable or tax receivable receivable in the previous year. The amount is based on the statutory tax rate on the reporting date or the tax rate of substantive legislation to measure the best estimate of the amount expected to be paid or received.

Deferred income tax measures and recognizes the temporary difference between the book value of assets and liabilities for financial statementing purposes and their tax base. Temporary differences arising from the following circumstances are not recognized as deferred income tax:

1. Assets or liabilities originally recognized in a transaction that is not a business

2. consolidation and does not affect accounting profits and taxable income (loss) at the time of the transaction;

3. Due to temporary differences arising from investment in subsidiaries, affiliated companies and joint venture interests, the company can control the timing of the temporary difference reversal and is likely to not revert in the foreseeable future.

Deferred income tax is measured at the tax rate at which the temporary difference is

• expected to reverse, and is based on the legal tax rate or substantive legislative tax rate on the reporting date.

The company will only offset the deferred income tax assets and deferred income tax liabilities when it meets the following conditions at the same time:

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

2. Deferred income tax assets and deferred income tax liabilities are related to one of the following taxpayers subject to income tax levied by the same tax authority; 1. The same taxpayer; or

3. Different taxpayers, but each entity intends to pay off the current income tax liabilities and assets on a net basis for each future period in which significant amounts of deferred income tax assets are expected to be recovered and deferred income tax liabilities are

20

expected to be settled, or at the same time Assets and liquidation of liabilities.

For the unused taxable losses and unused income tax credits at the later stage of transfer and deduction, the temporary difference can be recognized as deferred income tax assets in the range where there is a possibility that future taxable income will be available. It will be reassessed on each reporting day to reduce the relevant income tax benefits to the extent that it is not likely to be realized; or to revert the amount that has been reduced to the extent that it is likely to have sufficient taxable income.

(19) Earnings per share

The consolidated company lists the basic and diluted earnings per share attributable to the holders of the company's common equity. The basic earnings per share of the consolidated company is calculated by dividing the profit and loss attributable to the holders of the common stock equity of the company by the current weighted average number of common shares outstanding. Diluted earnings per share is calculated by adjusting the impact of all potential diluted common shares by dividing the profit and loss attributable to the common equity holders of the company and the weighted average number of common shares outstanding. The potential dilutive common stock of the consolidated company includes the employee's stock options and estimated employee compensation.

• (20) Department Information

The operating department is an integral part of the consolidated company and is engaged in business activities that may earn income and incur expenses (including income and expenses related to transactions between other components in the consolidated company). The operating results of all operating departments are regularly reviewed by the chief operating decision maker of the consolidated company to make decisions on the allocation of resources to that department and evaluate its performance. Each operating department has separate financial information.

5. Major sources of uncertainty in significant accounting judgments, estimates and assumptions

When the management team prepares this consolidated financial statement in accordance with the International Financial Reporting Standards recognized by the Financial Supervisory Commission, it must make judgments, estimates and assumptions that will affect the adoption of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Management team continues to review estimates and basic assumptions, and changes in accounting estimates are recognized during the period of change and future periods affected.

The accounting policy involves significant judgments and has no significant impact on the amount recognized in this consolidated financial statement.

Among uncertainties in assumptions and estimates, the existence of significant risks that will

21

not cause major adjustments for the following year will be as follows:

• (1) Allowance loss for accounts receivable

• The allowance loss for the accounts receivable of the consolidated company is estimated based on the assumption of default risk and expected loss rate. The company considers historical experience, current market conditions and forward-looking estimates on each reporting day to determine the assumptions and input values that must be used when calculating impairments. Please refer to Note 6 (3) for detailed explanations of relevant assumptions and input values.

• (2) Evaluation of inventory

• Since inventory must be measured at the lower of cost and net realizable value, the consolidated company assesses the amount of inventory due to normal wear and tear, obsolescence or no market sales value on the reporting date, and writes down the cost of inventory to net realizable value. This inventory evaluation is mainly based on the product demand in a specific period in the future as the basis for estimation, so it may cause significant changes due to rapid industrial changes. Please refer to Note 6 (4) for details of inventory evaluation and estimation.

6. Explanation of important accounting items

• (1) Cash and Cash equivalent:

Petty cash, cheques and demand deposits Fixed deposits	2022.12.31		2021.12.31
	$ 773,434 104,414 $ 877,848		762,775 - 762,775

Please refer to Note 6 (20) for the disclosure of interest rate risk and sensitivity analysis of the consolidated company's financial assets and liabilities.

The consolidated company’s fixed deposits, which is for more than three months, as of December 31, 2022 and 2021, were $88,160 thousands and $131,180 thousands NT dollars. Because they were not used as the consolidated company’s short-term assets, the accounts were recognized under other financial assets-current items. Please refer to note 6 (8) for details.

• (2) Financial assets measured at fair value through other comprehensive gains and losses:

Equity instruments measured at fair value through other comprehensive gains and losses： Domestic listed (counter) company stocks-Powertip	2022.12.31 $ 225,389	2021.12.31 313,832

22

Domestic unlisted (counter) company stocks-WK 9 ASSOCIATES LTD Domestic unlisted (counter) company stocks－Other U.S. listed company stocks TOTAL	272,806 310,771 149,560 180,168 724 964
	$ 648,479 805,735

1. Investment in equity instruments measured at fair value through other comprehensive gains and losses

Due to the above-mentioned designation as an equity instrument investment measured at fair value through other comprehensive gains and losses, the dividend income recognized in 2022 and 2021 were $49,717,000 and $64,569,000, respectively.

1. For credit risk and market risk information, please refer to Note 6 (20).

2. None of the consolidated company's financial assets measured at fair value through other comprehensive gains and losses have been provided as pledge and guarantees as of December 31, 2022 and 2021.

3. (3) Notes receivable, accounts receivable and collections

－ Notes receivable Occurs due to business Accounts receivable － Accounts receivable Related parties Collection Deduct ： Allowance for bad debts

2022.12.31	2021.12.31 42,609 432,218 62,402 311,510 (318,250) 530,489
$ 38,867 397,080 67,745 311,590 (318,312) $ 496,970

The consolidated company adopts a simplified method to estimate expected credit losses for all notes receivable and accounts receivable, that is, using lifetime expected credit losses to measure. For the purpose of measurement, these notes and accounts receivable are based on the basis of representing customers’ common credit risk characteristics of the contractual terms and ability to pay all due amounts are grouped and forward-looking information has been incorporated, including general economic and related industry information. The expected credit loss of the consolidated company's notes and accounts receivable analysis is as follow:

	2022.12.31
Accounts	Weighted	Expected credit
receivable	avg.expected	loss during the

23

Not overdue Less than 90 days overdue 91~365 days overdue More than 366 days overdue Not overdue Less than 90 days overdue More than 366 days overdue	Book value $ 489,078 8,314 255 317,635	credit loss ratio		allowance period (36) (438) (203) (317,635)
		0.01% 5.26% 80% 100% 2021.12.31
	$ 815,282			(318,312)
				Expected credit loss during the allowance period (37) (1,005) (1,798) (315,410)
	Accounts receivable Book value $ 509,394 19,527 4,408 315,410	Weighted avg.expected credit loss ratio
		0.01% 5.15% 40.77% 100%
	$ 848,739			(318,250)

The consolidated company's notes receivables, accounts receivable and collections of the allowance loss’s statement of changes are as follows:

Beginning balance Recognized impairment loss Reversal of impairment loss Foreign exchange gains or losses Ending balance	2022
	$ 318,312 318,250

None of the consolidated company's notes and accounts receivables have been provided as pledge and guarantees as of December 31, 2022 and 2021.

(4) Inventory

1. The inventory details are as follows:

24

Raw materials and consumables Semi-finished goods WIP Finished goods Raw materials in transit	2022.12.31	2021.12.31 90,188 357 64,489 106,583 5,047 266,664
	$ 71,973 26,652 24,647 76,136 1,025 $ 200,433

2. The consolidated company recognizes the loss of inventory depreciation due to inventory
write-down to the net realizable value, or the increase in the net realizable value due to the
improvement of economic conditions and the reduction of the recognized cost of goods
sold are as follows:
2022 2021
Loss for market price decline and obsolescence.
(Gain from recovery) $ 867 3,397

1. None of the consolidated company's inventories have been provided as pledge and guarantees as of December 31, 2022 and 2021.

2. (5) Investment using the equity method

The consolidated company’s investments using the equity method on the reporting date are listed below:

2022.12.31 2021.12.31
Associated companies $ 161,873 142,525
1. The associated companies from the consolidated company that adopt the equity method
are individually insignificant, and their summary financial information is as follows.
Such financial information is the amount included in the company's individual financial
report:

Period-end summary of the equity of individual insignificant associated companies	2022.12.31	2021.12.31 733,750
	$ 846,883

25

Book value Share attributable to the consolidated company： Continuing business unit's current net profit Other comprehensive gain and loss Total comprehensive gain and loss	2022		2021
	$ 28,597 1,740 $ 30,337		31,789 3,747 35,536

2. Guarantee

None of the consolidated company's investment using the equity method has been provided as pledge and guarantees as of December 31, 2022 and 2021.

