Stock Code: 2425

CHAINTECH Technology Corporation

2022 Annual Report

Printed on: April 30, 2023 Annual Report Website: http://mops.twse.com.tw Company Website: http://www.chaintech.com.tw

Notice to Reader:

For the convenience of readers, this report has been translated into English from the original Chinese version, prepared and used in the Republic of China. The English version has not been audited or reviewed by independent auditors. If there are any discrepancies between the English version and the original Chinese version, or any difference in the interpretation of the two versions, the Chinese-language report shall prevail.

I. Company Spokesperson, Acting Spokesperson Name of Spokesperson: Li, Kai-Li

Title: Manager of Marketing and Planning Department Tel: (02)2913-8833

Email: [email protected]

Name of Acting Spokesperson: Chang, Ya-Ling Title: Chief Auditor Tel: (02)2913-8833 Email: [email protected]

II. Company Address: 3F, No. 48-3, Minchuan Rd., Xindian Dist., New Taipei City Tel: (02)2913-8833
III. Stock Transfer Institution

Name: Service Agency Department, Grand Fortune Securities Co., Ltd. Address: 6F, No. 6, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City 10041

Tel: (02)2371-1658 Website: http ： // gfortune.com.tw

IV. CPAs for the Financial Report in the Most Recent Fiscal Year Name of Accounting Firm: PwC Taiwan

CPA Name: CPA Feng, Min-Chuan and CPA Lin, Ya-Hui Address: 27F., No. 333, Sec. 1, Keelung Rd., Taipei City Tel.: (02)2729-6666 Website: http ： //www.pwc.tw

V. Name of Trading Venues for Overseas Flotation of Marketable Securities and Means of Inquiry into Information Thereof: None
VI. Company Website: http:// www.chaintech.com.tw/

		Table of Contents
			Page
Chapter	1.	Letter to Shareholders .........................................................................................	1
Chapter	2.	Company Profile ..................................................................................................	4
		1. Date of Incorporation ...................................................................................	4
		2. Company History .........................................................................................	4
Chapter	3.	Corporate Governance Report .............................................................................	9
		1. Organization .................................................................................................	9
		2. Information of Directors, Supervisors, General Manager, Deputy
		General Manager, Assistant Manager, and Managers of Departments and
		Branches .......................................................................................................	12
		3. Status of Corporate Governance...................................................................	28
		4. Information on CPAs fees ............................................................................	69
		5. Information About Replacement of CPA .....................................................	69
		6. Chairman, General Manager, Manager in Charge of Financial or
		Accounting Affairs of the Company, Those Who Have Worked in a
		Certified Public Accountant’s Firm or Affiliated Enterprise Within the
		Last Year, and Name, Title and Period in a Certified Public Accountant’s
		Firm or Affiliated Enterprise to be Disclosed ..............................................	69
		7. Status of Share Transfer and Changes in Equity Pledge by the Director,
		Supervisors, Managers, and Shareholders with Over 10% Shareholdings
		in the Most Recent Year until the Publication Date of the Annual Report
		......................................................................................................................	70
		8. Information on the related party relationship as defined in the Statements
		of Financial Accounting Standards No. 6 between the Company's top ten
		shareholders by shareholding ratio ...............................................................	72
		9. Shares of Investment of Equity Method and the Consolidated
		Shareholdings Held by the Company, Its Directors, Supervisors,
		Managers, and Enterprises under Direct or Indirect Control of the
		Company ......................................................................................................	73
Chapter	4.	Funding Overview ...............................................................................................	74
		1. Capital and Shares ........................................................................................	74
		2. Corporate Bonds ...........................................................................................	80
		3. Issuance of Preferred Shares ........................................................................	80
		4. Global Depository Receipts (GDRs) ............................................................	80
		5. Employee Stock Options ..............................................................................	80
		6. New Restricted Employee Stares .................................................................	80
		7. Issuance of New Shares in Connection with the Merger or Acquisition of
		Other Companies ..........................................................................................	80
		8. Capital Utilization Plan and Implementation ...............................................	80

Chapter	5.	Operating Overview ............................................................................................ 81
		1. Business Activities ....................................................................................... 81
		2. Market, Production, and Sales Overview ..................................................... 91
		3. Employees .................................................................................................... 99
		4. Information on Environmental Protection Expenditure ............................... 100
		5. Labor Relations ............................................................................................ 100
		6. Cyber Security .............................................................................................. 103
		7. Material Contracts ........................................................................................ 104
Chapter	6.	Financial Overview ............................................................................................. 105
		1. Condensed balance sheet and statement of comprehensive income and
		audit opinion of the most recent five years .................................................. 105
		2. Financial Analysis of the Last Five Years ................................................... 109
		3. Audit Committee’s Review Report in the Most Recent Year ...................... 115
		4. Individual financial report for the latest year audited and approved by
		accountants ................................................................................................... 117
		5. Consolidated Financial Statements for the Most Recent Year, Certified
		by CPAs ........................................................................................................ 117
		6. Financial Difficulties of CHAINTECH and Its Affiliates in the Most
		Recent Year to the Publication Date of this Annual Report and their
		Impact on the Company's Financial Conditions ........................................... 117
Chapter	7.	Analysis for Financial Condition and Operating Performance and Risk
		Management ........................................................................................................ 118
		1. Comparative Analysis of Financial Conditions ........................................... 118
		2. Comparative Analysis of Financial Performance ......................................... 118
		3. Cash Flow Analysis ...................................................................................... 119
		4. Impact of Major Capital Expenditures on Corporate Finances and
		Business for the Most Recent Year .............................................................. 120
		5. Policy on Reinvestment in Other Companies, the Main Reasons for
		Profit/Loss Resulting Therefrom, Improvement Plan, and Investment
		Plans for the Upcoming Fiscal Year ............................................................ 120
		6. Risk Management and Assessment .............................................................. 121
		7. Other important items ................................................................................... 124
Chapter	8.	Special Notes ....................................................................................................... 125
		1. Information on Affiliated Companies .......................................................... 125
		2. Private Placement Securities in the Most Recent Year to the Publication
		Date of this Annual Report ........................................................................... 130
		3. Holding or Disposal of CHAINTECH's Shares by the Subsidiaries of
		the Most Recent Year to the Date of Publication of this Annual Report ..... 130
		4. Other Necessary Supplements ...................................................................... 130
Chapter	9.	The Most Recent Year and up to the Publication Date of the Annual Report,
		the Occurrence of Events as Provided for in Subparagraph 2, Paragraph 2,

Article 36 of the Securities Exchange Act Which Have a Material Effect on Shareholders' Equity or Securities Prices ............................................................ 130

Appendices

Individual Financial Report for the Most Recent Year ........................................................ 131 2. Consolidated Financial Report for the Most Recent Year ................................................... 207

Chapter 1. Letter to Shareholders

Dear Esteemed Shareholders:

I. 2022 Business Results

Our company'sconsolidated operating revenu for the year 2022 was NTD$6,198,674 thousand, a decrease of 4.90% compared to the consolidated operating revenu of NT $6,518,064 thousand for the year2021; The net profit after tax was NTD$363,465 thousand, with a net profit attributable to the owner of the parent company of NT $320,372 thousand, and a net profit after tax of NT $3.32 per share.

CHAINTECH's business results for 2022 and business plan for 2023 are summarized below:

(I) Implementation Results of Business Plan:

Unit: NT$ thousand; %

Item	2022	2021	Increase (Decrease) by Amount	Increase (Decrease) %
Operatingrevenue	6,198,674	6,518,064	(319,390)	(4.90)
Grossprofit	622,860	676,397	(53,537)	(7.92)
OperatingMargin	314,086	355,346	(41,260)	(11.61)
Netprofit after tax	363,465	162,744	200,721	123.34
Net profit attributable to owners ofparent company	320,372	122,224	198,148	162.12
Net profit on non-controlling interest	43,093	40,520	2,573	6.35
Net Profit after Tax per Share (NT$)	3.32	1.27	2.05	161.42

(II) Financial Position and Profitability Analysis:

Item	Year	2022	2021
Financial structure`％`	Ratio of liabilities to assets	28.05	39.52
	Ratio of long-term capital to property, plant and equipment	11,259.40	8,882.72
Solvency %	Current ratio	313.24	220.57
	Quick ratio	252.69	165.71
	Times interest earned ratio	55.97	37.37
Profitability %	Return on Assets(ROA)%	11.19	5.30
	Return on Equity (ROE)%	16.65	8.16
	Netprofit margin	5.86	2.50
	Earningsper Share after Tax (NT$)	3.32	1.27

I. Outline of 2023 Business Plan

In the face of future market changes, CHAINTECH's business policy, expected targets and important production and marketing policies are as follows:

(I). Business Policy
Marketing: Continue to strengthen the close cooperation between distributors and agents, build different types of sales channels, and strengthen cooperation with clients with sound financial structure.
Financial policy: Focus on stable operations and strict control over the quality of accounts receivable, make collections according to the terms of sales to ensure the asset preservation, and carry out production by order to maintain low inventories and the efficiency of working capital.
R&D policy: Focus on developing high-end motherboards for extreme overclocking and advanced gaming, develop specialized technologies such as power supply design and motherboard wiring for maximum overall computing performance to pave the way for the development of large motherboards for workstations and servers.
(II). Estimated sales volume and supporting information
With the fading of the epidemic beneifts and the mining boom, the board and card industry market has entered a supply-demand reversal since the second quarter of last year (2022). The supply chain inventory liquidation is expected to come to an end by the middle of this year (2023).

Benefiting from China's official reopen from the Covid-19 pandemic at the end of last year, the International Monetary Fund (IMF) predicted in its World Economic Outlook report in January that as economic activities gradually recover, the economic growth rate of China's domestic demand market will rebound to 5.2% this year, higher than the global average of 2.9%. As global economic activities are

slowing down, the economic growth of China and India will account for half of the world; In addition, the significant relaxation of online gaming restrictions by the Chinese authorities at the end of last year is expected to drive demand for graphics cards and a rebound in the PC DIY market.

Although the first quarter of this year was affected by last year's high base period, it is estimated that single quarter shipment and revenue momentum will decrease by 10% to 20% annually. Neverthless, following the launch of NVIDIA's RTX 40 series GPU in October last year, new products of relevant mainstream GPU and CPU have come to the market one after another. Therefore, the overall industry is expected to rebound to normal growth quarter by quarter.

(III). Important Production and Marketing Policies

Maintain cooperation with multiple suppliers and establish long-term strategic partnerships with them to ensure manufacturing capabilities and supply stability of raw materials. Continue to improve technology R&D and product quality, provide products that meet customer needs, and discover new sales channels.

CHAINTECH is committed to maintaining its financial health and stable operations based on its existing core values. It continues to maintain the technical quality of the products, strengthen product performance and marketing channels through the production and supplier management. In the face of the ever-changing board and card industry market, we are committed to optimizing our product portfolio, increasing the proportion of mid to high end products, and raising product unit prices. In addition to investing in the AI industry, we will continue to recruite more high-level R&D workforce. By organizing a high-level motherboard R&D team, we are determined to deeply involved in various industries to expand product categories and improve technical quality to ensure the sustainable development and stable profitability of the company in face of the ever-changing market demands. On behalf of the management team of CHAINTECH Technology Corporation, I would like to take this opportunity to once again express our gratitude for your continued support and encouragement.

Chairman: Kao, Shu-Jung

Chapter 2. Company Profile

I. Date of Founding: November 17, 1986

II. Company History:
1986 Founding of CHAINTECH Technology Corporation with an NT$5 million registered capital.
- Establishment of self-owned brand ELT.
1987 Purchase of factories and setting up production lines.
1988 Introduction of high-end equipment and appliances in the factories.
1989 Conclusion of technical cooperation contract with IBM in April.
- Cash capital increases of NT$55 million and NT$60 million in March and December, respectively, with paid-in capital reaching NT$120 million.
1990 Cash capital increase of NT$75 million in June, with the paid-in capital reaching NT$195 million.
1991 Establishment of Chaintech Computer GmbH through investment in Germany in July.
1993 Ex-Chairman of the Board Ke, Heng-Kuang passed away of illness, and Mr. Su, KeKang, representative of Behavior Tech Computer Corp., appointed as his successor.
1994 Capital reduction of NT$87 million in April and cash capital increase of NT$82 million in December, with a paid-in capital of NT$199 million.
- Purchased factory building on Lian-Cheng Road of Jhonghe City.
- Passed ISO-9002 certification.
1995 Cash capital increase of NT$121 million in July, with paid-in capital reaching NT$320 million.
- Increased investment of NT$1.3 million in Chaintech Computer GmbH, with 100% shareholding in November.
1996 Earnings turned capital increase of NT$32 million in November, with paid-in capital reaching NT$352 million.
- Establishment of the American subsidiary Chaintech Computer U.S.A. in December.
1997 Earnings and employees' bonus turned capital increase of NT$76.6 million in May, with paid-in capital reaching NT$428.6 million.
- Mr. Wang, Ching-Yeh, representative of Central Asia Venture Corp., appointed the Chairman of CHAINTECH in July.
1998 Publicly listed on February 4.
- Earnings and employees' bonus turned capital increase of NT$92.617 million and cash capital increase of NT$178.783 million in July, with paid-in capital reaching NT$700 million.

Acquired land in Tucheng in August and officially commenced construction in December.
Established Gold Ring overseas company in October.
Disposal of subsidiary in Germany and established an European subsidiary in October.
Passed ISO 9001 certification in December.
1999 Mr. Tung, Chung-Chuan, representative of Central Asia Venture Corp. appointed the Chairman of CHAINTECH on April 30.
Mr. He, Ai-Tang appointed the General Manager of CHAINTECH in October.
The first convertible corporate bonds of NT$300 million raised in December.
Mr. Tung, Chung-Chuan, representative of Hongyun Electronics Co., appointed the Chairman of CHAINTECH on December 18.
2000 Launched marketing posts in China Mainland in January to expand the Chinese market.
The Investment Review Commission passed indirect re-reinvestment in DONGGUAN CHANGAN FORTECH ELECTRONICS CO., LTD in January.
Relocated to the Tucheng plant in Taipei City in March.
The US subsidiary was combined with Chaintech Excel in April.
Shares went from Over-the-Counter to public listing on September 11.
Mr. Tung, Chung-Chuan passed away in December and Vice Chairman of the Board Tung, Ching-Chuan appointed interim Chairman.
2001 Mr. Tung, Ting-He, representative of Hongyun Electronics Co., was reappointed as the Chairman of CHAINTECH on January 4.
Established the Digital Media Business Development department in November, officially engaging in the field of digital multi-media.
2002 Inject of KRW270 million for the establishment of a subsidiary in February.
Mr. He, Ai-Tang appointed the Chairman of CHAINTECH and Ms. Chang, Pi-Lan appointed the Vice Chairman of CHAINTECH on May 2.
Issued 5 million employee stock option certificates in October.
Established the US subsidiary with US$1 million in December.
2003 Remaining bonds of "CHAINTECH I" completed the conversion in August.
2004 Sales of Tucheng plant in June.
The operation headquarters was relocated to the Far East Industrial Zone in Jhonghe City in December.
2005 After the completion of two private placements of convertible bonds in May and June, a total of NT$265 million was funded, with paid-in capital reaching NT$2,056,136,860, and became the subsidiary of Walton Advanced Engineering, Inc.
Changed its name to Walton Chaintech Corp on September 7.

Mr. Yu, Hung-Chi, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH in September.
Treasury stocks capital reduction of NT$16 million, with a paid-in capital of NT$2,040,136,860 in September.
2006 Capital reduction of NT$750,489,950 in January, with a paid-in capital of NT$1,289,646,910.
Set up the EMS Business Development Department in January to increase the OEM business.
Set up the Memory Business Development in January and officially entered the DRAM field.
2007 Passed ISO 14001 certification in June.
Capital increase of NT$11.17 million for employees' executive stock option, with paid-in capital reaching NT$1,300,816,910.
Disposal of South Korean subsidiary in December.
2008 Two private placements were listed on the Stock Exchange on September 5.
Capital reduction of NT$532,294,280, with paid-in capital reaching NT$768,522,630 on September 9.
2009 Mr. Chang, Ta-Rung, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH on January 6.
Jointly held 15% of Info-Tek Corporation’s equity with HannStar Board in July.
Mr. Fan, Po-Kang, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH in August.
2010 Cash capital increase of NT$207,500,000, with paid-in capital reaching NT$893,522,630 in March.
Acquired 100% equity of PSA through investment to expand the domestic channel market in April.
The operation headquarters was relocated to the 4F, No. 48-3, Minquan Road, Xindian District in April.
Sold out the entire shares of "Info-Tek Corporation" to GBM in July.
2011 Ended DRAM related businesses in April.
Capital reduction of NT$275,204,970 in November, with paid-in capital reaching NT$618,317,660.
Private placement of common shares totaling NT$385,280,000 in November, with paid-in capital reaching NT$1,178,317,660.
Yeland Investment obtained 35.64% of the Company's equity through private placement in November, and became a major shareholder of CHAINTECH.
Sold out all equity of subsidiary PSA in November.
Established the 1st Remuneration Committee in December.
2012 Mr. Lu, Li-Cheng, representative of Yeland Investment, appointed the Chairman of CHAINTECH on January 18.

Signed strategic alliance cooperation agreement with Shenzhen Colorful Group Limited in March, establishing strategic partnership incorporating production, sales, and research, for joint marketing of main board, display card, and digital multi-media products in March.
Capital reduction of NT$242,615,600 in August, with paid-in capital reaching NT$935,702,060.
Established Jinghong Digital R&D Service Co., Ltd. in Shenzhen in October.
2013 Changed its name to Chaintech Technology Corporation on January 10.
The operation headquarters was relocated to 3F, No. 48-3, Minquan Road, Xindian District in January.
In April, the Investment Review Commission approved Colorful Group’s investment in Zhongjie Properties, directly holding 10% equity of CHAINTECH.
Established the Wise Providence Limited overseas company in May.
Mr. Kao, Shu-Jung, representative of Yicheng International, appointed the Chairman of CHAINTECH on June 21.
Earnings turned capital increase of NT$9,357,030 in September, with paid-in capital reaching NT$945,059,090.
2014 The Investment Review Commission re-approved Colorful Group to invest in Yicheng International in March, directly holding up to 46.2% of the equity of CHAINTECH. In July, CHAINTECH officially varied to China Mainland invested enterprise.
Earnings turned capital increase of NT$147,129,220 in September, with paid-in capital reaching NT$1,092,488,310.
2015 Issuance of common shares by private placement in 2011 and became listed for transactions on June 10.
The status of Zhongjie Properties as a major shareholder was revoked on October 2.
2016 After the re-election of directors and supervisors, two independent directors were elected in addition to implementing corporate governance in June.
2018 Capital reduction of NT$77,500,000 on May 3, the base date for the capital reduction of treasury stock, with paid-in capital reaching NT$1,014,988,310.
Established the Application Technology Development Department in May.
Invested in B2B cloud service company CloudeMile Co. with the main business of in-depth learning and big data analysis in September.
2019 Acquired 51% of Sitonholy (Tianjin) Technology Co., Ltd.’s equity through the subsidiary Jinghong Investment in March.
Closed the Wise Providence Limited overseas company in April.
Sold Bahamas Federal Shanghai Co., Ltd. and Dongguan Kede plant in August.
2020 Invested in uSenlight Corporation in March for the 5G product layout.

2021 Acquired Baotou Yihui Information Technology Co., Ltd. through the subsidiary Sitonholy (Tianjin) Technology Co., Ltd. and strengthened IDC Internet basic platform services.
2022 Established the Mainboard Business Center in May.
Established the 1st Audit Committee in June.
Established Shenzhen subsidiary in November through our subsidiary, Sitonholy (Tianjin).
Capital reduction of NT$50,000,000 on December 12, the base date for the capital reduction of treasury stock, with paid-in capital reaching NT$964,988,310.

Chapter 3. Corporate Governance Report

I. Organization

(I) Organizational Structure

==> picture [483 x 394] intentionally omitted <==

----- Start of picture text -----

Shareholders'
Meeting
Board of Directors
Audit Committee
Auditing Office
Remuneration
Committee
Chairman of the
Board
General Manager
Sales and Motherboard Overseas
Financial Division Material Division
Marketing Division Business Center subsidiaries
----- End of picture text -----

(II) Businesses of Major Departments

Department	Responsible Business
Auditing Office	Assist the Board of Directors and the Manager in checking and reviewing the deficiency of the internal control system and measuring operation effect and efficiency, offering timely improvement suggestions to support the Company in reaching the goal of the internal control system, and ensure sustainable and effective implementation of internal control system that is to be used as the basis for perfectingthe internal control system.
Financial Division	1. Responsible for the mid-to-long-term capital planning and short-term funding scheduling of the Company. 2. Preparing and promoting the planning of operations concerning stock affairs, capital, and credit auditing. 3. Performing budget aggregation and preparation, preparing operational financial statements concerning accounting, tax processing, and cost settlement. 4. Managing and planning the Company's general and common affairs including procurement and management. 5. Establishing educational training system and following up on the implementation effectiveness of each unit. 6. Making and implementing human resource planning, recruitment, appointment, training, and development. 7. Establishing and implementing a personnel management system. 8. Undertaking the formulation of information-related business procedures and systems. 9. Establishing mechanisms related to safety control and firewall. 10. Preparing, reviewing and managing contracts, and handling matters involving litigation and mediation cases, collection of decrees, protection of intellectual propertyand operation secrets, and collection of bad debts.
Marketing Division	1. Planning and promoting various public relations advertising and marketing activities to enhance the image and reputation of the Company and its products. 2. Providing various marketing tools and formulating sales and marketing strategies to assist the business units in selling. 3. Responsible for sales and business expansion of the products. 4. Responsible for control and management related matters like handling of orders, arranging shipping, import and export declarations, and cargo insurance. 5. Responsible for matters related to customer service, DOA, RMA, and technical support.
Material Division	1. Responsible for the procurement and return of all raw materials, personal or production equipment as well as the disposal of abnormalities and claim for compensation thereof. 2. Responsible for supplier management and evaluation as well as raw material price investigation and costprice review and analysis.

Department	Responsible Business
	3. Keeping abreast of delivery schedules of materials and ensuring their sources to avoid production interruption and thus product delivery as a result of material shortage. 4. Responsible for orderproduction schedulingandprogress control management.
Motherboard Business Center	1. Responsible for the research and development of new products and the confirmation of primary samples. 2. Responsible for analysis and countermeasures of product defects for improvement and uplifting quality. 3. Responsible for document control operations to ensure the appropriateness and effectiveness of the documents. 4. Responsible for the matters related to new product verification, transfer of technology, and parts recognition. 5. Collecting industrial information and planning the specifications of products and services as reference for product development. 6. Providing customer service and resolving customers' problems arising in the use of CHAINTECH's products and transferring customer feedback to the relevant responsible units for handling and follow-up. 7. Promoting the implementation of quality assurance systems in each department of CHAINTECH. 8. Supervisingand implementingallqualitysystems.
Overseas subsidiaries	Responsible for managing the overseas subsidiaries.

II. Information of Directors, Supervisors, General Manager, Deputy General Manager, Assistant Manager, and Managers of Departments and Branches

(I) Director Information

1. Director Information

Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information	Departments and Branches (I) Director Information 1. Director Information
							April 18,2023 Unit: NT$thousands
Title	Nationality or Registration Place	Name	Gender Age	Date of Election	Term	Date First Election	Shares Held Upon Election		Number of Shares Currently Held		Shares Held by Spouse and Underage Children		Shares Held in the Name of Other Persons		Main Education and Experience	Current Positions in CHAINTECH and Other Companies	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:			Remarks
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Title	Name	Relation
Chairman of the Board	R.O.C.	E Cheng Technology Limited Representative: Kao, Shu-Jung	Male 60-69	2019.6.14	3	2012.1.18 2013.6.21	28,532,080 `－`	28.11 `－`	28,532,080 `－`	28.11 `－`	`－` `－`	`－` `－`	`－` `－`	`－` `－`	Department of Electronic Engineering, National Chin- Yi University of Technology, General Manager of AI-EN Thailand domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc.	President of the Company, Supervisor of E Cheng, Director of uSenlight Corporation, and Director of JDX Technology Co., Ltd.	`－`	`－`	`－`	Note 1
Director	R.O.C.	E Cheng Technology Limited Representative: Lu, Li-Cheng	Male 60-69	2019.6.14	3	2012.1.18 2012.1.18	28,532,080 `－`	28.11 `－`	28,532,080 `－`	28.11 `－`	`－` `－`	`－` `－`	`－` `－`	`－` `－`	General Manager of Computer Research Institute of Bond University and Albatron Technology Administrative Management Center, General Manager of LJ Optics, Chairman and General Manager of Chaintech Technology Corporation, corporate supervisor representative of Fullerton Technology Co., Ltd.	Chairman of Chun Electronics Co., Ltd. Independent Director of Walton Advanced Engineering, Inc.	`－`	`－`	`－`
Director	R.O.C.	E Cheng Technology Limited Representative: Wang, Mu-Tien	Male 50-59	2019.6.14	3	2012.1.18 2013.6.21	28,532,080 `－`	28.11 `－`	28,532,080 `－`	28.11 `－`	`－` `－`	`－` `－`	`－` `－`	`－` `－`	College of Law in Taiwan University, EMBA of the Chinese University of Hong Kong, Vice President of Credit Card Business Department of Ping An Bank, Associate Manager of Credit Business Division of CTBC Bank, General Manager of Credit Card Customer Service	CEO, Shanghai Himalayas Financial Information Services Co., Ltd.	`－`	`－`	`－`

Title	Nationality or Registration Place	Name	Gender Age	Date of Election	Term	Date First Election	Shares Held Upon Election	Shares Held Upon Election	Number of Shares Currently Held	Number of Shares Currently Held	Shares Held by Spouse and Underage Children	Shares Held by Spouse and Underage Children	Shares Held in the Name of Other Persons	Shares Held in the Name of Other Persons	Main Education and Experience	Current Positions in CHAINTECH and Other Companies	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Remarks
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Title	Name	Relation
															Department of China Merchants Bank.
Independent Director	R.O.C.	Chen, Kuo-Chin	Male 50-59	2019.6.14	3	2016.6.14	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	School of Computer Science, Tamkang University IBM Project Manager, HP Senior Deputy General Manager, Professional Consultant and Lecturer of Haoyu, Qunchuang, Yuyi, Chuangxin and Dun & Bradstreet	Professional Consultant and Lecturer of Timing international Group	`－`	`－`	`－`
Independent Director	R.O.C.	Tang, Han-Yu	Male 50-59	2019.6.14	3	2016.6.14	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	MBA of Peking University, General Manager of Gigabyte China Region, Consultant of VIA CPU Platform Inc.	Vice President of Business and General Manager of China for VIA Next Technologies,Inc.	`－`	`－`	`－`
Independent Director	R.O.C.	Yang, Hsin-Ying	F 30-39	2022.6.15	3	2022.6.15	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	B.S. in Financial Management, Ohio State University; MBA, Baruch College, City University of New York; Associate, Corporate Finance (Taipei), Citibank, N.A.	Independent Director, Shun On Electronic Co., Ltd., Director, Raffles Family Office(HK)	`－`	`－`	`－`	Note 2
Independent Director	R.O.C.	Wei, Chi-Feng	Male 40-49	2022.6.15	3	2022.6.15	613,000	0.60	578,000	0.60	`－`	`－`	`－`	`－`	School of Computer Science, Tamkang University Deputy General Manager, HP	Chairperson and General Manager, Emptech Co., Ltd.	`－`	`－`	`－`	Note 2

Note 1. Where the Chairman and the general manager is the same person, explain the reason, rationality, necessity, and responding measures: (1) The Chairman is also the general manager of CHAINTECH, which allows the Board of Directors to grasp the operating status of the Company and delayer the management capacity to improve the efficiency and decision-making capacity. (2) To improve the independence of the Board of Directors, the Company actively trains proper candidates and has increased the number of seats for Independent Directors to 4 for realizing corporate governance. (3) Among the members of the Board of Directors, less than half of the Directors are also an employee or managerial personnel. Note 2. Reelected and reappointed on 06/15/2022

April 18, 2023

Major Shareholders of the Corporate Shareholders

2. Major Shareholders of	the Corporate Shareholders April 18,20
Name of Corporate Shareholders	Major Shareholders of the Corporate Shareholders
E Cheng Technology Limited	COLORFUL GROUP LIMITED (100%)

Note 1. Directors and supervisors who are corporate shareholders shall fill in the name of corporate shareholders.
Note 2. Fill in the names of major shareholders with top-10 ownership of the institutional shareholders and their individual holding percentage. If the major shareholders are a judicial person, please proceed to fill in more details in Table 2 below.
Note 3. For institutional shareholders who are not under the organization of the Company, the name and shareholding of the shareholders shall be disclosed, i.e., name of the investor or donor and their contribution or donation ratio (refer to the notice issued by the Judicial Yuan for reference); if the donor has passed away, indicate “Passed away”.

3. Major Shareholders as Judicial Person

April 18, 2023

	April 18,2023
Name of Corporate Shareholders	Major Shareholders of the Corporate Shareholders
COLORFUL GROUP LIMITED	Wan Shan (100%)

Note 1. If major shareholders in the above Table 1 are a judicial person, the name of a judicial person shall be filled.
Note 2. Enter the names of the major shareholders of the corporation (with the top 10 shareholdings) and their shareholding ratios.
Note 3. For corporate shareholders who are not under the organization of the Company, the name and shareholding of the shareholders shall be disclosed, i.e., name of the investor or donor and their contribution or donation ratio (refer to the notice issued by the Judicial Yuan for reference); if the donor has passed away, indicate “Passed away”.

Disclosure of professional qualifications of directors and independence of independent directors:

	independent directors:
Conditions Name	Professional Qualification and Experience (Note 1)	Independence (Note 2)	Number of Other Taiwanese Public Companies Concurrently Served as an Independent director
Director: Representative, E Cheng Technology Limited: Kao, Shu-Jung	Graduated from the Department of Electronics, National Chin- Yi University of Technology, Chairman and General Manager of the Company, Currently, he is the corporate supervisor of E Cheng Technology Limited, corporate director of uSenlight Corporation, and director of JDX Technology Co., Ltd., more than five years of experience in business, finance, and corporate business, and has nearly 30 years of experience in the computer peripheral industry, with operational leadership, marketing, industry expertise and operational management skills, not fallen underSection30 ofthe CompanyAct.	None	None
Director: Representative, E Cheng Technology Limited: Lu, Li-Cheng	Master of Computer Science from BOND University, Australia, former General Manager of the Company, current Chairman of Chun Electronics Co., Ltd., Chairman of Peugeot Automotive, Independent Director of Walton Advanced Engineering, Inc., Executive Director of PG Union, with more than five years of business, financial and corporate business, competent in business leadership, marketing, industry expertise and operation management, not fallen under Section 30 of the Company Act.	None	1
Director: Representative, E Cheng Technology Limited: Wang, Mu- Tien	Bachelor of Law from National Taiwan University, EMBA from the Chinese University of Hong Kong, former Associate Manager of CTBC Bank Credit Card Division, Marketing Director of Bank of Communications Credit Card Center, Senior Vice President of CreditEase Group, currently CEO of Shanghai Himalala Financial Information Service Co., Ltd., with more than five years of business, finance and corporate business, competent in business leadership, marketing, legal and operational management and not fallen under Section 30 of the Company Act.	None	None
Independent Director Tang, Han-Yu	MBA, Peking University, former General Manager of GIGABYTE China, currently a consultant of VIA CPU Platform Inc., with more than five years of experience in business, finance, and corporate business, competent in business leadership, marketing, industry expertise, and operational management, not fallen under Section 30 of the Company Act.	Status of Independence	None
Independent Director Chen, Kuo- Chin	Bachelor of Computer Science from Tamkang University, author of_Five Forces Success Equation_published by Business Weekly Press, former Project Manager of IBM, Senior Vice President of HP, current consultant and lecturer of Timing International Group, with more than five years of business, finance and corporate business experience, competent in business leadership, marketing and operation management, not fallenunderSection30 ofthe CompanyAct.	Status of Independence	None

Conditions Name	Professional Qualification and Experience (Note 1)	Independence (Note 2)	Number of Other Taiwanese Public Companies Concurrently Served as an Independent director
Independent Director Yang, Hsin- Ying	Bachelor in Financial Management of Ohio State University and MBA from Baruch College, City University of New York, former Associate Manager of Citibank Corporate Finance (Taipei) and Manager of J.P. Morgan Asset Management (Hong Kong), current director of Raffles Family Office (Hong Kong) and independent Director of Shun On Electronic Co., Ltd., at least 5 years of working experience in business, finance and corporate business, competent in finance, accounting and risk management, and not fallen under Section 30 of the Company Act.	Status of Independence	1
Independent Director Wei, Chi-Feng	Department of Industrial Engineering, Da-Yeh University, former Deputy General Manager, HP, currently Chairman and General Manager of Emptech Co., Ltd., with more than five years of experience in business, finance, accounting and corporate business, competent in IT, marketing, industry expertise and business management, not fallen under Section 30 ofthe CompanyAct.	Status of Independence	None

Note 1. Professional Qualification and Experience: State the professional qualifications and experience of individual directors. If they are members of the Audit Committee and have accounting or financial expertise, their accounting or financial background and work experience should be stated. Also state whether there are any circumstances under Article 30 of the Company Act .
Note 2. Independent directors should state their independence, including but not limited to whether they, their spouse, or relatives within the second degree of kinship serve as directors, supervisors or employees of the Company or its affiliates; The number and proportion of the Company's shares held by relatives (or in the name of others); whether they serve as directors, supervisors or employees that have a specific relationship with the Company (refer to the provisions of Article 3, Paragraph 1, Subparagraphs 5 to 8 of the Regulations on the Establishment of Independent Directors of Public Companies and Matters to be Complied with); the amount of remuneration received for providing business, legal, financial, accounting and other services to the Company or its affiliates in the last two years.
Diversity and Independence of the Board of Directors:
- (1) Diversity of the Board of Directors:

The Company advocates and respects the policy of diversity of directors. In order to strengthen corporate governance and promote the sound development of the composition and structure of the Board of Directors, the Company advocates board diversity policy to improve the overall performance of the Company. Members of the Board of Directors are selected on a merit-based basis, with diverse and complementary abilities across industries, including basic composition (e.g. age, gender, nationality, etc.), industry experience and relevant competence (e.g., finance, accounting, legal and information technology), as well as business judgment, management, leadership and decision making and

crisis management abilities. In order to strengthen the functions of the Board of Directors to achieve the desired objectives of corporate governance, Article 20 of the Corporate Governance Best Practice Principles of the Company sets out the following capabilities of the Board of Directors as a whole:

Ability to make sound business judgment; 2. Ability to conduct accounting and financial analysis; 3. Business management ability. 4. Crisis management ability. 5. Knowledge of the industry. 6. An understanding of international markets; 7. Leadership ability. 8. Ability to make decisions.