(6) Property, plant and equipment

The cost and depreciation changes of the consolidated company's property, plant and equipment are as follows:

Cost： Balance as of January 1, 2022 Add Dispose Impact of exchange rate Balance as of December 31, 2022 Balance as of January 1, 2021 Add Depose Reclassify Impact of exchange rate Balance as of December 31, 2021		Property $ 41,360 - - -	Plant 557,903 576 (50,288) 5,742	Equipment 2,739,752 1,411 (46,223) 38,511	Other 338,050 2,846 (29,093) 4,683	Total 3,677,065 4,833 (125,604) 48,936
		$ 41,360	513,933	2,733,451	316,486	3,605,230
		$ 41,360 - - - -	600,862 11,949 (1,087) (51,023) (2,798)	2,828,150 5,800 (73,895) - (20,303)	333,673 9,244 (53,193) 51,023 (2,697)	3,804,045 26,993 (128,175) - (25,798)
		$ 41,360	557,90 2,739,752		338,050	3,677,065

Amortization ：

26

Balance as of January 1, 2022 Amortize Dispose Impact of exchange rate Balance as of December 31, 2022 Balance as of January 1, 2021 Amortize Dispose Reclassify Impact of exchange rate Balance as of December 31, 2021		$ - 318,218 2,582,064 321,614 3,221,896 - 13,647 25,977 7,645 47,269 - (50,100) (46,223) (27,784) (124,107) - 3,374 36,231 4,421 44,026 $ - 285,139 2,598,049 305,896 3,189,084 $ - 355,914 2,648,665 310,769 3,315,348 - 15,228 26,313 15,611 57,152 - (1,087) (73,895) (52,530) (127,512) - (49,982) - 49,982 - - (1,855) (19,019) (2,218) (23,092) $ - 318,218 2,582,064 321,614 3,221,896

Book value ：

Balance as of December 31, 2022 Balance as of December 31, 2021	$ 41,360 228,794 135,402 10,590 416,146 $ 41,360 239,685 157,688 16,436 455,169

(7) Right-of-use asset

The cost and depreciation of the consolidated company's leased land, houses and buildings, etc., are detailed as follows:

Cost of right-of use asset： Balance as of January 1, 2022 Increase Decrease Impact of exchange rate Balance as of December 31, 2022 Balance as of January 1, 2021 Increase	Property $ 58,663 - (4,070) 747	Plant 87,640 9,014 (25,160) 1,076	Total 146,303 9,014 (29,230) 1,823
	$ 55,340	72,570	127,910
	$ 57,707 1,342	135,309 6,460	193,016 7,802

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Decrease Impact of exchange rate Balance as of December 31, 2021 Amortization of right-of use asset: Balance as of January 1, 2022 Current amortization Decrease Impact of exchange rate Balance as of December 31, 2022 Balance as of January 1, 2021 Current amortization Decrease Impact of exchange rate Balance as of December 31, 2021 Book value： Balance as of December 31, 2022 Balance as of December 31, 2021

- (53,574) (53,574) (386) (555) (941) $ 58,663 87,640 146,303 $ 7,186 28,330 35,516 2,388 14,907 17,295 (3,929) (18,734) (22,663) 46 314 360 $ 5,691 24,817 30,508 $ 4,810 67,929 72,739 2,374 14,044 16,418 - (53,574) (53,574) 2 (69) (67) $ 7,186 28,330 35,516 $ 49,649 47,753 97,402 $ 51,477 59,310 110,787

1. The increase in right-of-use assets in 2022 and 2021 is due to the change in the lease period of the consolidated company's retail store and the extension of the lease period of land and plant. Please refer to Note 6 (11) for details on the related changes in lease liabilities.

2. The decrease of right-of-use assets in 2021 and 2020 is due to the expiry of the lease agreement for part of the leased plant of the consolidated company. The result of the rent negotiation is not as expected and it is not planned to renew the lease according to the original plan. For detailed explanations about the changes in the lease liability, please refer to Note 6 (11).

3. (8) Other financial assets-current

2022.12.31

2021.12.31

28

Other receivables Restricted assets-fixed deposits Other	$ 83,569 88,160 62,617 $ 234,346	102,114 131,180 65,479
		298,773

None of the consolidated company's other receivable have been impaired as of December 31, 2022 and 2021.

• (9) Short-term loans

022 and 2021. term loans
Bank Guaranteed Loan Unused quota Interest rate range	2022.12.31 2021.12.31 $ 60,00 60,00
	$ -		-
		2.20%~2.34%	1.44%

1. For the risk information of the interest rate and liquidity risk of the consolidated company, please refer to Note 6 (20).

2. Please refer to note 8 for details of the circumstances in which the consolidated

company uses assets to set mortgages for short-term borrowings.

• (10) Other payables and other current liabilities

r payables and other current liabilities
		2022.12.31	2021.12.31
Payable expenses	$	29,517	31,868
Salaries and bonuses payable		38,047	41,760
Payable employee dividends and remuneration to		29,950	34,806
directors and supervisors
Pension payable		11,121	10,967
Other		4,885	8,592
	$	113,520	127,993
e liability
ook values of the consolidated company's lease	liabilities are as follows:
		2022.12.31	2021.12.31
Current
	$	15,796	15,300

• (11) Lease liability

The book values of the consolidated company's lease liabilities are as follows:

29

Non-current

$

36,581 49,232

For maturity analysis, please refer to Note 6 (20) Financial Instruments. The amounts recognized in income are as follows:

2022 Interest expense on lease liability $ 1,829 Changes in lease payments that are not included in the measurement of lease liabilities and Costs for short-term leases and low-value leased assets $ 198 mounts recognized in the cash flow statement are as follows: 2022 Total cash outflow from lease $ 17,483	2022 $ 1,829	2022 $ 1,829	2021 2,090
	$ 198		57
			2021 16,489
	$ 17,483

The amounts recognized in the cash flow statement are as follows:

The consolidated company’s renews period for the lease term of land, houses and buildings as office premises and factory plants is usually three to five years. In addition, the land’s right-of-use in China usually lasts for 50 years. Part of the lease includes the option to extend the same period as the original contract when the lease term expires. The lease payments of some contracts depend on changes in the local price index.

Part of the contract also stipulates that the consolidated company advance the tax and insurance expenses related to the real estate to the lessor. Such expenses are usually incurred once a year.

• (12) Employee benefits

• Determine the benefit plan

The consolidated company determines the adjustment between the present values of welfare

obligations and the fair value of project assets as follows

Determine the present value of welfare obligations Fair value of project assets Net Definite Benefits Net Liabilities	2022.12.31	2021.12.31 (38,101) 15,507 (22,594)
	$ (35,493) 15,633 $ (19,860)

The consolidated company’s definite benefit plan is transferred to the special labor retirement reserve account of the Bank of Taiwan. The retirement payment of each employee which is subject to the Labor Standards Act is calculated based on the base number of years of service and the average salary of the six months before retirement. (1) Project asset composition

The retirement fund allocated by the consolidated company in accordance with the

30

Labor Standards Act is coordinated and managed by Bureau of labor funds under Ministry of Labor (hereinafter referred to as the Labor Fund Bureau). The minimum income allocated shall not be lower than the income calculated based on the two-year fixed deposit interest rate of the local bank.

As of the end of the reporting period, the balance of the consolidated company's Labor Retirement Reserve Special Account in Bank of Taiwan was NT$15,717,000. The information on the use of labor pension funds includes fund return rate and fund asset allocation. Please refer to the information published on the website of Bureau of labor funds under Ministry of Labor.

(2) Determination of changes in the present value of welfare obligations

The consolidated company’s determination of the changes of the present value of welfare obligations in 2022 and 2021 are as follows:

Confirmation of welfare obligations on January 1 Current service cost and interest Remeasurement of net defined benefit liabilities －Profit (loss) of project asset return －Actuarial losses due to changes in demographic assumptions －Actuarial losses due to changes in financial assumptions Project Benefits paid Confirmation of welfare obligations on December 31	2022		2021
	$ (38,101) (366) (193) - 1,716 1,451 $ (35,493)		(41,072) (281) 1,163 (35) 1,412 712 (38,101)

• (3) Changes in the fair value of project assets

The consolidated company’s changes in the fair value of the assets of the determined benefit plan in 2022 and 2021 are as follows:

fit plan in 2022 and 2021 are as follows:
Fair value of project assets on January 1 Interest income Remeasurement of net defined benefit liabilities －Benefits of project asset remuneration (excluding current interest)	2022 $ 15,507 105 1,213	2021
		15,717 46 232

31

Amount allocated to the project Project Benefits paid Fair value of project assets on December 31	259 (1,451) $ 15,633	224 (712) 15,507

• (4) Expenses recognized as profit and loss

List of recognized expenses in 2022 and 2021 is as follow:

Current service cost Net interest on net confirmed benefit liabilities Management fees	2022	2021 160 75 235 2021 235
	$ 104 157 $ 261 2022
	$ 261

• (5) Re-measured amount of net confirmed benefit liabilities recognized as other comprehensive gains and losses

The consolidated company's accumulated remeasured amount of net defined benefit liabilities recognized in other comprehensive income is as follows:

Accumulated balance on January 1 Recognized loss (profit) in the current period Accumulated balance on December 31	2022 $ (9,485) (2,736) $ (12,221)	2021 (6,713) (2,772) (9,485)

(6) Actuarial assumption

The major actuarial assumptions used by the consolidated company to determine the present value of welfare obligations at the end of the financial report are as follows:

Discount rate Future salary increase

2022.12.31	2021.12.31 0.70% 2.00%
1.25% 2.00%

The consolidated company expects to pay NT$423,000 to the definite benefit plan within one year after the reporting date in 2022.

The weighted average duration of the defined benefit plan is 8 years.

(7) Sensitivity analysis

32

When calculating and determining the present value of welfare obligations, the consolidated company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet, including discount rates, employee turnover rates, and future salary changes, etc. Any change in actuarial assumptions may materially affect the amount of the company's determined welfare obligations.

When adopting the main actuarial assumptions, the impact of changes in determining the present value of welfare obligations in 2022 and as of December 31, 2021 is as follows:

December 31, 2022 Discount rate Future salary increase December 31, 2021 Discount rate Future salary increase	Impact on determined welfare obligations Increase 0.25％ Decrease0.25％ $ (738) 763 756 (734) (849) 881 867 (840)
	Increase 0.25％ $ (738) 756 (849) 867

The sensitivity analysis above is based on the analysis of the impact of a single assumption change while other assumptions remain unchanged. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities in the balance sheet.

The methods and assumptions used in preparing the sensitivity analysis in this period are the same as those in the previous period.

2. Determine the allocation plan

The consolidated company's defined allocation plan is based on the labor pension regulations and is allocated to Bureau of labor insurance’s labor pension individual account at a rate of 6% of the labor's monthly salary. Under this plan, after the consolidated company allocates a fixed amount to Bureau of labor insurance, there is no statutory or constructive obligation to pay additional amounts. The pension expenses under the method for determining the appropriation of pensions in 2022 and 2021 are NT$3,690,000 and NT$3,332,000 respectively, which have been allocated to Bureau of labor insurance.

In 2022 and 2021, the overseas subsidiaries of the consolidated company will recognize retirement pension expenses of NT$12,907,000 and NT$12,336,000 respectively in accordance with local government regulations.

• (13) Income tax

33

1. Income tax expense

2. (1) The consolidated company's income tax expenses are as follows:

Current income tax expense Occurred in the current period Finance and tax difference Income tax assessment difference Deferred income tax expense The occurrence and reversal of temporary differences Income tax expense	2022 $ 49,391 61 3,029 52,481 (36,294) $ 16,187	2021 51,255 1,899 - 53,154 (1,748) 51,406

• (2) The details of income tax (benefits) expenses recognized by the consolidated company under other comprehensive gains and losses are as follows:

• The consolidated company’s details of income tax (benefits) expenses recognized under other comprehensive gains and losses in 2022 and 2021 are as follows:

Items not reclassified to profit or loss： The actuarial profit (loss) of the defined benefit welfare plan	2022	2021 554
	$ 547

• (3) The reconciliation between the consolidated company's income tax expenses and pre-tax net profit is adjusted as follows:

Net profit before tax Income tax calculated based on the domestic tax rate of the consolidated company's location Impact of tax rate differences in foreign jurisdictions Recognize the net investment interest using the equity method Tax adjustment Undistributed surplus levied 5% Differences between income tax assessment estimation	2022	2021 304,202 60,840 (5,937) (9,189) 3,793 - 1,899 51,406
	$ 211,564 42,312 3,260 (28,925) (6,219) 2,669 3,090 $ 16,187

2. Deferred income tax assets and liabilities

• (1) Unrecognized deferred income tax liabilities

The items that the consolidated company's overseas investee companies have not

34

recognized as deferred income tax liabilities are as follows:

Accumulated unrealized profit share with overseas investee companies	2022.12.31 $ 366,666	2021.12.31 324,969

(2) Unrecognized deferred income tax assets

The items that the consolidated company's overseas investee companies have not recognized as deferred income tax assets are as follows:

Accumulated unrealized loss share with overseas investee companies	2022.12.31 $ 192,359	2021.12.31 187,572

The temporary differences related to overseas investee companies are not recognized as deferred income tax assets and liabilities because the consolidated company can control the timing of the reversal of the temporary differences, and it is likely that they will not revert in the foreseeable future in 2022 and as of December 31, 2021.

Other items not recognized as deferred income tax assets of KoBrite Taiwani, a subsidiary of the consolidated company, are as follows:

Temporary differences can be reduced Taxable loss	2022.12.31 $ 121 55,922	2021.12.31 163 62,618 62,781
	$ 56,043

Taxable losses are in accordance with the Income Tax Act. The losses in the previous ten years are deducted from the net profit of the current year as approved by Revenue Service Office, and then the income tax is re-assessed. Such item was not recognized as deferred income tax assets because it is unlikely that KoBrite Taiwan, a subsidiary of the company, will have sufficient taxable income for the temporary difference in the future.

As of December 31, 2022, the company's subsidiary KoBrite Taiwan’s undeducted losses and deduction periods are as follows:

Year of deficit Undeducted loss The last year for deduction 2013 (Approved number) 54,151[2023 ]

35

2014 (Approved number) 2015 (Approved number) 2016 (Approved number) 2017 (Approved number) 2018 (Approved number) 2020 (Declared number) 2021 (Declared number) 2022 (Estimated number)	58,8552024 48,2212025 22,8322026 15,5742027 26,4512028 19,3072030 4,9402031 29,2802032 $ **279,611 **

(3) Recognized deferred tax assets and liabilities

The changes in the consolidated company's deferred income tax assets and liabilities are as follows:

Deferred income tax asset： Balance as of January 1, 2022 (Debit)/Credit Income Statement Balance as of December 31, 2022 Balance as of January 1, 2021 (Debit)/Credit Income Statement Balance as of December 31, 2021 Deferred income tax liability： Balance as of January 1, 2022 (Debit)/Credit Income Statement	Defined benefitplan $ 7,457 -	Other Total 13,618 21,075 17,719 17,719 31,337 38,794 13,514 20,969 104 106 13,618 21,075 Other Total 18,575 20,470 (18,575) (18,575)
	$ 7,457
	$ 7,455 2
	$ 7,457
	Defined benefitplan $ 1,895 -

36

(Debit)/Credit other comprehensive gain/loss Balance as of December 31, 2022 Balance as of January 1, 2021 (Debit)/Credit Income Statement (Debit)/Credit other comprehensive gain/loss Balance as of December 31, 2021	547 - 547 $ 2,442 - 2,442 $ 1,341 20,217 21,558 - (1,642) (1,642) 554 - 554 $ 1,895 18,575 20,470

1. In accordance with the laws of each country of incorporation, the income tax of profitable businesses of the consolidated company shall be declared separately by each individual company and shall not be declared in a consolidated manner.

2. The income tax settlement declarations of the company and its subsidiary KoBrite

Taiwan's profitable business have been approved by the auditing agency till year of 2020.

• (14) Capital and other equity

• Equity

The company’s authorized total capital stock is $3,500,000 thousands. At a par value of $10 per share with total of 350,000 thousand shares. The aforesaid total authorized share capital is all common stock. The issued shares are 173,203 thousand shares and 186,674 thousand shares respectively in 2022 and 2021 and the payment for all issued shares has been received.

1. Capital reserve

The content of the company's capital reserve balance is as follows:

Premium of issued stock Convertible corporate bonds during the redemption period are classified as other items in capital reserve Capital reserve arising from share-based payment transactions Changes in affiliated companies recognized using the equity method Other	2022.12.31		2021.12.31
	$ 266,841 88,350 30,753 1,048 599 $ 387,591		308,780 88,350 30,753 1,179 571 429,633

37

According to the Company Act, the capital reserve must be given priority to make up for the losses before it can be issued to new shares or cash in proportion to the shareholders’ original shares based on the realized capital reserve. The “realized capital reserve” mentioned in the preceding paragraph includes the excess of the issuance of stocks in excess of the par value and the income received from donations. In accordance with “Regulations Governing the Offering and Issuance of Securities by Securities Issuers”, the total amount of the capital reserve that can be allocated for replenishment each year shall not exceed 10% of the paid-in capital.

3. Retained earning

According to the company’s articles of association, if there is a surplus in the annual final accounts, the tax should be paid first and make up for the accumulated losses over the years, then 10% of legal reserve shall be set aside and the special reserve shall be set aside or converted according to the law or the competent authority. If there is still a surplus after, the balance shall be added to the undistributed reserve accumulated in the previous year and the board of directors shall draft a distribution proposal and submit it to the shareholders meeting for a resolution.