The current diversity policy of the Board of Directors of the Company and its implementation are as follows:

Item of diversification Names of Directors and Supervisors	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Basic composition	Expertise	Expertise	Expertise	Expertise	Expertise	Expertise	Expertise	Expertise
	Nationality	Gender	Employee status	Age				Seniority of Independent Director			Finance	Information technology	Marketing	Legal	Business management	Finance/Accounting	Leadership/Decision-making capabilities	Risk management
				30 to 39	40 to 49	50 to 59	60 to 69	Below 3 years	3 to 9 years	9+ years
Director: E Cheng Technology Limited Representative: Kao, Shu-Jung	R.O.C.	Male	V				V					V	V		V		V	V
Director: E Cheng Technology Limited Representative: Lu, Li- Cheng	R.O.C.	Male					V					V	V		V		V	V
Director: E Cheng Technology Limited Representative: Wang, Mu-Tien	R.O.C.	Male				V					V		V	V	V			V
Independent Director Tang, Han-Yu	R.O.C.	Male				V			V			V	V		V		V	V
Independent Director Chen, Kuo-Chin	R.O.C.	Male				V			V			V	V		V			V
Independent Director Yang, Hsin-Ying	R.O.C.	F		V				V			V					V		V
Independent Director Wei, Chi-Feng	R.O.C.	Male			V			V				V	V		V		V

The Company currently has 7 directors (including 4 independent directors), of which 14% (1) is employee, 57% (4) are independent directors, 86% (6) are male directors and 14% (1) is female director, and will increase one female directors to achieve gender equality.

(2) Independence of the Board of Directors:
A. The Company currently has four independent directors, accounting for 57% of the total number of directors, in compliance with the requirement that the number of independent directors shall not be less than 1/5 of the total number of directors, and the number of independent directors currently accounts for 4/7 of the total number of directors.
B. Among the four independent directors, two of them are newly elected this year, and the other two have not served for more than nine years, in compliance with the requirement that the term of office should be less than nine years.
C. Only one director is concurrently an employee, which is in compliance with the independence requirement.
D. None of the members of the Board of Directors falls under paragraphs 3 and 4 of Article 26-3 of the Securities and Exchange Act , and there is no spouse or kinship within the second parental level among the directors.

In summary, the independence objectives of the Board of Directors have been achieved and their qualifications are in compliance with the law.

(II) Information on General Manager, Deputy General Manager, Assistant Managers, and Managers of Departments and Branches

							April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -	April 18,2023 Unit: Shares Shares Held By Spouse and Minor Children Shares Held in the Name of Other Persons Main Education and Experience Positions Currently Held in Other Companies Managers who have spousal or second- degree family relationships within the Company End of Remarks Number of shares Shareholding ratio Number of shares Shareholding ratio Title Name Relation `－` `－` `－` `－` Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc None `－` `－` `－` (Note 1) `－` `－` `－` `－` M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities None `－` `－` `－` (Note 2) `－` `－` `－` `－` Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA) None `－` `－` `－` (Note 3) `－` `－` `－` `－` M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron None `－` `－` `－` (Note 4) `－` `－` `－` `－` Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc. None `－` `－` `－` -
Title	Nationality	Name	Gender	Date of Appointment	Number of Shares Held		Shares Held By Spouse and Minor Children		Shares Held in the Name of Other Persons		Main Education and Experience	Positions Currently Held in Other Companies	Managers who have spousal or second- degree family relationships within the Company			End of Remarks
					Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Title	Name	Relation
General Manager	R.O.C.	Kao, Shu- Jung	Male	2013.7.31	`－`	`－`	`－`	`－`	`－`	`－`	Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc	None	`－`	`－`	`－`	(Note 1)
Associate Manager of Marketing and Planning Department	R.O.C.	Chou, Tzu-An	Male	2016.5.1	`－`	`－`	`－`	`－`	`－`	`－`	M.S., Graduate School of Business Administration, National Taipei University, Manager of KPMG Taiwan and Underwriting Department, South China Wing Cheong, Senior Manager, Capital MarketsDivision,Risheng Securities	None	`－`	`－`	`－`	(Note 2)
Associate Manager, Motherboard Business Center	R.O.C.	Huang, Po-Lin	Male	2022.9.5	`－`	`－`	`－`	`－`	`－`	`－`	Department of Information Technology, Chung Hua University General Manager, American Megatrends International,LLCTaiwan Branch(USA)	None	`－`	`－`	`－`	(Note 3)
Associate Manager, Information Department	R.O.C.	Wei, Shih- Lun	Male	2023.3.1	`－`	`－`	`－`	`－`	`－`	`－`	M.S. in Computer Information Systems, University of Miami, U.S.A., Associate Manager of CRM Customer Relationship System, Wistron	None	`－`	`－`	`－`	(Note 4)
Financial/Accounting Manager	R.O.C.	Lai, Yu-Nu	F	2005.9.7	`－`	`－`	`－`	`－`	`－`	`－`	Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc.	None	`－`	`－`	`－`	-

Note 2. Mr. Chou, Tzu-An left the Company on January 31, 2022. Note 3. Associate Manager Huang, Po-Lin was inaugurated on September 5, 2022. Note 4. Associate Manager Wei, Shih-Lun was promoted to the position on March 1, 2023.

(III) Remuneration Paid During the Most Recent Fiscal Year to Directors, Supervisors, General Manager and Deputy General Manager

Remuneration to Directors and Independent Directors (names and remuneration thereof to be disclosed individually)

2022 Unit: NT$ thousands/share

Title	Name	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Total of A, B, C and Dand percentage to net income after tax	Total of A, B, C and Dand percentage to net income after tax	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Remuneration Paid to ConcurrentEmployees	Total of A, B, C, D, E, F and Gand percentage to net income after tax	Total of A, B, C, D, E, F and Gand percentage to net income after tax	Is there remuneration from reinvestee other than subsidiary or parent company
		Remuneration (A)		Severance pay and pension (B)		Remuneration of directors (C)		Allowances (D)				Salaries, bonuses and special expenses(E)		Severance pay and pension (F)		Employee rewards (G)
		Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech		All companies listed in this financial report		Chaintech	All companies listed in this financial report
																Cash	Stock	Cash	Stock
Director and General Manager	Representative of E Cheng Technology Limited: Kao, Shu- Jung	`－`	`－`	`－`	`－`	11,268	11,268	108	108	3.55	3.55	3,180	3,180	`－`	`－`	575	`－`	575	`－`	4.72	4.72	600
Director	E Cheng Technology Limited Representative: Lu, Li-Cheng
Director	Representative of E Cheng Technology Limited: Wang, Mu- Tien
Independent Director	Tang, Han-Yu	`－`	`－`	`－`	`－`	850	850	144	144	0.31	0.31	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	0.31	0.31	`－`
Independent Director	Chen, Kuo-Chin
Independent Director	Yang, Hsin-Ying
Independent Director	Wei, Chi-Feng
1. Please describe the remuneration payment policy, system, standard, and structure of Independent Directors, and describe the connectivity with the amount of the remuneration paid according to factors such as duties, risks assumed, and time invested: For the remuneration of Independent Directors, except for referring to Directors' performance evaluation results, the Company also refer to Article 16-1 of the Company's Articles of Incorporation: where the Board of Directors are authorized to determine the remuneration of Directors and Supervisors according to the level of participation with CHAINTECH's operations and the value of their contribution, with reference to the standard within the industry. 2. In addition to the information disclosed in the table above, remuneration paid to any director of the Company (such as serving as a adviser to all non-employees of the parent company/all companies/re-invested companies in the financial report,etc.)in the most recent fiscalyear: None. None.

Table of range of remuneration

Table of range of remuneration
Range of Remuneration Paid to Each Director of CHAINTECH	Name of Directors
	Total of the four items(A+B+C+D)		Total of the seven items(A+B+C+D+E+F+G)
	CHAINTECH	All companies listed in this financial reportI	CHAINTECH	All companies listed in this financial report J
Less than NT$ 1,000,000	Lu, Li-Cheng, Wang, Mu-Tien, Tang,Han-Yu, Chen,Kuo-Chin	Same as left	Lu, Li-Cheng, Wang, Mu-Tien, Tang,Han-Yu, Chen,Kuo-Chin	Same as left
NT$1,000,000 (inclusive) to NT$2,000,000
NT$2,000,000 (inclusive) to NT$3,500,000
NT$3,500,000 (inclusive) to NT$5,000,000	Kao, Shu-Jung	Same asleft	Kao, Shu-Jung	Same asleft
NT$5,000,000 (inclusive) to NT$10,000,000
NT$10,000,000 (inclusive) to NT$15,000,000
NT$15,000,000 (inclusive) to NT$30,000,000
NT$30,000,000 (inclusive) to NT$50,000,000
NT$50,000,000 (inclusive) to NT$100,000,000
OverNT$100,000,000
Total	5	5	5	5

2. Supervisors' remuneration (disclose the name and remuneration individually)

2022 Unit: NT$ thousands/share

Title	Name	Supervisors' remuneration	Supervisors' remuneration	Supervisors' remuneration	Supervisors' remuneration	Supervisors' remuneration	Supervisors' remuneration	Total of A, B and Cand percentage to net income after tax	Total of A, B and Cand percentage to net income after tax	Is there remuneration from reinvestee other than subsidiary or parent company
		Remuneration (A)		Rewards (B)		Allowances (C)
		CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report
Supervisor	Chou Chun- Tsun	`－`	`－`	`－`	`－`	36	36	0.02	0.02	`－`
Supervisor	Hsu, Sheng- Chin

Note: The Supervisors all stepped down on June 15, 2022 when the Shareholders' Meeting elected 4 Independent Directors to replace the Supervisors to form the Audit Committee.

Table of range of remuneration

	Table of range of remuneration	Table of range of remuneration
Range of Remuneration Paid to Each Supervisor of CHAINTECH	Name of Supervisor
	Total of the three items (A B C)
	CHAINTECH	All companies listed in this financial report D
Less than NT$ 1,000,000	Hsu, Sheng-Chin, Chou, Chun-Tsun	Same as left
NT$1,000,000 (inclusive) to NT$2,000,000
NT$2,000,000 (inclusive)toNT$3,500,000
NT$3,500,000 (inclusive) to NT$5,000,000
NT$5,000,000 (inclusive) to NT$10,000,000
NT$10,000,000 (inclusive)toNT$15,000,000
NT$15,000,000 (inclusive) to NT$30,000,000
NT$30,000,000 (inclusive) to NT$50,000,000
NT$50,000,000 (inclusive)toNT$100,000,000
OverNT$100,000,000
Total	2	2

3. Remuneration for the General Manager and Deputy General Manager (disclose the name and remuneration individually)

2022 Unit: NT$ thousands/share

Title	Name	Salary (A)	Salary (A)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and allowances, etc. (C)	Bonuses and allowances, etc. (C)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Total of A, B, C and D andpercentage to net income after tax(`％`)	Total of A, B, C and D andpercentage to net income after tax(`％`)	Remuneration from reinvestee other than subsidiary or parent company
		Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	CHAINTECH		All companies listed in this financial report		Chaintech	All companies listed in this financial report
								Cash	Stock	Cash	Stock
Director and General Manager	Kao, Shu- Jung	2,616	2,616	`－`	`－`	600	600	575	`－`	575	`－`	1.18	1.18	`－`

Table of range of remuneration

Range of Remuneration Paid to the General Manager and Deputy General Managers	Name of General Manager and DeputyGeneral Manager	Name of General Manager and DeputyGeneral Manager
	CHAINTECH	All companies listed in this financial report E
Less than NT$ 1,000,000
NT$1,000,000 (inclusive) to NT$2,000,000
NT$2,000,000 (inclusive) to NT$3,500,000
NT$3,500,000 (inclusive) to NT$5,000,000	Kao, Shu-Jung	Same as left
NT$5,000,000 (inclusive) to NT$10,000,000
NT$10,000,000 (inclusive) to NT$15,000,000
NT$15,000,000 (inclusive) to NT$30,000,000
NT$30,000,000 (inclusive) to NT$50,000,000
NT$50,000,000 (inclusive) to NT$100,000,000
OverNT$100,000,000
Total	1	1

4. Remuneration for the Five Senior Officers with the Highest Remuneration (disclose the name and remuneration individually)

2022 Unit: NT$ thousands/share

Title	Name	Salary (A)	Salary (A)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and allowances, etc. (C)	Bonuses and allowances, etc. (C)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Total amount of A, B, C and D and percentage of net income aftertax(%)	Total amount of A, B, C and D and percentage of net income aftertax(%)	Remuneration from reinvestee other than subsidiary or parent company
		Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech	All companies listed in this financial report	Chaintech		All companies listed in this financial report		Chaintech	All companies listed in this financial report
								Cash	Stock	Cash	Stock
Director and General Manager	Kao, Shu- Jung	4,417	4,417	99	99	990	990	960	`－`	960	`－`	2.02	2.02	`－`
Assistant Manager of Marketing and Planning	Chou, Tzu- An (Note 1)
Associate Manager, Motherboard BusinessCenter	Huang, Po- Lin (Note 2)
Financial/Accounting Manager	Lai, Yu-Nu

Note 1. Mr. Chou, Tzu-An left the Company on January 31, 2022.

Note 2. Associate Manager Huang, Po-Lin was inaugurated on September 5, 2022.

Names of Managers and for Distribution of Employees Remunerations and Distribution Status

					December 31,2022	December 31,2022
	Title	Name	Stock	Cash	Total	Ratio of total amount to net income (%)
Managerial Officers	Director and General Manager	Kao, Shu-Jung	`－`	960	960	0.30
	Assistant Manager of Marketing and Planning	Chou, Tzu-An (Note 1)
	Associate Manager, Motherboard Business Center	Huang, Po-Lin (Note 2)
	Financial/Accounting Manager	Lai, Yu-Nu

Note 1. Mr. Chou, Tzu-An left the Company on January 31, 2022.

Note 2. Associate Manager Huang, Po-Lin was inaugurated on September 5, 2022.

(IV) Compare and analyze the total remunerations paid to each of CHAINTECH's Directors, Supervisors, General Managers, and Deputy General Managers in the 2 most recent years by all companies listed in this Company's individual and consolidated financial statements as a percentage of NIAT listed in the individual financial report and describe the policies, standards, and packages for payment of and the procedures for determining of such compensations and its linkage to business performance and future risk exposure.
Analysis of total remuneration of Directors, Supervisors, General Manager and Deputy General Manager as a percentage of NIAT:

Item Title	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes
	2022		2021
	Chaintech	All companies included in the financial statements	Chaintech	All companies included in the financial statements
Directors (including independent directors)	5.03	5.03	6.95	6.95
Supervisor	0.02	0.02	0.43	0.43
General Managers and Deputy General Manager	1.18	1.18	3.10	3.10

Description of policies, standards, and packages for payment of remuneration of CHAINTECH, as well as procedures for determining remuneration, and its linkage to business performance and future risk exposure relevance:
(1) The remuneration of CHAINTECH's Directors comprise of salaries, rewards, and allowances:

Allowances: Primarily comprise of traffic allowance for Directors and Supervisors, which is determined according to the payment standards for listed companies or within the industry.

Salaries: All CHAINTECH's Directors and Supervisors do not get paid salaries.

Remuneration: In accordance with Article 19 of the Company's Articles of Incorporation, the rewards of the Company's directors are based on the evaluation results of the Board of Directors' Performance Evaluation and the Remuneration Committee Charter, and the performance evaluation results of individual directors are used as the basis for consideration and reference in determining their individual remuneration each year. In addition to the overall operational performance, future business risks and development trends of the industry, the Company also takes into account the performance achievement rate and contribution of individual directors and provides them with reasonable remuneration. The performance evaluation and the reasonableness of the remuneration are proposed and reviewed by the Remuneration Committee and discussed and approved by the Board of Directors.

(2) The remuneration of the managerial officers shall be in accordance with Paragraph 2, Article 3 of the Regulations Governing the Remuneration of Managerial Officers of the Company, including salaries, bonuses, and employee rewards, etc., which shall be based on the duties and contributions of the Manager and shall be determined by taking into consideration the Regulations

Governing the Assessment and Evaluation of Employees of the Company and the salary level of the position in the industry market. Since the establishment of the Remuneration Committee on December 1, 2011, the remuneration of the managerial officers has been proposed and approved by the Remuneration Committee and discussed and approved by the Board of Directors.

(3) Relevance of future risk: The remuneration standards, or structure and system of CHAINTECH to pay Directors, Supervisors, General Manager and Deputy General Managers are based on the evaluation according to CHAINTECH's Regulations Governing the Evaluation for Directors and Managers. Except for referring to the overall operating efficiency of the Company, the future operating risks and development trend of the industry, CHAINTECH also refers to the individual performance achievement and the contribution made to CHAINTECH's performance to provide reasonable compensation. Relevant performance audit and rationality of remuneration are reviewed by the Remuneration Committee and the Board of Directors, and they shall review the remuneration system at any time according to the actual operating status and relevant laws and regulations to pursue the balances between the sustainable operations and risk control of the Company.

III. Status of Corporate Governance

(I) Implementation of Board of Directors

A total of 6 meetings (A) were held by the Board of Directors in 2022. The attendance of directors and supervisors was as follows:

Title	Name	Number of Actual Attendance (Appearance) (B)	Times of Attendance by Proxy	Actual attendance (attendance as nonvoting delegate) (%) [B/A]	Remarks
Chairman of the Board	Representative of E Cheng Technology Limited: Kao, Shu- Jung	6	0	100%	Re-elected (required to attend 6 meetings) Re-election Date: 2013.6.21
Director	Representative of E Cheng Technology Limited: Lu, Li- Cheng	6	0	100%	Re-elected (required to attend 6 meetings) Re-election Date: 2012.1.18
Director	Representative of E Cheng Technology Limited: Wang, Mu- Tien	6	0	100%	Re-elected (required to attend 6 meetings) Re-election Date: 2013.6.21
Independent Director	Tang, Han-Yu	6	0	100%	Re-elected (required to attend 6 meetings) Re-election Date: 2016.6.14
Independent Director	Chen, Kuo-Chin	5	1	83%	Re-elected (required to attend 6 meetings) Re-election Date: 2016.6.14
Independent Director	Yang, Hsin-Ying	3	0	100%	Newly elected (required to attend 3 meetings) Re-election Date: 2022.6.15
Independent Director	Wei, Chi-Feng	3	0	100%	Newly elected (required to attend 3 meetings) Re-election Date: 2022.6.15
Supervisor	Chou Chun-Tsun	3	0	100%	Resigned (required to attend 3 meetings) Date resigned 2022.6.15
Supervisor	Hsu Sheng-Chin	1	0	33%	Resigned (required to attend 3 meetings) Date resigned 2022.6.15

Attendance of Independent Directors at each board meeting ◎: Attendance in Person ☆ : Attendance

by Proxy `＊` : On Leave

byProxy `＊`: On Leave
2022	1/21	3/23	5/4	6/15	8/4	11/4
Tang, Han-Yu	◎	◎	◎	◎	◎	◎
Chen, Kuo-Chin	◎	◎	◎	☆	◎	◎
Yang, Hsin-Ying	`－`	`－`	`－`	◎	◎	◎
Wei, Chi-Feng	`－`	`－`	`－`	◎	◎	◎

Other issues to be recorded:

If operation of the Board of Directors encounters one of the following circumstances, the date, session of the board meeting, content of the proposal, opinions of all Independent Directors, and the Company’s handling of the aforementioned opinions should be clarified:
(1) Matters referred to in Article 14-3 of the Securities and Exchange Act. CHAINTECH has established an Audit Committee, hence not applicable.
(2) Other than the matters mentioned above, other resolutions on which the Independent Directors have dissenting opinions with records or written announcements: None.
In regards the recusal of Independent Directors from voting due to conflict of interests, the name of the Independent Directors, the resolutions, reasons for recusal due to conflict of interests and voting outcomes shall be stated:

Items	Date/Term	Recusal Director	Proposal Content	Reasons of recusal	Participation in Voting
1	2022.1.21 The 17th session of the 14th Board of Directors	Kao, Shu-Jung	Discuss the proposal on 2022 managerial officers' remuneration	Conflict of interests	Recusal from law and not participate in voting
		Kao, Shu-Jung	Discuss the 2021 managerial officers' year- end bonus and special leaves bonus	Conflict of interests	Recusal from law and not participate in voting
2	2022.3.23 The 18th session of the 14th Board of Directors	Kao, Shu- Jung/Lu, Li- Cheng/Wang, Mu-Tien/Tang, Han-Yu/Chen, Kuo-Chin	Discuss the proposal on CHAINTECH's 2021 rewards to Directors and Supervisors.	Conflict of interests	Recusal from law and not participate in voting regarding the personal remuneration
		Kao, Shu-Jung	Discuss the proposal on CHAINTECH's 2021 rewards to managerial officers	Conflict of interests	Recusal from law and not participate in voting

Disclose the evaluation cycle and period, scope of evaluation, method, and content of evaluation for the Board of Directors' self (or peer) evaluation

Implementation of Board of Directors' Evaluation

Evaluation cycle	Period of evaluation	Scope of evaluation	Evaluation method	Content of evaluation
Once a year	From January 1, 2022 to December 31, 2022	Board of Directors, Individual Directors, Remuneration Committee and Audit Committee	Internal self-evaluation of the Board of Directors, self- evaluation of Directors, internal self-evaluation of the Remuneration Committee and internal evaluation of the Audit Committee	Please see the following explanation s for details

(1) The internal evaluation of annual performance in 2022 aimed to:
A. Performance audit for the Board of Directors: (1) the degree of participation in the Company's operations; (2) enhancement of decision-making quality of the Board of Directors; (3) the composition and structure of the Board of Directors; (4) the election and continuous education of Directors.; (5) internal control.
B. Performance audit for the individual Directors: (1) mastery of the Company's objectives and tasks; (2) cognition of Directors’ duties.; (3) the degree of participation in the Company's operations; (4) internal relationship management and communication; (5) professional and continuous education of directors; (6) internal control.
C. Performance evaluation of the Remuneration Committee: (1) the degree of participation in the Company's operations; (2) cognition of functional committees' duties; (3) enhancement of decision-making quality of the functional committees; (4) composition of the functional committees and the election of committee members.
D. Performance evaluation of the Audit Committee: (1) the degree of participation in the Company's operations; (2) cognition of functional committees' duties; (3) enhancement of decision-making quality of the functional committees; (4) composition of the functional committees and the election of committee members; (5) internal control.

(2) Evaluation results:

The Company has completed the self-evaluation of performance of the Board of Directors, functional committees and board members for FY2022, of which the Board of Directors' self-evaluation score was 91 (out of 100); the overall average score of individual board members' self-evaluation was 92 (out of 100); the Remuneration Committee's self-evaluation score was 95 (out of 100); and the Audit Committee's self-evaluation score was 90 (out of 100). It shows that the operation of the Board of Directors, Remuneration Committee and Audit Committee is good as a whole. Only some directors fail to meet the requirements for further study hours and the Remuneration Committee only held two meetings a year, which are the main reasons for failing to get score. It is expected to be the primary improvement plan in 2023. The results of this evaluation have been reported to and approved by the Board of Directors on January 13, 2023.

Goal of enhancing Board of Directors functions (such as establishing an audit committee and uplifting information transparency) and evaluation of its implementation in the current and most recent fiscal year:
(1) To enhance the depth of corporate governance, four independent directors were elected at the shareholders' meeting on June 15, 2022, so that the number of independent directors exceeds one-half of all directors, and an Audit Committee has been formed by all independent directors.
(2) The Remuneration Committee is appointed by the Board of Directors from among all independent directors.
(3) At the beginning of 112, the Company joined the Corporate Operating and Sustainable Development Association and became a member. It provides various refresher courses every year and encourages directors to attend various corporate governance courses to strengthen the functions of board members.
(4) The Company takes out Directors' and Officers' Liability Insurance for all directors and supervisors and managerial officers every year, and reviews the policy contents regularly to ensure that the insurance coverage and indemnity amount meet the needs.
(5) It is expected that a corporate governance officer will be established in FY2023 to enhance the corporate governance objectives.
(II) Operations of the Audit Committee

On June 15, 2022, the directors of the Company were comprehensively re-elected, and the Audit Committee was established on the same day. The Audit Committee only met twice (A) (held on 4/8 and 4/11) in 2022. The independent directors' attendance is as follows:

Title	Name	Times of Attendance in Person (B)	Attendance in Person (%) [B/A]	Remarks
Convener	Tang, Han- Yu	2	100%	Newly elected (required to attend 2 meetings) Date newly elected: 2022.6.15
Members	Chen, Kuo-Chin	2	100%	Newly elected (required to attend 2 meetings) Date newly elected: 2022.6.15
Members	Yang, Hsin-Ying	2	100%	Newly elected (required to attend 2 meetings) Date newly elected: 2022.6.15
Members	Wei, Chi- Feng	2	100%	Newly elected (required to attend 2 meetings) Date newly elected: 2022.6.15

Other issues to be recorded:

If the operation of the Audit Committee falls under any of the following circumstances, the meeting date of the Audit Committee, the session, the content of the proposals, the independent directors' objections, reservations or major proposals, the results of the Audit Committee's resolutions, and the Company's handling of the comments of the Audit Committee.

(1) Matters referred to in Article 14-5 of the Securities and Exchange Act.

Date/Term & Session of the Audit Committee	Date/Term & Session of the Board of Directors	Proposal Content and Resolution	Objections, qualified opinions, or significant suggestions from independent directors	The Company’s response to the opinions of the Audit Committee
2022.8.4 The 1st meeting of the 1st term	2022.8.4 The 2nd meeting of the 15th term	The consolidated financial report of the Company for 2022 Q2.	None	Approved by all the Directors present.
		Pass the proposal on the endorsement for CHAINTECH's re-invested businesses	None	Approved by all the Directors present.
2022.11.4 The 2nd meeting of the 1st term	2022.11.4 The 3rd meeting of the 15th term	The consolidated financial report of the Company for 2022 Q3.	None	Approved by all the Directors present.
		Appointment, Remuneration and Evaluation of Independence of the Company's Certified Public Accountants	None	Approved by all the Directors present.
		Proposal on amendments to the Company's Rules of Procedure fortheBoardMeetings.	None	Approved by all the Directors present.
		Proposal on the amendment and renaming to the Operating Procedures to Prevent Insider Trading ofthe Company	None	Approved by all the Directors present.
		Establishment of a Shenzhen subsidiary through the transfer of investment from Sitonholy (Tianjin) technology Co.,Ltd.	None	Approved by all the Directors present.

(2) Apart from foregoing matters, other matters that were not approved by the Audit Committee, but were approved by two-thirds or more of all directors: None.
In regards to the recusal of Independent Directors from voting due to conflict of interests, the name of the Independent Directors, the resolutions, reasons for recusal due to conflict of interests and voting results shall be stated: None.
Policy on communications between the Independent Directors, the Chief Audit Officer and the CPAs.
(1) The Independent Directors and Chief Audit Officer of CHAINTECH meet at least twice separately per year, and regularly report to the Independent Directors at the Audit Committee meetings regarding the implementation of the Company and its subsidiaries' audit operations and follow-up, and fully communicate during the meeting. The auditors also regularly submit the results of the audit report and follow-up report to Independent Directors.

(2) Communications between the Independent Directors, the Chief Audit Officer and the CPAs:

On June 15, 2022, the Company established an Audit Committee to replace the supervisors. On March 23, 2022, the CPAs held a briefing session with the independent directors and the supervisors; after June 15, 2022, the CPAs communicated with the independent directors and the Chief Audit Officer on the following matters:

Date	Attendees	Proposal Content	Communication Results
2022/3/23 CPA Communication Meeting	Independent Director Tang, Han- Yu, Independent Director Chen, Kuo-Chin Supervisor Chou, Chun-Tsun Supervisor Hsu, Sheng-Chin Chief Audit Officer Chang, Ya-Ling CPA Lin, Ya-Hui	The CPA explained and discussed the scope of audit, findings, other communication matters and independence in 2021 The CPA explained the key points of the recent law update and strengthen information security management	No opinions at this meeting
2022/8/4 Audit Committee	Independent Director Tang, Han- Yu, Independent Director Chen, Kuo-Chin Independent Director Yang, Hsin- Ying Independent Director Wei, Chi- Feng Chief Audit Officer Chang, Ya-Ling CPA Lin,Ya-Hui	CPA post-approval meeting on Q2 2011 consolidated financial statements CPAs' Report on the Update of Securities and Regulatory Law and Corporate Governance Implementation Audit execution report from April to May2022.	No opinions at this meeting
2022/11/4 Audit Committee	Independent Director Tang, Han- Yu, Independent Director Chen, Kuo-Chin Independent Director Yang, Hsin- Ying Independent Director Wei, Chi- Feng Chief Audit Officer Chang, Ya-Ling	Audit report for July to September 2022. Adopt the proposal on the Company's 2023 Audit Plan.	No opinions at this meeting
2023/1/13 CPA Communication Meeting	Independent Director Tang, Han- Yu, Independent Director Chen, Kuo-Chin Independent Director Yang, Hsin- Ying Independent Director Wei, Chi- Feng Chief Audit Officer Chang, Ya-Ling CPA Lin, Ya-Hui	The CPAs explained to the Audit Committee about the Audit Quality Indicator (AQI)	No opinions at this meeting
2023/3/22 Audit Committee	Independent Director Tang, Han- Yu, Independent Director Chen, Kuo-Chin Independent Director Yang, Hsin- Ying Chief Audit Officer Chang, Ya-Ling CPA Feng, Min-Chuan	The CPA explained the scope of audit, findings, other communication matters and independence in 2022, and the meeting discussed the recent law updates and coprorate governance highlights. Audit report for October to December in 2022 Discuss the proposal on the Evaluation for Effectiveness of Internal Control System and the Internal Control System Statement for 2022.	No opinions at this meeting

The CPAs proactively meet at least twice a year to report the audit results of financial

statements and recent changes in relevant laws and regulations to the independent directors and Chief Audit Officer, and attend the meetings of the Audit Committee and the Board of Directors at least twice a year for consultation, communication and discussion and exchange of views. If the independent directors and supervisors have any questions, they can raise them in time and get immediate reply.

(3) CHAINTECH's Independent Directors, Chief Audit Officer, and CPAs maintain healthy communication.
The annual work priorities of the Audit Committee are as follows:

The goal of the Audit Committee is to provide assistance to the Board of Directors in performing its duty of supervising the Company on accounting, auditing, financial reporting process and quality of financial control, and integrity related matters.

Main review items of the Audit Committee include:

‧ Formulation or amendment to the internal control system.
‧ Assessment of the effectiveness of the internal control system
‧ Stipulate or amend procedures for acquiring or disposing of assets, derivatives trading, provision of capital loans to other parties, the provision of endorsements or guarantees to other parties, and other major financial activities.
‧ Items that involve the director's own interests.
‧ Significant asset or derivative transactions.
‧ Significant loans, endorsements or guarantees of funds.
‧ The offering, issuance, or private placement of equity-type securities
‧ Appointment, dismissal and remuneration of CPAs.
‧ Appointment and dismissal of finance manager, accounting manager, and chief internal auditor
‧ The annual financial report signed or stamped with the seal of the Chairman, managerial officer, and chief accounting officer, and the Q2 financial report certified by the accountants.
Succession planning of the Board of Directors and key management
(1) Succession planning of board members

The Company has seven directors (including four independent directors), each with expertise in management, leadership, financial accounting, and industry knowledge required by the Company. The composition of the Board of Directors will be planned for each term according to the Company's development and statutory requirements. In the future, the Company intends to increase the number of environmental protection or information personnel according to the Company's development needs, so as to prepare for the succession plan of directors and to improve the functions of the Board of Directors and enhance the Company's sustainable competitiveness.

(2) Succession planning of the key management

The Company has established the management rules for the managerial level and above as the important management level of the Company. Each employee has a job agent and is scheduled to attend training courses from time to time to strengthen the future management team and to cultivate multi-faceted management talents as reserve cadres for future succession in order to achieve the goal of "professional integrity and sustainable management".