In accordance with the Company Act, the company authorizes the board of directors to have more than two-thirds of the directors present and the resolution of more than half of the directors present shall distribute dividends and bonuses or legal reserve stipulated in Article 241, Paragraph 1 of the Company Act and all or part of the paid-in capital. The above all shall be distributed in cash and reported to the board of directors.

Shareholder dividends and employee dividends are issued in two types: stock dividends and cash dividends, of which the ratio of cash dividends shall not be less than 10%. The company's board of directors resolved to distribute cash dividends for 2021 and 2020 earnings on March 17, 2022 and March 18, 2021 respectively. In the shareholders' meeting resolved cash dividends for 2021 and 2020 earnings on June 06, 2022 and August 12, 2021. The dividends distributed to owners are as follows:

2021 Dividend rate Amount Dividends distributed to owners of common stock： Cash $ 1.00173,203	2021 Dividend rate Amount Dividends distributed to owners of common stock： Cash $ 1.00173,203	2020 Dividend rate Amount 0.80137,339	2020 Dividend rate Amount 0.80137,339	2020 Dividend rate Amount 0.80137,339
		Dividend rate
		0.80

On March 14, 2023, the board of directors proposed a profit distribution proposal for 2022. The amount of dividends distributed to owners is as follows:

2022

38

Dividend rate Amount

Dividends distributed to owners of common stock ： Cash $ 0.85 147,223

4. Treasury stock

In 2021, the company subscribed treasury shares to employees at a subscription price of $20 per share, totaling 1,529,000 shares. After deducting various tax expenses, the recognized capital reserve was $7,653,000, and the treasury shares were adjusted to $22,858,000.

As of December 31, 2020 and 2021, the number of shares repurchased as treasury stock were 10,000 thousand shares and 8,471 thousand shares.

On August 11, 2021, the company passed a resolution of the board of directors to cancel 8,471,000 treasury shares that had not been transferred to employees. The base date of capital reduction is October 9, 2021, and the change registration has been completed. As of December 31, 2022 and 2021, the number of treasury shares bought back was 0,000 shares and 8,471,000 shares respectively.5. Other equity (net after tax)

Balance as of January 1, 2022 difference arising from the exchange of net assets of foreign operating institutions Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses Balance as of December 31, 2022 Balance as of January 1, 2021 difference arising from the exchange of net assets of foreign operating institutions Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses	Difference arising from the exchange of net assets of foreign operating institutions	Unrealized gains and losses of financial assets measured at fair value through other comprehensive gains and losses	Other 113,698 72,828 (146,256) 40,270 51,649 (34,274) 96,628
	$ (229,076) 72,828 -	342,774 - (146,256)
	$ (156,248)	196,518
	$ (194,802) (34,274) -	246,451 - 96,628

39

Dispose of equity instruments measured at fair value through other comprehensive gains and losses Balance as of December 31, 2021	- (305) (305)
	$ (229,076) 342,774 113,698

(15) Earnings per share

1. Basic earnings per share

The basic earnings per share of the consolidated company for 2022 and 2021 are calculated on the basis of the net profit attributable to common equity holders of the company and the weighted average number of outstanding shares of common stocks. The relevant calculations are as follows:

• (1) Net profit attributable to holders of the company's common stocks

2022 Net profit attributable to holders of the company's common stock $ 200,380 (2) The weighted average number of common shares outstanding 2022 Common shares outstanding on January 1 173,203 Impact of treasury stocks - The weighted average number of common shares outstanding on December 31 173,203 2022 (3) Basic earnings per share (NT $) $ 1.16		2022		2022 249,233
				2021 171,674 532
		173,203 - 173,203 2022
				172,206
		2022		2021 1.45
	$ 1.16

2. Diluted earnings per share

The diluted earnings per share for 2022 and 2021 are calculated on the basis of the net profit attributable to common equity holders of the company and the weighted average number of common stocks outstanding after adjusting the dilution effect of all potential common stocks. The relevant calculations are as follow:

• (1) Net profit attributable to the company's common stock holders (diluted)

Net profit attributable to holders of the company’s common stocks (Basically diluted)		2022		2021 249,233
		$ 200,380

• (2) Weighted average number of shares outstanding (diluted) of common stocks (thousand shares)

40

Weighted average number of shares outstanding (basic) The impact of employee stock dividends The weighted average number of common stocks outstanding on December 31 (diluted) Diluted earnings per share (NT$) Diluted earnings per share		2022		2021 172,206 1,256 173,462 2021 1.44
		173,203 1,641
		174,844
		2022
		$ 1.15

• (3) Diluted earnings per share (NT$)

• (16) Revenue from customer contracts

• Revenue breakdown

Major regional markets： China and HK Taiwan United States Korea Other Total Main product/service line： LED components and product manufacturing and sales Construction Other Total			2022		Total 622,131 452,291 158,469 154,850 121,183
	Dept.A $ 302,789 435,684 158,469 154,850 121,183	Dept.B 315,868 - - - -	Dept.C 2,826 16,607 - - -	Other 648 - - - -
	$ 1,172,975	315,868	19,433	648	1,508,924
	$ 852,831 298,315 21,829	286,820 - 29,048	- 16,607 2,826	- - 648	1,139,651 314,922 54,351
	$ 1,172,975	315,868	19,433	648	1,508,924

41

Major regional markets： China and HK Taiwan United States Korea Other Total Main product/service line： LED components and product manufacturing and sales Construction Other Total			2021		Total 702,339 317,934 130,803 211,356 169,654
	Dept.A $ 256,689 305,967 130,803 211,356 169,654	Dept.B 425,679 - - - -	Dept.C 18,752 11,967 - - -	Other 1,219 - - - -
	$ 1,074,469	425,679	30,719	1,219	1,532,086
	$ 963,541 83,226 27,702	383,963 - 41,716	- 11,826 18,893	- - 1,219	1,347,504 95,052 89,530
	$ 1,074,469	425,679	30,719	1,219	1,532,086

2. Contract balance

ract balance
Contract assets- construction	2022.12.31		2021.12.31	2021.1.1 107,420
	$ 315,553		176,783

Please refer to Note 6 (3) for the disclosure of accounts receivable and its impairment. Changes in contract assets are mainly due to the difference between the time when the company transfers goods or services to the customer to meet the performance obligations and the time when the customer pays.

(17) Construction contracts

The details of the contract revenue of the merged company's recognition of construction contracts in 2022 and 2021 based on the percentage of completion method are as follows:

2022.12.31 2021.12.31

The amount of contract revenue recognized as revenue in

the current period

$

314,922

95,052

42

Cumulative costs incurred (including contract costs related to future activities) Add: accumulative total recognized project benefits Cumulative incurred costs and recognized profits Less: accumulative project progress request amount Net Contractual job reported as the total amount of customer accounts receivable for assets Contractual job reported as the total amount of accounts payable to customers for liabilities Retained amount of construction contract

$ 350,128 437,412 43,989 54,900 394,117 492,312 78,564 315,529 $ 315,553 176,783 $ 394,117 492,312 $ 78,564 315,529 $ 80,386 15,610

Please refer to Note 6 (16) for the disclosure of the contract balance and the amount of income.

• (18) Remuneration of employees, directors and independent directors

According to the company’s articles of association, the current year’s pre-tax benefits shall be used to deduct the benefits before the distribution of employee compensation and directors’ remuneration. After retaining the amount of accumulated losses, if there is a balance, the employee’s remuneration shall not be less than 8% and the director and supervisors’ remuneration shall not be more than 2%. The aforementioned employee remuneration which may be issued by stock or cash includes employees from affiliated companies who meet certain conditions.

The company’s remuneration for employees in 2022 and 2021 is NT$18,999,000 and NT$26,461,000 respectively and the remuneration for directors and independent directors is NT$4,750,000 and NT$6,615,000, which are based on the company’s pre-tax net profit for each period. The amount before deduction of employees, directors and independent directors’ remuneration multiplied by the number of employees’ remuneration and directors’ and supervisors’ remuneration as stipulated in the company’s articles of association is the basis for estimation, and is reported as operating costs or operating expenses for 2022 and 2021. If difference between the actual distribution amount in the next year and the estimated amount occurs, such occurrence will be dealt with accordance to the change in accounting estimates and the difference will be recognized as the profit and loss of the next year.

• (19) Non-operating income and expenses

• Interest income

43

The detail of the consolidated company's interest income is as follow:

Interest from bank deposits	2022 $ 7,605	2021 5,310

2. Other income

The detail of the consolidated company’s other income for 2022 and 2021 are as follows:

Rental income Dividend income Other	2022	2021 12,763 64,569 13,049
	$ 6,841 49,717 17,417
	$ 73,975	90,381

3. Other gains and losses

The detail of the consolidated company’s other gains and losses for 2022 and 2021 are as follows:

Net foreign currency exchange gains Gains from disposal of fixed assets Other	2022	2021
	$ (9,373) 995 (3,508)	26,173 171 (3,757)
	$ (11,886)	22,587

(20) Financial instruments

1. Credit risk

2. (1) Exposure of credit risk

The book value of financial assets and contract assets represents the maximum

amount

of credit risk.