(III) Implementation of corporate governance and the Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons

Reasons
Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
I. Has the Company formulated and disclosed its corporate governance practice principles in accordance with the "Corporate Governance Practice Principles for TWSE/TPEx Listed Companies"?	V		CHAINTECH has adopted the "Corporate Governance Practice Principles" to promote corporate governance at the Board Meeting since December 19, 2014, and has made disclosures on its Company website and MOPS.	None
II. Shareholding Structure & Shareholders' Rights (I) Does the Company establish internal operating procedures to deal with shareholders' suggestions, doubts, disputes and litigations, and implement in accordance with the procedures? (II) Does the Company possess a list of its major shareholders with controlling power as well as the ultimate owners of those major shareholders? (III) Does the Company establish and execute a risk management and firewall system within its affiliates? (IV) Has the Company established internal rules against insiders using undisclosed information to trade in securities?	V V V V		(I) CHAINTECH has appointed a spokesperson and an acting spokesperson to handle related matters in accordance with regulations. Furthermore, CHAINTECH also provides a mailbox exclusive for handling shareholders' recommendations or disputes on CHAINTECH's website. In the event of any dispute, the Company shall entrust the matter to the lawyers of legal consultation of CHAINTECH. (II) CHAINTECH has set up a shareholder stock unit and a stock service agency that can keep abreast of the major shareholders of the Company and the ultimate controlling party of the major shareholders. (III) CHAINTECH and its affiliated enterprises are running independently, and CHAINTECH has formulated the Supervisory Methods for the Group to supervise the operation of subsidiaries, so as to implement the risk control and management mechanism over them. The Company also established effective risk management for the Management of Related Party Transaction. (IV) CHAINTECH has established the “Procedures for Handling Material Internal InformationandPreventionof Insider Trading”	None None None None

Evaluation Items	State ofOperations	State ofOperations	State ofOperations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
			as internal regulations.
III. Composition and Responsibilities of the Board of Directors (I) Has the Board of Directors drawn up policies on diversity of its members and implementedthem?	V		(I) CHAINTECH has established the "Corporate Governance Practice Principles" and "Election Procedures for the Directors and Supervisors" to stipulate the diversity of the composition of the Board. The fundamental conditions and diversity guidelines of professional knowledge have been formulated for CHAINTECH's business operations and development needs. The principle of appointment is based on the merits. On June 15, 2022, the Board of Directors of the Company was fully re-elected at the Annual General Meeting of Shareholders, and a total of 7 directors were elected, of which 4 are independent directors, more than half of all directors, and none of the independent directors have served more than three consecutive terms. Please refer to page 13-18 for the board member diversity policy, specific management objectives and implementation status.	None
(II) In addition to the Remuneration Committee and Audit Committee established according to law, is the Company willing to set up other functional committees? (III) Does the Company establish standards and methods for evaluating Board performance, conduct annual performance evaluations, submit performance evaluation results to	V	V	(II) In addition to the Remuneration Committee set up in accordance with the law, CHAINTECH has elected four independent directors in the 2022 shareholders' meeting. Other functional committees will be set up according to the Company's requirement evaluation. (III) CHAINTECH has adopted the "Regulations Governing Performance Evaluation of the Board of Directors" on January 27, 2021. The scope of evaluation includes the overall operation of	Not yet voluntarily established Currently under planning None

Evaluation Items			State ofOperations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
the Board, and use the results as a basis for determining the compensation and nomination of individual directors? (IV) Does the Company regularly implement assessments on the independence of CPA?	V		the board, the performance of individual directors and the performance evaluation of functional members; The 2022 annual evaluation results were all above 90 points, belonging to the excellent and good grade, which was reported in the Board of Directors on January 13, 2023. For details, please refer to page 30-32. CHAINTECH will benefit from the evaluation in helping the Company and the Board of Directors to gain continual improvements and advances, and the evaluation may serve as the reference for nominating Directors in the future. (IV) Starting from 2023, before the Audit Committee and the Board of Directors resolve to reappoint the CPAs, the Company will evaluate the professionalism, independence, quality control, supervision and innovation of the audit firm and audit team in accordance with the 13 indicators in the five major components of the Audit Quality Indicators (AQI) published by the FSC and the AQI reports provided by the firm. The six indicators will be divided into two levels of consideration; the firm will compare the average index of the industry, and in some cases, the AQI will be compared with the relevant values of the last two years of audit, and the AQIs will be analyzed and applied to confirm the independence and suitability of the appointed CPAs. In 2022, according to the evaluation of CHAINTECH Accounting Department, CPAs from Pricewaterhouse Coopers, Feng, Min- Chuan and Lin, Ya-Hui conform to the independence evaluation standard, so they are competent enough to act as CPAs for CHAINTECH, so they were elected and appointed at the Board of Directors and theAudit Committee on December 4,2022.The	None

Evaluation Items			State ofOperations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
			independence and appropriateness of the appointed CPAs for FY2023 will be discussed at the board meeting in November 2023 after the AQI report of the appointed firm is obtained and evaluated. CHAINTECH's 2022 CPA independence assessment standards are detailed in Page 43.
IV. Does the listed Company have an adequate number of qualified corporate governance personnel and assign a corporate governance executive to handle corporate governance matters (including but not limited to the provision of data to Directors and Supervisors for business execution, assisting Directors and Supervisors in legal compliance, matters related to Board Meeting and Shareholders' Meeting, preparation of minutes for Board Meeting and Shareholders' Meeting)?	V		On January 13, 2023, the Board of Directors approved the appointment of Ms. Lai, Yu-Nu, the head of the Finance and Accounting Department, as the Corporate Governance Officer of the Company, responsible for coordinating corporate governance-related matters. In addition, the Standard Operating Procedures for Handling Directors' Requests have been established in accordance with the law to assist directors in carrying out their duties and to enhance the effectiveness of the Board of Directors. The Company has appointed a professional stock agency, the Stock Affairs Agency Department of Fubon Securities Co., Ltd., to coordinate with the Company's Management Department in planning and handling matters related to shareholders' meetings. In FY2022, a total of 18 directors, managerial officers and employees were given a course on "Insider Equity and Precautions against Insider Trading" with a total of 27 hours to remind them of the importance of protecting their own rights, the Company's rights and the rights of shareholders when they are aware of important internal information of the company.	None

Evaluation Items			State ofOperations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
V. Has the company established a channel to communicate with stakeholders (including but not limited to the shareholders, employees, customers and suppliers), and set up a special zone for stakeholders on the Company's website, and appropriately respond to the important corporate social responsibility issues that are essential to stakeholders?	V		CHAINTECH website has established a special zone (including employees, suppliers, customers, investors, community and complaint channels) for stakeholders and has a mailbox and contact number in place. Any stakeholders can exchange views with CHAINTECH at any time, but they are not allowed to go beyond the national laws and regulations as well as the Company internal control system regulations.	None
VI. Has the Company commissioned a professional stock affair agency to manage shareholders' meetings and other relevant affairs?	V		CHAINTECH has commissioned Grand Fortune Securities to handle matters related to shareholders' meetings.	None
VII. Information Disclosure (I) Does the Company establish a website to disclose information on financial operations and corporate governance? (II) Does the Company adopt other means of information disclosure (such as establishing an English language website, delegating a professional to collect and disclose Company information, implement a spokesperson system, and disclosing the process of legal person conferences on the Company website)? (III) Does the Company publish and declare its annual reportwithin two months from the	V V V		(I) CHAINTECH has set up its Company website (www.chaintech.com.tw)to disclose relevant information at any time and publish and declare its Company profile and various financial and business information on the MOPS according to the requirements of the competent authority. (II) CHAINTECH has launched and maintained the English website. In addition to introducing the technical services and business related to the Company's products on the website, it also discloses the financial business and corporate governance on a regular or irregular basis according to the regulations, and the legal person briefing process is also placed on the "investor zone" of the Company's website. A corporate spokesperson is also available toprovide contact information and to ensure that shareholders'	None None None

Evaluation Items			State ofOperations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
end of a fiscal year and publish and declare its financial reports for the first, second, and third quarters and the operating status of each month within the prescribed time.			opinions are answered. (III) CHAINTECH publishes and declares its annual report, its financial reports for the first, second, and third quarters and the operating status of each month within the prescribed time; for details, please see the content of declaration on the MOPS (website: https:// mops.twse.com.tw/)
VIII. Has the Company provided other important information that is helpful to understand the implementation of corporate governance (including but not limited to the rights and interests of employees, employee care, investor relations, supplier relations, stakeholder rights, continuous education of directors and supervisors, implementation of the risk management policies and risk measurement standards, customer policies, and purchase of liability insurance for the Directors and Supervisors)?	V		1. Employee rights and interests: CHAINTECH has established an Employee Welfare Committee and developed relevant regulations to regularly provide pensions to employees and ensure their rights and interests in accordance with the law. 2. Employee care: CHAINTECH has joined the group insurance, provides regular health checkups for employees, and organizes employee education and training to safeguard the physical and mental health of employees. 3. Investor relations: CHAINTECH has set up a special zone for stakeholders in accordance with the law to protect the basic rights and interests of the investors. 4. CHAINTECH has established the Procurement Department to manage the affairs related to suppliers and maintain a smooth complaint channel to protect the legitimate rights and interests of both parties. 5. Stakeholder rights: CHAINTECH has developed the rules and regulations to protect the rights of different stakeholders. CHAINTECH has also set up a special zone for different stakeholders on CHAINTECH's website and provided corresponding complaint channels to allow the stakeholders to feedback immediately to CHAINTECH inunequaltreatment or right	None

Evaluation Items	Evaluation Items	State ofOperations	State ofOperations	State ofOperations
		Yes	No	Summary
				damage. 6. Implementation of Risk Management Policies and Risk Measurement Standards: CHAINTECH has formulated relevant operating guidelines and control measures that are implemented by specially-assigned persons. The audit personnel shall regularly and irregularly audit and track the implementation of the corrective actions. 7. The Company has purchased liability insurance for Directors and Supervisors, and the amount of insurance coverage, coverage and insurance premium and the like are reported to the Board of Directors on a regular basis. 8. Directors and supervisors' continuous education: CHAINTECH has irregularly notified directors and supervisors through letters to participate in professional knowledge education course hosted by the relevant units.Pleasereferto page43.
IX. Preferential enhancement items and measures have to be proposed for what is improved and what is not for the corporate governance assessment resultsreleasedinthemostrecent yearby the corporate governance Centerof TaiwanStock Exchange.
What is improved	1. The Company has added a female director. 2. Increase independent director: 3. Set up the Corporate Governance Officer.
Preferential enhancement items	1. The Company is expected to increase the number of legal advocacy meetings. 2. Continue to promote the policy of diversifying the Board of Directors and increase the percentage of female directors. 3. Continue to update the company website and fully disclose the Company’s governance affairs. CHAINTECH will also continue to strengthen corporate governance in the future and implement transparencyand enhance shareholders' interests and rights.

Information on the continuing education of the Company's directors in 2022:

Title	Name	Date of participation	Organizer	Course Name	Training Hours
Chairman of the Board	Kao, Shu- Jung	2022.04.22	Taishin International Bank	Taishin 30 Sustainable Net Zero Summit Forum	6 hours
Chairman of the Board	Kao, Shu- Jung	2022.12.08	Accounting Research and Development Foundation	Internet Technology Development Trends and New Thinkingof Internal Auditors	6 hours
Independent Director T	ang, Han Yu	2022.04.22	Taishin International Bank	Taishin 30 Sustainable Net Zero Summit Forum	3 hours
Independent Director T	ang, Han Yu	2022.12.08	Accounting Research and Development Foundation	Internet Technology Development Trends and New Thinkingof Internal Auditors	6 hours
Independent Director	Yang, Hsin-Ying	2022.3.10	Taiwan Stock Exchange	An international perspective on independent directors and board supervision	1 hour
Independent Director	Yang, Hsin- Ying	2022.10.05	Securities & Futures Institute	Workshop on Equity Trading Compliance for Insiders of Publicly Listed Companies for 2022	3 hours
Independent Director	Yang, Hsin- Ying	2022.12.15	Corporate Operating and Sustainable Development Association	Introduction to the New Corporate Governance Roadprint 3.0	3 hours
Director	Wang, Mu-Tien	2022.12.23	Accounting Research and Development Foundation	Legal Liability and Case Analysis of the Company's "Competition for Business Rights"	3 hours
Director	Wang, Mu-Tien	2022.12.26	Accounting Research and Development Foundation	Corporate Ethics and Sustainable Development	3 hours
Director	Lu, Li- Cheng	2022.04.22	Taishin International Bank	Taishin 30 Sustainable Net Zero Summit Forum	3 hours
Director	Lu, Li- Cheng	2022.10.25	Taiwan Corporate Governance Association	2022 Research and Outlook of Key Economic and Trade Issues	3 hours

Evaluation Standards for the Independence of CPAs

Evaluation Standards for the Independence of CPAs
Evaluation Item	2022 evaluation results (Y/N)	Whether in line with the independence (Y/N)
1. The CPA has not engaged in any financial interest relations, whether directly or indirectly, with CHAINTECH.	Y	Y
2. There are no financing or guarantee activities between CPAs and CHAINTECH or its Directors and Supervisors?	Y	Y
3. The CPAs have not been influenced in auditing by consideration of the possibility of customer loss.	Y	Y
4. There are no close business relationship or potential employment relationship between the CPAs and CHAINTECH.	Y	Y
5. The audit service team members of CPAs have not acted as the Director, Supervisor, or manager of CHAINTECH or held a position of CHAINTECH that have a substantial influence upon audit cases currently or in the most recent two years.	Y	Y
6. The non-audit service provided by the accounting firm to CHAINTECH has not directly influenced the important audit items.	Y	Y
7. The CPAs have not engaged in publicizing any shares or other securities issued by CHAINTECH or worked as the agency thereof.	Y	Y
8. There are no CPAs who acted as the director, supervisor, manager or positions that have substantial influence over the audit cases of CHAINTECH within one year after relief.	Y	Y
9. The CPAs did not receive presents or gifts with the material value from CHAINTECH or its Directors, Supervisors, or managers.	Y	Y
10. No CPAs have been appointed for five consecutive years.	Y	Y

(IV) The composition, duties and operations of the Remuneration Committee, if the Company has:

Information on the members of the Remuneration Committee

(IV) The composition, duties and operations of the Remuneration Committee, if the Company has: 1. Information on the members of the Remuneration Committee	(IV) The composition, duties and operations of the Remuneration Committee, if the Company has: 1. Information on the members of the Remuneration Committee	(IV) The composition, duties and operations of the Remuneration Committee, if the Company has: 1. Information on the members of the Remuneration Committee	(IV) The composition, duties and operations of the Remuneration Committee, if the Company has: 1. Information on the members of the Remuneration Committee	(IV) The composition, duties and operations of the Remuneration Committee, if the Company has: 1. Information on the members of the Remuneration Committee
April 18, 2023
Conditions Identification Type (Note 1) Name		Professional Qualification and Experience (Note 2)	Independence (Note 3)	Number of members concurrently serving on the Remuneration Committee of other public companies
Independent Director Convener	Tang, Han- Yu	General Manager of GIGABYTE China (1998~2002), General Manager of VIA Technologies (2002~2008), President of SYMBIO SYSTEMS INC. Asia Pacific Region (2011~2015), Business Consultant of VIA CPU Platform Inc. (2015~2022) Vice President of Business and General Manager of China Region for VIA Next Technologies, Inc.(2/2022~present)	Status of Independence	None
Independent Director	Chen, Kuo- Chin	Senior Deputy General Manager of HP (1998~2014), Consultant and Lecturer of Hawk Wing, ACE, Yuyi, Creative, and The Dun & Bradstreet (2014~2016), consultant and lecturer of Timing International (2017 to present).	Status of Independence	None
Independent Director	Yang, Hsin- Ying	MBA from Baruch College, City University of New York, and B.S. in Financial Management from Ohio State University, former manager at J.P. Morgan Hong-Kong (2010~2014), Associate Manager in the Corporate Finance Department at Citibank (2014~2019), and Independent Director of Shun On Electronic (2020~present).	Status of Independence	1
Independent Director	Wei, Chi- Feng (Note 4)	Department of Industrial Engineering, Da-Yeh University, former Deputy General Manager, HP (2002~2017), current Chairman and General Manager, Emptech Co., Ltd. (2017~present).	Status of Independence	None

Note 1. Please specify in the form the relevant working years, professional qualifications and experience and independence of the members of the Remuneration Committee. If they are independent directors, please indicate to refer to Schedule 1 on page 12-13 and the Directors and Supervisors (I) for details.

Note 2. Professional Qualification and Experience: state the professional qualifications and experience of individual Remuneration Committee members.
Note 3. Status of Independence: state the independence of the members of the Remuneration Committee, including but not limited to whether they, their spouse, or relatives within the second degree of kinship serve as directors, supervisors or employees of the Company or its affiliates; The number and proportion of the Company's shares held by relatives (or in the name of others); whether they serve as directors, supervisors or employees that have a specific relationship with the Company (refer to the provisions of Article 6, Paragraph 1, Subparagraphs 5 to 8 of the Regulations on the Establishment of Remuneration Committee of TWSE/TPEx Listed

Companies and Performance of Functions); the amount of remuneration received for providing business, legal, financial, accounting and other services to the Company or its affiliates in the last two years.

Note 4. Wei, Chi-Feng was appointed by the Board of Directors as the member of the Remuneration Committee on August 4, 2022.
Operational Status of the Remuneration Committee
- (1) The Company's Remuneration Committee consists of 4 members.
- (2) Main responsibilities of the Remuneration Committee:

The Committee shall meet at least twice a year, and shall faithfully perform the following functions and powers in a professional and objective position and with the care of a good manager, and shall submit its recommendations to the Board of Directors for discussion.

Formulate and regularly review the policies, systems, standards, and structure of the performance evaluation standards and remuneration of the Directors, Supervisors, and Managers of the Company.
Regularly evaluate and determine the remuneration content and amount of the Directors, Supervisors, and managerial officers of the Company.
(3) Term of office: From August 4, 2022 to June 14, 2025. The Remuneration Committee has held 2 meetings (A) in the most recent year (2022). The qualifications and attendance of the members is set out as follows:

Title	Name	Times of Attendance in Person(B)	Times of Attendance byProxy	Actual attendance rate (%) (B/A) (Note)	Remarks
Convener	Tang, Han- Yu	2	0	100%	Re-elected (required to attend 2 meetings) Date elected and appointed:2022.8.4
Members	Chen, Kuo- Chin	2	0	100%	Re-elected (required to attend 2 meetings) Date elected and appointed:2022.8.4
Members	Yang, Hsin- Ying	2	0	100%	Re-elected (required to attend 2 meetings) Date elected and appointed:2022.8.4
Members	Wei, Chi- Feng	0	0	—	Newly elected (required to attend 0 meeting) Date elected and appointed:2022.8.4
Other issues to be recorded: I. If the Board of Directors refuses to adopt or amends a recommendation of the Remuneration Committee, the date of the meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the Remuneration Committee’s opinion (e.g., if the remunerationpassed bythe Board of Directors exceeds the recommendation of the Remuneration

Other issues to be recorded:

I. If the Board of Directors refuses to adopt or amends a recommendation of the Remuneration Committee, the date of the meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the Remuneration Committee’s opinion (e.g., if the remuneration passed by the Board of Directors exceeds the recommendation of the Remuneration

Committee, the circumstances and cause for the difference shall be specified) shall be specified: None. II. If a member has a dissenting or qualified opinion, if a member has a dissenting or qualified opinion, that a member has a record or reservation that is recorded or stated in a written statement, the date and session of the Remuneration Committee, the content of the proposal, all members' opinions, and the handling of the opinions of the member of the Remuneration Committee shall be stated. Date/Term Proposal Content Resolution The Company's actions in response to the opinions of the Remuneration Committee 2022.1.21 The 5th meeting of the 5th term I. Pass the proposal on 2022 individual managerial officers’ remuneration. II. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus. Passed by all attending committee members Submitted to the Board and passed by all attending directors 2022.3.23 The 6th meeting of the 5th term I. Pass the proposal of continuous application of the measures related to remuneration of Directors, Supervisors and managers of CHAINTECH II. Pass the proposal for the Company's 2021 rewards to Directors and Supervisors III. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021. Passed by all attending committee members Submitted to the Board and passed by all attending directors	Committee, the circumstances and cause for the difference shall be specified) shall be specified: None. II. If a member has a dissenting or qualified opinion, if a member has a dissenting or qualified opinion, that a member has a record or reservation that is recorded or stated in a written statement, the date and session of the Remuneration Committee, the content of the proposal, all members' opinions, and the handling of the opinions of the member of the Remuneration Committee shall be stated. Date/Term Proposal Content Resolution The Company's actions in response to the opinions of the Remuneration Committee 2022.1.21 The 5th meeting of the 5th term I. Pass the proposal on 2022 individual managerial officers’ remuneration. II. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus. Passed by all attending committee members Submitted to the Board and passed by all attending directors 2022.3.23 The 6th meeting of the 5th term I. Pass the proposal of continuous application of the measures related to remuneration of Directors, Supervisors and managers of CHAINTECH II. Pass the proposal for the Company's 2021 rewards to Directors and Supervisors III. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021. Passed by all attending committee members Submitted to the Board and passed by all attending directors	Committee, the circumstances and cause for the difference shall be specified) shall be specified: None. II. If a member has a dissenting or qualified opinion, if a member has a dissenting or qualified opinion, that a member has a record or reservation that is recorded or stated in a written statement, the date and session of the Remuneration Committee, the content of the proposal, all members' opinions, and the handling of the opinions of the member of the Remuneration Committee shall be stated. Date/Term Proposal Content Resolution The Company's actions in response to the opinions of the Remuneration Committee 2022.1.21 The 5th meeting of the 5th term I. Pass the proposal on 2022 individual managerial officers’ remuneration. II. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus. Passed by all attending committee members Submitted to the Board and passed by all attending directors 2022.3.23 The 6th meeting of the 5th term I. Pass the proposal of continuous application of the measures related to remuneration of Directors, Supervisors and managers of CHAINTECH II. Pass the proposal for the Company's 2021 rewards to Directors and Supervisors III. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021. Passed by all attending committee members Submitted to the Board and passed by all attending directors	Committee, the circumstances and cause for the difference shall be specified) shall be specified: None. II. If a member has a dissenting or qualified opinion, if a member has a dissenting or qualified opinion, that a member has a record or reservation that is recorded or stated in a written statement, the date and session of the Remuneration Committee, the content of the proposal, all members' opinions, and the handling of the opinions of the member of the Remuneration Committee shall be stated. Date/Term Proposal Content Resolution The Company's actions in response to the opinions of the Remuneration Committee 2022.1.21 The 5th meeting of the 5th term I. Pass the proposal on 2022 individual managerial officers’ remuneration. II. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus. Passed by all attending committee members Submitted to the Board and passed by all attending directors 2022.3.23 The 6th meeting of the 5th term I. Pass the proposal of continuous application of the measures related to remuneration of Directors, Supervisors and managers of CHAINTECH II. Pass the proposal for the Company's 2021 rewards to Directors and Supervisors III. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021. Passed by all attending committee members Submitted to the Board and passed by all attending directors
Date/Term	Proposal Content	Resolution	The Company's actions in response to the opinions of the Remuneration Committee
2022.1.21 The 5th meeting of the 5th term	I. Pass the proposal on 2022 individual managerial officers’ remuneration. II. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus.	Passed by all attending committee members	Submitted to the Board and passed by all attending directors
2022.3.23 The 6th meeting of the 5th term	I. Pass the proposal of continuous application of the measures related to remuneration of Directors, Supervisors and managers of CHAINTECH II. Pass the proposal for the Company's 2021 rewards to Directors and Supervisors III. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021.	Passed by all attending committee members	Submitted to the Board and passed by all attending directors

Note:

(1) Where members of the Remuneration Committee resign before the end of the year, the Notes column shall be annotated with the date of resignation. Actual attendance rate (%) shall be calculated using the number of Remuneration Committee meetings convened and actual attendance during the term of service.
(2) (2) If members of the Remuneration Committee are re-elected before the end of the fiscal year, incoming and outgoing members shall be listed accordingly, and the "Remark" column shall indicate whether the status of a member is "Outgoing", "Incoming" or "Reelected", and the date of re-election. The actual attendance rate (%) shall be calculated based on the number of meetings held by the Remuneration Committee and the number of actual attendance during the term of service.
Membership and operation of the Nomination Committee: CHAINTECH has yet to establish an Nomination Committee, hence not applicable.

(V) Promotion of sustainable development and the differences and reasons from the Sustainable Development Best Practice Principles for TWSE or TPEx Listed Companies and the reasons (the Company's system and measures for environmental protection, social engagement, social contribution, social services, social welfare, consumer rights, human rights, and other social responsibilities activities and the implementation thereof):

implementationthereof):
Evaluation Items	State of Operations			Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
I. Does the Company establish a governance structure to promote sustainable development, and set up a full-time (part-time) unit to promote sustainable development, which is authorized by the Board of Directors to be handled by senior management, and the supervision of the Board of Directors ? (Report the implementation status, not the compliance orexplanation)		V	CHAINTECH has established "Corporate Social Responsibility Best Practice Principles" to implement corporate governance, promote the development of a sustainable environment, and maintain social welfare. The Management Department is a part-time unit that is responsible for promoting CSR activities, and it has not formulated the Sustainable Development Best Practice Principles and has not reported the handling informationto theBoard of Directors.	Under planning
II. Has the Company assessed the environmental, social, and corporate governance risks related to its operations based on the principle of materiality and established related risk management policies or strategies? (Report the implementation status, not the compliance or explanation)	V		The Company’s department for promoting sustainable development is the General Manager Office, and has established the Regulations for the Prevention of Insider Trading, the Procedures and Code of Conducts for Integrity Management, and the Procedures for Self- Evaluation of the Internal Control System for the realization of its risk management policy. In addition, it has implemented corporate governance, risk assessment of environmental, social and corporate governance issues related to company operations, and related risk management strategies and measures (pleasereferto pages 53 &120)	None
III. Environmental Issues (I) Has the Company established a suitable environmental management systembased onthe	V		(I) CHAINTECH has established the "Regulations Governing the OccupationalandEnvironmental	None

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
characteristics of its industry? (II) Does the Company strive to improve energy efficiency and use recycled materials with low impact on the environment? (III) Does the Company assess the potential risks and opportunities of climate change for its current and future operations and undertake response measures with respect to climate change? (IV) Does the Company calculate the amount of	V V V		Safety and Health Management" in accordance with the Labor Safety and Health Act, and its subsidiary Siteng Heli (Tianjin) Technology Co. has obtained ISO9001 certification. (II) Due to the energy shortage and the carbonization of the earth in recent years, the Company continued to promote measures for energy conservation and carbon reduction, such as the implementation of garbage separation and paper box recycling. The toner cartridges used by the printing machine are returned to the original supplier for recycling. Encourage employees to bring their own cups and lunch boxes to reduce the use of disposable tableware. The Company also encourages employees to turn off the light when leaving and adopt paperless operations to minimize the impacts of the Company's operations on the natural environment. (III) As the carbonization of the earth has been worsening, CHAINTECH faces potential risks related to aspects of operation and environment, such as resource shortage and an increase in costs for raw materials, which would cause impacts on CHAINTECH's operations. CHAINTECH will develop green energy technology to create opportunities for CHAINTECH. (IV) The Company’s products are allproduced by	None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
greenhouse gas emissions, water consumption, and waste production in the past two years and implement policies to cut down energy and water consumption, carbon and greenhouse gas emissions, and waste production?			means of OEM in China Mainland. Taiwan is the operational headquarters, so although the headquarters has no problem of greenhouse gas emission, water consumption and waste, it attaches great importance to and cares for energy conservation and carbon reduction, and has been constantly promoting electronic measures and reduction in use of paper, water and electricity, aiming to conserve energy and reduce carbon emission.
IV. Social Issues (I) Has the Company set up management policy and procedures according to related laws and regulations and the International Human Rights Treaty? (II) Does the Company establish and implement reasonable employee welfaremeasures	V V		(I) The Company adheres to the laws and regulations of the location where it operates, and follows internationally recognized human rights standards such as the International Bill of Human Rights, the International Labor Organization - Declaration on Fundamental Principles and Rights at Work, and the Ten Principles of the United Nations Global Compact, and respects the protections set forth in human rights conventions. To maintain the rights and interests of employees through the Company's internal work rules and provide channels for complaints, the Company has implemented advocacy on internal work rules, and has never engaged in child labor or forced labor and human abuse. (II) The remuneration policy for employees is determined based on individualability and	None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
(including salary, leave and other benefits) and appropriately reflect operational performance or results in employee remuneration? (III) Has the company provided employees with a safe and healthy working environment, and routinely implemented safety and health education for employees?	V		contribution to the Company, performance and consideration of the Company's future business risks. The Company also implements an employee evaluation system twice a year, and in accordance with the Company's Articles of Incorporation, no less than 0.1% of the Company's annual profit is appropriated to employees as rewards. The Company emphasizes diversity and equality in the workplace. As of the end of 2022, the percentage of female employees in the Company was 47%, and the percentage of female managerial officers and above in the Company was 33%. (III) In accordance with the relevant laws and regulations of occupational safety and health, the Company provides safety and health equipment necessary for the safety and health of employees, sets up emergency escape routes and exits in the office, regularly disinfects the working environment, regularly maintains the elevators, has fire facilities and regular health inspections, and implements various work safety and health education and training. The Company has established the Occupational and Environmental Safety and Health Management Regulations and enforces them in accordance with the regulations. In 2022, there were no occupational accidents among ouremployees.	None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
(IV) Has the Company established an effective competency development career training program for employees? (V) Does the Company comply with relevant laws and regulations and international standards, and has a policy and complaint procedure to protect the rights of consumers or customers with respect to the health and safety of customers, customer privacy, marketing and labeling of products and services? (VI) Has the Company formulated supplier management policies that require suppliers to comply with relevant regulations on environmental protection, occupational safety and health and labor rights, and requested their reporting on the implementation of such issues?	V V V		(IV) The Company organizes educational training for employees from time to time, aiming to enrich their knowledge and ability, to develop their potential intelligence and to improve their professional ability. In 2022, the occopational training totalled 124.5 hours. (V) CHAINTECH follows IPR related laws and regulations, and attaches great attention to customers' opinions. Except for maintaining communication with customers at any time, the Company also provides product information, contact window, and mailbox on its website, and set up a special zone for stakeholders as the channel for customers to make inquiries and appeal. (VI) CHAINTECH has formulated the Operating Procedures for Supplier Management. Before engaging in commercial dealings with the suppliers, CHAINTECH shall evaluate whether the suppliers had negative records of affecting environment and society in the past as the significant references for selecting suppliers, and shall stipulate that the suppliers shall provide qualified products made with environmental- friendly raw materials to duly fulfill its corporate social responsibility. If the Company's suppliers violate the corporate social responsibility policy and theimpact uponenvironment and societyis

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
			significant, the Company is entitled to terminate or rescind the contract at any time.
V. Has the Company prepared reports that reveal non-financial information, such as sustainable development reports, with reference to international reporting standards or guidelines? Has the company received assurance or certification of the aforesaid reports from a third party accreditation institution?		V	Even though CHAINTECH has not prepared its CSR report, CHAINTECH has established the "Corporate Social Responsibility Practice Principles" to fulfill its corporate social responsibility. CHAINTECH considers the interests of its stakeholders and treat its customers and suppliers in fair and reasonable manners, and has complied with the regulations under the agreement on social and environmental responsibility.	Has not prepared the CSR report
VI. If the Company has its own code of practice for sustainable development in accordance with the Sustainable Development Best Practice Principles of TWSE/TPEx Listed Companies, please describe the differences between its operation and the code: CHAINTECH has established the "Corporate Social Responsibility Practice Principles" and implemented the rules and procedures in accordance with the requirements. CHAINTECH will think over the preparation of the corporate social responsibility report or formulate the relevant regulations in the future according to actual needs.
VII. Other important information to help learn about the implementation of sustainable development: CHAINTECH has established relevant management regulations concerning employees' rights and interests and supplier relations, established Employee Welfare Committee to attach importance to the rights and interests of employees, and put in place communication channels with banks and other creditors, customers and suppliers; (1) Environmental Protection: As CHAINTECH has no plant in Taiwan, it focuses on environment protection in its offices. CHAINTECH actively promotes paper and packaging materials for reuse and waste sorting, so as to reduce the impact of environmental pollution, and strive to promote sustainable development philosophy and fulfill corporate social responsibility. (2) Community engagement, social contribution, social services, social welfare, etc.: Regular assistance for socially disadvantaged groups, fulfillment of social responsibilities, and participation in public welfare in the past two years: In 2021, CHAINTECH donated NT$100,000 to each of Puren Youth Care Foundation, House of Dreams, and PSA Business Group Charity Foundation (hearing care services), totaling NT$300,000. In FY2022,theCompanydonated the AI model development and model managementplatform toNationalChin-YiUniversityof

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies and Reasons
	Yes	No	Summary
Technology at a market value of about NT$9 million and the high-end AI computing server at a market value of about NT$320 thousand to increase practical training courses for students and support local education to nurture future AI professionals and meta-universe masters. (3) Consumer rights and interests: Through a comprehensive quality management system, stringent quality management is conducted in various processes to ensure the best services and products to customers. (4) Human Rights: CHAINTECH's labor-management relations are equal. The Company respects the work performance of every employee, so that there is no labor dispute, fully manifesting CHAINTECH's efforts on human rights issues. (5) Safety and Health: CHAINTECH provides a safe employment environment for employees, displaying its fulfillment of the responsibility for employees' life safety. Meanwhile, the Company regularly provides straining and work safety education for the employees to avoid occupationalaccidents, safeguard employees' life safety and enhance theirunderstanding of healthand safetyrelatedknowledge.

Note 1. Major issues and risk assessment of the Company in promoting sustainable development:

Material Issue	Risk evaluation item	Risk Management Strategies and Measures
Environment	Environmental protection	1. The Company has no production or manufacturing in Taiwan, so no related waste will be generated. 2. The Company is committed to energy saving and carbon reduction, and uses recycled paper.
Society	Occupational safety	1. Regular safety and health education and training, fire safety training, fire and earthquake prevention courses are held. 2. Regularly inspect the safety measures of the office premises. 3. The Company provides regular health checkups to employees.
Corporate Governance Officer	Strengthen the functions of the Board of Directors and compliance with laws and regulations	1. Strengthen the function of the Board of Directors to enhance the sustainable value of enterprises; and implement the Corporate Governance Sustainable Development Blueprint 3.0. 2. Implement the internal control mechanism, to ensure that all employees of the Company can really comply with the laws and regulations.