• (2) Concentration of credit risk

Since the company has a broad customer base and does not significantly concentrate on transactions with a single customer and the sales area is scattered, there is no significant concentration of the credit risk of accounts receivable. In order to reduce credit risk, the company also regularly and continuously evaluates the financial situation of customers, but usually does not require customers to provide collateral.

44

• (3) Credit risk of accounts receivable

Please refer to Note 6 (3) for the credit risk exposure information of notes and accounts receivable.

Other financial assets measured at amortized cost include other receivables and certificates of deposit, etc. Please refer to Note 6 (8) for details of the impairment provision status on December 31, 2022 and 2021.

All the financial assets listed above are with low credit risk. Therefore, the amount of expected credit losses in twelve months is used to measure the allowance for loss during the period (for the explanation of how the company determines that the credit risk is low, please refer to Note 4 (7)).

2. Liquidity risk

The following table shows the contractual maturity dates of financial liabilities, excluding the effect of estimated interest.

			Contractual
		Book value	cash flow	within 1 yr	1-2yr	above 2yrs
December 31,2022
Non-derivative financial
liabilities
Bank loan	$	60,000	(61,337)	(61,337)	-	-
Notes and Accounts		259,837	(259,837)	(259,837)	-	-
Payable(Including related
parties)
Other payables		108,635	(108,635)	(108,635)	-	-
Lease liabilities		52,377	(55,250)	(17,350)	(17,949)	(19,951)
(including non-current)
	$	480,849	(485,059)	(447,159)	(17,949)	(19,951)
December 31,2021
Non-derivative financial
liabilities
Bank loans	$	60,000	(60,864)	(60,864)	-	-
Notes and Accounts		263,115	(263,115)	(263,115)	-	-
Payable(Including related
parties)
Other payable		117,715	(117,715)	(117,715)	-	-
		45

==> picture [414 x 51] intentionally omitted <==

The consolidated company does not expect the cash flow analysis on the due date to occur significantly earlier, or the actual amount will be significantly different.

1. Exchange rate risk

2. (1) Exposure to exchange rate risk

The company's financial assets and liabilities exposed to significant foreign currency exchange rate risks are as follows:

Financial assets Monetary item RMB USD HKD Financial liabilities	Financial assets Monetary item RMB USD HKD Financial liabilities		2022.12.31		2021.12.31	NTD 886 307,027 208,138 - 5,121 96
		Foreign	Exchange rate		Foreign currency Exchange rate 204 4.344 11,092 27.680 58,647 3.549 - 4.344 185 27.680 27 3.549
		currency		NTD
		$ 196 13,528 5,819 - 256 -	4.408 30.710 3.938 4.408 30.710 3.938	864 415,445 22,915 - 7,862 -
	Monetary item RMB USD HKD

(2) Sensitivity analysis

The consolidated company’s exchange rate risk mainly comes from cash denominated in foreign currencies, cash equivalents and accounts receivable, etc., resulting in foreign currency exchange gains and losses during conversion. In 2022 and 2021, when the NTD depreciates 5% against the USD, RMB and HKD, under all other factors remain unchanged, the net profit before tax for 2021 and 2020 increased by NT$21,568,000 and NT$25,542,000 respectively.

• (3) Exchange gains and losses of monetary items

Due to the wide variety of functional currencies that the consolidated company uses, the exchange gain and loss information of monetary items is disclosed in summary. The foreign currency exchange’s gains and losses (including realized and unrealized)

46

in 2022 and 2021 are loss of NT$9,373,000 and gain of NT$26,173,000 respectively.

4. Interest rate analysis

The details of the consolidated company's financial assets and financial liabilities interest rate risk exposure are as follows:

Fixed interest rate instruments： Financial assets Variable interest rate instruments： Financial assets Financial liabilities	Book	value	value
	2022.12.31		2021.12.31
	$ 279,085 $ 766,533 (60,000) $ 706,533		232,434 759,479 (60,000) 699,479

The consolidated company's financial assets and financial liabilities interest rate risk exposure are described in the liquidity risk management of this note.

The following sensitivity analysis is determined based on the interest rate risk of non-derivative instruments on the reporting date. For floating rate liabilities, the analysis method is based on the assumption that the amount of liabilities outstanding on the reporting date will be circulated throughout the year. The rate of change used by the company when reporting interest rates internally to management is an increase or decrease of 1% in interest rates, which also represents management's assessment of the reasonably possible range of changes in interest rates.

If the interest rate increases or decreases by 1% and all other variables remain unchanged, the company’s net profit before tax for 2022 and 2021 increases or decreases NT$7,065 thousands and NT$6,995 thousands respectively. The main reason is this consolidated company's demand deposits and long-term loans with variable interest rates.

5. Other price risk

If the price of equity securities changes on the reporting date (the two-period analysis adopts the same basis and assumes that other changing factors remain unchanged), the impact on the comprehensive profit and loss items is as follows:

Stock price on reporting day Increase 5% Decrease 5%	2022 Other comprehensive profit and loss after-tax amount After-tax profit and loss $ 11,269 -	2022 Other comprehensive profit and loss after-tax amount After-tax profit and loss $ 11,269 -	2021	2021
	Other comprehensive profit and loss after-tax amount $ 11,269		Other comprehensive profit and loss after-tax amount 15,692	After-tax profit and loss
				-
	$ (11,269)	-	(15,692)	-

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6. Fair value information

• (1) Types and fair value of financial instruments

The consolidated company's financial assets and liabilities measured at fair value through profit and loss, financial assets and liabilities for hedging, and financial assets measured at fair value through other comprehensive gains and losses are measured at fair value on the basis of repeatability. For the book value of financial instruments that are not measured by fair value is a reasonable approximation of fair value and lease liabilities, there is no need to disclose fair value information according to regulations ) are listed as follows:

Financial assets measured at fair value through other comprehensive gains and losses Domestic and foreign listed (counter) stocks Domestic and foreign unlisted (counter) stocks Total Financial assets measured at amortized cost Cash and case equivalent Notes and accounts receivable (Including related parties) Other financial assets- current Refundable deposits Total		2022.12.31	2022.12.31	2022.12.31	Total 226,113 422,366 648,479 - - - - -
	Book value $ 226,113 422,366		Fair value
		Level 1 226,113 -	Level 2 - -	Level 3 - 422,366
	$ 648,479	226,113	-	422,366
	$ 877,848 496,970 234,346 7,502	- - - -	- - - -	- - - -
	$ 1,616,666	-	-	-

48

Financial liabilities

measured at amortized cost

nancial liabilities easured at mortized cost
Bank loan Notes and accounts payable (Including related parties) Other payables Lease liabilities (including non-current) Total	$ 60,000 - - - - 259,837 - - - - 108,635 - - - - 52,377 - - - -
	$ 480,849 - - - -

Financial assets measured at fair value through other comprehensive gains and losses Domestic and foreign listed (counter) stocks Domestic and foreign unlisted (counter) stocks Total Financial assets measured at amortized cost Cash and case equivalent Notes and accounts receivable (Including related parties)		2021.12.31	2021.12.31	2021.12.31	Total 314,796 490,939
	Book value $ 314,796 490,939		Fair value
		Level 1 314,796 -	Level 2 - -	Level 3 - 490,939
	$ 805,735	314,796	-	490,939	805,735
	$ 762,775 530,489	- -	- -	- -	- -

49

Other financial assets- current Refundable deposits Total Financial liabilities measured at amortized cost Bank loan Other payables Notes and accounts payable (Including related parties) Lease liabilities (including non-current) Total	298,773 - - - - 7,054 - - - -
	$ 1,599,091 - - - -
	$ 60,000 - - - - 263,115 - - - - 117,715 64,532 - - - -
	$ 505,362 - - - -

(2) Fair value evaluation technique for measuring financial instruments by fair value

If a financial instrument has a public quotation in the active market, the public quotation in the active market shall be the fair value. The market prices announced by major exchanges and central government bond over-the-counter trading centers judged to be popular bonds are the basis for the fair value of listed (counter) equity instruments and debt instruments with publicly quoted prices on the active market.

If public quotations of financial instruments can be obtained from exchanges, brokers, underwriters, industry associations, pricing service agencies or competent authorities in a timely and frequent manner and the prices represent actual and frequent fair market transactions, then the financial instruments have an active market public quotation. If the above conditions are not met, the market is deemed inactive. In general, large bid-ask spreads, significant increase in bid-ask spreads, or very little trading volume are indicators of inactive markets.

If the financial instruments held by the consolidated company have an active market, their fair values are listed as follows according to their categories and attributes: When financial assets and liabilities measured at fair value through profit and loss are quoted in an active market, the market price is the fair value. Except for the above-mentioned financial instruments within active markets, the fair values of other financial instruments are obtained through evaluation techniques or with reference to the quotations from

50

counterparties. The fair value obtained through evaluation technique can refer to the current fair value of other financial instruments with similar substantive conditions and characteristics, discounted cash flow method, or other evaluation techniques, including the use of market information available on the date of the consolidated balance sheet calculated.

If the financial instruments held by the consolidated company have an inactive market, their fair values are listed as follows according to their categories and attributes: Equity instruments without public quotation: If there is no market for reference, the evaluation method is used to estimate. The estimates and assumptions used are consistent with the information used by market participants as estimates and assumptions when pricing financial products. The information is available to the consolidated company.

The interest rate of bank borrowing is mostly close to the market interest rate, so the borrowing amount is taken as the fair value. Please refer to Note 6 (9) for the interest rate.

• (3) Transfer between level 1 and level 2

No such transfer in 2021 and 2020.

• (4) List of changes in level 3

January 1, 2022 Total profit or loss Recognized in other comprehensive income Return from capital reduction December 31, 2022 January 1, 2021 Total profit or loss Recognized in other comprehensive income December 31, 2021	Measured at fair value through other comprehensive gains and losses Equity instruments without public quotation $ 490,939 (57,573) (11,000) $ 422,366 $ 555,571 (64,632) $ 490,939	Measured at fair value through other comprehensive gains and losses Equity instruments without public quotation $ 490,939 (57,573) (11,000) $ 422,366 $ 555,571 (64,632) $ 490,939
		$ 422,366
		$ 555,571 (64,632)
		$ 490,939

The above-mentioned total profit or loss is reported in the series of "unrealized

51

appraised profit (loss) of financial assets measured at fair value through other comprehensive gains and losses".

Among them, those related to assets still held as of December 31, 2022 and 2021 are as follows:

llows:
Total profit or loss Recognized in other comprehensive income (Listed in “Unrealized Appraisal Profits and Losses of Financial Assets Measured at Fair Value through Other Comprehensive income'')	2022 $ (57,573)	2021 (64,632)

• (5) Quantitative information on the fair value measurement of significant unobservable inputs (level 3)

The consolidated company's fair value measurement is classified as the third level mainly for financial assets measured at fair value through other comprehensive gains and losses-equity instrument investment without an active market.

Most of the company’s fair value is classified as the third level with only a single significant unobservable input and only equity instrument investments without an active market have multiple significant unobservable inputs. The significant unobservable input values of equity instrument investment without an active market are independent to each other, so there is no interrelationship.

The quantitative information list of significant unobservable input values is as follows:

Item Financial assets measured at fair value through other comprehensive gains and losses- equity instrument investment without an active market	Evaluation technique Net asset value method	Significant unobservable input value ‧Net asset value	Significant unobservable input value and fair value relationship
			Not applicable

52

• (21) Financial risk management

• Summary

The consolidated company is exposed to the following risks due to the use of financial instruments

• (1) Credit risk

• (2) Liquidity risk

• (3) Market risk

This note expresses the consolidated company's risk information on the above-mentioned risks, the consolidated company's objectives, policies and procedures for measuring and managing risks. For further quantitative disclosure, please refer to the respective notes of the individual financial report.

1. Risk management structure

The consolidated company's financial division provides services for each business, analyzes the internal risk report of risk insurance according to the degree and breadth of risk, supervises and manages the financial risks related to the company's operations. The consolidated company establishes appropriate internal policies and systems to control credit risk and liquidity risk. As for market risks, we collect information from various parties, hoping to accurately predict the future trends of exchange rates, interest rates, etc., and use financial instruments to avoid risky risks when necessary to reduce the impact of these risks. The use of financial instruments is regulated by the consolidated company’s relevant policies, and internal auditors continue to review compliance with policies and risk limits. The consolidated company does not trade financial instruments for speculative purposes.

1. Credit risk

Credit risk is the risk of the consolidated company's financial loss due to the inability of its customers or financial instrument counterparties to fulfill contractual obligations. It mainly comes from the company's accounts receivable from customers and securities investments.

• (1) Accounts receivable and other receivables

The consolidated company's accounts receivable covers many customers, scattered in different industries and geographic regions, and there is no significant concentration of transactions with a single customer and the sales area is scattered, so the credit risk of accounts receivable is not likely to be significantly concentrated. The company has established a credit policy. According to this policy, before standard payment and shipping conditions are given, it is necessary to analyze the credit rating of each new customer individually before the transaction begins.

• (2) Investment

The credit risk of bank deposits, fixed income investments and other financial

53

instruments is measured and monitored by the consolidated company's financial division. Since the transaction partner and the performing party are all creditworthy banks and financial institutions, corporate organizations and government agencies with investment level and above, there is no significant credit risk.

1. Liquidity risk

Liquidity risk refers to the risk that the consolidated company cannot deliver cash or other financial assets to pay off financial liabilities and fail to perform related obligations. The consolidated company manages and maintains sufficient cash and cash equivalents to support the company's operations and reduce the impact of cash flow fluctuations. The management of the consolidated company supervises the use of bank financing lines and ensures compliance with the terms of the loan contract.

1. Market risk

Market risk refers to the risk that changes in market prices, such as exchange rates, interest rates, and equity instrument prices, affect the consolidated company's earnings or the value of financial instruments held. The goal of market risk management is to control the risk of market risk within an acceptable range and minimize the risk.

• (1) Exchange rate risk

The consolidated company is exposed to sales and purchase transactions that are not denominated in functional currencies, which causes the consolidated company to generate exchange rate fluctuation risks. The consolidated company’s functional currency is mainly NTD. The main denomination currencies for these transactions are USD, RMB and HKD.

• (2) Other market price risk

The consolidated company incurs equity price risk insurance due to equity securities and open fund investments in listed counters.

• (22) Capital management

The consolidated company plans its capital management based on the characteristics of the current industry and the future development of the company, taking changes in the external environment and other factors into account, to ensure that the company has the necessary financial resources and operating plans to support the future working capital and capital expenditures, research and development expenses, debt repayment and dividend expenses, etc. The management authority uses an appropriate total debt/equity ratio to determine the company’s optimal capital structure. In order to maintain a sound capital base, the

company optimizes the balance of debt and equity so to increase shareholder compensation. The consolidated company’s debt-to-equity ratio at the reporting date is as follows:

Total liabilities	2022.12.31 $ 582,707	2021.12.31
		636,462

54

Total equity 2,983,241 3,028,698 Debt-to-equity ratio 20% 21%

As of December 31, 2022 and 2021, the consolidated company's capital management method has not changed significantly.

7. Related party transactions

• (1) Name and relationship of related parties

The related parties involved in transactions with the consolidated company during the period

covered in this consolidated financial report are as follows:

Name of related parties AB Corp. DongGuan E-run electronics co.,ltd.	Relationship with the company Affiliated company of the consolidated company Subsidiary of the consolidated company

• (2) Major transactions with related parties

• Operating income

The consolidated company's major sales amounts to related parties are as follows:

Affiliated company－AB Corp.	2022		2021
	$ 151,060		123,940

The consolidated company's sales price to the above-mentioned related parties is based on the company's various product price lists, and the payment to the above-mentioned related parties is collected from 90 to 135 days after the month end.

1. Purchase

The consolidated company's purchase amount from related parties is as follows:

Subsidiaries: Affiliated company－DongGuan E-run Affiliated company－AB Corp.	2022		2021
	$ 21,657 5,210 $ 26,867		33,451 2,313 35,764

The consolidated company's purchase terms and conditions from the above-mentioned related parties are from 85 days to 115 days of monthly settlement, and the price is no different from other manufacturers.

1. Amounts due from related parties

The details of the company's accounts receivable from related parties are as follows:

Account item Accounts receivable-	Type of related parties Affiliated company－AB Corp	2022.12.31		2021.12.31
		$ 67,745		62,402

55

related party

4. Amounts due to related parties

The details of the company's accounts payable to related parties are as follows:

Account item Type of related parties Accounts payable- related party Affiliated company－AB Corp Accounts payable- related party Affiliated company－DonGuan E-run (3) Key management personnel transactions Remuneration of key management personnel Short-term employee benefits Post-employment benefits Pledged assets Asset name Subject to pledge Other financial assets- current(pledged fixed deposit) Contract bond and warranty deposit Real estate Short-term/ long-term loan	Account item Type of related parties Accounts payable- related party Affiliated company－AB Corp Accounts payable- related party Affiliated company－DonGuan E-run (3) Key management personnel transactions Remuneration of key management personnel Short-term employee benefits Post-employment benefits Pledged assets Asset name Subject to pledge Other financial assets- current(pledged fixed deposit) Contract bond and warranty deposit Real estate Short-term/ long-term loan	Account item Type of related parties Accounts payable- related party Affiliated company－AB Corp Accounts payable- related party Affiliated company－DonGuan E-run (3) Key management personnel transactions Remuneration of key management personnel Short-term employee benefits Post-employment benefits Pledged assets Asset name Subject to pledge Other financial assets- current(pledged fixed deposit) Contract bond and warranty deposit Real estate Short-term/ long-term loan	2022.12.31		2021.12.31
			$ 412 8,015 $ 8,427 2022		813 11,347 12,160 2021
			$ 11,275 91 $ 11,366 2022.12.31		10,095 85 10,180 2021.12.31
	Other financial assets- current(pledged fixed deposit) Real estate	Contract bond and warranty deposit Short-term/ long-term loan	$ 83,569 68,337 $ 151,906		102,114 70,932 173,046

8. Pledged assets

9. Significant contingent liabilities and unrecognized contractual commitments: N/A

10. Loss from major disaster: N/A

11. Significant post-period matters: N/A

12. Other

• (1) The functions of employee benefits, depreciation and amortization expenses are summarized

as follows:

Function Category		2022			2021
	Attributable to operating	Attributable to operating	Total	Attributable to operating	Attributable to operating	Total

56

	costs	expenses		costs	expenses
Employee benefit Salary expense Labor and health insurance expense Pension expense Directors' remuneration Other employee benefits Depreciation expense Amortization fee	170,866 5,602 10,959 - 4,531 34,713 -	125,367 8,417 5,899 2,675 4,340 29,851 85	296,233 14,019 16,858 2,675 8,871 64,564 85	193,616 8,125 10,497 - 4,431 36,865 -	160,283 8,379 5,406 5,711 4,176 36,705 47	353,899 16,504 15,903 5,711 8,607 73,570 47

(2) The coronavirus pneumonia epidemic had a minor impact on the production and sales of the consolidated company and its subsidiaries. All production systems have fully resumed to work and production lines have returned to normal. The consolidated company will continue to pay attention to the development of the incident and related impacts.