(VI) Implementation of Ethical Corporate Management and Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
I. Formulating policies and plans for Ethical Corporate Management (I) Has the Company established the ethical corporate management policies approved by the Board of Directors and specified in its rules and external documents the ethical corporate management policies and practices and the commitment of the Board of Directors and senior management to rigorous and thorough implementation of such policies? (II) Does the company establish a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within its business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly, which shall at least include those specified in Paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"?	V V		(I) CHAINTECH has established the "Code of Ethical Conduct" and "Code of Conduct for Directors, Supervisors, and Managerial Officers." The Directors, Supervisors and Senior Executives are in compliance with the standards of the implementation of business. Relevant rules and regulations are disclosed on the MOPS and CHAINTECH's website. (II) CHAINTECH stipulates in its "Code of Ethical Conduct" not to request or accept any unjust profits or carry out any other unethical conducts that violate integrity, or are illegal, or breach of fiduciary. When the Company signs a contract with others, the content of the contract will include the provisions that the counterparty shall be in compliance with the integrity management policy and that if the counterparty is involved in bad faith behaviors, the Company is entitled to terminate or rescind the contract. Moreover, the Company avoids carrying on transactions with the parties having records of dishonest conduct.The auditors ofCHAINTECH shall	None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
(III) Has the Company provided any solutions to prevent the unethical conducts, stipulate the definite procedures, conduct guidelines, punishment for violation as well as appeals system and put into practice, and review and revise on a regular basis the aforesaid solutions?	V		periodically examine CHAINTECH's compliance with the foregoing systems according to the annual audit plan and prepare audit reports and submit the same to the Board of Directors. (III) CHAINTECH has established and implemented the Code of Conduct for Directors, Supervisors and Managerial Officers and the Code of Ethical Conduct. For any unethical conduct or conducts violating integrity, CHAINTECH would impose punishments according to Rule 8.3 of its Rules for Personnel Management and provide employee's appeal channels to deal with any unreasonable treatments. CHAINTECH shall at all times monitor the development of relevant local and international regulations concerning ethical corporate management and encourage their Directors, Supervisors, managers, and employees to make suggestions, based on which, the adopted ethical corporate management policies will be reviewed and improved with a view to achieving better implementation of ethical management.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary

II. Implementing integrity operation (I) Has the Company assessed the integrity records of its business partners, and specified ethical business policy in contracts with them? (II) Does the Company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity, and regularly reports (at least once a year) to the Board of Directors the implementation of the ethical corporate management policies and prevention programs against unethical conduct? (III) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement such policy properly?	V V	V	(I) CHAINTECH shall consider whether the counterparty has records of dishonest conduct before transactions and avoid transactions with them. When a contract is signed with others, the content will include the terms of termination or rescission of the contract at any time upon the counterparty involving any dishonest conduct. (II) CHAINTECH's auditors are responsible for the formulation and implementation of ethical corporate management policies, but they are not urged to regularly report to the Board of Directors. (III) CHAINTECH stipulates policies for preventing the conflict of interests in its Code of Conduct for Directors, Supervisors and Managerial Officers and its Code of Ethical Conduct. If the Board of Directors has various proposals, the Director who has a conflict of interest shall abstain from voting. If the employees have a conflict of interest over	None Under planning None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
(IV) Has the Company established an effective accounting system and internal control systems to implement ethical corporate management, and has the internal audit unit prepared relevant audit plans according to the evaluation results for the risk of unethical conduct, and based on which, audited the compliance with the prevention programs for unethical conduct, or has the Company engaged CPAs for performing such audits? (V) Does the Company host routine internal and external training geared towards business integrity practices?	V V		business execution, supervisors shall be notified to abstain from answering. CHAINTECH has set up a whistle-blowing mailbox for its internal and external systems to provide unobstructed channels for report and appeal. (IV) CHAINTECH has established the accounting system and internal control system according to relevant laws and regulations. Internal auditors regularly review their compliance, perform project audits from time to time according to the requirements, and report the audit results to the Board of Directors. (V) New employees are trained with a special emphasis on the principles of corporate integrity (including anti-corruption), and courses on corporate governance and integrity are held regularly. Our procurement department also regularly educates our suppliers about our principles of ethical corporate management in order to eliminate dishonest business practices. TheCompanydeepens its businessphilosophy

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
			of ethical corporate management through public commitment, information dissemination and education. On November 24, 2022, the Company held an education and training course on the issue of ethical corporate management, which was attended by 9 people for a total of 18 hours.
III. Operation of the whistleblowing system (I) Has the company established a specific whistleblowing and reward system, set up convenient whistleblowing channels and designated appropriate personnel? (II) Does the Company establish standard investigation operation and procedure for whistle-blowing matters, follow-up measures to be adopted after the investigation, and relevant confidential mechanisms?	V V		(I) CHAINTECH has established the "Report System and Measures" and set up the report mailbox for employees to report the breach of good faith to department supervisors, auditors or supervisors in any form. Furthermore, the Company has also set up a whistle-blowing mailbox on its website for relevant personnel to report on illegal conduct. (II) CHAINTECH has established standard operating procedures for investigation in accordance with Article 6 of the "Report System and Measures". In accordance with Article 8, the identity of the whistle-blowers and the contents of whistle-blowing will be kept strictly confidential. If any material violation is found in the investigation, CHAINTECHwill immediatelymake a report	None None None

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
(III) Has the Company established protection measures for whistle-blower from mishandling against them?	V		and notify the independent directors in writing. (III) According to rule 6.7 under the Code of Conduct for Employees, the identity of the whistle-blowers and the content of reported misconduct shall be kept confidential. The whistle-blowers shall not be subject to inappropriate measures out of whistle- blowing.
IV. Strengthening information disclosure (I) Has the Company disclosed the content and effectiveness of its ethical corporate management best practice principles on its website and the Market Observation Post System(MOPS)?	V		CHAINTECH has disclosed the "Ethical Corporate Management Regulations" on CHAINTECH's website "Corporate Governance Regulations" and theMarket Observation Post System(MOPS).	None
V. Where the Company has stipulated its own ethical corporate management best practices according to the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies," please describe any differences between the prescribed best practices and the actual activities takenby the company: No substantialdifference.
VI. Other important information that is helpful to learn about the ethical management of the Company: (Such as review and amendment of the Company's Ethical Corporate Management Best Practice Principles) 1. CHAINTECH complies with the relevant laws and regulations of the Company Act and the Securities and Exchange Act, which are taken as the basis for integrity management. 2. CHAINTECH's "Proceeding Rules for Board Meetings" requires the director who or whose representative has interest relationship with the meeting matter to be discussed shall abstain himself/herself from the discussion or voting and cannot exercise the voting right on behalf of other director. 3. Article 5 ofCHAINTECH'sProceduresfor HandlingMaterial Internal InformationandPreventionof Insider Trading stipulates that those

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
being aware of information of the Company that has a material effect on the stock price shall not buy or sell the Company's stock or other marketable securities of the nature of equity by itself or in the name of another person before or within 18 hours after it is made public. 30 days before the announcement of the annual financial report and 15 days before the announcement of the quarterly financial report, the directors shall be notified in writing (including electronic documents) that they are prohibited from trading in their shares during the closed period so as to take care to avoid insider trading. 4. In transactions with the manufacturers, the Company has always followed the principle of good faith and been committed to strengthening internal education.

being aware of information of the Company that has a material effect on the stock price shall not buy or sell the Company's stock or other marketable securities of the nature of equity by itself or in the name of another person before or within 18 hours after it is made public. 30 days before the announcement of the annual financial report and 15 days before the announcement of the quarterly financial report, the directors shall be notified in writing (including electronic documents) that they are prohibited from trading in their shares during the closed period so as to take care to avoid insider trading.

In transactions with the manufacturers, the Company has always followed the principle of good faith and been committed to strengthening internal education.

(VII) If Corporate Governance codes and relevant laws and regulations are formulated, their inquiry methods shall be disclosed:
CHAINTECH has established the Articles of Incorporation, Corporate Governance Practice Principles, Rules of Procedure for Shareholders' Meeting, Rules of Procedure for Shareholders' Meeting for Board Meeting, Measures of Director Election, Handling Procedures for Acquisition or Disposal of Assets, Operation Procedures of Capital Loan to Others, Endorsement/ Guarantee Operating Procedures, Remuneration Committee Organization Charter, Ethical Corporate Management Regulations, and Standards for Practices of Corporate Social Responsibility. The rules and regulations are issued at CHAINTECH's website, and the inquiry path is as follows for shareholders’ query: Homepage > Investor Zone > Corporate Governance > Corporate Governance Guidelines (http:// www.chaintech.com.tw/).
(VIII) Other material information that can enhance the understanding of the state of Corporate Governance at the Company:

Courses involving corporate governance participated in by CHAINTECH's managers (including general manager, deputy general managers, accountant officer, finance supervisor, internal audit supervisor) for professional training in the most recent year:

Title	Name	Date of Professional Training	Organizer	Course Name	Training Hours
General Manager	Kao, Shu- Jung	2022/4/22	Taishin International Bank	Sustainable Net Zero Summit Forum	3
General Manager	Kao, Shu- Jung	2022/12/8	Accounting Research and Development Foundation	Internet Technology Development Trends and New Thinking of Internal Auditors	6
Financial/Accounting Manager	Lai, Yu-Nu	2022/2/17	Fubon Securities	Acts on "Acquisition or Disposal of Assets" and "Fund Loaning and Endorsement Guarantee"	3
Financial/Accounting Manager	Lai, Yu-Nu	2022/9/23	Securities & Futures Institute	How to Become a Competent Assistant of the Audit Committee	6
Financial/Accounting Manager	Lai, Yu-Nu	2022/11/28	Accounting Research and Development Foundation	Management Rights Dispute from the Perspective of Corporate Governance and Shareholder Structure	3
Financial/Accounting Manager	Lai, Yu-Nu	2022/11/29	Accounting Research and Development Foundation	Regulation of Related Party Transactions of Directors, Supervisors and Senior Executives and Corporate Governance Practices	3
Audit Supervisor	Chang, Ya- Ling	2022/2/17	Fubon Securities	Acts on "Acquisition or Disposal of Assets" and "Fund Loaning and Endorsement Guarantee"	3
Audit Supervisor	Chang, Ya-	2022/3/2	Taiwan Stock	ESG Information Disclosure	3

Title	Name	Date of Professional Training	Organizer	Course Name	Training Hours
	Ling		Exchange	and Promotion and Corporate Governance Regulations
Audit Supervisor	Chang, Ya- Ling	2022/9/23	Securities & Futures Institute	How to Become a Competent Assistant of the Audit Committee	6
Spokesperson	Li, Kai-Li	2022/7/20	ESG Booster Corp.	Linking ESG Context and Sustainability Report & Future Trend of Green Finance	2
Spokesperson	Li, Kai-Li	2022/8/25	ESG Booster Corp.	GHG Accounting Pathway Guide & Industry Net Zero Transformation	2
Spokesperson	Li, Kai-Li	2022/10/14	ESG Booster Corp.	Financial Impacts of Climate Change and Sustainability Accounting Highlights & Green Business Opportunities	2
Spokesperson	Li, Kai-Li	2022/11/3	ESG Booster Corp.	Carbon Disclosure Plan and Scientific Reduction Target Commitment & International Carbon Risk and Carbon Emission Regulation Policy	2

(IX) Implementation of Internal Control System

1. Internal Control Statement

	1. Internal Control Statement
	Chaintech Technology Corporation
	Statement on Internal Control System
	Date: March 22, 2023
Based	on the results of the self-assessment of the Company's internal control system for 2022, the Company
declares the following:
I.	The Company acknowledges that it is the responsibility of the Board of Directors and the Manager
	to establish, implement and maintain a system of internal control and that the Company has
	established such a system. The objective of the internal control system lies in providing a reasonable
	guarantee for achieving business benefits and efficiency (including profitability, performance, and
	protection of assets and safety), ensuring the reliability, timeliness, transparency, and regulatory
	compliance with relevant norms and laws and regulations.
II.	The internal control system has inherent limitations. The internal control system is designed, no
	matter how perfect, to provide reasonable guarantee on the achievement of the above three objectives;
	moreover, the effectiveness of the internal control system is subject to changes in environment and
	situations. However, CHAINTECH's internal control system contains self-monitoring mechanisms,
	and CHAINTECH will take corrective actions upon identification of any deficiency thereof.
III.	CHAINTECH has made judgments on the design of internal control systems and effectiveness of
	implementation according to the judgment items in the "Handling Guidelines Governing the
	Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the
	"Handling Guidelines"). The judgment items for internal control system adopted in the "Handling
	Guidelines" divide the internal control system into five composition elements according to the
	process of management and control: (1) Control Environment; (2) Risk Assessment; (3) Control
	Activities; (4) Information and Communication; and (5) Monitoring Activities. Each composition
	element includes a number of items. For the aforementioned items, please refer to the provisions of
	"Handling Guidelines."
IV.	CHAINTECH has already adopted the aforementioned ICS assessment items to evaluate the
	effectiveness of ICS design and implementation.
V.	Based on the results of the determination in the preceding paragraph, the Company is of the opinion
	that, as of December 31, 2022Note 2, the internal control system (including the supervision and
	management of subsidiaries), including the design and implementation of the internal control system
	relating to the effectiveness and efficiency of the operations, reliability, timeliness, and transparency
	of reporting, and compliance with applicable laws and regulations, is effective and can reasonably
	assure the achievement of the foregoing goals.
VI.	This statement will become the main content of CHAINTECH's annual report and prospectus, and
	shall be made public. Any falsehood, concealment, or other illegality in the content made public will
	entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
VII.	This statement was approved by the Board of Directors on March 23, 2022, and none of the seven
	Directors in attendance (including one attended by proxy) objected to it and all consented to the
	content expressed in this statement.
	Chaintech Technology Corporation
	Chairman and General Manager: Kao, Shu-Jung
	Signature

Note 1. In the design and implementation of the internal control system of publicly-listed companies, if there is any material deficiency during the year, it shall be added behind paragraph 4, to list and explain the major deficiency discovered in self-check as well as the improvement actions taken by the Company and improvement status before the balance sheet date.

Note 2. The date of the statement is the date of the "end of the fiscal year."

Any CPA commissioned to review the ICS shall disclose the CPA’s audit report: N/A.

(X) Punishments against the Company and its internal personnel in accordance with the law in the most recent year and up to the date of the publication of the annual report, punishments imposed by the Company against its internal personnel for violating the provisions of the internal control system, major deficiency and improvement: None.
(XI) Significant resolutions made at Shareholders' Meeting and Board Meeting in the most recent fiscal year up to the publication date of this Annual Report:
Content and implementation of important resolutions of the shareholders' meeting in 2022
- (1) Pass the Company's 2021 Business Report and Financial Statements.
  - Implementation status: Resolved as passed.
- (2) Adopt the Company’s earning distribution plan for 2021.

Implementation status: The distribution of cash dividends amounted to NT$57,899,298 (a distribution of cash dividends of NT$0.60 per share) was distributed to the shareholders. The ex-dividend date was July 9, 2022 and the distribution was fully made on August 1, 2022.

(3) Adopt the proposal on the amendment to the Company's Articles of Incorporation.

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended Articles of Incorporation.

(4) Adopted the proposal on amending the “Rules of Procedure of the Board of Shareholders” of the Company.

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended measures.

(5) Approve the amendments to the Regulations Governing the Election of Directors and Supervisors.

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended measures.

(6) Adopt the proposal on amending the Procedures for the Acquisition or Disposal of Assets of the Company..

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended procedures.

(7) Pass the proposal on amending the Operating Procedures for Fund Loaning and Endorsement Guarantee of the Company.

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended procedures.

(8) Adopt the proposal on the amendment to the Company’s Procedures for Loaning of Funds to Others.

Implementation status: Announced on the Company's website on June 15, 2022 and processed under the amended procedures.

(9) Proposal on the election of directors of the 15th Board of Directors.

Implementation status: The elected directors for the 15th Board of Directors are as follows

General Directors (3): Representative, E Cheng Technology Limited: Kao, ShuJung/Lu, Li-Cheng/Wang, Mu-Tien

Independent Directors (4): Tang, Han-Yu, Chen, Kuo-Chin, Yang, Hsin-Ying and Wei, Chi-Feng were registered on July 15, 2022, with the approval of the Ministry of Economic Affairs.

Important resolutions of the Board of Directors from January 1, 2022 to April 30, 2023 (publication date)

Date	Meeting Type	Important resolutions:
2022.1.21	The 17th session of the 14th term	1. Adopt the proposal on the Company's 2022 operation plan. 2. Pass the proposal on CHAINTECH's individual salary and remuneration for managers in 2022. 3. Pass the proposal on 2021 managerial officers’ year-end bonus and special leaves bonus of the Company. 4. Pass the proposal on the indirect investment in Baotou Yihui Information Technology Co., Ltd. 5. Pass the proposal on renewal of the endorsement for CHAINTECH'sre-invested businesses.
2022.3.23	The 18th meeting of the 14th term	1. Pass the Company's 2021 Business Report and Financial Statements. 2. Pass the proposal on reviewing the policies, systems, standards and structures for the performance evaluation, salary and remuneration of the directors, supervisors and managers of the Company. 3. Pass the proposal on the Company's 2021 rewards to Directors and Supervisors. 4. Pass the proposal on CHAINTECH's rewards to managerial officers for 2021. 5. Adopt the proposal on ‘Evaluation for Effectiveness of Internal Control System’ and ‘Internal Control System Statement’ for 2021 6. Adopt the proposal on the amendment to the Company's Articles of Incorporation. 7. Adopted the proposal on amending the “Rules of Procedure of the Board of Shareholders” of the Company. 8. Approve the amendments to the Regulations Governing the Election of Directors and Supervisors. 9. Adopt the proposal on amending the Procedures for the Acquisition or Disposal of Assets of the Company.. 10. Pass the proposal on amending the Operating Procedures for Fund Loaning and Endorsement Guarantee of the Company. 11. Adopt the proposal on the amendment to the Company’s Procedures for Loaning of Funds to Others. 12. Approve the establishment of the Audit Committee Charter by the Company. 13. Pass the proposal on the re-election of directors of the Company. 14. Approved the authorization of Chairman of the Board to interact with banks and securities and financial companies in the name of CHAINTECH. 15. Approved the matters concerning the convening date, time, place and content ofCHAINTECH's2022 regularShareholders'

Date	Meeting Type	Important resolutions:
		Meeting.
2022.5.4	The 19th meeting of the 14th term	1. Adopt the proposal on the consolidated financial report of the Company for Q1 2022. 2. Adopt the proposal on the distribution of surplus for 2021. 3. Pass the nomination and review the candidate list of directors (including independent directors). 4. Adopt the proposal on lifting the non-competition restrictions for newly elected directors. 5. Pass the proposal on renewal of the endorsement for CHAINTECH'sre-invested businesses.
2022.6.15	The 1st meeting ofthe15thterm	1. Pass the proposal on the election of Chairman of the 19th Board of Directors ofthe Company.
2022.8.4	The 2nd meeting of the 15th term	1. Adopt the proposal on the consolidated financial report of the Company for Q2 2022. 2. Pass the proposal on making supplementary statement on the endorsement guarantee provided by the Company for Beijing Sitonholy Technology Co., Ltd. 3. Pass the list and tenure of the members of the 6th Remuneration Committee of the Company 4. Pass the authorization of Chairman of the Board to interact with banks and securities and financial companies in the name of CHAINTECH.
2022.11.4	The 3rd meeting of the 15th term	1. Adopt the proposal on the Company’s Q3 2021 Consolidated Financial Report. 2. Adopt the proposal on the Company’s 2023 Audit Plan. 3. Adopt the proposal on the appointment, remuneration and independence evaluation of CPAs of the Company. 4. Adopt the proposal on the amendment to CHAINTECH's Rules of Procedure for Board Meeting. 5. Adopt the proposal on the amendment to some provisions of the Operating Procedures to Prevent Insider Trading of the Company 6. Adopt the proposal on the determination of base day for decapitalization of treasury stock. 7. Adopt the proposal on the change of spokesperson. 8. Adopt the proposal on the establishment of a Shenzhen subsidiary through the transfer of investment from Sitonholy (Tianjin)Technology Co.,Ltd..
2023.1.13	The 4th meeting of the 15th term	1. Adopt the proposal on the Company's 2023 operation plan. 2. Pass the proposal on reviewing the policies, systems, standards and structures for the performance evaluation, salary and remuneration of the directors, supervisors and managers of the Company. 3. Pass the proposal on the discussion of the Regulations Governing Performance Evaluation of the Board of Directors. 4. Pass the proposal on CHAINTECH's remuneration for individual managerial officers in 2022. 5. Pass the proposal on CHAINTECH's remuneration for individual managerial officers in 2023. 6. Pass the proposal on 2022 managerial officers’ year-end bonus and special leaves bonus of the Company. 7. Pass the proposalonthe Company’s setup ofthefirst Corporate

Date	Meeting Type	Important resolutions:
		Governance Officer.
2023.3.23	The 5th meeting of the 15th term	1. Adopt the 2022 Business Report and Financial Statements. 2. Pass the proposal on the Company's 2022 rewards to Directors. 3. Pass the proposal on CHAINTECH's rewards to managerial officers for 2022. 4. Pass the proposal on CHAINTECH's remuneration for newly elected managerial officers in 2023. 5. Adopt the proposal on ‘Evaluation for Effectiveness of Internal Control System’ and ‘Internal Control System Statement’ for 2022 6. Pass the GHG accounting and third-party verification schedule of the Company's subsidiaries. 7. Adopt the matters concerning the convening date, time, place and content of CHAINTECH's 2023 regular shareholders' meeting.

(XII) In the most recent year and as of the publication date of this report, whether there are Directors or Supervisors having different opinions on the important resolutions passed by the Board of Directors with records or written announcements: None.
(XIII) Resignation or Dismissal of the Company's Key Individuals, Including the Chairman, General Manager, and Heads of Accounting, Finance, Internal Audit, Corporate Governance and R&D for the Most Recent Year and up to the Date of Publication of this Annual Report: None.

IV. Information on CPAs fees

(I) CPA fees

					Unit: NT$1,000 Total Remarks 3,899	Unit: NT$1,000 Total Remarks 3,899
Accounting Firm	Name of CPA	Audit Period	Audit Fees	Non-audit Fee (Note)	Total	Remarks
Pricewaterhou se Coopers	Feng, Min- Chuan	2022/01/01~2022/12/31	3,374	525	3,899
	Lin, Ya- Hui	2022/01/01~2022/12/31

Note: Services of non-audit fees: Transfer valuation, business registration for treasury stock decapitalization, and the Group’s main corporate file service fees.

(II) Where the CPA firm was replaced, and the audit fees in the fiscal year, when the replacement was made, were less than that in the previous fiscal year before replacement, the amount of audit fees paid before/after replacement and reasons for paying this amount shall be disclosed: N/A.
(III) Where accounting fee paid for the year was more than 10% of the previous year, the sum, proportion, and cause of the reduction shall be disclosed: None.

V. Information About Replacement of CPA: None.

VI. Chairman, General Manager, Manager in Charge of Financial or Accounting Affairs of the Company, Those Who Have Worked in a Certified Public Accountant’s Firm or Affiliated Enterprise Within the Last Year, and Name, Title and Period in a Certified Public Accountant’s Firm or Affiliated Enterprise to be Disclosed The affiliated enterprises of the accounting firm of CPAs refer to those in which the CPAs of the accounting firm hold more than 50% shares or obtain more than half seats of directors, or the accounting firm of CPAs is company or institution of affiliated enterprises in released or printed materials to the outside: None.

VII. Status of Share Transfer and Changes in Equity Pledge by the Director, Supervisors, Managers, and Shareholders with Over 10% Shareholdings in the Most Recent Year until the Publication Date of the Annual Report:

(I) Change in the equities of the Directors, Supervisors, Managers and substantial shareholders

Unit: Shares

				Unit: Shares	Unit: Shares
Title	Name	2022		(As of April 18, 2022)
		Changes in number of shares	Changes in shares pledged	Changes in number of shares	Changes in shares pledged
Director	E Cheng Technology Limited Representative: Kao, Shu- Jung Representative: Lu, Li- Cheng Representative: Wang, Mu-Tien	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－`
Independent Director	Chen, Kuo-Chin	`－`	`－`	`－`	`－`
Independent Director	Tang, Han-Yu	`－`	`－`	`－`	`－`
Independent Director	Yang, Hsin-Ying (Note 1)	`－`	`－`	`－`	`－`
Independent Director	Wei, Chi-Feng (Note 1)	`－`	`－`	(35,000)	`－`
Supervisor	Chou, Chun-Tsun (Note 1)	`－`	`－`	`－`	`－`
Supervisor	Hsu, Sheng-Chin (Note 1)	`－`	`－`	`－`	`－`
General Manager	Kao, Shu-Jung	`－`	`－`	`－`	`－`
Assistant Manager of Marketing and Planning	Chou, Tzu-An (Note 2)	`－`	`－`	`－`	`－`
Associate Manager of R&D Department	Huang, Po-Lin (Note 3)	`－`	`－`	`－`	`－`
Associate Manager, Information Department	Wei, Shih-Lun (Note 4)	`－`	`－`	`－`	`－`
Manager of Finance/Accounting	Lai, Yu-Nu	`－`	`－`	`－`	`－`
Major Shareholder	E Cheng Technology Limited	`－`	`－`	`－`	`－`

Note 1. Supervisor Chou, Chun-Tsun and Supervisor Hsu, Sheng-Chin stepped down on June 15, 2022 and were replaced by Director Yang, Hsin-Ying and Director Wei, Chi-Feng after re-election.
Note 2. Associate Manager Chou, Tzu-An left the Company on January 31, 2022. Note 3. Associate Manager Huang, Po-Lin was inaugurated on September 5, 2022. Note 4. Associate Manager Wei, Shih-Lun was promoted to the position on March 1, 2023.

(II) Equity transfer information:

Equity transfer of CHAINTECH's Directors, Supervisors, managerial officers and major shareholders to related parties.

(III) Information on equity pledge:

There is no equity pledge by the Directors, Supervisors, managers and major shareholders of CHAINTECH.

VIII.Information on the related party relationship as defined in the Statements of Financial Accounting Standards No. 6 between the Company's top ten shareholders by shareholding ratio:

			Unit: Shares;%	Unit: Shares;%	Unit: Shares;%	Unit: Shares;%	Unit: Shares;%	Unit: Shares;%	Unit: Shares;%
Name	Shares Held by the Person		Shares Held By Spouse and Minor Children		Total Shares Held in the Name of Other Persons		The title or name and relations of the top 10 shareholders who are related parties, spouses, or relatives within the second degree of kinship. (Note 3)		Remarks
	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Name	Relation
E Cheng Technology Limited	28,532,080	29.57	`－`	`－`	`－`	`－`	`－`	`－`	Director/Major Shareholder
E Cheng Technology Limited Representative: Chang, Chi	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	-
Investment account of Yuanfu Investment (HK) Co., Ltd. under custody ofCTBC	7,312,173	7.58	`－`	`－`	`－`	`－`	`－`	`－`	-
Li, Shih-Lung	6,000,000	6.22
APAQ Technology Co.,Ltd	4,710,000	4.88
Yang, Shun-Hsing	2,055,000	2.13	`－`	`－`	`－`	`－`	`－`	`－`	-
Chen, Ching-Lieh	1,568,000	1.62
Lin, Wei-Ling	1,382,468	1.43
Investment account of Citibank Taiwan as custodian of UBSEurope SE	1,229,723	1.27
Hsu, Sheng-Chin	1,041,048	1.08
Wu,Ming-Wei	956,000	0.99

Note 1. All the top 10 shareholders shall be listed. For juristic person shareholders, their names and the name of their representatives shall be listed separately.

Note 2. Shareholding ratio is calculated separately based on the ratio of shares held in the name of the person, his/her spouse, minor children, or others.

Note 3. Relations between the aforementioned shareholders, including juristic person shareholders and natural person shareholders, shall be disclosed based on the financial reporting standards used by the issuer.

IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:

IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company:
December 31,2022;Unit: Shares;% Re-investment Businesses (Note 1) Investments of CHAINTECH Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses Total Ownership Number of shares Shareholdin gratio Number of shares Shareholdi ngratio Number of shares Shareholdin gratio Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. (Note 3) Baotou Yihui Information Technology Co., Ltd. (Note 3) Sitonholy (Shenzhen) Technology Co., Ltd.(Note 3) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) 100% 51% 100% 100% 100% `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) 100% 51% 100% 100% 100%
Re-investment Businesses (Note 1)	Investments of CHAINTECH		Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses		Total Ownership
	Number of shares	Shareholdin gratio	Number of shares	Shareholdi ngratio	Number of shares	Shareholdin gratio
Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. (Note 3) Baotou Yihui Information Technology Co., Ltd. (Note 3) Sitonholy (Shenzhen) Technology Co., Ltd.(Note 3)	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	100% 51% 100% 100% 100%	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－`	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	100% 51% 100% 100% 100%

Note 1. Investment by using the equity method Note 2. The investee company is a limited company with no share issued, so there is no number of shares held. Note 3. The investee company is a 100% reinvestment of Sitonholy (Tianjin) Technology Co., Ltd.

Chapter 4. Funding Overview

I. Capital and Shares

(I) Sources of Capital

1. Formation of share capital

MM/YYYY	Issued Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Number of shares	Amount	Number of shares	Amount	Sources of Capital	Capital from Non-Cash Assets	Others
1986.11	10	500,000	5,000,000	500,000	5,000,000	Incorporation of the Company	None	Note
1989.03	10	6,000,000	60,000,000	6,000,000	60,000,000	Cash Capital Increase of NT$55,000,000	None	Note
1989.12	10	12,000,000	120,000,000	12,000,000	120,000,000	Cash Capital Increase of NT$60,000,000	None	Note
1990.06	10	19,500,000	195,000,000	19,500,000	195,000,000	Cash Capital Increase of NT$75,000,000	None	Note
1994.05	10	19,500,000	195,000,000	11,700,000	117,000,000	Capital Reduction of NT$78,000,000	None	Note
1994.05	10	19,900,000	199,000,000	19,900,000	199,000,000	Cash Capital Increase of NT$82,000,000	None	Note
1995.07	10	50,000,000	500,000,000	32,000,000	320,000,000	Cash Capital Increase of NT$121,000,000	None	Note
1996.11	10	50,000,000	500,000,000	35,200,000	352,000,000	Capital Increased by Surplus of NT$32,000,000	None	Note
1997.05	10	50,000,000	500,000,000	42,860,000	428,600,000	Capital Increased by Surplus of NT$70,400,000 Capital Increased by Employee Bonus of NT$6,200,000	None	Note
1998.04	10	200,000,000	2,000,000,000	70,000,000	700,000,000	Capital Increased by Surplus of NT$85,720,000 Capital Increased by Employee Bonus of NT$6,897,000 Cash Capital Increase of NT$178,783,000	None	Note
1999.06	10	200,000,000	2,000,000,000	77,943,000	779,430,000	Capital Increased by Surplus of NT$42,000,000 Capital Increased by Capital Surplus of NT$35,000,000 Capital Increased by Employee Bonus of NT$2,430,000	None	Note
2000.06	10	200,000,000	2,000,000,000	95,019,900	950,199,000	Capital Increased by Surplus of NT$116,914,500 Capital Increased by Capital Surplus of NT$38,971,500 Capital Increased by Employee Bonus of NT$14,883,000	None	Note
2000.12	10	200,000,000	2,000,000,000	102,924,423	1,029,244,230	Capital Increased by Corporate Convertible Bonds of NT$79,045,230	None	February 13, 2001 (90) Business No. 09001037670
2001.06	10	200,000,000	2,000,000,000	117,187,775	1,171,877,750	Capital increase with surplus by NT$56,608,430 Capital Increased by Capital Surplus of NT$46,315,990 Capital Increased by Employee Bonus of NT$13,194,440 Capital Increased by Convertible Bonds of NT$26,514,660	None	May 23, 2001 (90) TWF (I) No. 132078

2002.05	10	200,000,000	2,000,000,000	135,133,069	1,351,330,690	Capital Increased by Surplus of NT$82,031,440 Capital Increased by Capital Surplus of NT$70,312,660 Capital Increased by Employee Bonus of NT$23,795,240 Capital Increased by Convertible Bonds of NT$3,313,600	None	May 16, 2002 (91) TWF (I) No. 126710
2003.10	10	200,000,000	2,000,000,000	135,197,020	1,351,970,200	Capital Increased by Convertible Bonds of NT$639,510	None	October 13, 2003 (92) Business No. 09201288850
2005.7	10	250,000,000	2,500,000,000	149,863,686	1,498,636,860	Capital Increased by Corporate Convertible Bonds under Private Placement of NT$146,666,660	None	July 8, 2005 (94) Business No. 09401126820
2005.8	10	250,000,000	2,500,000,000	205,613,686	2,056,136,860	Capital Increased by Convertible Bonds under Private Placement of NT$557,500,000	None	August 16, 2005 (94) Business No. 09401158030
2005.9	10	250,000,000	2,500,000,000	204,013,686	2,040,136,860	Writing Off Repurchased Treasury Stock of NT$16,000,000	None	September 26, 2005 (94) Business No. 09401190290
2006.2	10	250,000,000	2,500,000,000	128,964,691	1,289,646,910	Capital Reduction of NT$750,489,950	None	February 6, 2006 (95) Business No. 09501018170
2007.1	10	250,000,000	2,500,000,000	129,813,191	1,298,131,910	Capital Increased by Employee Equity of NT$8,485,000	None	January 22, 2007 (96) Business No. 09601012070
2007.8	10	250,000,000	2,500,000,000	130,078,691	1,300,786,910	Capital Increased by Employee Equity of NT$2,655,000	None	August 16, 2007 (96) Business No. 09601197660
2007.10	10	250,000,000	2,500,000,000	130,081,691	1,300,816,910	Capital Increased by Employee Equity of NT$30,000	None	October 17, 2007 (96) Business No. 09601253600
2008.9	10	250,000,000	2,500,000,000	76,852,263	768,522,630	Capital Reduction of NT$532,294,280	None	September 22, 2008 (97) Business No. 09701239470
2010.3	10	250,000,000	2,500,000,000	89,352,263	893,522,630	Cash Capital Increase of NT$125,000,000	None	March 17, 2010 (99) Business No. 09901050980
2011.11	10	250,000,000	2,500,000,000	117,831,766	1,178,317,660	Capital Reduction of NT$275,204,970 Cash Capital Increase under Private Placement of NT$560,000,000	None	November 24, 2011 (100) Business No. 10001266040
2012.8	10	250,000,000	2,500,000,000	93,570,206	935,702,060	Capital Reduction of NT$242,615,600	None	August 14, 2012 (101) Business No. 10101165750
2013.9	10	250,000,000	2,500,000,000	94,505,909	945,059,090	Capital Increased by Surplus of NT$9,357,030	None	September 9, 2013 (102) Business No. 10201184650
2014.9	10	250,000,000	2,500,000,000	109,248,831	1,092,488,310	Capital Increased by Surplus of NT$147,429,220	None	September 23, 2014 (103) Business No. 10301199230
2018.5	10	250,000,000	2,500,000,000	101,498,831	1,014,988,310	Treasury Stock Capital Reduction of NT$77,500,000	None	May 23, 2018 (107) Business No. 10701052620
2023.1	10	250,000,000	2,500,000,000	96,498,831	964,988,310	Treasury stock Capital Reduction of NT$50,000,000	None	January 9, 2023 (112) Business No. 11101247660

Note: It is not provided for no value of disclosure due to time.

Type of Shares

April 18, 2023 (shares)

	2. Type of Shares	2. Type of Shares	2. Type of Shares	April 18,2023(shares)
Type of Shares	Authorized Share Capital			Remarks
	Outstanding Shares	Unissued shares	Total
Ordinary Shares	96,498,831	153,501,169	250,000,000

(II) Shareholder Structure

April 18, 2023

Shareholder Structure Quantity	Financial Institutions	Other Legal Persons	Individual	Foreign Institutions and Foreigners	Chinese Capital	Total
Number of Individuals	1	19	10,863	24	1	10,908
Number of shares	87,000	5,774,923	50,957,016	11,147,812	28,532,080	96,498,831
Shareholding Ratio (%)	0.09	5.98	52.81	11.55	29.57	100.00

Note: The first TPEx-listed company and emerging stock companies shall disclose their own shareholding ratio of Mainland investors. Mainland investor refers to the companies invested by the people, legal persons, groups, other institutions, or companies that are invested in the third region by people from China Mainland, as stipulated in Article 3 of the Regulations Governing the Investment and Licensing in Taiwan by the People from China Mainland.

(III) Distribution of Shares

1. Common shares

April 18, 2023

			April 18,202
Shareholding Range	Number of Shareholders	Number of shares	Shareholding Ratio (%)
1 to 999	4,302	847,566	0.88
1,000 to 5,000	5,440	10,857,471	11.25
5,001to10,000	653	5,406,798	5.60
10,001 to 15,000	161	2,069,871	2.15
15,001to20,000	108	2,047,528	2.12
20,001to 30,000	71	1,844,163	1.91
30,001to40,000	42	1,524,291	1.58
40,001to 50,000	33	1,545,799	1.60
50,001to100,000	41	3,060,959	3.17
100,001to200,000	25	3,618,852	3.75
200,001to400,000	14	3,876,041	4.02
400,001to 600,000	3	1,633,000	1.69
600,001to 800,000	4	2,561,000	2.66
800,001to1,000,000	2	1,775,000	1.84
1,000,001 and above (This range can be further classified wherenecessary)	9	53,830,492	55.78
Total	10,908	96,498,831	100.00

2. Preferred Shares: N/A.

(IV) List of Major Shareholders

April 18, 2023

IV) List of Major Shareholders		April 18,202
Shares Name of major shareholder	Number of shares	Shareholding ratio
E Cheng Technology Limited	28,532,080	29.57%

(V) Net worth, earnings, dividends, and market price-related information for the last two years up to the publication date of this annual report

Unit: thousand shares

						Unit: thousand shares
Year	Item			2021	2022	Current year up to March 31, 2023 (Note 8)
Market Price Per Share (Note 1)	Highest			42.50	32.75	38.00
	Lowest			23.10	21.80	28.90
	Average			29.08	27.63	32.81
Net value per share (Note 2)	Before distribution			18.74	20.95	21.78
	After distribution			18.74	20.95	`－`
Earnings Per Share	Weighted Average Shares			96,499	96,499	96,499
	Earnings Per Share (Note 3)		Before adjustment	1.27	3.32	0.35
			After adjustment	1.27	3.32	`－`
Dividends per share	Cash Dividends			0.60	0.80 (Note 9)	`－`
	Stock Grants	Dividend for paid-in capital		`－`	`－`	`－`
		Earnings Grants		`－`	`－`	`－`
	Accumulated dividend not paid out(note 4)			`－`	`－`	`－`
Return on Investments	Price-to-earningratio (Note 5)			22.89	8.32(Note 9)	`－`
	Price-to-dividend ratio (Note 6)			48.47	34.54(Note 9)	`－`
	Cash dividend yield (Note 7)			0.02	0.03 (Note 9)	`－`

*If retained earnings or capital reserves were used for capital increase, market prices and cash dividends that were
retroactively adjusted based on the number of shares after distribution shall be disclosed.
Note 1. Disclose the annual maximum and minimum market value of the common stock. The annual average market value is calculated based on each year's transaction value and quantity.
Note 2. Please fill these rows based on the number of shares that have been issued at the end of the fiscal year and the distribution plan approved at the Board Meeting or Shareholders' Meeting in the subsequent fiscal year.
Note 3. If there is any retrospective adjustment required due to stock grants or capital reduction to offset losses, earnings per share before and after the adjustment shall be disclosed.
Note 4. If the conditions of equity securities issuance allow unpaid dividends to be accumulated to the subsequent years in which there is profit, the Company shall disclose the accumulated unpaid dividends respectively up to that year.
Note 5. P/E Ratio = Average closing price for each share in the year/earnings per share
Note 6. P/D ratio = Average closing price per share of the year/Cash dividends per share
Note 7. Cash dividend yield = cash dividend per share/current year average per share closing price.
Note 8. The net value per share and earnings per share should be filled up to the quarter nearest to the date of the publication of this annual report to be audited by an accountant. The remaining column should be filled with the annual data up to the publication of this annual report.
Note 9. Earnings distribution proposal passed by the Board of Directors for 2022 has not been resolved by the Shareholders' Meeting.

(VI) Explanation of the Company's dividend policy, implementation, and the expected significant changes
Dividend policy

If CHAINTECH has a surplus in the general annual report, the surplus shall be made up for the previous losses, apart from allocating income taxes. And 10% of the balance shall be allocated as a statutory surplus reserve unless the statutory surplus reserve has reached the paid-in capital. After the statutory surplus reserve is retained or rotated in accordance with the rules and regulations by competent agencies, the undistributed earnings at the beginning of the period shall be combined and the Board of Directors shall formulate a specific proposal for distribution of earnings to be submitted to the Shareholders' Meeting for resolution, with consideration given to retaining partial earnings. For the current year, cash dividends shall not be less than 5%. However, if cash dividends are not paid below NT$0.1 per share, the dividend will be distributed in stock dividends.

Distribution of dividends proposed at the most recent Shareholders' Meeting:
- CHAINTECH's earnings distribution for 2022 was approved by the Board of Directors on May 5, 2023, to issue NT$0.8 per share. After the resolution of the General Shareholders' Meeting is passed, the Chairman of the Board will be authorized to set the ex-dividend base date.
(VII) Effect of free allotment of shares proposed at this shareholders' meeting on the Company's business performance and earnings per share: No free allotment is proposed at the shareholders' meeting in 2023.
(VIII) Rewards for Employees, Directors, and Supervisors:
Percentage or scope of rewards for employees, directors, and supervisors as prescribed under the Articles of Incorporation:

If CHAINTECH has a profit for the year, it shall appropriate no less than 0.1% as the rewards for employees, and no more than 6% as rewards for directors and supervisors.

However, in case of the accumulated losses, certain profits shall first be reserved to cover them, and then reserve rewards to employees, directors and supervisors in accordance with the proportion mentioned in the preceding paragraph.

Accounting treatment for the basis of estimating the amount of rewards for employees, directors, and supervisors for this fiscal period, the basis of calculating the number of shares to be distributed as employees’ rewards, and for any discrepancy between the actual amount distributed and the estimated figures.
(1) The rewards for employees, directors, and supervisors of CHAINTECH is estimated in accordance with CHAINTECH's Articles of Incorporation.
(2) The remuneration for employees, directors, and supervisors of CHAINTECH shall be based on the explanation letter issued by the Accounting Research and Development Foundation (96) Official Letter No. 052. The amount of remuneration for employees, directors, and supervisors of the Company shall be estimated, and recognized under appropriate accounting items of operation cost or operation expense according to its nature. If there is a discrepancy between the resolution of Shareholders' Meeting and estimated amount in financial statements, it is considered as changes in an estimate and is recognized as profit or loss for the current period.

The Board of Directors approved the amount of remuneration for employees, directors, and supervisors and calculation of earnings per share:
(1) Amount of remuneration for employees, directors and supervisors:

As approved by the Board of Directors on March 22, 2023, the proposed distribution of rewards to employees, directors and supervisors of CHAINTECH for the year of 2022 is as follows:

  - A. Employee’s rewards: NT$4,039,470.

  - B. Rewards for directors and supervisors: NT$12,118,410.

  - C. All the above amounts have been paid in cash, which has no difference with the estimated amounts that were found in 2022.

(2) The amount of any employee remuneration distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee remuneration: N/A.
If there is any discrepancy between the actual amount of bonuses distributed to employees and directors (including the number and dollar amount of shares distributed, as well as share price) and the recognized amount of bonuses for employees and directors in the previous fiscal year, the amount, causes, and treatment shall be stated:

Unit: NT$

Item	Actual distribution in 2022	Recognized in 2021
Rewards of employees in cash	1,662,911	1,662,911
Rewards of employees in shares	0	0
Rewards for Directors and Supervisors	4,988,732	4,988,732

(IX) Repurchase of Shares by CHAINTECH

(1) Completed execution

(1) Completed execution
Term of Repurchase	7th term
Purpose of Repurchase	Transfer to employees
Repurchase period	From October 15, 2019 to December 12, 2019
Repurchase price	Average repurchase price of NT$30.35
Type and number of repurchased shares	Common stocks/5,000,000 shares
Total monetary amount of the repurchase	NT$151,745,862
Ratio of quantity repurchased to scheduled quatity of repurchase	100%
Number of shares eliminated and transferred	0 Shares
Cumulative number of shares held	5,000,000 shares

Term of Repurchase	7th term
Ratio of the cumulative number of shares held to total number of shares issued (%)	4.93%
Remarks	The Company bought back treasury stocks for the 7th time and has not transferred them to the employees for more than 3 years. In accordance with the regulations, 12/12/2022 was set as the base date for decapitalization and the change was approved by the Ministry of Economic Affairs on 1/9/2023.

(2) Undergoing: None.

II. Issuance of Corporate Bonds (including overseas corporate bonds): None.
III. Issuance of Preferred Shares: None.
IV. Issuance of Overseas Depository Receipts: None.
V. Employee Stock Options: None.
VI. New Employee Shares with Limited Rights: None.
VII. Issuance of New Shares in Connection with the Merger or Acquisition of Other Companies: None.

VIII.Capital Utilization Plan and Implementation: None.

Chapter 5. Operating Overview

I. Business Activities

(I) Scope of Business:
Business Items
- (1) CC01010 Power Generation, Transmission and Distribution Machinery Manufacturing (limited to the 2810 power generation, transmission and distribution machinery manufacturing according to the Industrial Standard Classification of the Republic of China; 2890 other power equipment manufacturing, limited to wind power generation equipment manufacturing).
- (2) CC01030 Electric Appliances and Audio-visual Electronic Products Manufacturing (limited to 2730 audio-visual electronic products manufacturing, 2851 household AC manufacturing, 2852 household refrigerator manufacturing, 2853 household washing machine manufacturing, 2854 household electric fan manufacturing, and 2859 other household electric appliances manufacturing according to the Industrial Standard Classification of the Republic of China).
- (3) CC01060 Wired Communication Machinery and Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing and 2729 other communication and transmission equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (4) CC01070 Wireless Communication Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing, 2729 other communication and transmission equipment manufacturing and 2751 measurement, navigation and control equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (5) CC01080 Electronic Parts and Components Manufacturing (limited to 2630 printed circuit board manufacturing, 2691 printed circuit board parts and components manufacturing and 2699 other electronic parts and components manufacturing according to the Industrial Standard Classification of the Republic of China).
- (6) CC01101 Telecommunications Control RF Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing, 2729 other communication and transmission equipment manufacturing and 2760 radiation and electronic medical equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (7) CC01110 Computer and Peripheral Devices Manufacturing (limited to 2711 computer manufacturing, 2712 display and terminal manufacturing and 2719 other computer and peripheral devices manufacturing according to the Industrial Standard Classification of the Republic of China).
- (8) CC01120 Data Storage Media Manufacturing and Copying (limited to 2740 data storage media manufacturing according to the Industrial Standard Classification of the Republic of China).
- (9) CE01010 General Instruments Manufacturing (limited to 2751 measurement, navigation and control equipment manufacturing and 2760 radiation and electronic medical equipment manufacturing according to the Industrial Standard Classification of the Republic of China).

(10) CH01040 Toys Manufacturing (limited to 3312 toys manufacturing according to the Industrial Standard Classification of the Republic of China).
(11) F102030 Tobacco and Beverage Wholesale (limited to 4546 tobacco and beverage wholesale according to the Industrial Standard Classification of the Republic of China).
(12) F109070 Stationery, Musical Instrument, and Entertainment Products (limited to 4581 books and stationery wholesale, 4582 sports products, and apparatus wholesale and 4583 toys and entertainment products wholesale according to the Industrial Standard Classification of the Republic of China), excluding books, magazines, and newspapers wholesale.
(13) F113010 Machinery Wholesale (limited to 4643 agricultural and industrial machinery and equipment wholesale according to the Industrial Standard Classification of the Republic of China).
(14) F113020 Electrical Appliances Wholesale (limited to 4561 household appliances wholesale according to the Industrial Standard Classification of the Republic of China).
(15) F113030 Precision Instruments Wholesale (limited to 4564 household photographic equipment and optical products wholesale and 4649 other machinery and appliances wholesale according to the Industrial Standard Classification of the Republic of China).
(16) F113050 Computer and Office Machine and Equipment Wholesale (limited to 4641 computer and peripheral equipment and software wholesale and 4644 office machine and equipment wholesale according to the Industrial Standard Classification of the Republic of China).
(17) F113070 Telecommunication Equipment Wholesale (limited to 4642 electronic equipment and parts and components whole according to the Industrial Standard Classification of the Republic of China), excluding telecommunication core network equipment (such as exchange and transmission equipment) wholesale.
(18) F118010 Information Software Wholesale (limited to 4641 computer and peripheral equipment and software wholesale according to the Industrial Standard Classification of the Republic of China).
(19) F119010 Electronic Materials Wholesale (limited to 4642 electronic equipment and parts and components wholesale according to the Industrial Standard Classification of the Republic of China).
(20) F203020 Tobacco and Beverage Retail (limited to 4729 other food and beverage, tobacco retail according to the Industrial Standard Classification of the Republic of China; excluding the retail of drug stores, pharmacy, cosmeceuticals shop, or live animal shop).
(21) F209060 Stationery, Musical Instrument and Entertainment Products Retail (limited to 4761 books and stationery retail, 4762 sports products and apparatus retail, 4763 toys and entertainment products retail and 4764 music tape and movies retail according to the Industrial Standard Classification of the Republic of China), excluding the retail of books, magazines and newspapers.
(22) F213010 Electric Appliances Retail (limited to 4741 household electric appliances retail and 4833 audio-visual equipment retail according to the Industrial Standard Classification of the Republic of China).
(23) F213030 Computer and Office Machine and Equipment Retail (limited to 4831

computer and peripheral equipment and software retail according to the Industrial Standard Classification of the Republic of China).

(24) F213060 Telecommunication Equipment Retail (limited to 4832 telecommunication equipment retail according to the Industrial Standard Classification of the Republic of China), excluding the retail of telecommunication core network equipment (e.g. exchange and transmission equipment).
(25) F214030 Auto and Motor Vehicle Parts and Components Retail (limited to 4843 auto and motor vehicle parts and components retail according to the Industrial Standard Classification of the Republic of China).
(26) F218010 Information Software Retail (limited to 4831 computer and peripheral equipment and software retail according to the Industrial Standard Classification of the Republic of China).
(27) F219010 Electronic Materials Retail (limited to 4831 computer and peripheral equipment and software retail, 4832 telecommunication equipment retail and 4833 audio-visual equipment retail according to the Industrial Standard Classification of the Republic of China).
(28) I501010 Product Design (limited to 7402 design service for specially manufactured products in industrial design and 7409 design service for specially manufactured products in other professional design service industry according to the Industrial Standard Classification of the Republic of China).
(29) JA02010 Electrical Appliance and Electronic Products Repair (limited to 9521 computer and peripheral equipment repair, 9522 telecommunication and transmission equipment repair and 9523 audio-visual electronic products and household appliances repair according to the Industrial Standard Classification of the Republic of China).
Business proportion

Business proportion
	Unit: NT$thousands
Item	2022 operatingrevenue
	Amount	Percentage
Computerperipherals	6,189,288	99.85%
Others	9,386	0.15%
Total	6,198,674	100.00%

Current products and services
(1) Display cards
(2) Motherboard
(3) AI server and system integration
(4) High-performance data computing solutions
New products and services that are planned to be developed
(1) Display cards
- A. RTX 4090 and RTX 4080 were officially launched at the end of 2022. RTX 4090 is the flagship gaming GPU of NVIDIA GeForce RTX series, using

DLSS 3 RTX 4090 in the light tracing game, increasing in performance by up to 2-4 times compared to 3090 Ti, maintaining 100 FPS in 4K resolution games with lower power consumption. Its dedicated hardware can accelerate 3D, video and AI, making it the perfect graphics card for HD gaming and content creation, giving users a "speed traversal" hardware experience.

B. With the launch of RTX 4070Ti in early 2023, the Company will officially open the era of 2K+120FPS immersive experience light tracing games for all. Using the highly efficient third-generation RTX architecture NVIDIA Ada Lovelace, it is able to present the highest resolution on a 1440p display.
C. The subsequent development plans will be prepared for the development of NVIDIA Ampere new high-end chips that cover the series of Kudan, Vulcan, Neptune, Advanced, Ultra, and so on.
D. The display cards heat dissipation solutions developed in advance for NVIDIA's next-generation chips include Vulcan, Neptune, Advanced, etc.
(2) Motherboard
A. For new Intel series products, Z790/B760 series chipset products have been released, and the development of each product line is nearing the final stage. Next, we will continue to develop new Intel 700 series chipset products, including iGame, CVN, BATTLE-AX and NetCase, which will be released in the second half of 2023.
B. For AMD series new products, we are developing the new generation of AM5 processor series chipsets, using the latest AMD 600 series chipsets. The product line includes CVN, BATTLE-AX, Netchi and other mid-range DIY console boards, which are scheduled to be released in the second half of 2023.
C. We attach importance to the development of electronic commerce, strengthen the cooperation between network marketing products and electronic commerce.
D. We will strengthen close cooperation with Intel, AMD, NV and other upstream manufacturers.
(3) AI server and system integration
A. SITONHOLY, a subsidiary of the Company, is not only the distributor of NVIDIA DGX, Tesla and Jetson series, but also develops a variety of GPU servers under its own brand, such as the Deep Thought series for AI and deep learning, the fully water-cooled Silent Thought series for offices, the Rex series for enterprise virtualization, and the Granite series for performance and massive storage space.
B. The SMP heterogeneous resource monitoring platform based on X86 system can be deployed on windows, Linux and macOS systems, and the service can be obtained through web after successful installation.
C. The SCM cluster management cloud platform, developed by SITONHOLY, supports machine learning, deep learning, and high performance computing (HPC). It can quickly deploy deep learning environments, automatically start training tasks by appointment, and keep track of training progress and quality with visualized training tasks, and allocate computing resources on demand to automatically recycle and reduce waste. In addition, it is capable of multilevel user management for precise control of user privileges.

(II) Industry Overview

Current State and Development of the Industry
(1) Board Industry

According to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker, worldwide shipments of conventional PCs were lower than expected in 4Q22, at 67.2 million units, down 28.1% from the same period in 2021.

Initial estimates of global PC manufacturers' unit shipments in 4Q2022

(Unit: Millions)

Manufacturer	4Q22	4Q22	4Q21	4Q21	4Q22-
	Shipment	Market share	Shipment	Market share	4Q21Growth
		(%)		(%)	Rate (%)
Lenovo	15.5	23.0%	21.6	23.1%	-28.5%
HP	13.2	19.6%	18.6	19.9%	-29.0%
Dell	10.8	16.1%	17.2	18.4%	-37.2%
Apple	7.5	11.2%	7.7	8.2%	-2.1%
ASUS	4.8	7.2%	6.1	6.5%	-20.9%
Others	15.4	22.9%	22.3	23.9%	-31.0%
Total	67.2	100.0%	93.5	100.0%	-28.1%

Source: IDC Quarterly Personal Computing Device Tracker, January 10, 2023

IDC stated: "While 4Q2022 shipments were comparable to 4Q2018, the market challenge in 2018 came from Intel's supply chain constraints, signaling the end of the PC market's pandemic boom, and despite the recent downturn in demand, fullyear 2022 shipments of 292 million units are still well above pre-pandemic levels. Weak demand is the main reason for the decline, as most users already own relatively newer classes of computers, and the global economy continues to deteriorate.

Jitesh Ubrani, research manager from IDC's Mobile and Consumer Device Tracker division, added: "Demand has been boosted by discounted prices due to excess channel inventory over the past few months, but at the same time, average selling prices (ASPs) have fallen. Even with price reductions, inventory management of PC units and components will remain a key issue in the coming quarters and could further impact ASPs.

Supply chain activity also illustrates the caution that many large suppliers are taking into 2023, but it is widely believed that some PC markets may bottom out in 2023 and that the overall consumer market will resume growth in 2024. Even though the business sector retains several growth drivers, including the impending end of support for Windows 10 and organizational updates, the consumer market remains the big variable beyond 2023.

Ryan Reith, Vice President of IDC's Global Mobile and Consumer Device Tracker Group, also said: "The consecutive quarters of decline paint a clear picture of pessimism in the PC market, but it's really all about perception. PC shipments in 2021 are near record highs, so any comparison is distorted. As we look back at this point, the boom and bust of the PC market will be a matter of historical record, but there are still unlimited opportunities ahead, and we believe the market could recover in 2024 and see some opportunities for the remainder of 2023.

However, thanks to the overall graphics card terminal brand manufacturers inventory de-stocking into the end, and the accelerated unsealing in mainland China since the beginning of this year, sales momentum can be extended, some GPU highend graphics card new products are still somewhat in short supply, some graphics card products also due to promotional activities catalyzed by sales performance rebound, coupled with the second quarter launch of the NVIDIA RTX 4070 midrange series graphics card new products into the rollout period in April, thus driving the wave of upgrade and replacement in domestic Internet cafes.

In addition, after last year's mining wave, the global market still needs time to digest the second-hand mining cards, and JD.com, one of the top two e-commerce platforms in China, has recently announced that the sale of second-hand cards, refurbished cards, cottage cards and discontinued models (such as NVIDIA's RTX 20 series and GTX 16 series graphics products) will be banned on its platform. NVIDIA even suggested that consumers should purchase the RTX 40 series after the mining wave as their first choice, and then choose genuine graphics cards from AIC partners in China (such as Seven Rainbow, ASUS, Gigabyte, MSI, JAC, MaxSun, and Sotec, etc.) to ensure product quality and after-sales service.

The market generally expects the launch of mid-range graphics cards to help boost overall graphics card market demand, which in turn will drive the PC DIY market to become more active.

(2) Current State and Development of the AI Industry

IDC recently released the IDC Worldwide Artificial Intelligence Spending Guide 2023. According to the latest forecast, China's AI market spending will increase to US$14.75 billion by 2023, accounting for about one-tenth of the global total. Due to the impact of the epidemic, geopolitical and macroeconomic factors, IDC has slightly revised downward the size of the AI market in China in 2022, with a growth rate of about 17.9% compared to 2021. In the long run, the innovation of AI technology has driven the further implementation of application scenarios, with hot spots represented by AIGC, digital human, multimodality, AI big model, and intelligent decision making bringing more imagination and possibilities to the market. In addition, enterprises' active promotion of their own "digitization" and "digital intelligence" transformation has created diversified demands for AI technologies, laying the foundation for the long-term growth of China's AI market scale. IDC estimates that China's AI market will reach US$26.44 billion by 2026, with a five-year compound growth rate (CAGR) of over 20% from 2021-2026.

Technology Dimension

From a technology perspective, AI hardware spending will still account for more than half of the total market size in China over the five-year forecast period, and this forecast reduction is mainly due to the impact of the hardware market. For 2022, considering the epidemic, economic situation, and supply chain, there is a slowdown in the purchase of servers and storage systems by government, Internet, manufacturing, and other industry users, as well as enterprise users in the SMB market. In the long term, with the gradual improvement of AI infrastructure, the proportion of hardware in the total market size in China will gradually decrease.

However, the AI software market has greater potential for growth over the five-year forecast period, with both scale and growth rate revised upward in this forecast. Thanks to the continuous advancement of AI technology, model accuracy has improved significantly, and AI software has shown higher efficiency in processing massive, high-dimensional and complex data. For example, in natural language processing, AI big models can better recognize semantics, thus achieving more accurate and natural conversations. In computer vision, AI big models can better recognize images and video, enabling higher recognition accuracy and a wider range of application scenarios. IDC predicts that AI software spending will grow to $7.69 billion in 2026, accounting for 29% of the total market, up 10% from 2021.

The AI services market will further expand at a slightly slower rate than the software market. The dominant IT services segment will reach US$3.27 billion in 2026, nearly four times higher than in 2021, with a five-year CAGR of nearly 30%. In recent years, AI services have become one of the main ways that many enterprises use AI technology. AI services are used to process massive amounts of data, increase productivity, optimize supply chains, and improve customer experience. As a result, the demand for AI services market is also growing, which is driving the expansion of the market size.

Industry Applications

IDC expects that over the five-year forecast period, AI spending will continue to be dominated by industry users in the professional services sector, followed by government and finance, which together account for more than half of the total market. The fastest-growing industries are banking and local government, with a five-year CAGR of over 23%. Specifically, AI can be widely applied to search and recommendation, advertising and marketing in the professional services sector. Currently, ChatGPT has been embedded in Bing Search, bringing more intelligent and humanized features to enhance users' search experience and search efficiency, providing new ideas for the domestic market. In the government industry, the main applications are in public safety, urban management and social services. Through face recognition and big data-related technologies, potential security risks can be identified, and staff verification can also be performed during business processing to improve efficiency. The main applications in the financial industry include

risk management, fraud detection, investment analysis, etc. With the continuous progress of digital people, the service model of the financial industry will also be reshaped.

Application Scenarios

In order to better demonstrate the market dynamics, this IDC Worldwide AI Spending Guide adds the following six application scenarios to the existing 30 application scenarios:

Automated Identification and Access Control

Automated Inspection

Automated Task Processing

Optimized Operations

Public Transportation Scheduling

Route Planning

Of the 36 application scenarios, IDC expects Augmented Customer Service Agents, Sales Process Recommendation and Augmentation, and Smart Business Innovation and Automation to be the focus scenarios over the five-year forecast period, with more than one-third of the market investment flowing into them. Enhanced smart customer service can provide personalized service to customers through AI technology, including smart conversations and smart marketing, to improve customer satisfaction and user stickiness. Sales process recommendation and enhancement can help the sales team to conduct sales solution output in a more standardized manner and improve the efficiency of sales performance under the premise of compliance. Intelligent business innovation and automation can improve the level of automation and intelligence of business processes through AI technology, including process automation, intelligent document management, data acquisition and analysis, etc., empowering the efficiency and innovation of enterprises through automation technology. In the future, with the continuous development and application of AI technology, these scenarios will be continuously optimized and upgraded, bringing more business value to enterprises.

(3) The "iPhone Moment" of AI

NVIDIA CEO Jen-Hsun Huang mentioned at the annual GPU Technology Conference (GTC) on March 21, 2023 that the "iPhone moment" of AI has arrived, with industry players scrambling to digitize, reinvent themselves as software-driven technology companies, and attempt to be the ones to disrupt the market rather than be disrupted by it. Cloud computing has grown into a $1 trillion industry over the past decade, but with the end of Moore's Law, increased CPU performance also means increased power, resulting in conflicting demands for data center growth and carbon reduction. In addition to solving problems that ordinary computers can't solve with accelerated computing, NVIDIA offers generative artificial intelligence modeling applications that will help reshape the future of countless industries.

Correlation among upstream, midstream, and downstream of the industry Motherboard and display cards:

==> picture [459 x 305] intentionally omitted <==

----- Start of picture text -----

Motherboard System
Semiconductor Special application
integrators
IC
CPU
Monitor
Static memory
Logic clip
Programmable read
Interface Cards
only memory
Diode
Power supply End users
Printed circuit board Case
Metal and plastic Stand
component Connector Keyboard Distributor
Expansion slot
Soft and hard
drives
Drive program basic Other input devices
Software Franchiser
output and input
system
----- End of picture text -----

Product development trends and competition status
(1) The overall GPU market will see a significant decrease in shipments in 2022 due to rising PC component costs and inflation. According to a previous report by Jon Peddie Research cited by Wccftech and Techspot, the global PC GPU market, which includes various GPUs, shipped 64.2 million units in the fourth quarter of 2022, down 38.5 million units or 35% from the same period in 2021, and down 15.4% from the third quarter. DT GPUs declined 24%, while NB GPUs declined 43%, the largest decline since peaking in 2011. Based on current trends, JPR analysts estimate that overall GPU shipments will grow 0.19% between 2022 and 2026, reaching an installed base of 3.013 billion units, with DT discrete GPUs likely to increase, reaching 32% of total market shipments in 2026. This is also consistent with the trend of plummeting shipments by motherboard manufacturers in 2022, with a significant recovery not expected until 2024.
(2) The steadily growing e-sports market is still a battleground for board makers to compete. According to the latest figures from data analysis firm Newzoo, global gaming revenues will exceed US$1 billion in 2022, reaching US$1.384 billion (NT$37.36 billion), with China accounting for one-third of the market share. According to Newzoo, the global total revenue of e-sports is expected to reach US$1.86 billion by 2025.In the steadily growing e-sports market, digital content and live streaming are two of the fastest growing segments, and brand owners should strengthen their marketing efforts in these segments.
(3) With the advent of the digital age, cell phones and various thin and light mobile devices are constantly evolving, testing the ability of board makers to streamline the overall design architecture. At CES 2023, AMD announced the launch of the

Ryzen 7040 series APU processors with RDNA 3 architecture-based GPUs (iGPUs), and leaked data from GeekBench benchmark tests show that the Ryzen 7 7840HS processor with Radeon 780M iGPU is comparable to NVIDIA GTX 1650 and other standalone GPUs in terms of OpenCL graphics performance. It is expected that this series of processors will pose a threat to the low-end graphics card market when they are officially launched. AMD APUs offer a higher price/performance advantage than NVIDIA's dGPU-based discrete graphics cards, which continue to increase in performance and price. Especially for beginners, Supermicro APUs not only have both CPU and GPU, but also consume less power than dGPUs. The APU also eliminates the need for a discrete graphics card, which means the chip can be easily deployed in more compact devices. With AMD's iGPU chipset performance advancing, NVIDIA is likely to lose its current leadership in the gaming market and maintain its dominant position in the AI training and enterprise markets.

(III) Technology and Research Overview

R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:

the gaming market and maintain its dominant position in the AI training and enterprise markets. (III) Technology and Research Overview R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:	the gaming market and maintain its dominant position in the AI training and enterprise markets. (III) Technology and Research Overview R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:	the gaming market and maintain its dominant position in the AI training and enterprise markets. (III) Technology and Research Overview R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:	the gaming market and maintain its dominant position in the AI training and enterprise markets. (III) Technology and Research Overview R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:
Unit: NT$thousands Year Research Project Results Expenditure 2022 Display cards Motherboard AI servers and system integrators Development of NVIDIA Ampere high-end chipset Development of graphics card heat dissipation solution in advance for NVIDIA's next-generation chips Development of iGame series high-end game motherboard, using the latest Intel700 series high-end chipset. Application of Edge Server 33,798 2023 Q1 Display cards Motherboard AI servers and system integrators AdaLovelace, the third-generation RTX architecture from NVIDIA, officially launched RTX4070Ti Deluxe Edition Intel Z790/B760 series chipset product release completed Delivered Face Recognition (Edge Server) System for Banking Industry to Customers with Computer Vision AI Core Technology 16,613
Year	Research Project	Results	Expenditure
2022	Display cards Motherboard AI servers and system integrators	Development of NVIDIA Ampere high-end chipset Development of graphics card heat dissipation solution in advance for NVIDIA's next-generation chips Development of iGame series high-end game motherboard, using the latest Intel700 series high-end chipset. Application of Edge Server	33,798
2023 Q1	Display cards Motherboard AI servers and system integrators	AdaLovelace, the third-generation RTX architecture from NVIDIA, officially launched RTX4070Ti Deluxe Edition Intel Z790/B760 series chipset product release completed Delivered Face Recognition (Edge Server) System for Banking Industry to Customers with Computer Vision AI Core Technology	16,613

(IV) Short-/long-term business development plans
Short-term development plans
- (1) Continue to work closely with major customers to expand market share and reduce production costs with the economic scale.
- (2) Maintain a sound financial structure to uphold a good corporate profile.
- (3) Continue to expand customer base and maintain and establish sales channels.
Long-term development plans
- (1) Continuously maintain the release of the latest original chip products and develop products matching new chips of manufacturers.
- (2) Continue to improve product quality, reduce costs, and strengthen competitiveness.

(3) Look forward into the intelligent technology wave, build a set of completely independently developed AI industry ecology to become a key resource integrator and service provider.

II. Market, Production, and Sales Overview

(I) Main Products and Sales Regions
Main Products
- (1) Display cards
- (2) Motherboard
- (3) AI server and system integration
- (4) High-performance data computing solutions

2. Sales regions

Unit: NT$ thousands

Item	2020	2020	2021	2021	2022	2022
	Sub-total	Total	Sub-total	Total	Sub-total	Total
Domestic Sales Revenue	665	665	13,991	13,991	9,260	9,260
Foreign Sales Revenue	-	4,671,645	-	6,504,073	-	6,189,414
Mega	-	-	-	-	-	-
Asia Pacific Region	4,671,645	-	6,504,073	-	6,189,414	-
Europe	-	-	-	-	-	-
Total	-	4,672,310	-	6,518,064	-	6,198,674

Market share

As the motherboard and display cards fall into professional OEM businesses, there is no independent brand, so it is not applicable to the calculation of the market share.

Future supply and demand of the market and its growth

According to a preliminary survey of Gartner, an international research and consulting firm, global PC shipments in 4Q2022 were approximately 65.3 million units, a decrease of 28.5% on a YoY basis, marking the largest decline since the agency's tracking. The top six brands, including Lenovo, HP, Dell, Apple, Asus and Acer, all saw a doubledigit decline. Shipments for the year also fell 16.2% to 286 million units, falling below the 300 million unit mark. According to Mikako Kitagawa, chief analyst at Gartner, total global PC shipments in 2022 are close to pre-COVID-19 levels, and the PC industry has experienced very unusual ups and downs over the past 11 years, with the overall market downturn estimated to continue into early 2024 after the strong demand driven by the epidemic ends in 2020-2021. The survey results are broadly consistent with the preliminary findings of the IDC Tracking Report.

However, according to the company's observation, U.S. consumer spending on PCs is still high and terminal demand appears to be quite healthy. In May and June, the number of days of NB inventory for Windows consumption will drop from 135-155 days to about 110 days before the outbreak. This will prompt PC brand manufacturers to be more aggressive in purchasing parts from this quarter onwards, and demand for related parts will start to climb from the middle of the second quarter, with a strong wave of shipments in the third quarter. Overall, global NB shipments are expected to increase by 9% QoQ in the second quarter and 17% QoQ in the third quarter, leaving the previous poor shipment and industry atmosphere behind. In order to cope with the traditional peak season in the second half of the year, we expect to see more rush orders from consumer NBs, and the recovery driven by consumer models will continue all the way to the end of the year.

For the board industry, as NVIDIA's mid-range new products come out one after another and the inventory clearance of board manufacturers comes to an end, the industry generally believes that the graphics card market is expected to pick up, and the business can be flat or grow slightly in the year compared to last year.

According to IDC's 2022 H2 China Accelerated Computing Market Analysis Report, the accelerated server market will grow 22.9% year-over-year in 2022 and is expected to maintain steady growth over the next five years, reaching US$16.3 billion by 2027. With a series of policies released by the Chinese government in recent years, the important role of AI in supporting China's core competitiveness has been clearly defined, and the promotion of new infrastructure, digital economy and other sustainable policies is an important reason for the steady growth of China's AI market. The launch of the "Eastern Digital and Western Computing" project and the construction of the Intelligent Computing Center will integrate national-level resources while adjusting the industrial structure and upgrading the computing infrastructure.

Competition Niches
(1) The R&D team that is in closer contact with the market

In order to sustain stable growth in revenue and profit, the Company has been increasing the proportion of high-end products in recent years. In 2018, we invested in SITONHOLY through our subsidiary Shenzhen Jinghong Digital R&D Service Co., Ltd., hoping that the graphics card products can be used for higher level applications. Established in 2009, SITONHOLY positioned high performance computing as its core development direction in 2012, providing total solutions for cloud computing, AI servers, AI workstations, edge servers, system integration, product customization, software development, etc. SITONHOLY strives to become the industry's leading AI infrastructure solution provider; to promote the successful implementation of metaverse, deep learning, edge computing and other industry applications. In order to promote the successful implementation of metaverse, deep learning, edge computing and other industrial applications, SITONHOLY established the SITONHOLY AI Industrial Park in Yixian Science Park in Tianjin Binhai District in 2021, which is an AI industrial base integrating R&D, production and manufacturing, and acquired the Yihui Information Technology Cloud Computing Center in Baotou, Inner Mongolia, to engage in server leasing and public cloud business, accelerating SITONHOLY's nationwide matrix of computing data centers. With the rapid development in recent years, Sitonholy has gradually become the leading AI server company in China, and in the second half of 2022, it continued its achievements in the first half of the year and won the top two lists in the national server market again:

A. Sitonholy AI Server is ranked in the Top 8 of China's accelerated computing server market share (by revenue)
B. Sitonholy AI Server ranked Top 4 in China Non-GPU Accelerated Computing Server market share (in terms of revenue)

==> picture [455 x 16] intentionally omitted <==

In addition, since motherboards are the technical core of various solutions, in 2022, CHAINTECH established a high-end motherboard R&D center, dedicated to the development of high-end motherboards with extreme overclocking and stable performance, with applications including gaming motherboards and commercial motherboards. The Company is expected to combine Taiwan's complete electronics supply chain with the extensive channels in the mainland market to once again polish CHAINTECH's golden sign.

(2) Professional management team

The Company's management team has accumulated many years of technology and experience, and the management level is all industry seniors, with the relevant knowledge of product key technology, so can fully grasp the overall market changes. For professional talents, the elite system has been adopted to reduce the management, sales, and research fees to maintain a sound operation structure.