13. Disclosure of Matters in Notes

• (1) Information with regard to major transactions

In 2022, in accordance with the requirements of the securities issuer’s financial report

preparation standards, the relevant information about major transactions that should be disclosed again by the company is as follows:

1. Loans to others

Unit: NTD thousand

#	Companies that lend loans	Prospective borrowers	Accounting subjects	The highest amount of the current period	Ending balance	Actual lending amount	Interest rate range	Loan by nature (note 1)	Transaction amount with regard to business	Reasons for short-term financing	Allowance for loss amount	Colla	teral	Limited amount of loans for each entity (Note 2)	Limited amout of total loans (Note 3)
												Name	Value
1 2 3	Bright LED electronics DongGuan BRTLED DongGuan	KoBrite Taiwan Henan Bright Crystal DongGuan	Other receivables Other receivables Other	80,000 38,173 (RMB$8,660) 26,448	80,000 24,244 (RMB$5,500) -	50,000 19,886 (RMB $4,511) -	2% 2% 2%	2 2 2	- - -	Operating turnover Operating turnover Operating	- - -	N N N	- - -	286,209 148,161 148,161	1,144,836 592,644 592,644

57

BRTLED KoBrite receivables (RMB$6,000)

turnover

Note 1: 1. means have business contacts. 2. means has the need for short-term financing. Note 2: The limit for total amount of lending loans does not exceed 10% of the net worth of the enterprise. Foreign companies in which the company directly or indirectly hold 100% of the voting shares are not subject to the 10% limit on loans to the company's net worth, but the respective limits for capital loans should still not exceed 100% of the company's net worth. Note 3: The limit for total amount of capital loans shall not exceed 40% of the net worth of the enterprise. Foreign companies in which the company directly or indirectly hold 100% of the voting shares are not subject to the 40% limit on total amount of loans to the company's net worth, but the respective limits for capital loans should still not exceed 60% of the company's net worth.

Note 4: The above transactions have been reversed in the preparation of the consolidated report.

Note 5: It is converted to NTD at the RMB exchange rate of 4.408 at the end of the period

2. Endorsement for others: N/A

1. The situation of holding marketable securities at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Unit: thousand shares

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Holding Types and names of securities Relationship with Accounting items End of term Interim
the securities issuer Highest
Company Unit/share Book value Holding Fair value Sharehol Note
ratio ding
Ratio
The Powertip Corporate director Financial assets measured at 19,020 225,389 12% Price per share 12%
company fair value through other market =11.85
comprehensive gains and
losses-non-current
〃 DS N/A 〃 764 - 3% Price per stock 3%
market= -
〃 Assurant, Inc. 5.25% Subordinat 〃 〃 0.5 309 -% Price per share -%
(AIZN) market = USD
20.19
〃 Qwest Corp (CTBB) 〃 〃 0.2 103 -% Price per share -%
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----- Start of picture text -----

market = USD
16.70
AT&T Inc. 5.35% GLB NTS 66 〃 〃 0.1 67 -% Price per share -%
(TBB) market = USD
21.68
United States Cellular Corporat 〃 〃 0.5 245 -% Price per share -%
(UZD) market = USD
15.97
The WK 9 Corporate director Financial assets measured at 15,380 272,806 15% 272,806 15%
company fair value through other
comprehensive gains and
losses-non-current
〃 Foxfortune Technology Ventures 〃 〃 2,000 63,976 12% 63,976 12%
Ltd.
〃 New fund capital 〃 〃 8,900 85,584 16% 85,584 16%
648,479
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1. The cumulative amount of buying or selling the same securities reaches NTD$300 million or more than 20% of the paid-in capital: N/A

2. Acquired real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A

3. Disposal of real estate with an amount of NTD$300 million or more than 20% of the paid-in capital: N/A

4. The amount of purchases and sales with related parties reaches NTD$100 million or more

   • than 20% of the paid-in capital:

Import (sell) company	Trading partner Name	Relations		Transaction	Transaction		Circumstances and reasons for trading condition which are different from regular trading	Circumstances and reasons for trading condition which are different from regular trading	Notes and accounts receivable (paid)	Notes and accounts receivable (paid)	Note
			Import (sell)	Amount	% of total import (sales)	Credit period	Price	Credit period	Balance	% of total notes and accounts receivable (paid)

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The company AB Corp. Affiliated company (Sell) (151,060) (13)% OA 135 Price No significant 67,745 20% Note
days agreement differences
according to
the company
The company WanHui (HK) Subsidiary Import 709,109 87% Ajust Price No significant (1,866,241) (98)% Note
according to agreement differences
its funding according to
needs the company
WanHui (HK) The company 100% owned parent (Sell) (709,109) (76)% Ajust Price No significant 1,866,241 99% Note
company according to agreement differences
its funding according to
needs the company
WanHui (HK) DongGuan Subsidiary Import 691,101 86% Ajust Price No significant (377,239) (98)% Note
BRTLED according to agreement differences
its funding according to
needs the company
DongGuan WanHui (HK) 100% owned parent (Sell) (691,101) (71)% Ajust Price No significant 377,239 80% Note
BRTLED company according to agreement differences
its funding according to
needs the company
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Note: The transactions listed on the left column have been written off during the preparation of the consolidated statement.

1. Receivables from related parties amount to NT$100 million or more than 20% of the paid-in capital:

Company with account receivables	Trading partner Name	Relations	Balance of accounts receivable from related parties	Turnover	Overdue amounts from related parties	Overdue amounts from related parties	Amounts receivable from related parties recovered after the period	allowance for loss amount	Note
					Amount	Processing
WanHui (HK) DongGuan BRTLED	The company WanHui (HK)	100% owned parent company 〃	1,866,241 377,239	0.41 1.12	Note 1 Note 1	Note 1 Note 1	33,236 66,860	- -	Note 2 Note 2

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• Note 1: The difference between receivables and payables shall be collected based on fund requirements.

• Note 2: The transactions listed on the left column have been written off during the preparation of the consolidated statement.

• Engage in derivatives trading: N/A

• Business relations and important transactions between parent and subsidiary

companies:

	companies:
# (Note 1)	Name of traders	Transaction objects	Relation with traders (Note 2)	Transaction situation
				Subject	Amount	Condition	% of combined total revenue or total assets
0 1 1 2 2 2	The company WanHui (HK) 〃 DongGuan BRTLED 〃 DongGuan BRTLED	KoBrite Taiwan The company 〃 WanHui (HK) 〃 Henan Bright Crystal	1 2 2 2 2 3	Other receivables Sales revenue Accounts receivable Sales revenue Accounts receivable Other receivables	50,000 709,109 1,866,241 691,101 377,239 19,886	Adjusted according to funding needs 〃 〃 〃 - -	1.40% 46.99% 52.34% 45.80% 10.58% 0.56%

Note 1. The way to fill in the serial number is as follows:

  - 1.0 represents the parent company.