(3) Competitive business mode

CHAINTECH has conducted marketing of products developed and produced by Chaintech in many countries through the business sales platforms of major customers. In the market of China Mainland, it has cooperated with operation platforms and image centers in Shenyang, Beijing, Nanjing, Xi’an, Chengdu, Wuhan, Guangzhou, Shenzhen. Moreover, it has also opened up the international business: South Korea marketing center in Seoul is mainly responsible for the South Korean market; the sales center in Hamburg of Germany is mainly responsible for the entire European market. With the changing global market, the Company has created a variety of channels and modes to enhance the visibility of products in different markets and expand the product sales regions through the marketing channels of cooperation partners.

Favorable and Unfavorable Factors of Development Prospect and Countermeasures
(1) Advantages:

Industrial value chain integration, reducing costs and improving product quality in China Mainland market through strategic alliances and joint procurement. Cooperation with strategic partner COLORFUL GROUP LIMITED has expanded further from products to channels and operation. The "COLORFUL" platform strategic system has developed in China Mainland for many years. At present, it has been ranked the first for 20 consecutive years in the Chinese market of display cards, with a market share of more than 25%, 300 core distribution channels, 3,000 direct and indirect channel partners, covering 660 cities, and over 5,000 retail stores. The great advantage of product sales network makes CHAINTECH's products keep grow steadily in the main consumer market - China Mainland.

In terms of new businesses, it has cooperated with Sitonholy (Tianjin) to develop high-performance data computing software and hardware solutions and integrate services, thus carrying out the layout in the 100 billion-level AI infrastructure service market in China. Sitonholy (Tianjin) devotes itself to provision of software and hardware solutions to in-depth learning, GPU high-performance computing, virtualization and storage in the AI area, and turns out to be the core cooperation

partner in China of the globally leading AI leader NVIDIA. In recent years, it has provided high-performance computing and in-depth learning products and solutions for thousands of education and research institutions and AI customers, with the service points covering East, South, Central, Northwest, and Southwest China. Meanwhile, its possesses rich experience in channel operation and international resources integration, hence contributing to the Company's entry into the AI industrial ecology and market channel of CHAINTECH's key market, China Mainland market.

(2) Disadvantages

The panel industry has been maturing and stabilizing, and with matured design and manufacturing comes intensive competition. The biggest challenge for board manufacturers is whether or not they have the ability to adjust their inventories in response to the reversal of supply and demand in the market after the epidemic and mining boom, and whether or not they can focus on enterprise applications such as networking, computing, industrial, medical, financial, and commercial transportation needs in response to the sluggish demand cycle in the end market.

In terms of the new businesses, the AI hardware producers and distributors in the key market China Mainland have actively transformed to enter into the AI software and hardware solutions and products market, hence making the competition more intensive, so continuous input of R&D resources must be maintained to raise the competition threshold.

Countermeasures:

A. CHAINTECH's product manufacturing adopts the outsourcing method, so there is no need to solicit more orders by cutting down price for the purpose of maintaining the capacity utilization rate.
B. Strengthen inventory cost management to lower operation risk.
C. Set clear product orientation to conform to the niche market.
D. Expand the product channel share, including sales channels for ecommerce platforms and online franchises.
E. Product design in closer contact with the market
F. Actively achieve stable supply of wafers and key components, sign longterm contracts with suppliers to lock up production capacity, and maintain stable sales and profit.
G. Continue to invest in high-performance data computing solutions and services with high added value.

(II) Major applications and production process of the primary products

Major uses of the primary products

The main products of CHAINTECH in 2023 can be classified into three categories: graphics card, motherboard and AI server. The three important applications are described as follows.

(1) The panel and display cards are one of the main components for the following computer systems:

A. PC, purposes: Clerical processing, briefing system, graphic design and drawing, spreadsheet, multi-media
B. Computer workstation, use: Engineering design, financial information, image processing and editing, desk top publishing
C. Server, use: Video servers, internet servers, file servers, database servers
D. Multi-user and multi-tasking computer system mainframe
E. E. Computer-aided design CAD system and computer auxiliary manufacturing CAM system

(2) AI servers

AI server mainly refers to the server that adopts the heterogeneous form, mainly in rack type. In the heterogeneous mode, it can be CPU+GPU, CPU+FPGA, CPU+TPU, CPU+ASIC or CPU+ multiple acceleration cards. Although AI server can adopt a variety of heterogeneous forms, CPU+GPU is widely used at present. Therefore, when the industry talks about AI server, it is often regarded as GPU server. With the extensive technical applications of cloud computing, big data, AI, and IoT, the relevant data has grown exponentially in recent years. IDC data statistics show that 90% of data all over the world are produced in recent years, which imposes challenges to the processing power of CPUs. On the other hand, the physical technology and the number of cores of CPUs are approaching the limit, but the amount of data will not stop increasing, so the processing capacity of servers must be improved. Therefore, in the era of AI, traditional servers with only CPU serving as the computing power provider can no longer meet the demand.

Different from CPUs, GPUs adopt parallel computing mode and have thousands of cores on a single card. They are good at processing intensive computing applications, such as graphics rendering, computational vision and machine learning.

2. Production processes of the main products

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----- Start of picture text -----

SMT FLOW CHART
Solder side Loader Solder paste High speed Multifunction
Solder side Loader printing mounting mounting
Solder paste High speed Multifunction
Printing mounting mounting
Pass Pass
Sampling Visual
PQC sampli Visual ICT Hot air reflow inspection
inspection inspectio Test Sampling Visual
PQC sampli n inspection
Fail
Fail Fail
Rework Touch-up Repair
Rework Touch-up Repair
PTH assembly
PTH assembly
----- End of picture text -----

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----- Start of picture text -----

DIP FLOW CHART
Components & Pre-forming Visual inspection &
Operation Manual insertion Visual inspection Wave Soldering touch-up Visual
Components Manual insertion Visual inspection Wave Soldering inspection
Pre-forming & Touch-up
Pass Pass
Functional test CPU ICT Test Additional Components
Functional test Voltage ICT Test Additional Components
Fail Fail Fail
Motherboard
Pass Repair repair
PQC sampling inspection Packing Stock stock
PQC Sampling spection Packing
PTH assembly
PTH assembly
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(III) Supply of Major Raw Materials

Name	Suppliers	State of supply
Chip	NVIDIA	Stable
Electronic parts and components	HK LINK`、`Superway`、`Glory Rich	Stable

(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:

Major suppliers in the past two years

Unit: NT$ thousands

	2021	2021	2021	2021	2022	2022	2022	2022	As of Q12023	As of Q12023	As of Q12023	As of Q12023
Item	Title	Amount	Percentage of net sales in the year (%)	Relations with the issuer	Title	Amount	Percentage of net sales in the year (%)	Relations with the issuer	Title	Amount	Percentage of net purchases as of Q1 of the current year (%)	Relations with the issuer
1	005505	1,960,929	33	`－`	005505	1,399,310	25	`－`	005505	445,268	34	`－`
2	005507	718,534	12	`－`	005507	759,978	13	`－`	005507	176,226	14	`－`
3	002886	245,883	4	`－`	002886	265,164	5	`－`	002886	129,020	10	`－`
4	Others	3,068,034	51	`－`	Others	3,222,865	57	`－`	Others	550,568	42	`－`
	Net purchases	5,993,380	100		Net purchases	5,647,317	100		Net purchases	1,301,082	100

Explanation of changes: Not applicable

Major sales customers for the most recent two fiscal years

Materials unit: NT$ thousands

					Materials unit: NT$thousands	Materials unit: NT$thousands	Materials unit: NT$thousands	Materials unit: NT$thousands
Year	2021				2022				As of Q12023
Item	Title	Amount	Percentage of net sales in the year (%)	Relations with the issuer	Title	Amount	Percentage of net sales in the year (%)	Relations with the issuer	Title	Amount	Percentage of net sales as of Q1 of the current year(%)	Relations with the issuer
1	COLORFUL	2,178,925	33	Related parties	COLORFUL	2,092,517	34	Related parties	COLORFUL	374,105	31	Related parties
	Others	2,873,233	45	`－`	Others	4,106,157	66	`－`	Others	820,986	69	`－`
	Net sales	6,518,064	100		Net sales	6,198,674	100		Net sales	1,195,091	100%

Explanation of changes: Not applicable

(V) Production volume and value in the most recent two fiscal years

Unit: Pcs, NT$ thousands

				Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands
Year	2021			2022
Production volume and value Main Products	Production Capacity	Production Volume	Production Value	Production Capacity	Production Volume	Production Value
Computerperipherals	800,000	691,857	3,638,020	880,000	433,165	1,871,415
Total	800,000	691,857	3,638,020	880,000	433,165	1,871,415

(VI) Sales volume and value in the most recent two fiscal years

Unit: Pcs, NT$ thousands

					Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands
Year	2021				2022
Sales volume Main Products	Domestic Sales		Foreign Sales		Domestic Sales		Foreign Sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Computer peripherals	118	13,991	1,154,392	6,495,677	-	9,260	422,650	6,180,028
Others	-	-	-	8,396	-	-	-	9,386
Total	118	13,991	1,154,392	6,504,073	-	9,260	884,006	6,189,414

III. umber of Employees in the Last Two Years Up to the Printing of this Annual Report

Year	Year	2021	2022	Year to March 31, 2012
Number of employees	Direct employees	0	0	0
	Indirect employees	19	19	27
	Total	19	19	27
AverageAge		43.19	51.11	50.30
AverageYearofServices		10.08	9.10	6.34
Education distribution ratio (%)	PhD	0	0	0
	Master	21	11	8
	University/College	74	79	85
	Senior HighSchool	5	10	7
	Below Senior High School	0	0	0

IV. Information on Environmental Protection Expenditure

(I) Loss and disposal caused by environmental pollution in the most recent year and as of the date of the annual report: None.
(II) Future countermeasures (including improvement measures) and possible expenditures (including the estimated amount of losses that may be incurred for the failure of adopting countermeasures, estimated amount for penalty and compensation; where there is no reasonable estimation, the facts thereof shall be explained): CHAINTECH outsources the production of its products and there had been no pollution to the environment. However, CHAINTECH still stringently requests the processing plants shall comply with relevant environmental laws and regulations to join hands in solving the environmental issues of scarcer energy on earth.

V. Labor Relations

CHAINTECH always adheres to the belief of improving the care for employees, so that they can strive to make progress without any worries. It has formulated multiple welfare measures concerning vocation and retirement system, so employees have maintained high centripetal force and the labor relations have remained harmonious, without any disputes therefrom.

(I) Employee Benefit Plans, Continuing Education, Training, and Retirement Systems and the Status of Their Implementation, and the Status of Labor-management Agreements and Measures for Preserving Employees' Rights and Interests:
Employees' welfare measures
- (1) CHAINTECH has purchased national health insurance, labor insurance and group insurance for all the employees, and handles the payment for employees' childbirth, injury, health care, retirement, and death pursuant to Labor Insurance Act, National Health Care, Group Insurance and relevant rules and regulations in the Labor Standard Act.
- (2) CHAINTECH rewards employees for stock subscription to enhance employees' participation enthusiasm.
- (3) CHAINTECH has established an Employee Welfare Committee to promote employee welfare work, such as gifts at Spring Festival and holidays, allowance for weddings and funerals, celebration of employees' birthday, regular domestic and international travel activities.
- (4) Employees' health check-ups are conducted regularly.
CHAINTECH's system concerning advanced studies, educational training, and its implementation:

CHAINTECH's human resources department formulates education and training plans annually based on business development and employee needs.

(1) Induction training: The HR Department is in charge of introducing the Company's organizational structure and system, work rules, and responsibilities; each staffing department shall explain the operating rules and procedures, and regularly assess and supervise new employees.

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(2) External training: Participation in the professional courses offered by the corporate management consulting companies, education, and training institutions, and government agencies.
(3) Internal training: Senior or learned employees or professional lecturers are invited to impart their experience and professional knowledge.
(4) Departmental training: The professional training courses organized by each department.

In 2022, 76 received 132 hours of educational training related to ethical corporate management issues (including ESG, compliance with ethical corporate management related laws, food safety health management, accounting system, corporate governance and internal control related courses).

Implementation of retirement system

CHAINTECH has established retirement regulations for the employees with formal employment. The retirement conditions, pension benefits and calculation methods are handled in accordance with the Labor Standard Act, Labor Pension Act, and relevant laws and regulations.

The new pension system in the "Labor Pension Act" is a defined contribution plan. As for the pension payment, CHAINTECH allocates no less than 6% of the monthly salary of employees as pension to be deposited into the individual retirement fund account managed by Labor Insurance Bureau.

The old pension system in the Labor Standard Act is a defined benefit plan. Upon approval of the retirement, two bases for the annual salary shall be paid every one year; however, if the job tenure is over fifteen years, one base shall be paid every one year, but the total shall not exceed 45 bases. The payment of pension is calculated through multiplying the above base standard with the average monthly salary six months before retirement.

4. Labor Relations

The realization of corporate business objectives is dependent upon the committed devotion and hard work of the employees. Therefore, labor relations have always been the focus of CHAINTECH's efforts. CHAINTECH has always adhered to the philosophy of respect for humanity and care for employees and adopts an open, candid, and honest attitude towards employees in terms of various salary and welfare policies. Since its establishment, CHAINTECH has established harmonious labor relations, without any disputes arising therefrom.

Code of ethical conducts for employees

CHAINTECH has established the Code of Ethical Management and the Code of Ethical Conducts for Employees. All Chaintech employees, whether inside or outside the Company, are required to maintain a high level of personal behavior and professional ethics. CHAINTECH's employees shall clearly understand and abide by the following principles:

(1) Avoid any possible conflict between personal interests and the interests of the Company or possible impact.
(2) Do not use the properties, information or position of the Company for personal gain.
(3) The confidential and commercially sensitive information obtained in the course of business shall be kept confidential.
(4) Do not engage in business dealings with dishonest suppliers, customers or

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businesses.

(5) Suppliers, contractors, customers, and other persons related to the business of the Company must maintain the highest standards of professional ethics. It is prohibited to offer or accept improper benefits or give any gift, money or entertainment that may affect the normal business relationship and judgment. Bribery of any form shall be strictly prohibited.
Protective measures for work environment and employees' personal safety

The software and hardware facilities of CHAINTECH's office environment are designed with protecting the safety of employees as the first consideration, so as to ensure that employees can get the maximum protection at work. The Company has set up access card devices at each entrance to protect the personal safety of employees. All mechanical and electrical or fire fighting equipment (such as fire alarms or fire extinguishers) of the Company are inspected at least once a year to ensure the normal operation of all alarms, smoke exhaust and fire fighting facilities to ensure that they are in the best usable condition at all times. In addition, CHAINTECH annually organizes health check-ups and carries out fire drills as scheduled by the building management committee so that employees are well informed about their physical conditions and know the correct responses at the time of emergencies. CHAINTECH also provides employees with group insurance to increase their protection at work.

Gender Equality and Diversity Friendly Workplace

We are committed to providing a dignified and safe work environment for our employees. We are committed to ensuring that employees are not discriminated against, harassed or treated unequally on the basis of race, gender, religion, age, political affiliation or any other status protected by applicable laws and regulations. For entrylevel specialists in the same job category, they are treated equally, and for those with relevant professional and work experience, they are treated according to their academic experience, expertise, and licenses, without discrimination based on gender or ethnicity.

Under the concept of diversity and equality in the workplace, the percentage of female employees in our company reached 47% in 111 years, and the percentage of female supervisors in all supervisors reached 44%. We are committed to taking care of our female employees and allowing them to reach their full potential, so that we can create a "gender-friendly workplace" where female employees can truly feel comfortable and healthy in the workplace.

(II) Explain the losses incurred to CHAINTECH for labor disputes in the most recent two years as of the published date of the statements, and the current and future possible estimated amounts and the countermeasures:

Since its establishment on November 17, 1986, CHAINTECH has developed harmonious labor relations and communication channels. The Company attaches great importance to the opinions of employees and their demands and is committed to offering the best assistance for them. Therefore, there has been no major labor disputes since establishment. Looking forward to the future, with favorable labor interaction, the possibility of losses incurred by labor disputes is extremely low.

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VI. Cyber Security

(I) Describe the cyber security risk management framework, the cyber security policy, the specific management plan and the resources invested in the cyber security management, etc.:
Cyber security risk management framework:

Establish an cyber Security Committee to supervise the operation of the Company's cyber security management system and maintenance operations. The General Manager is the Committee Chairman of the Committee as the Company's commitment to promote cyber security. Establish a special department for information security and assign the chief information security officer as the chief executive officer to coordinate information security matters. Establish the "Cyber Security Policy" as the management basis to protect employees, customers, suppliers and business related cyber security to ensure the sustainable operation of the enterprise. The organizational structure of the Company's Cyber Security Committee is as follows:

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----- Start of picture text -----

Cyber Security Committee
Committee Chairman
General Manager
Cyber Security Committee
Chief Executive Officer:
Head of Information
Security
Cyber Security Group Internal Audit Group
(Responsible (Audit department for
department for information security)
information security)
----- End of picture text -----

Cyber Security Policy: In consideration of the operating objectives, perform cyber security risk assessment, formulate cyber security policies, determine the information security requirements, and implement appropriate and adequate cyber security measures accordingly, so as to be followed by all employees to ensure the security of the Company's information collection, processing, transmission, storage and distribution. The Company is committed to icyber security management to ensure the confidentiality, integrity, and availability of the Company's critical information assets, and to meet the requirements of relevant laws and regulations, in order to gain the trust of customers, meet the commitments to shareholders, and ensure the Company's critical business continuity objectives.
Specific management plan: Develop a complete standard and clear operation process, so that the information security management system operation; conduct risk assessments regularly to identify high-risk projects and devote appropriate resources to mitigate or transfer risks; Use tools and techniques to identify, protect, detect, respond and recover information system data in a timely and effective manner; establish the emergency and recovery process of the abnormal events of information security, to achieve the rapid isolation of information security events, eliminate threats and reduce the scope and extent of influence; carry out internal and external audit regularly every year to check

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the whole cyber system to ensure compliance with the cyber security policy; keep abreast of the latest cyber security information and technologies to enhance defence or management practices to effectively block new types of security threats and reduce operational risks.

Resources invested in cyber security: In order to enhance cyber security, the Company continues to increase manpower layout related to information security and the software and hardware investment related to information security protection architecture. By far, the Company has set up a dedicated department responsible for information security, which is comprised of a Chief Information Security Officer and an information security engineer. In addition, the Company invested about NT$3.2 million in the software and hardware related to information security in 2022, demonstrating the great importance attached by the Company to information security.
(II) Cyber security audit and review:
The cyber security audit shall be handled by the specialized unit according to the Company’s cyber security management regulations and cyber security audit plan, and the audit report shall be made to report the implementation effect.
In the most recent year and as of the date of the annual report, there have been no major security incidents affecting CHAINTECH's operations in the most recent year.

VII. Material Contracts:

Nature	Parties	Main Content	Restrictive Provisions	Contract Start/End Date
Property Leases	Prosperity Dielectrics Co., Ltd.	Office Leases	None	2021.01.01~2023.12.31
Property Leases	Sun Plaza International Co., Ltd.	Office Leases	None	2022.03.01-2025.02.28

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Chapter 6. Financial Information

I. Condensed balance sheet and statement of comprehensive income and audit opinion of the most recent five years
(I) Condensed Consolidated and Parent Company Only Balance Sheets
1. Consolidated Condensed Balance Sheet

			Unit: NT$thousands 2019 2020 2021 2022 2023 up to March 31 1,970,057 2,320,135 2,902,127 2,743,209 3,012,148 62,003 34,723 23,158 20,490 21,856 137,045 319,723 200,485 142,383 185,540 188,971 180,171 168,525 181,275 181,763 23,539 56,794 107,045 118,965 113,730 2,381,615 2,911,546 3,401,340 3,206,322 3,515,037 650,766 960,411 1,315,737 875,750 1,105,705 680,122 1,008,661 1,373,636 (Note 1) (Note 1) 10,606 17,467 28,542 23,521 20,578 661,372 977,878 1,344,279 899,271 1,126,283 690,322 1,026,128 1,402,078 (Note 1) (Note 1) 1,552,047 1,724,317 1,808,744 2,021,193 2,101,354 1,014,988 1,014,988 1,014,988 964,988 964,988 - 100 100 100 100 786,346 900,677 974,651 1,135,378 1,169,196 757,396 852,427 916,752 (Note 1) (Note 1) (97,541) (39,702) (29,249) (79,273) (32,930) (151,746) (151,746) (151,746) - - 168,196 209,351 248,317 285,858 287,400 1,720,243 1,933,668 2,057,061 2,307,051 2,388,754 1,691,293 1,885,418 1,999,162 (Note 1) (Note 1)	Unit: NT$thousands 2019 2020 2021 2022 2023 up to March 31 1,970,057 2,320,135 2,902,127 2,743,209 3,012,148 62,003 34,723 23,158 20,490 21,856 137,045 319,723 200,485 142,383 185,540 188,971 180,171 168,525 181,275 181,763 23,539 56,794 107,045 118,965 113,730 2,381,615 2,911,546 3,401,340 3,206,322 3,515,037 650,766 960,411 1,315,737 875,750 1,105,705 680,122 1,008,661 1,373,636 (Note 1) (Note 1) 10,606 17,467 28,542 23,521 20,578 661,372 977,878 1,344,279 899,271 1,126,283 690,322 1,026,128 1,402,078 (Note 1) (Note 1) 1,552,047 1,724,317 1,808,744 2,021,193 2,101,354 1,014,988 1,014,988 1,014,988 964,988 964,988 - 100 100 100 100 786,346 900,677 974,651 1,135,378 1,169,196 757,396 852,427 916,752 (Note 1) (Note 1) (97,541) (39,702) (29,249) (79,273) (32,930) (151,746) (151,746) (151,746) - - 168,196 209,351 248,317 285,858 287,400 1,720,243 1,933,668 2,057,061 2,307,051 2,388,754 1,691,293 1,885,418 1,999,162 (Note 1) (Note 1)	Unit: NT$thousands 2019 2020 2021 2022 2023 up to March 31 1,970,057 2,320,135 2,902,127 2,743,209 3,012,148 62,003 34,723 23,158 20,490 21,856 137,045 319,723 200,485 142,383 185,540 188,971 180,171 168,525 181,275 181,763 23,539 56,794 107,045 118,965 113,730 2,381,615 2,911,546 3,401,340 3,206,322 3,515,037 650,766 960,411 1,315,737 875,750 1,105,705 680,122 1,008,661 1,373,636 (Note 1) (Note 1) 10,606 17,467 28,542 23,521 20,578 661,372 977,878 1,344,279 899,271 1,126,283 690,322 1,026,128 1,402,078 (Note 1) (Note 1) 1,552,047 1,724,317 1,808,744 2,021,193 2,101,354 1,014,988 1,014,988 1,014,988 964,988 964,988 - 100 100 100 100 786,346 900,677 974,651 1,135,378 1,169,196 757,396 852,427 916,752 (Note 1) (Note 1) (97,541) (39,702) (29,249) (79,273) (32,930) (151,746) (151,746) (151,746) - - 168,196 209,351 248,317 285,858 287,400 1,720,243 1,933,668 2,057,061 2,307,051 2,388,754 1,691,293 1,885,418 1,999,162 (Note 1) (Note 1)	Unit: NT$thousands 2019 2020 2021 2022 2023 up to March 31 1,970,057 2,320,135 2,902,127 2,743,209 3,012,148 62,003 34,723 23,158 20,490 21,856 137,045 319,723 200,485 142,383 185,540 188,971 180,171 168,525 181,275 181,763 23,539 56,794 107,045 118,965 113,730 2,381,615 2,911,546 3,401,340 3,206,322 3,515,037 650,766 960,411 1,315,737 875,750 1,105,705 680,122 1,008,661 1,373,636 (Note 1) (Note 1) 10,606 17,467 28,542 23,521 20,578 661,372 977,878 1,344,279 899,271 1,126,283 690,322 1,026,128 1,402,078 (Note 1) (Note 1) 1,552,047 1,724,317 1,808,744 2,021,193 2,101,354 1,014,988 1,014,988 1,014,988 964,988 964,988 - 100 100 100 100 786,346 900,677 974,651 1,135,378 1,169,196 757,396 852,427 916,752 (Note 1) (Note 1) (97,541) (39,702) (29,249) (79,273) (32,930) (151,746) (151,746) (151,746) - - 168,196 209,351 248,317 285,858 287,400 1,720,243 1,933,668 2,057,061 2,307,051 2,388,754 1,691,293 1,885,418 1,999,162 (Note 1) (Note 1)	Unit: NT$thousands 2019 2020 2021 2022 2023 up to March 31 1,970,057 2,320,135 2,902,127 2,743,209 3,012,148 62,003 34,723 23,158 20,490 21,856 137,045 319,723 200,485 142,383 185,540 188,971 180,171 168,525 181,275 181,763 23,539 56,794 107,045 118,965 113,730 2,381,615 2,911,546 3,401,340 3,206,322 3,515,037 650,766 960,411 1,315,737 875,750 1,105,705 680,122 1,008,661 1,373,636 (Note 1) (Note 1) 10,606 17,467 28,542 23,521 20,578 661,372 977,878 1,344,279 899,271 1,126,283 690,322 1,026,128 1,402,078 (Note 1) (Note 1) 1,552,047 1,724,317 1,808,744 2,021,193 2,101,354 1,014,988 1,014,988 1,014,988 964,988 964,988 - 100 100 100 100 786,346 900,677 974,651 1,135,378 1,169,196 757,396 852,427 916,752 (Note 1) (Note 1) (97,541) (39,702) (29,249) (79,273) (32,930) (151,746) (151,746) (151,746) - - 168,196 209,351 248,317 285,858 287,400 1,720,243 1,933,668 2,057,061 2,307,051 2,388,754 1,691,293 1,885,418 1,999,162 (Note 1) (Note 1)
Year Item		2018	2019	2020	2021	2022	2023 up to March 31
Current assets		1,728,661	1,970,057	2,320,135	2,902,127	2,743,209	3,012,148
Property, Plant, and Equipment(Note 2)		122,073	62,003	34,723	23,158	20,490	21,856
Funds and Investment		108,985	137,045	319,723	200,485	142,383	185,540
Intangible assets		-	188,971	180,171	168,525	181,275	181,763
Other assets		54,784	23,539	56,794	107,045	118,965	113,730
Total assets		2,014,503	2,381,615	2,911,546	3,401,340	3,206,322	3,515,037
Current liabilities	Before distribution	279,003	650,766	960,411	1,315,737	875,750	1,105,705
	After distribution	431,252	680,122	1,008,661	1,373,636	(Note 1)	(Note 1)
Non-current liabilities		1,376	10,606	17,467	28,542	23,521	20,578
Total Liabilities	Before distribution	280,379	661,372	977,878	1,344,279	899,271	1,126,283
	After distribution	432,625	690,322	1,026,128	1,402,078	(Note 1)	(Note 1)
Equity attributable to owners of theparent		1,734,124	1,552,047	1,724,317	1,808,744	2,021,193	2,101,354
Share capital		1,014,988	1,014,988	1,014,988	1,014,988	964,988	964,988
Capital surplus		-	-	100	100	100	100
Retained earnings	Before distribution	831,650	786,346	900,677	974,651	1,135,378	1,169,196
	After distribution	679,404	757,396	852,427	916,752	(Note 1)	(Note 1)
Otherequityinterest		(112,514)	(97,541)	(39,702)	(29,249)	(79,273)	(32,930)
Treasury stock		-	(151,746)	(151,746)	(151,746)	-	-
Non-controlling interests		-	168,196	209,351	248,317	285,858	287,400
Total shareholder equity	Before distribution	1,734,124	1,720,243	1,933,668	2,057,061	2,307,051	2,388,754
	After distribution	1,581,878	1,691,293	1,885,418	1,999,162	(Note 1)	(Note 1)

Note 1. The 2022 earning distribution plan is yet to be approved by the Shareholders’ Meeting Note 2. Asset revaluation has not been performed for each year.

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2. Condensed Parent Company Only Balance Sheet

Unit: NT$ thousands

						Unit:	NT$thousan
Year Item		2018	2019	2020	2021	2022	2023 up to March 31
Current assets		1,551,324	1,412,661	1,537,656	1,682,849	1,445,132	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
Property, Plant, and Equipment(Note 2)		-	55,272	32,489	9,590	8,995
Funds and Investment		455,185	609,394	838,275	758,325	752,940
Intangible assets		-	-	-	-	2,222
Other assets		11	9,413	39,854	54,085	75,568
Total assets		2,006,520	2,086,740	2,448,274	2,504,849	2,284,857
Current liabilities	Before distribution	272,396	534,693	720,822	694,514	254,348
	After distribution	424,645	563,643	769,072	752,413	(Note 1)
Non-current liabilities		-	-	3,135	1,591	5,595
Total Liabilities	Before distribution	272,396	534,693	723,957	696,105	263,664
	After distribution	424,645	563,643	772,207	754,004	(Note 1)
Equity attributable to owners of theparent		1,734,124	1,552,047	1,724,317	1,808,744	2,021,193
Share capital		1,014,988	1,014,988	1,014,988	1,014,988	964,988
Capital surplus		-	-	100	100	100
Retained earnings	Before distribution	831,650	786,346	900,677	974,651	1,135,378
	After distribution	679,404	757,396	852,427	916,752	(Note 1)
Other equity interest		(112,514)	(97,541)	(39,702)	(29,249)	(79,273)
Treasury stock		-	(151,746)	(151,746)	(151,746)	-
Non-controlling interests		-		-	-	-
Total shareholder equity	Before distribution	1,734,124	1,552,047	1,724,317	1,808,744	2,021,193
	After distribution	1,581,878	1,523,097	1,676,067	1,750,845	(Note 1)

Note 1. The 2022 earning distribution plan is yet to be approved by the Shareholders’ Meeting Note 2. Asset revaluation has not been performed for each year.

106

(II) Condensed Consolidated and Parent Company Only Statement of Comprehensive Income

Condensed Consolidated Statement of Comprehensive Income

					Unit: NT$thousands 2022 2023 up to March 31 6,198,6741,195,091 622,860 109,103 314,086 32,742 116,798 7,470 430,884 40,212 363,465 33,869 - - 363,465 33,869 (46,473) 47,834 316,992 81,703 320,372 33,818 43,093 51 270,348 80,161 46,034 1,542 3.32 0.35	Unit: NT$thousands 2022 2023 up to March 31 6,198,6741,195,091 622,860 109,103 314,086 32,742 116,798 7,470 430,884 40,212 363,465 33,869 - - 363,465 33,869 (46,473) 47,834 316,992 81,703 320,372 33,818 43,093 51 270,348 80,161 46,034 1,542 3.32 0.35
Year Item	2018	2019	2020	2021	2022	2023 up to March 31
OperatingRevenue	4,050,310	4,738,182	4,672,310	6,518,064	6,198,674	1,195,091
Operating margin including (unrealized) realized profits of affiliated companies	372,418	332,636	437,005	676,397	622,860	109,103
Operating (loss) profit	267,295	132,133	226,211	355,346	314,086	32,742
Non-operating income and expenses	39,808	19,772	(36,587)	(147,157)	116,798	7,470
Pretax net profit (loss)	307,103	151,905	189,624	208,189	430,884	40,212
Net profit from continuing operations in the currentperiod	256,644	137,224	183,413	162,744	363,465	33,869
Loss from discontinued operations	(12,340)	(8,545)	-	-	-	-
Net profit (loss) for current period	244,304	128,679	183,413	162,744	363,465	33,869
Other comprehensive income (loss) (net amount after tax)	(83,211)	14,973	61,488	8,899	(46,473)	47,834
Total comprehensive income (loss)	161,093	143,652	244,901	171,643	316,992	81,703
Net profit attributable to owners of the parent company	244,304	106,942	145,907	122,224	320,372	33,818
Net profit attributable to non-controlling equity	-	21,737	37,506	40,520	43,093	51
Total comprehensive income or loss attributable to the owner of the parent company	161,093	121,915	203,746	132,677	270,348	80,161
Total comprehensive income (loss) attributable to non- controlling interests	-	21,737	41,155	38,966	46,034	1,542
Earnings (loss)per share	2.39	1.06	1.51	1.27	3.32	0.35

Note 1. The 2022 earning distribution plan is yet to be approved by the Shareholders’ Meeting

Note 2. Asset revaluation has not been performed for each year.

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2. Condensed Parent Company Only Statement of Comprehensive Income

				Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item	2018	2019	2020	2021	2022	2023 up to March 31
OperatingRevenue	3,755,138	3,591,114	3,515,850	4,173,178	3,900,444	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
Operating margin including (unrealized) realized profits of affiliated companies	357,955	158,267	228,826	350,104	335,120
Operating (loss) profit	270.828	79.694	154,155	270,833	241,301
Non-operating income and expenses	23,606	26,054	(5,381)	(111,194)	146,488
Profit before tax	294,434	105,748	148,774	159,639	387,789
Net profit from continuing operations in the currentperiod	-	-	-	-	-
Loss from discontinued operations	-	-	-	-	-
Net profit (loss) for current period	244,304	106,942	145,907	122,224	3,900,444
Other comprehensive income (loss) (net amount after tax)	(83,121)	14,973	57,839	10,453	335,120
Total comprehensive income (loss)	161,093	121,915	203,746	132,677	241,301
Net profit attributable to owners of the parent company	-	-	-	-	-
Net profit attributable to non-controlling equity	-	-	-	-	-
Total comprehensive income or loss attributable to the owner of the parent company	-	-	-	-	-
Total comprehensive income (loss) attributable to non- controlling interests	-	-	-	-	-
Earnings (loss) per share	2.39	1.06	1.51	1.27	3.32

Note 1. The 2022 earning distribution plan is yet to be approved by the Shareholders’ Meeting Note 2. Asset revaluation has not been performed for each year.