     2. Subsidiaries are numbered sequentially starting from Arabic numeral 1 according to the company type.

• Note 2: The type of relationship with the trader is marked as follows:

   1. Parent company to subsidiary.
  
   2. Subsidiary to parent company.
  
   3. Subsidiary to subsidiary.
  

• (2) Re-investment business related information

• The consolidated company's reinvestment business information for 2020 is as follows

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(Exclude investee companies in China):

Investor Name	Investee Name	Region	Main business Items	Original investment amount Original investment amount	Original investment amount Original investment amount	Hold at the end of period	Hold at the end of period	Hold at the end of period	Investee Current income	Recognized in this period Investment (Profit) Loss	Note
				End of period	End of last year	Shares (thousand)	Ratio	Book value
The company 〃 〃 〃 〃 〃 KoBrite KoBrite	WanHui (HK) KoBrite Corp. LiSheng Int’l AB Corp. WanShui Powertip image KoBrite Taiwan Bright Crystal (HK)	HK Mauritius HK US HK TW TW HK	Processing business of LED indicators, displays and related components Investment holding PCB processing Dealer Investment holding Optical lens, lens design and production Investment holding Investment holding	524,673 1,082,499 139,297 1,702 61,910 64,966 500,000 404,342	524,673 1,082,499 139,297 1,702 61,910 64,966 500,000 404,342	11,460 8,783,545 35,740 52 2,993 7,671 50,000 100,994	100% 93% 60% 16% 23% 19% 100% 80%	2,348,293 204,085 93,128 11,410 24,698 125,765 3,590 166,195	100% 93% 60% 16% 23% 19% 100% 80%	142,773 (33,239) 6,495 486 125 27,986 recognized by KoBrite for investment gains and losses recognized by KoBrite for investment gains and losses	Subsidiary (Note) 〃 〃 adopting the equity method 〃 〃 Subsidiary (Note) Subsidiary (Note)

Note: The transactions listed on the left have been written off during the preparation of the consolidated financial report.

• (3) Information with regard to investment in China

• Relevant information about reinvestment in China:

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Name of invested Main business Paid-in Investment Cumulative Exported or Cumulative Current Direct or Interim Recognized End of period Investment
company in China Items capital method remittances recovered in remittances profit (loss) indirect Highest investment investment repatriated
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				from Taiwan at the beginning of the period Amount (Note 1)	this period Investment amount	this period Investment amount	from Taiwan at the end of the period Amount (Note 1)	of the investee company	investment Holding ratio	Shareholding Ratio	profit (loss) in this period (Note 3)	Book value	as of the current period Income (Note 1)
					Export (Note 1)	Amount (Note 1)
DongGuan BRTLED r DongGuan KoBrite DongGuan Yi-Run DongGuan LiSheng PCB Henan Bright Crystal	Manufacture and sell of LED component and its elated products Production and processing of LED chips production and sale of other steel products PCB processing Production and sales of high-quality crystals and LED lighting products, as well as import and export business	HKD340,222 US$14,590 RMB$41,001 HKD$10,000 US$16,200	Indirect investment through WanHui (HK) (Note 4) Indirect investment though KoBrite Corp. Indirect investment through WanHui (HK) Indirect investment through LiSheng Int’l (Note 4) Indirect investment through Bright Crystal (HK) (Note 4)	- 149,121 (US$4,974) 58,813 (HKD$15,280) 3,279 (HKD$852) 403,981 (US$13,475)	- - - - -	- - - - -	- 149,121 (US$4,974) 58,813 (HKD$15,28 0) 3,279 (HKD$852) 403,981 (US$13,475 )	(604,324) 87,155 544 11,072 (33,727)	100% 93% 23% 60% 74%	100% 93% 23% 60% 74%	(605,232) 80,740 125 6,596 (24,974)	1,481,610 (17,223) 24,698 59,451 154,134	- - 15,804 (HKD$4,453) - -

2. Limits for reinvestment in China:

Cumulative investment amount remitted from Taiwan to China at the end of the period	Approved investment amount by the Overseas Chinese and Foreign Investment Commission (Note 1)	According to the regulations of the Overseas Chinese and Foreign Investment

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Commission
Investment quota in
China
615,194 2,152,041 Note 2
(US18,449 and HKD16,132) (US19,002 and HKD398,296)
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     - Note 1: It is converted into NTD at the end of the period using the USD exchange rate of 30.71, HKD exchange rate of 3.938 and RMB 4.408.

     - Note 2: The Company has been approved by Bureau of Industry of the Ministry of Economic Affairs to comply with the operating headquarters certification letter, so there is no limit on the amount of investment in China.

     - Note 3: The investment gains and losses of the current period are calculated based on the financial statements of the investee company verified by accountants.

     - Note 4: Existing reinvestment companies in the third region use their own funds and machinery and equipment for investment.

     - Note 5: Except for Dongguan Yi-Run Electronics Co., Ltd., the remaining transactions have been written off during the preparation of the consolidated financial report

  3. Major shareholders information:

• For direct or indirect major transactions (has been written off when preparing the consolidated report) of the consolidated company’s investee companies in China in 2022, please refer to the description of "Information on Major Transactions"

• (4) Major shareholder information

Unit: shares

or shareholder information		Unit: shares
Shares Name of major shareholders	Number of shares held	Holding ratio
~~Yi-Run investment company~~	31,859,212	18.39%
~~WanHui investment company~~	27,378,397	15.81%
~~Tseng-Jen Liaw~~	21,062,417	12.16%

Note: (1) The information of major shareholders in this table is based on the last business day

• at the end of each quarter by the company. The total number of common shares and special shares, which sum up to 5% or more, of the company that have been delivered without physical registration (including treasury shares) is calculated by the company. As for the share capital recorded in the company's financial report and the company's actual number of shares delivered without physical registration, there may be differences due to different calculation bases.

• (2) If above information belongs to the shareholder's delivery of shares to the trust, it is

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disclosed in individual accounts by the trustor who opened the trust account for the trustee. As for the shareholders’ declaration of insider’s shareholding in accordance with the Securities and Exchange Act, their shareholding includes their own shareholding plus the shares delivered to the trust and the right to use the trust property. For information on insider’s shareholding declaration, please refer to Market observation post system.

14. Department information

• (1) General information:

The consolidated company has four departments required to be reported: Department A, Department B, Department C, and other departments. Department A is the sales business of light-emitting diode components and related products, Department B is engaged in the manufacturing and sales of light-emitting diode components and related products, Department C is engaged in the manufacturing and sales of dies and other departments are engaged in manufacturing and sales of PCB, etc.

• (2) Departmental profit and loss, assets, liabilities and their measurement basis and adjustment information required to be reported:

The consolidated company uses the departmental pre-tax profit and loss in the internal management report which reviewed by the chief operating decision maker (excluding non-recurring gains and losses and exchange gains and losses) as the basis for the management of resource allocation and performance evaluation. Since income tax, non-recurring gains and losses, and conversion gains and losses are managed on a group basis, the consolidated company does not amortize income tax expenses (benefits), non-recurring gains and losses, and conversion gains and losses to the reporting department. In addition, not all profit and loss of reportable departments include significant non-cash items other than depreciation and amortization. The reported amount is consistent with the report used by the operating decision maker.

The accounting policies of the operating department are the same as the "Summary Description of Important Accounting Policies" described in Note 4.

The consolidated company regards sales and transfers between departments as transactions with a third person and measured at the current market price.

Information and adjustments of the operating department of the consolidated company are as follows:

		2022	2022
Dept. A	Dept. B	Dept. C	Other dept. Adjust/ eliminate	Total

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Revenue Revenue from external customers Revenue from depts. Total revenues Dept. profit (loss) Total asset of dept. Total liability of dept.	$ 1,172,975 -	315,868 718,981	19,433 139,664	648 74,640	- (933,285)	1,508,924 -
	$ 1,172,975	1,034,849	159,097	75,288	(933,285)	1,508,924
	$ 213,744	144,533	(42,650)	11,965	(116,028)	211,564
	$ 4,911,191	2,698,035	509,990	176,733	(4,730,001)	3,565,948
	$ 2,049,102	349,742	247,960	20,398	(2,084,495)	582,707

Revenue Revenue from external customers Revenue from depts. Total revenues Dept. profit (loss) Total asset of dept. Total liability of dept.					2022	2022	2022				Total 1,532,086 -
	Dept. A $ 1,074,469 -		Dept. B 425,679 719,981		Dept. C		Other dept. 1,219 97,909		Adjust/ eliminate
					30,719 240,046
									- (1,057,936)
	$ 1,074,469		1,145,660		270,765		99,128		(1,057,936)		1,532,086
	$ 297,688		14,650		(14,858)		20,877		(14,155)		304,202
	$ 4,680,794		2,479,606		585,905		160,380		(4,241,525)		3,665,160
	$ 1,774,540		338,309		284,929		21,797		(1,783,113)		636,462

• (3) Information on types of products and services:

The reportable departments of the consolidated company information has been based on different products and services, and there is no need to disclose product and labor service information.

• (4) Information on region:

The information about the location of the consolidated company is as follows: Revenue is classified based on the geographic location of the customer and non-current assets are classified based on the geographic location of the asset.

1. Revenues from external customers:

Region China Taiwan Korea United states	2022 $ 622,131 452,291 158,469 154,850	2021
		702,337 317,936 130,803 211,356

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Other

	121,183	169,654
$	1,508,924	1,532,086

2. Non-current assets

	Region Taiwan China Total	2022 $ 240,012 468,026	2021 220,629 517,673
		$ 708,038	738,302

Non-current assets include investments using the equity method, property, plant and equipment, right-of-use assets, deposits and other non-current assets. However, it does not include non-current assets that include financial instruments and deferred income tax assets.

• (5) Information of important customers:

In both 2022 and 2021, the consolidated company has no non-affiliated customers who account for more than 10% of its consolidated operating income.

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