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(III) Name of the CPAs and their opinions for the most recent five years

Audit Year	Name of accounting firm	Name of CPAs	Audit Opinions
2018	Pricewaterhouse Coopers	Wu, Han-Chi, Hsu, Sheng-Chung	No retained opinions
2019	Pricewaterhouse Coopers	Hsu, Sheng-Chung, Wu, Han-Chi	No retained opinions
2020	Pricewaterhouse Coopers	Feng, Min-Chuan and Lin, Ya-Hui	No retained opinions
2021	Pricewaterhouse Coopers	Feng, Min-Chuan and Lin, Ya-Hui	No retained opinions
2022	Pricewaterhouse Coopers	Feng, Min-Chuan and Lin, Ya-Hui	No retained opinions

II. Financial Analysis of the Last Five Years

1. Consolidated financial analysis

Item	Year	2018	2019	2020	2021	2022	2023 up to March 31
Financial structure (%)	Ratio of liabilities to assets	`13.92`	`27.77`	`33.59`	`39.52`	`28.05`	`32.04`
	Ratio of long-term capital to property, plant and equipment	`1420.56`	`2774.45`	`5568.84`	`8882.72`	`11,259.40`	`10,929.51`
Solvency (%)	Current ratio	`619.59`	`302.73`	`241.58`	`220.57`	`313.24`	`272.42`
	Quick ratio	`584.66`	`240.02`	`204.28`	`165.71`	`252.62`	`206.20`
	Interest coverage ratio	`137.18`	`26.82`	`30.16`	`37.37`	`55.97`	`129.37`
Operating ability	Accounts receivable turnover rate (times)	`4.08`	`5.04`	`4.12`	`4.76`	`5.05`	`4.64`
	Average Collection Days	`89.46`	`72.42`	`88.59`	`76.68`	`72.27`	`78.66`
	Inventory Turnover Rate(times)	`35.28`	`19.42`	`13.28`	`14.58`	`12.00`	`8.24`
	Accounts payable turnover rate (times)	`20.10`	`16.74`	`11.43`	`10.20`	`9.14`	`7.45`
	Average days of sales	`10.34`	`18.79`	`27.48`	`25.03`	`30.41`	`44.29`
	Property, Plant and Equipment Turnover Rate (Times)	`31.85`	`51.48`	`96.61`	`225.22`	`284.03`	`225.78`
	Total assets turnover rate(times)	`2.03`	`1.99`	`1.60`	`1.92`	`1.93`	`1.36`
Profitability	Return on assets (%)	`12.29`	`6.07`	`7.13`	`5.30`	`11.19`	`1.04`
	Return on equity (%)	`14.13`	`7.45`	`10.04`	`8.16`	`16.66`	`1.44`
	Income before tax to paid-incapital ratio (%)	`29.05`	`14.97`	`18.68`	`20.51`	`44.65`	`4.17`
	Net profit rate (%)	`5.98`	`2.72`	`3.93`	`2.50`	`5.86`	`2.83`
	Earnings per share (NT$)	`2.39`	`1.06`	`1.51`	`1.27`	`3.32`	`0.35`

109

Year Item	Year Item	2018	2019	2020	2021	2022	2023 up to March31
Cash flow	Cash flow ratio (%)	`159.19`	`(10.93)`	`(7.72)`	`45.11`	`66.90`	`7.04`
	Cash flow adequacy ratio	`335.40`	`107.13`	`214.87`	`166.84`	`185.77`	`48.28`
	Cash reinvestment ratio (%)	`25.23`	`註1`	`(4.38)`	`27.00`	`22.88`	`3.32`
Leverage	Degree of operating leverage	`1.05`	`4.24`	`3.00`	`1.10`	`1.11`	`1.26`
	Degree of financial leverage	`1.01`	`1.05`	`1.03`	`1.02`	`1.03`	`1.04`
Please explain the reasons for changes in various financial ratios in the most recent two years. (If the change is within 20%, the explanation is not required). 1. Solvency: The current ratio and quick ratio increased, mainly due to the decrease in current assets and current liabilities in the year. The increase in the interest coverage ratio is mainly due to the increase in pre- tax net profit. 2. Operating competency: The change in accounts receivable turnover rate and inventory turnover rate is mainly due to the decrease in accounts receivable and sales revenue for the current period. 3. Increase in various ratio of profitability: Mainly due to the increase in the ratios caused by the increase in the net profit of the current period. 4. Cash flow: The change of cash flow ratio is mainly due to the decrease in inventories and current liabilities of theperiod.
Note 1. Cash flow from operating activities refers to cash inflow, so for net cash outflow, it is not applicable. `＊` If the Company has formulated a standalone financial report, it shall also offer an explanation of the Company's individual financial ratios.

2. Individual financial analysis

Item	Year	2018	2019	2020	2021	2022	2023 up to March 31
Financial structure (%)	Ratio of liabilities to assets	13.58	25.62	29.57	27.79	11.54	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
	Ratio of long-term capital to property, plant and equipment	-	2,808.02	5,307.39	18,860.73	22,470.18
Solvency (%)	Current ratio	569.51	264.20	213.63	242.31	568.17
	Quick ratio	533.91	208.26	189.07	210.18	519.89
	Interest coverage ratio	137.00	19.61	24.59	33.03	74.43
Operating ability	Receivables turnover rate (times)	3.81	4.07	3.56	3.77	4.32
	Average Collection Days	95.80	89.68	102.52	96.81	84.49
	Inventory Turnover Rate (times)	32.26	17.35	13.72	19.00	20.69
	Payables Turnover Rate (Times)	18.41	14.42	11.46	12.57	15.70
	Average days of sales	11.31	21.03	26.60	19.21	17.64
	Property, Plant and Equipment Turnover Rate (Times)	300,411.04	129.94	80.12	198.35	419.74
	Total Asset Turnover Rate (Times)	1.87	1.72	1.44	1.67	1.71

110

Item	Year	2018	2019	2020	2021	2022
Profitability	Return on assets (%)	12.36	5.45	6.66	5.10	13.55
	Return on shareholder equity (%)	14.13	6.51	8.91	6.92	16.73
	Ratio of net income before tax in paid-in capital (%) (Note 7)	29.01	10.42	14.66	15.73	40.19
	Netprofit rate(%)	6.51	2.98	4.15	2.93	8.21
	Earnings per share (NT$)	2.39	1.06	1.51	1.27	3.32
Cash flow	Cash flow ratio (%)	156.83	6.45	(10.69)	58.52	204.79
	Cash flow adequacyratio	383.93	124.48	244.03	205.07	222.97
	Cash flow reinvestment ratio (%)	26.21	(8.22)	(4.88)	19.11	22.01
Leverage	Degree of operatingleverage	1	1.19	2.13	1.68	1.06
	Degree of financial leverage	1.01	1.08	1.04	1.02	1.02
Please explain the reasons for changes in various financial ratios in the most recent two years. (If the change is within 20%, the explanation is not required). 1. Solvency: 2. The current ratio and quick ratio increased, mainly due to the decrease in current assets and current liabilities in the year. The increase in the interest coverage ratio is mainly due to the increase in pre- tax net profit 2. Operating competency: The change in accounts receivable turnover rate and inventory turnover rate is mainly due to the decrease in accounts receivable and sales revenue for the current period. 3. Increase in various ratio of profitability: Mainly due to the increase in the ratios caused by the increase in the net profit of the current period. 4. Cash flow: The change of cash flow ratio is mainly due to the decrease in inventories and current liabilities of theperiod.
Note 1. Cash flow from operating activities refers to cash inflow, so for net cash outflow, it is not applicable.

111

Note 1. The year that has not been audited and attested by CPAs should be noted. Note 2. The companies who are listed or whose shares are traded at securities exchange shall include the financial data for the year one quarter before the printing date of the annual report into the financial statements of the year for analysis.
Note 3. Calculation formulas shall be disclosed at the end of the annual report:
Financial structure
- (1) Debt-asset Ratio = Total Liabilities/Total Assets.
- (2) Long-term funds to property, plant and equipment = (Stockholders' equity ＋ Noncurrent Liabilities) / Net Property, Plant and Equipment
Solvency
- (1) Current Ratio = Current Assets/Current Liabilities.
- (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses)/Current Liabilities.
- (3) Interest Coverage Ratio = Net Profit before Tax and Interest/Interest Expenses.
Operating ability
- (1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period.
- (2) Average Collection Days = 365/Receivables Turnover Rate.
- (3) Inventory Turnover Rate = Cost of Sales/Average Inventory.
- (4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Cost of goods sold/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period.
- (5) Average Days for Sale = 365/Inventory Turnover Rate.
- (6) Property, plant, and equipment turnover rate = Net sales/Average net property, plant, and equipment.
- (7) Total Asset Turnover Rate = Net Sales/Average Total Assets.
Profitability
- (1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets.
- (2) Return on equity = net income after tax/average equity
- (3) Net margin = net income/net sales.
- (4) Earnings per share = (net income – dividends on preferred shares)/weighted average number of issued shares. (Note 4)
Cash flow
- (1) Cash flow ratio = net operating cash flow/current liabilities.
- (2) Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years/(capital expenditures + inventory increase + cash dividend) for the most recent five years.
- (3) Cash reinvestment ratio = (Net cash flow from operating activities – cash dividend)/(gross fixed assets value + long-term investment + other assets + working capital). (Note 5)
Degree of Leverage:
- (1) Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6).
- (2) Financial leverage = Operating income/(Operating income - Interest expenses).
Note 4. Special attention shall be paid to the following matters when using the calculation formula to earning per share above:
Based on the weighted average number of shares of common stock, rather than the number of issued shares at the end of the year.
If the company conducted cash capital increase or transaction of treasury stock, the circulation period should be considered and the weighted average number of shares calculated.
If the Company conducted capital increase by retained earnings or capital surplus, it shall retrospectively adjust the earnings per share for the past fiscal year and the semi-annual earnings ratio, without considering the issuance period of the capital increase.
If the preferred stocks are nonconvertible cumulative preferred stocks, its dividend of the year (whether it is being distributed or not) shall add or subtract the net loss from the net income after tax. If the preferred stock is non-cumulative, the dividend of the preferred stock should be deducted from the net profit after tax, if any; if there is a loss, it shall not be adjusted.

Note 5. Special attention should be paid to the following matters when measuring cash flow analysis:

Net cash flow from operating activities is the net cash inflow from operating activities in the cash flow statement.
Capital expenditure is the annual cash outflow of capital investment.

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The increase in inventory is included only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
Cash dividends include cash dividends from common stock and preferred stocks.
The gross property, plant, and equipment refer to the total value of property, plant, and equipment minus accumulated depreciation.
Note 6. The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.
Note 7. If the Company's shares have no par value or a par value other than NT$10, any calculation that involves the paid-in capital ratio shall be replaced with the equity ratio attributable to the owner of the parent company, as shown in the balance sheet.

Calculation formulas:

  1. Financial structure

     - (1) Debt-asset Ratio = Total Liabilities/Total Assets.

     - (2) Ratio of Long-Term Funds to Fixed Assets = (Net Shareholders' Equity + Long-term Liabilities)/Net Fixed Assets.

  2. Solvency

     - (1) Current Ratio = Current Assets/Current Liabilities.

     - (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses)/Current Liabilities.

     - (3) Interest Coverage Ratio = Net Profit before Tax and Interest/Interest Expenses.

  3. Operating ability

     - (1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period.

     - (2) Average Collection Days = 365/Receivables Turnover Rate.

     - (3) Inventory Turnover Rate = Cost of Sales/Average Inventory.

     - (4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Cost of goods sold/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period.

     - (5) Average Days for Sale = 365/Inventory Turnover Rate.

     - (6) Fixed Asset Turnover Ratio = Net Sales/Average Net Fixed Asset

     - (7) Total Asset Turnover Rate = Net Sales/Average Total Assets.

  4. Profitability

     - (1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets.

     - (2) Return on Equity (ROE) = Gain (loss) after tax/Average net equity.

     - (3) Net margin = net income/net sales.

     - (4) Earnings per share = (net income – dividends on preferred shares)/weighted average number of issued shares. (Note 4)

  5. Cash flow

     - (1) Cash flow ratio = net operating cash flow/current liabilities.

     - (2) Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years/(capital expenditures + inventory increase + cash dividend) for the most recent five years.

     - (3) Cash reinvestment ratio = (Net cash flow from operating activities – cash dividend) / (gross fixed assets value + long-term investment + other assets + working capital). (Note 5)

  6. Degree of Leverage:

     - (1) Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6).

     - (2) Financial leverage = Operating income/(Operating income - Interest expenses).

Note 3. Special attention shall be paid to the following matters when using the calculation formula to earning per share above:
Based on the weighted average number of shares of common stock, rather than the number of issued shares at the end of the year.
If the company conducted cash capital increase or transaction of treasury stock, the circulation period

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should be considered and the weighted average number of shares calculated.

If the Company conducted capital increase by retained earnings or capital surplus, it shall retrospectively adjust the earnings per share for the past fiscal year and the semi-annual earnings ratio, without considering the issuance period of the capital increase.
If the preferred stocks are nonconvertible cumulative preferred stocks, its dividend of the year (whether it is being distributed or not) shall add or subtract the net loss from the net income after tax. If the preferred stock is non-cumulative, the dividend of the preferred stock should be deducted from the net profit after tax, if any; if there is a loss, it shall not be adjusted.
Note 4. Special attention should be paid to the following matters when measuring cash flow analysis:
Net cash flow from operating activities refers to the net cash inflow from operating activities in the statement of cash flows.
Capital expenditure is the annual cash outflow of capital investment.
The increase in inventory is included only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
Cash dividends include cash dividends from common stock and preferred stocks.
Gross fixed assets refer to the total fixed assets before deduction of accumulated depreciation.
Note 5. The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.

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III. Audit Committee’s Review Report in the Most Recent Year.

Chaintech Technology Corporation

Supervisors' Review Report

Whereas

The Financial Report and Consolidated Financial Report issued by the Board of Directors of Chaintech for the year 2022 have been audited by CPA Feng, Min-Chuan and CPA Lin, Ya-Hui of Pricewaterhouse Coopers (PwC) Taiwan, which, together with the proposal of the Business Report, have been reviewed by the supervisors and are considered to be consistent. Therefore, the review report has been prepared in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review.

Sincerely,

2023 Regular Shareholders' Meeting of Chaintech

Chaintech Technology Corporation

Convener of the Audit Committee:

Yang, Hsin-Ying

March 22, 2023

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Chaintech Technology Corporation

Supervisors' Review Report

Whereas

The proposal for the 2022 earnings distribution has been reviewed by the supervisors and is considered to be consistent. Therefore, the review report has been prepared in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Please review.

Sincerely,

2023 Regular Shareholders' Meeting of CHAINTECH

Chaintech Technology Corporation

Convener of the Audit Committee: Yang, Hsin-Ying

May 5, 2023

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IV. Financial report verified by the CPAs for the most recent year (Please refer to Pages 131-206 for details).
V. Consolidated Financial Statements verified by the CPAs for the most recent year (Please refer to Pages 207-287 for details).
VI. Financial Difficulties of CHAINTECH and Its Affiliates in the Most Recent Year to the Publication Date of this Annual Report and their Impact on the Company's Financial Conditions: None.

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Chapter 7. Analysis for Financial Condition and Operating Results and Risk Management

I. Financial Status: The main reason for the significant changes in assets, liabilities, and shareholders' equity in the past two years, and the impact of such changes; if such changes are significant, future countermeasures should be stated.

Year Item	2022	2021	Difference	Difference
			Amount	%
Current assets	2,743,209	2,902,127	(158,918)	(5.48)
Investment using equity method	-	-	-	-
Property, plant, and equipment	20,490	23,158	(2,668)	(11.52)
Intangible assets	181,275	168,525	12,750	7.57
Otherassets	118,965	107,045	11,920	11.14
Totalassets	3,206,322	3,401,340	(195,018)	(5.73)
Currentliabilities	875,750	1,315,737	(439,987)	(33.44)
Non-current liabilities	23,521	28,542	(5,021)	(17.59)
Total Liabilities	899,271	1,344,279	(445,008)	(33.10)
Share capital	964,988	1,014,988	(50,000)	(4.93)
Capitalsurplus	100	100	-	-
Retained earnings	1,135,378	974,651	160,727	16.49
Otherequityinterest	(79,273)	(29,249)	(50,024)	171.03
Treasury stock	-	(151,746)	151,746	(100.00)
Total equity attributable to owners of the parent company	2,021,193	1,808,744	212,449	11.75
Non-controllinginterests	285,858	248,317	37,541	15.12
Totalequity	2,307,051	2,057,061	249,990	12.15
Analysis of changes in the percentage of increase and decrease: (more than 20% and the amount of change reaching NT$10 million) 1. Decrease in current assets: It is mainly due to the decrease in accounts receivable and inventories in the current year. 2. Decrease in property, plant and equipment: It is mainly due to the apportionment of depreciation expense in the current year. 3. Decrease in total liabilities: Mainly due to the decrease in accounts payable and short-term borrowings during the year. 4. Increase in retained earnings: Mainly due to the increase in earnings in the current period. 5. Decrease in other equity: Mainly due to the unrealized valuation of non-current financial assets measured at fair value through other comprehensive gains and losses and the difference in the conversion and exchange of subsidiaries. 6. Increase in uncontrolled interests: Mainly due to the increase in the income from the reinvested company.

Analysis of changes in the percentage of increase and decrease: (more than 20% and the amount of change reaching NT$10 million)

Decrease in current assets: It is mainly due to the decrease in accounts receivable and inventories in the current year.
Decrease in property, plant and equipment: It is mainly due to the apportionment of depreciation expense in the current year.
Decrease in total liabilities: Mainly due to the decrease in accounts payable and short-term borrowings during the year.
Increase in retained earnings: Mainly due to the increase in earnings in the current period.
Decrease in other equity: Mainly due to the unrealized valuation of non-current financial assets measured at fair value through other comprehensive gains and losses and the difference in the conversion and exchange of subsidiaries.
Increase in uncontrolled interests: Mainly due to the increase in the income from the reinvested company.
II. Financial Performance: The main reasons for the significant changes in operating revenue, operating profit, and net profit before tax in the most recent two years, and the expected sales volume and its basis, as well as the possible impact on the Company's financial condition and countermeasures.

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Unit: NT$ thousands

Year Item	2022	2021	Increase (decrease) amount	Change ratio %
Net operatingrevenue	6,198,674	6,518,064	(319,390)	(4.90)
Operatingcosts	5,575,814	5,841,667	(265,853)	(4.55)
Grossprofit	622,860	676,397	(53,537)	(7.92)
Operatingexpenses	308,774	321,051	(12,277)	(3.82)
Operatingincome	314,086	355,346	(41,260)	(11.61)
Non-operating income and expenses	116,798	(147,157)	263,955	(179.37)
Profit before tax	430,884	208,189	222,695	106.97
Tax expense	(67,419)	(45,445)	(21,974)	48.35
Profit	363,465	162,744	200,721	123.34
Analysis of changes in the percentage of increase and decrease: 1. Decrease in operating revenue, operating cost and operating margin:Mainly due to the decrease in operating revenue during the year as compared with the same period of last year. 2. Increase in operating profits: The decrease in current operating profit is mainly due to the decrease in operating revenue in the current year. 3. Increase in non-operating revenue: The increase in non-operating revenue in the current year is mainlydue to exchangegains in the currentperiod.

Analysis of changes in the percentage of increase and decrease:

Decrease in operating revenue, operating cost and operating margin: Mainly due to the decrease in operating revenue during the year as compared with the same period of last year.
Increase in operating profits: The decrease in current operating profit is mainly due to the decrease in operating revenue in the current year.
Increase in non-operating revenue: The increase in non-operating revenue in the current year is mainly due to exchange gains in the current period.
III. Cash flow: Analysis of changes in cash flow in the most recent year, improvement plans for liquidity shortage, and cash liquidity analysis for the upcoming fiscal year.

(I) Liquidity analysis in the most recent two years

Year Item	2022	2021	Increases (decreases) ratio %
Cash flow ratio	66.9	45.11	48.30
Cash flow adequacyratio	185.77	168.84	10.03
Cash reinvestment ratio	22.88	27.00	(15.26)
Analysis of changes in the percentage of increase and decrease: Increase/decrease in various cash flow ratios compared to the previous year: Mainly due to the increase in net cash inflow and the decrease in liabilities during the year compared to the sameperiod of lastyear.

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(II) Cash liquidity analysis for the following year.

Cash Flow Analysis

		Cash Flow Analysis	Cash Flow Analysis
				Unit: NT$thousands
Beginning cash balance	Annual net cash flow from operating activities of the year	Cash outflow for the year	Cash surplus (inadequacy)+- 	Remedial measures for cash inadequacy
				Investment plans	Financial plan
1,061,262	(73,889 )	48,003	939,370	0	0
Analysis of the changes in cash flow: 1. Business activities: Mainly due to		the growth of estimated turnover, resulting in cash outflow.

IV. Impact of major capital expenditures on corporate finances and business for the most recent year:
CHAINTECH had no significant capital expenditure in the most recent year.
Expected benefits: N/A.
V. Policy on Reinvestment in Other Companies, the Main Reasons for Profit/Loss Resulting Therefrom, Improvement Plan, and Investment Plans for the Upcoming Fiscal Year:
Newly added investment businesses in the most recent year:
- (1) In order to increase the computing power of the cloud service base and to enrich the surplus capital, the Company's Board of Directors approved on January 21, 2022 to increase the investment in Baotou Yihui by RMB8.5 million through Sitonholy (Tianjin).
- (2) In order to develop the Group's business in South China and to solve the problem of social security payment for local employees, the Company's Board of Directors approved at its board meeting on November 4, 2022 the intention to invest in the establishment of "Sitonholy (Shenzhen) Technology Co., Ltd." through Sitonholy (Tianjin), with the estimated investment amount not exceeding CNY3,000,000, in order to comply with the local laws and regulations and to achieve normal operation.
Reasons for the profit or loss from reinvestment and improvement plans:

Unit: NT$ thousand

				Unit: NT$thousand
Name of reinvestment companies	Initial amount of investment	Investee Income (loss) for the period	Reason	Improvement Plan
	December 31, 2022
Shenzhen Jinghong Digital R&D Service Co.,Ltd.	499,065	44,639	`－`	`－`

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3. Investment Plans for the Next 12 Months: None.

VI. Risk Management and Assessment

(I) The Organizational Structure of Risk Management

VI. Risk Management and Assessment (I) The Organizational Structure of Risk Management	VI. Risk Management and Assessment (I) The Organizational Structure of Risk Management	VI. Risk Management and Assessment (I) The Organizational Structure of Risk Management
The implementation and responsible units of CHAINTECH's risk management are as below:
Risk Items	Responsible Department	Risk Business Items
Operational Strategy Risk	General Manager Office	Construct corporate value and principles, formulate annual operating strategies, mid-to-long-term operational objectives, and evaluate investment returns in combination with the Group’s core competitiveness,industrial trends,and international economy.
Financial Risk	Financial Division	Provide transparent and credible financial information, operational analysis and improvement plans, and make appropriate financial planning, interest rate risk hedging, customer credit risk control, account collection, and financial crisis forecasts to reduce corporate risks.
Legal risks	Financial Division	Responsible for the preparation and management of contracts, disposal of litigation and mediation cases, collection of laws and regulations, intellectual property and business secrets protection, bad debt collection and the like, to reduce the overall legal risks of theCompany.
Information Risk	Financial Division	Plan and construct information management system, be in charge of network and system information security control, protection measures and system recovery mechanism, and provide real-time, accurate and suitable management information to the management, so as to reduce the Company's operations and information security risks.
Inventory risk	Material Division	Procure raw materials and finished products, and undertake OEM contractingbusinesses and inventorymanagement.
Internal Risk	Auditing Office	Draft and implement the annual audit plan based on the results of risk evaluation, evaluate the effectiveness of the design and implementation of the Company's internal control system, and assist the risk management organization and operational unit in designing risk management-based control operations.

(II) Impact of interest rates and exchange rate fluctuations, as well as inflation on the Company’s profit and loss, as well as future response measures:

1. Changes in interest rates

Apart from share capital and operation profit, CHAINTECH's working capital mainly depends on the bank loan. A bank loan is a kind of liability with a floating interest rate, so market interest rate changes will also change the effective interest rate and interest costs, thus influencing the profit or loss of CHAINTECH.

As of December 31, 2022, the balance of CHAINTECH's bank loan was NT$145,464 thousand, and if the market interest rate increased or reduced by 1%, the Company's net loss before tax would decrease or increase by NT$1,455 thousand on the condition that other factors remain unchanged, which accounted for 0.023% of our consolidated net revenue, having no significant effect on the overall net income after tax.

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CHAINTECH's countermeasures for changes in interest rates are as below:

A. Maintain close contact with banks to obtain a preferential interest rate and actively reduce interest expenses.
B. Refer to the interest rate volatility in domestic and overseas index markets to grasp the future trend of the interest rate.
Changes in exchange rates

CHAINTECH is mainly engaged in foreign sales in the US dollar. Therefore, CHAINTECH will also take US$ as the payment currency in procurement as much as possible to reduce the amount of foreign currency held. In addition, the financial department of CHAINTECH maintains close contact with banks' foreign exchange department to keep abreast of the trend of the exchange rate as the basis for exchange settlement, thus reducing the risks arising out of exchange rates. The future countermeasures are as below:

(1) Effects on CHAINTECH's profit or loss: CHAINTECH's consolidated profit (loss) from the exchange in 2022 was NT$101,506 thousand, accounting for 1.64% of the consolidated net income of the year; there overall exchange profit or loss would not result in any significant effect.
(2) Future Remedial Measures:
- A. Pay close attention to the development of domestic and foreign political and economic conditions and maintain contact with financial institutions to keep abreast of the changes in the exchange rate.
- B. Make judgment upon the trend of the future exchange rate, and adjust the US$ holding when appropriate, so as to create the most optimal exchange gain.
- C. Hedge possible risks of foreign currency with forwarding exchange contracts and select credit-worthy financial institutions to enter into contracts.
- D. Engage in transactions with steady hedging means instead of speculative ones as the principle for responding to exchange rate risks.
Inflation

CHAINTECH always pays attention to the price fluctuation of raw materials, maintains good interaction with suppliers, and preset the procurement quantity by judging the price trend of raw materials, so as to lower the impact of price increases.

(III) Policy regarding High-risk Investments, Highly Leveraged Investments, Loans to Other Parties, Endorsements/Guarantees, and Derivatives Transactions, Main Reasons for the Profit (Loss) Generated Thereby, and Response Measures to Be Taken in the Future:
High-risk and highly leveraged investment policies: The Company's policy is to engage in non-high risk and non-high leveraged investments.
Derivative products transaction policy: CHAINTECH follows the principle of hedging against risks in substantial positions, and disposes of related matters according to the provisions of "Procedures for Acquisition and Disposal of Assets." CHAINTECH didn't get engaged in derivative financial product transaction in 2022.

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Loan to other parties: CHAINTECH's capital loan is only limited to parent company and subsidiaries, to the exclusion of shareholders or any other parties. The Company did not engage in loaning funds to others in the year 2022.
Endorsements and Guarantees for other parties: CHAINTECH may conduct endorsement/guarantee for the companies in which it directly or indirectly holds more than 90% of the voting shares. The endorsement and guarantee provided by CHAINTECH during 2022 were made according to the "Endorsement/ Guarantee Operating Procedures" formulated by CHAINTECH.
(IV) Research and development work to be carried out in the future, and further expenditures expected for research and development work
Future research and development plan
- (1) Display cards

We will adopt the latest NVIDIA Ada Lovelace series chipsets to develop high, mid and low end gaming graphics cards, so that a reasonable proportion of products in each price range can be distributed. For high-end gamers, we will develop e-sports graphics cards with core overclocking, high power consumption and outstanding heat dissipation performance.

(2) Motherboard
A. Develop iGame series gaming motherboard, including Vulcan, Ultra, and Gaming MINI iTX series by using the latest Intel 700 series high-end chipset.
B. Develop the Intel 700 LGA1700/AMD AM5 600 series medium-end motherboard, including the plan for CVN, BATTLE-AX, and Netscape series product line.
C. UEFI multi-language graphical BIOS enhanced version.
D. Join the development of industrial control motherboards, mainly for industry applications including: Tax-controlled finance, digital signage, retail cashier, cloud storage, commercial games, multi-screen output, minicomputers, custom branded machines, and other fields of use.
(3) High-performance data computing solutions
A. These include new generation AI deep learning, machine learning, big data analysis and high performance scientific computing applications.
B. Explore marginal computing and AI solutions in the industrial field; Explore automated machine learning and business AI solutions; Explore opportunities for cloud computing services.

2. Estimated R&D spendings:

In order to maintain CHAINTECH's competitiveness, CHAINTECH has diversified product research and development and attached great importance to resource input for R&D. In 2023, the expenditure related to R&D is expected to maintain at a similar level to 2022, within 0.5% of the revenue.

(V) Changes in domestic and overseas policies and laws that impact the company’s financial operations and countermeasures:

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There have been no matters arising out of changes in domestic and overseas laws that have influenced CHAINTECH's finance and business in the most recent year. The operating team of the Company will continuously pay close attention to the changes in policies and laws that may affect CHAINTECH's operation, and make quick response thereof.

(VI) Impact of changes in technology and industry on the Company’s financial operations, and related countermeasures:

In recent years, the biggest change in technology lies in electronization, and CHAINTECH has also been electronized as well. Whether in internal procedures or external connections, it has applied the newest technologies, hence lowering the cost.

(VII) Effect on the Crisis Management of Changes in the Corporate Image, and Measures to Be Taken in Response:

CHAINTECH has always valued corporate image and risk management. Currently, there is no foreseeable crisis. If there are matters occurring that influence CHAINTECH's corporate image or lead to enterprise crisis, CHAINTECH will set up a project team that is in full charge of formulating the countermeasures.

(VIII) Expected Benefits and Possible Risks Associated with Any Mergers and Acquisitions, and Measures to Be Taken in Response: None.
(IX) Expected Benefits and Possible Risks Associated with Any Plant Expansion, and Measures to Be Taken in Response: None.
(X) Risks Associated with Any Consolidation of Sales or Purchasing Operations:

In terms of the procurement: CHAINTECH follows the raw material procurement policy of maintaining two or more suppliers and diversifying raw material sources while keeping long-term close partnership with suppliers to ensure the sufficient supply of raw materials.

In terms of sales: Although CHAINTECH's sales are concentrated in some regions, the Company has established long-term cooperative relationships with its existing customers. On the other hand, CHAINTECH will also strive to develop new customers to expand and diversify the distribution channels and strive to reduce the risks concerning sales concentration.

(XI) Impact and risk of the mass transfer or change of shares of the directors, supervisors or major shareholders holding more than 10% of the shares of the Company, and measures to be taken in response: None.
(XII) Impact and risk associated with changes in management rights, and countermeasures: None.
(XIII) For litigation or non-litigation events, the major litigation, non-litigation or administrative dispute cases that have been judged or are pending of the Company and its directors, President, substantial responsible persons, major shareholders holding more than 10% of the shares and its affiliates shall be listed; if the results of which are likely to have a material impact on shareholders' equity or the price of securities, the facts in dispute, the amount of the subject matter, the commencement date of the proceeding, the principal parties involved and the disposition as of the date of publication of the annual report shall be disclosed: None.
(XIV) Other important risks and countermeasures: None.

VII. Other important items: None.

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Chapter 8. Special Notes

I. Information on Affiliated Companies

(I) Consolidated Business Report of Affiliated Companies
Organization chart of affiliated companies

==> picture [387 x 322] intentionally omitted <==

----- Start of picture text -----

Chaintech Technology Corporation
Shenzhen Jinghong Digital R&D Service Co., Ltd.
100%
Sitonholy (Tianjin) Technology Co., Ltd.
51%
Baotou Yihui
Beijing Sitonholy Information Sitonholy (Shenzhen)
Technology Co., Ltd. Technology Co., Ltd.,
Technology Co., Ltd.
100% 100%
100%
----- End of picture text -----

125

2. Basic information of affiliated companies

Unit: NT$ thousands

				Unit: NT$thousands
Name of business	Date of Incorporation	Address	Actual paid- in capital	Main business or production items
Shenzhen Jinghong Digital R&D Service Co., Ltd.	2012.08	Room 305B, 3/F, Factory Building 3, Meilin Doli Industrial Zone, Beihuan Road, Meifeng Community, Meilin Sub-district, Futian District, Shenzhen	NT$499,065	Technology research and development and trading of electronic products, computer hardware, and peripheral devices
Sitonholy (Tianjin) Technology Co., Ltd.	2018.07	No. 1, Cuipu Road, Yixian Science Industrial Park, Tianjin City, PRC	NT$110,630	Wholesale of electronic products, communication products, computer hardware and software and related spareparts
Beijing Sitonholy Technology Co., Ltd.	2012.05	Room 317, 3F, Building 29, Court 9, Anningzhuang West Road, Haidian District. Beijing City, PRC	NT$36,824	Wholesale of electronic products, communication products, computer hardware and software and related spareparts
Baotou Yihui Information Technology Co., Ltd.	2012.09	A308, Software Park Building, Rare Earth Development Zone, Baotou City, Inner Mongolia Autonomous Region	NT$50,643	Electronic products, communication products, computer software and hardware, and data processing and storage and support services
Sitonholy (Shenzhen) Technology Co., Ltd.	2022.12	1102A, 11/F, Technology Building, Doli Industrial Zone, No.105 Meihua Road, Meifeng Community, Meilin Sub-district, Futian District, Shenzhen	NT6,527	Wholesale of electronic products, communication products, computer hardware and software and related spare parts

126

For those who are concluded as the existence of the controlling and subordinate relations, the information of the same shareholders: None.
Industry and interactive division of labor of overall affiliated companies:
(1) Industry: Electronics and R&D Centers.
(2) Interactive division of labor situation:
- a. CHAINTECH is responsible for the order receiving, procurement and sales.
- b. Shenzhen Jinghong Digital R&D Service Co., Ltd. is responsible for product research and development and trading of electronic peripherals.
- c. The Company invested in Sitonholy (Tianjin) Technology Co., Ltd, responsible for the production, manufacturing and sales of server products, through Jinghong.
- d. The Company invested in Beijing Sitonholy Technology Co., Ltd, responsible for the production, manufacturing and sales of server products, through Sitonholy (Tianjin) Technology Co., Ltd.
- e. The Company invested in Baotou Yihui Information Technology Co., Ltd., responsible for computer hardware and software, data processing, storage and support services, through Sitonholy (Tianjin) Technology Co., Ltd.
- f. The Company invested in Sitonholy (Shenzhen) Technology Co., Ltd, responsible for the production, manufacturing and sales of server products, through Sitonholy (Tianjin) Technology Co., Ltd.

127

5. Information of Directors, Supervisors, and General Managers in all affiliated companies:

Unit: Share; %

Name of business	Title	Name or representative	NumberofSharesHeld	NumberofSharesHeld
			Number of shares	Shareholding ratio
Shenzhen Jinghong Digital R&D Service Co., Ltd. Company	Chairman of the Board	Chaintech Technology Corporation Representative: Chu, Ping	Note	100%
Sitonholy (Tianjin) Technology Co., Ltd.	Chairman of the Board Director Supervisor Supervisor	Tianjin Daweisi Technology Center Representative: Wang, Wei Shenzhen Jinghong Digital R&D Service Co., Ltd. Representative: Chu, Ping Representative: Yang Li-Ping Tianjin Daweisi Technology Center Representative: Guo, Rui-Ling Shenzhen Jinghong Digital R&D Service Co., Ltd. Representative:He,Bo	Note	51%
Beijing Sitonholy Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Shou-Zheng	Note	100%
Baotou Yihui Information Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: Cheng Wei	Note	100%
Sitonholy (Shenzhen) Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: He,Bo,Guo,Rui-Ling	Note	100%

Note: A company with limited liability; therefore, no number of shares.

128

6. Operation Overview of Affiliated Companies

Unit: NT$ thousands

Name of business	Capital	Total Assets	Total liabilities	Net Value	Operating Revenue	Operating income	Current profit and loss (after tax)	Earnings per share (NT$) (after tax)
Shenzhen Jinghong Digital R&D Service Co., Ltd.	499,065	644,716	34,159	610,557	59,475	(2,494)	44,639	-
Sitonholy (Tianjin) Technology Co., Ltd.	110,630	1,192,912	556,812	636,100	2,036,285	79,936	44,851	-
Beijing Sitonholy Technology Co., Ltd.	36,824	113,889	62,610	51,279	196,482	3,078	1,701	-
Baotou Yihui Information Technology Co., Ltd.	50,643	28,564	8,315	20,249	5,988	(5,557)	(2,849)	-
Sitonholy (Shenzhen) Technology Co., Ltd.	6,527	-	-	6,527	-	-	-

(II) Consolidated financial statements of affiliated companies: Due to the Consistency of compilation subject between the consolidated financial statements of the consolidated financial statement for parent company and subsidiaries, the financial statements are consolidated.
(III) Relations report: None

129

II. Private Placement Securities in the Most Recent Year to the Publication Date of this Annual Report: None.
III. Holding or Disposal of CHAINTECH's Shares by the Subsidiaries of the Most Recent Year to the Date of Publication of this Annual Report: None.
IV. Other Necessary Supplements: None.
Chapter 9. The Most Recent Year and up to the Publication Date of the Annual Report, the Occurrence of Events as Provided for in Subparagraph 2, Paragraph 2, Article 36 of the Securities Exchange Act Which Have a Material Effect on Shareholders' Equity or Securities Prices: None

130

Appendix I: Individual Financial Report for the Most Recent Year

Independent Auditors' Report

(112) Cai-Shen-Bao-Zi No. 20005374

To Chaintech Technology Corporation:

Audit Opinion

The independent auditors have audited the accompanying parent company only balance sheets of Chaintech Technology Corporation (hereinafter referred to as "the Company") as of December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, parent company only statements of changes in equity, and parent company only statements of cash flows for the years then ended, and the notes to the parent company only financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying parent company only financial statements, in all material respects, give a true and fair view of the parent company only financial position of the Company as of December 31, 2022 and2021, and of its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers."

Basis of Audit Opinion

We conducts the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountant and the GAAS of Republic of China. Our responsibilities under those standards are further described in the Responsibilities of Certified Public Accountants for Auditing the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

Key Audit Matters

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the parent company only financial statement of the Company for the year ended December 31, 2022. These matters are addressed in the context of our audit of the parent company only financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers, Taiwan

27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 110208, Taiwan

T: +886 (2) 2729 6666, F:+ 886 (2) 2729 6686, www.pwc.tw

131

Key audit matters for the parent company only financial statement of the Company for the year ended December 31, 2022 are stated as follows:

Sales revenue cut-off

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Note IV(XXVI) to the parent company only financial statements. For the description of sales revenue, please refer to Note VI(XIV) to the parent company only financial statements.

The Company has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Company mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. These revenue recognitions generally involve a large number of manual operations. Considering that the volume of the shipments of the Company is large, and the amount of transaction before and after the financial statement date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Company. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.
Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Company determines the sales recognition when the customer receives the delivery of goods and the right of control is transferred.
Perform a closing test for sales revenue from delivery of warehouses for a certain period before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.
Make an written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

132

Assessment of impairment of intangible assets by Shenzhen Jinghong Digital R&D Service Co., Ltd. - investments accounted for using the equity method

Description

Regarding the accounting policy for assessment of impairment of investments accounted for using the equity method, please refer to Note IV(XVII) to the parent company only financial statements. For the estimation and assumption uncertainty in assessment of impairment of investments accounted for using the equity method, please refer to Note V(II) to the parent company only financial statements.

In 2019, the Company had a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through Shenzhen Jinghong Digital R&D Service Co., Ltd. Goodwill and customer relationships were recognized in investments accounted for using the equity method according to the equity purchase contract. This has a significant impact on the parent company only financial statements of the Company.

To assess whether intangible assets are impaired, Shenzhen Jinghong Digital R&D Service Co., Ltd. estimates the future cash flows based on the cash-generating units to which the intangible assets belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the assessment of the impairment of intangible assets by Shenzhen Jinghong Digital R&D Service Co., Ltd. as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above: We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.
Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.
Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

133

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

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

In preparing the parent company only financial statements, the responsibility of management includes assessing the Company's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless the management intends to liquidate the Company or terminate the business, or has no realistic alternative but to do so.

The governance units (including the audit committee) of the Company, are responsible for overseeing the Company's financial reporting process.

Responsibilities of Certified Public Accountants for Auditing the Parent Company Only 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 GAAS of Republic of China will always detect a material misstatement of the parent company only financial statements when it exists. Misstatements may arise from fraud or error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the parent company only financial statements, it will be deemed as material.

We conduct the audit in accordance with the GAAS of Republic of China, and exercise professional judgment and maintain professional skepticism throughout the audit. We also execute the following tasks:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

134

expressing an opinion on the effectiveness of the Company's internal control.

Evaluate the appropriateness of accounting policies adopted by management and the reasonableness of the accounting estimates and related disclosures made accordingly.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, determine 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 parent company only financial statements; or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or circumstances may cause the Company to no longer continue as a going concern.
Evaluate the overall expression, structure, and contents of the parent company only financial statements (including related notes) and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Company to express an opinion about the parent company only financial statements. We are responsible for the direction, supervision, and performance of the 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 the Norm 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 are of most significance in the audit of the parent company only financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

135

Pricewaterhouse Coopers

==> picture [120 x 51] intentionally omitted <==

Feng, Min-Chuan

Independent Auditors' Report

Lin, Ya-Hui

Former Securities and Futures Bureau, Financial Supervisory Commission Approved Certification Number: Jin-Guan-Zheng-Liu-Zi No. 0960038033 Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Shen-Zi No. 1070323061

March 22, 2023

136

Chaintech Technology Corporation Parent Company Only Balance Sheets For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands

Assets	December31,2021	December31,2021
	Amount $ 353,911 33,847 335,199 736,800 219,114 3,978 1,682,849 200,485 557,840 9,590 2,962 - 20,770 30,353 822,000 $ 2,504,849	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets measured at amortized cost -current 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets		14 1 13 30 9 -
		67
		8 22 1 - - 1 1
		33
		100

(Continued)

137

Chaintech Technology Corporation Parent Company Only Balance Sheets For the Years Ended December 31, 2022 and 2021

Liabilities and equity

Unit: NT$ thousands
December31,2022
December31,2021
Notes
Amount
%
Amount
%
VI(X)
$ -
-
$ 226,840
9
VI(XIV)
118
-
640
-
VII
100,675
5
353,456
14
VII
74,227
3
57,771
3
73,462
3
54,160
2
5,643
-
1,544
-
223
-
103
-
254,348
11
694,514
28
VI(XX)
3,721
-
-
-
5,595
1
1,591
-
9,316
1
1,591
-
263,664
12
696,105
28
VI(XII)
964,988
42
1,014,988
40
100
-
100
-
VI(XIII)
159,534
7
147,312
6
29,249
1
39,701
2
946,595
42
787,638
31
(
79,273) (
4 ) (
29,249) (
1)
VI(XII)
-
- (
151,746) (
6)
2,021,193
88
1,808,744
72
IX
XI
$ 2,284,857
100
$ 2,504,849
100

Current liabilities
2100
Short-term borrowings
2130
Current contract liabilities
2170
Accounts payable
2200
Other payables
2230
Current tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Total current liabilities
2570
Deferred tax liabilities
2580
Non-current lease liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary shares
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury shares
3XXX
Total equity
Significant Contingent Liabilities and
Unrecognized Contract Commitments
Significant Events after the End of the
Financial Reporting Period
3X2X
Total liabilities and equity

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

Manager: Kao, Shu-Jung

138

Chaintech Technology Corporation Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2022 and 2021

Item

Unit: NT$ thousands
(EPS in NT$)
2022
2021
Notes
Amount
%
Amount
%
VI(XIV) and VII $ 3,900,444
100
$ 4,173,178
100
VI(IV)(XVIII)
(XVIIII) and VII (
3,565,324)(
92)(
3,823,074 )(
91)
335,120
8
350,104
9
VI(XVIII)(XIX)
and VII
(
48,732) (
1) (
43,756 ) (
1)
(
32,155) (
1) (
24,941 ) (
1)
(
15,084)
- (
1,894 )
-
XII(II)
2,152
- (
8,680 )
-
(
93,819)(
2)(
79,271 )(
2)
241,301
6
270,833
7
1,650
-
126
-
VI(XV)
6,295
-
6,015
-
VI(IX)(XVI)
99,185
3
(
119,713 ) (
3)
VI(XVII)
(
5,281)
- (
4,984 )
-

VI(V)
44,639
1
7,362
-
146,488
4
(
111,194 )(
3)
387,789
10
159,639
4
VI(XX)
(
67,417)(
2)(
37,415 )(
1)
$ 320,372
8
$ 122,224
3
VI(II)
($ 58,102)(
1) $ 14,335
-
(
58,102)(
1)
14,335
-
VI(V)
8,078
- (
3,882 )
-

8,078
- (
3,882 )
-
($ 50,024)(
1) $ 10,453
-
$ 270,348
7
$ 132,677
3
VI(XXI)
$ 3.32
$ 1.27
VI(XXI)
$ 3.31
$ 1.27

4000
Operating Revenue
5000
Operating costs
5950
Gross profit from operations
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6300
Research and development
expenses
6450
Expected credit gains (losses)
6000
Total operating expenses
6900
Total operating expenses
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Financial costs
7070
Share of profit or loss of
subsidiaries, associates, and joint
ventures accounted for using
equity method
7000
Total non-operating income
and expenses
7900
Profit before tax
7950
Tax expense
8200
Profit
Other comprehensive income,
net
Items that will not be reclassified
to profit or loss
8316
Unrealized valuation gain (loss)
on equity instruments measured
at fair value through other
comprehensive income
8310
Total amount of items that will
not be reclassified to profit or
loss
Items that may be reclassified
subsequently to profit or loss
8361
Exchange differences on
translation of financial
statements of foreign operation
8360
Total amount of items that may
be reclassified subsequently to
profit or loss
8300
Other comprehensive income,
net
8500
Total comprehensive income
(loss)
Basic earnings per share
9750
Profit
Diluted earnings per share
9850
Profit

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Manager ： Kao, Shu-Jung

Accounting Supervisor ： Lai, Yu-Nu

139

Unit: NT$ thousands

Chaintech Technology Corporation Parent Company Only Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Notes For the Year Ended December 31, 2021 Balance as of January 1, 2021 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2020 VI(XIII) Legal reserve appropriated Reversal of special reserve Cash dividends paid Balance as of December 31, 2021 2022 Balance as of January 1, 2022 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2021 VI(XIII) Legal reserve appropriated Reversal of special reserve Cash dividends paid Retirement of treasury share Balance as of December 31, 2022		Ordinaryshares $ 1,014,988 - - - - - - $ 1,014,988 $ 1,014,988 - - - - - - 50,000 $ 964,988	Capital surplus - changes in the net worth of associates and joint ventures accounted for using equity method $ 100 - - - - - - $ 100 $ 100 - - - - - - - $ 100				Retained earnings			Other equityinterest	Other equityinterest	Other equityinterest	Treasuryshares $151,746 - - - - - - $151,746 $ 151,746 - - - - - - 151,746 $ -		Total equity
					Legal reserve $ 132,984 - - - 14,328 - - $ 147,312 $ 147,312 - - - 12,222 - - - $ 159,534		Special reserve $ 97,541 - - - - 57,840 - $ 39,701 $ 39,701 - - - - 10,452 - - $ 29,249		Unappropriated retained earnings $ 670,152 122,224 - 122,224 14,328 57,840 48,250 $ 787,638 $ 787,638 320,372 - 320,372 12,222 10,452 57,899 101,746 $ 946,595	Exchange differences on translation of financial statements of foreign operation $ 40,868 - 3,882 3,882 - - - $ 44,750 $ 44,750 - 8,078 8,078 - - - - $ 36,672		Unrealized gains (losses) on financial assets at fair value through other comprehensive income $1,166 - 14,335 14,335 - - - $15,501 $ 15,501 - 58,102 58,102 - - - - $42,601
															$ 1,724,317 122,224 10,453 132,677 - - 48,250 $ 1,808,744 $ 1,808,744 320,372 50,024 270,348 - - 57,899 - $ 2,021,193

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman: Kao, Shu-Jung

Manager Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-

140

Chaintech Technology Corporation Parent Company Only Statements of Cash Flows For the Year Ended December 31, 2022 and 2021

Cash flows from operating activities
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expenses
Depreciation expenses on right-of-use assets
Expected credit losses (gains)
Amortization expenses
Interest income
Interest expenses
Dividend income
Share of profit or loss of subsidiaries
accounted for using equity method
Impairment loss
Changes in operating assets and liabilities
Net changes in operating assets
Accounts receivable (including related
parties)
Inventories
Other current assets
Other non-current assets
Net changes in operating liabilities
Accounts payable (including related
parties)
Contract liabilities
Other payables
Other current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax received (paid)
Net cash flows from operating activities
Cash flows from investing activities
Acquisition of property, plant, and equipment
Decrease in financial assets measured at amortized
cost -current
Acquisition of Intangible assets
Increase in prepayments for business facilities
Increase in refundable deposits
Net cash flows used in investing
activities
Cash flows from financing activities
Decrease in short-term loans
Repayments of lease liabilities
Cash dividends paid
Net cash flows generated used in
financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Unit: NT$ thousands
Notes
January 1, 2022
to December 31,2022
January 1, 2021
to December 31,2022
$ 387,789 $ 159,639
VI(VI)(XVIII)
10,831
22,899
VI(VII)(XVIII)
4,210
1,482
XII(II)
(
2,152 )
8,680
VI(VIII)(XVIII)
129
-
(
1,650 ) (
126 )
VI(XVII)
5,281
4,984
VI(XV)
(
6,100 ) (
5,795 )
VI(V)
(
44,639 ) (
7,362 )
VI(V)(IX)(XVI)
-
97,765
358,069
51,615
100,906 (
44,896 )
(
1,117 ) (
3,401 )
(
247 )
1,925
(
252,781 )
98,773
(
522 )
640
16,705 (
1,962 )
120 (
67 )
574,832
384,793
1,650
126
6,100
5,795
(
5,530 ) (
5,107 )
(
56,184 )
20,829

520,868
406,436
VI(VI)
(
10,236 )
-
29,226
23,040
VI(VIII)
(
2,351 )
-
(
624 )
-
(
750 )
-
15,265
23,040
(
226,840 ) (
175,187 )
VI(XXII)
(
4,178 ) (
1,498 )
VI(XIII)
(
57,899 ) (
48,250 )
(
288,917 ) (
224,935 )
247,216
204,541
353,911
149,370
$ 601,127$ 353,911

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman ： Kao, Shu-Jung

Manager: Kao, Shu-Jung

Accounting Supervisor : Lai, Yu-Nu

141

Cash and cash equivalents at end of period Chaintech Technology Corporation Notes to Parent Company Only Financial Statements For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

(I) The original East Chaintech Technology Corporation was established in November 1986, and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTC-listed company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company is principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.
(II) Colorful Group Ltd. (hereinafter referred to as the "Colorful Group") acquired 10% equity in the Company indirectly through Zhongjie Xingye Co., Ltd., and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, Zhongjie Xingye Co., Ltd. sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2022, the Colorful Group indirectly held 29.57% of the equity in the Company through Yicheng International Development Co., Ltd.

II. Approval Date and Procedures of the Financial Statements

The parent company only financial statements were approved by the Board of Directors on March 22, 2023.

III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2022:

142

New/Revised/Amended Standards and Interpretations Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to International Accounting Standards (“IAS”)16 “Property,Plant and Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts — Cost of Fulfilling a Contract” Annual improvement over the 2018-2020 period	Effective date issued by the International Accounting Standards Board As of January1, 2022 As of January1, 2022 As of January1, 2022 As of January1, 2022

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Company

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2023:

New/Revised/Amended Standards and Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies” Amendment to IAS8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective date issued by
	the International Accounting Standards Board As of January 1, 2023 As of January 1, 2023 As of January 1, 2023

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(III) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by the IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

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New/Revised/Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture”
Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”
IFRSs 17 “Insurance Contracts”
Amendments to IFRSs 17 “Insurance Contracts”
Amendments to IFRSs 17 “ the initial application of IFRSs 17 and
IFRSs 9 - Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants”

Effective date issued by
the International
Accounting Standards
Board
Pending decision by the
International Accounting
Standards Board"
As of January 1, 2024
As of January 1, 2023
As of January 1, 2023
As of January 1, 2023
As of January 1, 2024
As of January 1, 2024

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

IV. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of the parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Statement of compliance

The parent company only financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation

The parent company only financial statements have been prepared based on historical cost convention.
The financial statements prepared in accordance with IFRSs, international accounting standards, interpretations and interpretations (hereinafter referred to as the IFRSs) are required to be used for the preparation of financial statements. The financial statements of the Company shall also require the use of certain critical accounting estimates. Management requires the use of judgment in applying the Company’s accounting policies. For items involving a higher degree of judgment or complexity, or items where assumptions and estimates are significant to the parent company only financial statements, please refer to Note V for details.

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(III) Foreign currency translation

The Company's items listed in the parent company only financial statements are measured and presented in the currency of the primary economic environment in which the Company operates (i.e., functional currency).

Foreign currency transactions and balances
(1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the retransaction at the balance sheet date are recognized in profit or loss.
(3) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(4) All exchange gains and losses are presented in the Income Statement within "other gains and losses."
Translation of foreign operations
The results of operations and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(1) Assets and liabilities for each balance sheet presented are re-translated at the closing rate prevailing at the balance sheet date;
(2)Income and expenses for each Statement of Comprehensive Income are re-translated at the average exchange rates for the period;
(3)All resulting exchange differences are recognized in other comprehensive income.
(4)When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Company still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all

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interest in these foreign operations.

(IV) Standard of assets and liabilities being classified as current and non-current

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.
(2) Liabilities held mainly for trading purposes.
(3) Assets that are expected to be realized within twelve months from the balance sheet date.
(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets that do not meet the aforementioned conditions are classified as non-current.

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Liabilities that are expected to be paid off within the normal operating cycle.
(2) Liabilities held mainly for trading purposes.
(3) Liabilities that are to be paid off within twelve months from the balance sheet date.
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the aforementioned conditions are classified as non-current.

(V) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.
Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Company using trade date accounting.
At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

(VI) Financial assets at fair value through other comprehensive income

Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:

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(1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.
(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Company adopts trade date accounting for financial assets that follow regular way purchase or sale measured at fair value through other comprehensive income.
At initial recognition, the Company measures the financial assets at fair value plus transaction costs; the Company subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following derecognition of the investment. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

(VII) Financial assets measured at amortized cost

refers to an asset that meets all of the following conditions:
- (1) The financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.
- (2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Company adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.
The Company measures financial assets at fair value plus transaction cost at initial recognition, and subsequently recognizes interest income and impairment loss during the circulation period using the effective interest method according to the amortization procedure, and recognizes any gains or losses upon derecognition in profit or loss.
(VIII) Accounts receivable
Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
Short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(IX) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Company measured the credit risk that increased insignificantly since original recognition vie the 12-month expected credit loss amount through financial debt instrument at fair value

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through other comprehensive income, financial asset at amortized cost and accounts receivable significant financial components. For those credit risk increased significantly since original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.

(X) De-recognition of financial assets

Financial assets are de-recognized when the Company's contractual rights to receive cash flows from financial assets are lapsed.

(XI) Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

(XII) Inventories

Inventories are measured at the lower of cost and net realizable value, and cost is determined using the weighted average method. The cost of finished goods and work in progress includes materials, direct labor, other direct costs, and production-related manufacturing expenses, but does not include borrowing costs. The item by item approach is used in comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of the completion and applicable variable selling expenses.

(XIII) Investments accounted for using equity method - subsidiaries/associates

Subsidiaries refer to all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Unrealized gains and losses resulting from transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.
The share of gain or loss and other comprehensive income generated from the subsidiary was recognized as profit or loss of the period and other comprehensive income (loss), respectively. If the Company's share of loss recognized on the subsidiary is equal to or exceeds the equity interest in the subsidiary, the Company will not recognize further losses unless the Company has statutory obligations or deferred obligations or has paid for the subsidiary.
When the Company disposes its investment in an subsidiary and loses significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be

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required if the relevant assets or liabilities were disposed of. If it retains significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

Associates are all entities over which the Company has significant influence but does not control. In general, it is presumed that the investor has significant influence if an investor holds directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
The Company's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Company.
Where an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for under the equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.
When the Company disposes of any related enterprise, and the significant impact on the related enterprise is thereby lost, the accounting treatment provides that the Company directly dispose of the relevant assets or liabilities for all the amounts previously recognized

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in other comprehensive income related to the related enterprise, on the same basis, that is, if the interests or losses previously recognized as other comprehensive income are reclassified as profit or loss when the relevant assets or liabilities are disposed, then when the significant impact on the related enterprise is lost, the benefit or loss in equity is concomitantly reclassified as profit or loss. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

According to the "Rules Governing the Preparations of Financial Statements by Securities Issuers," profit for the current period and other comprehensive income for the current period reported in an entity's parent company only statement of comprehensive income shall be equal to profit for the current period and other comprehensive income attributable to owners of the parent reported in that entity's consolidated statement of comprehensive income. Total equity reported in an entity's parent company only financial statements shall be equal to equity attributable to owners of parent reported in that entity's consolidated financial statements.

(XIV) Property, plant, and equipment

Property, plant and equipment are recorded as the foundation of acquisition cost.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replacement shall be derecognized. All other repairs and maintenance are recognized as current gain or loss when incurred.
Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors," from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

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Fixed assets 3~5 years Tooling equipment 2~3 years Other equipment 3 years

(XV) Lease transaction in the capacity of a lessee - right-of-use assets/lease liabilities

A right-of-use asset and a lease liability are recognized for a leased asset on the date when it becomes readily available for the Company's use. When a lease contract is a short-term lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.
On the lease commencement date, the Company measures lease liabilities by the present value of outstanding lease payments, using the Company's incremental borrowing rate. Lease payments include : fixed payments less any lease incentives receivable. In subsequent periods, the Company measures lease liabilities at amortized cost using the effective interest method and recognizes interest expenses during the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.
Right-of-use assets are recognized at cost on the lease commencement date. The cost includes: the originally measured amount of lease liabilities. In subsequent periods, the Company measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.
When a lease modification decreases the scope of a lease, the carrying value of the right-ofuse asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.
(XVI) Intangible assets

The computer software is amortized using the straight-line method over an estimated useful life of three years to recognize its cost.

(XVII) Impairment of non-financial assets

The Company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the impairment loss is recognized. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Where an impairment loss of assets recognized in previous years does not exist or decrease, the impairment loss is reversed. However, the carrying amount of the asset increased by the impairment loss shall not exceed the book value of the asset after abatement the depreciation or amortization if the impairment loss is unrecognized.

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(XVIII) Borrowings

Borrowings refer to short-term loans from banks. The initial recognition of loans measured at fair value less transaction cost. Any subsequent difference between the price and the redemption value after deducting the transaction cost shall be recognized as interest expense in gain and loss by applying amortization procedure of effective interest method during the circulation period.

(XIX) Accounts payable

Accounts payable refer to the debts incurred by purchase of materials, goods, or services on credit, and the notes payable incurred by both operating and non-operating activities.
Short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XX) De-recognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(XXI) Offset of financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXII) Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

Pension

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

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(XXIII) Income tax

Income tax expense comprises current and deferred income tax. Income tax is recognized in gain or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country domicile where the Company operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Company shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.
Deferred income tax adopts the balance sheet approach, and is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheets. Deferred income tax is not recognized, if the temporary difference arises from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income (loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that

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intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXIV)Share capital

Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.
When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXV) Dividend distribution

Dividends are recognized in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVI)Revenue recognition

Sales of goods
(1) The Company manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product, and the Company has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.
(2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.
(3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Company has unconditional rights to the contract price since that point in time, and the Company can collect the consideration from the customer once upon the contractual time is expired.

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Financial composition

The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Company and customers are all less than one year. Therefore, the Company has not adjusted the transaction price to reflect the time value of money.

Costs to acquire contracts from customers

The Company recognizes the incremental costs incurred in the contracts with the customers and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

(XXVII)Government grants

Government grants are recognized at their fair value when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Company’s expense are recognized as profit or loss on a systematic basis when the expense occurs.

V. Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Company's parent company only financial statements requires management to make critical judgments in applying the Company's accounting policies and make critical assumptions and estimates concerning future events according to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(I) Significant judgments in applying accounting policies

None.

(II) Significant accounting estimates and assumptions

Assessment of goodwill impairment by Shenzhen Jinghong Digital R&D Service Co., Ltd. investments accounted for using the equity method

The assessment of goodwill impairment relies on the Company’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units.

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VI. Descriptions of Significant Accounting Items

(I) Cash

Cash on hand and revolving funds Cheque deposits and demand deposits Transferred to financial assets measured at amortized cost -current	December 31, 2022 $ 62 605,686 605,748 ( 4,621) $ 601,127	December 31, 2021 $ 57 387,701 387,758 ( 33,847) $ 353,911

The Company associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.
The demand deposits as of December 31, 2022 and 2021 provided as security,have been transferred to the “financial assets measured at amortized cost -current ” title according to their nature.
For more information on the Company's cash and cash equivalents are provided as collateral, please refer to Note VIII.

(II) Financial assets at fair value through other comprehensive income

Item Non-current items: Equity Instruments Shares of publicly quoted entity Shares of non- publicly quoted entity and non- emerging shares Adjustment Sub-total Total	December 31, 2022 $ 169,634 15,350 184,984 ( 42,601) 142,383 $ 142,383	December 31, 2021
		$ 169,634 15,350 184,984 15,501 200,485 $ 200,485

The Company elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income. The fair value of such investments was NT$142,383 and NT$200,485, respectively, for the years ended December 31, 2022 and 2021.
The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

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Equity instruments measured at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Shareholding at end of period	2022	2021
	($ 58,102) $ 6,100	$ 14,335 $ 5,795

For more information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII (II) and (III).

(III) Accounts receivable

Accounts receivable Accounts receivable (related parties)		December31,2022
	Total	Loss allowance	Net
	$ 197,279 525,778 $ 723,057	($ 6,765) ( 210) ($ 6,975)	$ 190,514 525,568 $ 716,082

Accounts receivable Accounts receivable (related parties)		December31,2021
	Total	Loss allowance	Net
	$ 344,031 737,095 $ 1,081,126	($ 8,832) ( 295) ($ 9,127)	$ 335,199 736,800 $ 1,071,999

Aging analysis of accounts receivable is stated as follows:

Not overdue Overdue for 1-90 days	December 31, 2022 $ 700,741 22,316 $ 723,057	December 31, 2021 $ 1,056,455 24,671 $ 1,081,126

The aging analysis above is based on past due date.

The balance of receivables on contracts with customers as of December 31, 2022, December 31, 2021, and January 1, 2021 was NT$723,057, NT$1,081,126, and NT$1,132,741, respectively.
Without consideration of the collateral held or other credit enhancements, the maximum

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credit risk that best represent the Company's accounts receivable as of December 31, 2022 and 2021 amounted to NT$716,082 and NT$1,071,999, respectively.

For more information on the credit risk of accounts receivable, please refer to Note XII (II).

(IV) Inventories

Raw materials Work in progress Finished good		December31,2022
	Costs	Allowanceforprice decline	Carryingamount
	$ 9,792 107,801 5,535 $ 123,128	($ 604) ( 167) ( 4,149) ($ 4,920)	$ 9,188 107,634 1,386 $ 118,208

Raw materials Work in progress Finished good		December31,2021
	Costs	Allowanceforprice decline	Carrying amount
	$ 84,616 73,637 63,305 $ 221,558	($ 337) - ( 2,107) ($ 2,444)	$ 84,279 73,637 61,198 $ 219,114

Cost of inventories is recognized by the Company as expenses in the current period:

Cost of sold inventories Inventory falling price loss(gain on inventories)	2022 $ 3,562,848 2,476 $ 3,565,324	2021
		$ 3,827,229 ( 4,155) $ 3,823,074

Note: The Company's reported the gain on inventories in 2021 as a result of de-stocking.

(V) Investments using equity method

January 1 Share of investment gains and losses using equity method Impairment loss Other changes in equity December 31	2022 $ 557,840 44,639 - 8,078 $ 610,557	2021
		$ 652,125 7,362 ( 97,765) ( 3,882) $ 557,840

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Subsidiaries Shenzhen Jinghong Digital R&D Service Co.,Ltd Associates uSenlight Corporation	December 31, 2022	Shareholding Ratio (%) 100 6.13	December 31, 2021	Shareholding Ratio (%) 100 13.05
	Listed amount $ 610,557 - $ 610,557		Listed amount $ 557,840 - $ 557,840

The share of profit and loss of subsidiaries (losses) recognized by the Company using the equity method is derived from the evaluation of the financial report data from the audited financial statement for the same period. The breakdown is as follows:

Shenzhen Jinghong Digital R&D Service Co.,Ltd uSenlight Corporation	2022 $ 44,639 - $ 44,639	2021 $ 43,170 ( 35,808) $ 7,362

For information on the Company's subsidiaries, please refer to Note IV(III) to the consolidated financial statements for the year ended December 31, 2022.
On January 21, 2020, the Board of Directors of the Company resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Company has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2022, the Company held a 13.05% equity interest in uSenlight Corporation, making the Company its single largest shareholder. As the other two largest shareholders (not the Company's related parties) held more than the Company’s shares, the Company had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Company had significant influence but had no control over uSenlight Corporation.
For the above investment accounted for using equity method in 2021, the Company carried out an impairment test based on the recoverable amount of such investment. Based on the above valuation result, the Company recognized a impairment loss on investments accounted for using equity method of NT$97,765.
The basic information of the associates that are material to the Company is as follows:

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Company name	Principal place of business	Shareholding ratio	Shareholding ratio	Measurement method
		December 31, 2022	December 31, 2021
uSenlight Corporation	The Republic of China	6.13%	13.05%	Equity method

(1) uSenlight Corporation compensated for losses due to capital reduction and issued new shares for capital increase in 2022. However, the Company did not subscribe according to the shareholding ratio, resulting in our shareholding ratio decreasing from 13.05% to 6.13%. Additionally, the Company has made a full reduction to the book amount of $0 for the investment target in 2021, and we do not intend to continue supporting uSenlight Corporation in the future.
(2) uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.
The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Proportionate share of net assets of associates Net equity difference Impairment loss recognized Book value of associates	uSenlight Corporation December 31, 2021 $ 229,391 183,046 ( 243,232) ( 141,233) $ 27,972 $ 3,650 94,115 ( 97,765) $-

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Statement of comprehensive income

Revenue Profit from continuing operations (Total comprehensive income)	uSenlight Corporation 2021 $ 88,129 ($ 274,391)

(VI) Property, plant, and equipment

As of January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Depreciation expenses December 31 December 31, 2022 Costs Accumulated depreciation	Derivative instruments	Tooling equipment $ 68,613 ( 59,083) $ 9,530 $ 9,530 156 ( 9,543) $ 143 $ 68,769 ( 68,626) $ 143	Others $ 1,497 ( 1,437) $ 60 $ 60 7,095 ( 915) $ 6,240 $ 8,592 ( 2,352) $ 6,240	Total $ 73,650 ( 64,060) $ 9,590 $ 9,590 10,236 ( 10,831) $ 8,995 $ 83,886 ( 74,891) $ 8,995
	$ 3,540 ( 3,540) $- $ - 2,985 ( 373) $ 2,612 $ 6,525 ( 3,913) $ 2,612

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January 1, 2021 Costs Accumulated depreciation 2021 January 1 Depreciation expenses December 31 December 31, 2021 Costs Accumulated depreciation	Fixed assets $ 3,540 ( 3,540) $- $ - - $- $ 3,540 ( 3,540) $-	Tooling equipment $ 68,613 ( 36,212) $ 32,401 $ 32,401 ( 22,871) $ 9,530 $ 68,613 ( 59,083) $ 9,530	Others $ 1,497 ( 1,409) $ 88 $ 88 ( 28) $ 60 $ 1,497 ( 1,437) $ 60	Total $ 73,650 ( 41,161) $ 32,489 $ 32,489 ( 22,899) $ 9,590 $ 73,650 ( 64,060) $ 9,590

(VII) Lease transaction - lessee

The Company's leased underlying assets are buildings, of which the lease term is usually 3- 5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.
Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

Property Property	December 31, 2022 Carrying amount $ 11,033 2022 Depreciation expenses $ 4,210	December 31, 2021 Carrying amount $ 2,962 2021 Depreciation expenses $ 1,482

The additions to the right-of-use assets of the Company for the years ended December 31, 2022 and 2021 is $12,281 and $0, respectively.

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Profit or loss items in connection with lease contracts are stated as follows:

2022 Items affecting profit or loss for the period Interest expenses of lease liabilities $ 296	2021 $ 118

The cash flows used in the Company's leases for the years ended December 31, 2022 and 2021 totaled NT$4,474 and NT$1,616, respectively.

(VIII) Intangible assets

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2022
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January 1 Costs Accumulated amortization and impairment January 1 Addition Amortization expenses December 31 December 31 Costs Accumulated amortization and impairment	Computer software $ - - $- $ - 2,351 ( 129) $ 2,222 $ 2,351 ( 129) $ 2,222

No balance of intangible assets as of December 31, 2021

(IX) Impairment of non-financial assets

The impairment loss recognized by the Company in 2021 was NT$97,765, as detailed below.

below.
		2021
	Profit or loss for the period	Other comprehensive income
	recognized	recognized
Loss-long-term equity investment
using equity method	$ 97,765	$-

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The Company conducted a impairment test on the invested company-uSenlight Corporation, as of December 31, 2021. After evaluation, the recoverable amount of the invested company- uSenlight Corporation, was small. Therefore, the total impairment loss of $97,765 was recognized.

(X) Short-term borrowings

Nature of Borrowings December 31, 2021 Interest range Collateral Borrowings Collateralised borrowings $ 191,228 0.90%~1.13% Other current assets- bank deposits Credit borrowings 35,612 0.96% None $ 226,840

No Current borrowings as of December 31, 2022
Interest expenses recognized in profit or loss as of December 31, 2022 and 2021 were NT$4,985 and NT$4,866, respectively.

(XI) Pension

The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
The pension costs recognized by the Company in accordance with the aforesaid pension regulations for the years ended December 31, 2022 and 2021were NT$932 and NT$769, respectively.

(XII) Share capital

As of December 31, 2022, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$964,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.
Treasury shares
(1) The reason for repurchase and movements in the number of treasury shares are as follows:

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December 31, 2022 Number of shares

Company name of holding securities Reason for repurchase (thousand shares) Carrying amount For the transfer of shares to The Company employees - $ -

December 31, 2021 Number of shares Company name of holding shares Reason for repurchase (thousand shares) Carrying amount For the transfer of shares to The Company employees 5,000 $ 151,746

(2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.
(3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.
(4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back. The Company passed a resolution by the board of directors to cancel its treasury shares on November 4, 2022, with a benchmark date of December 12, 2022. The Company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XIII) Retained earnings

Under the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, in addition to the income tax payable according to law, the Corporation shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the total paidup-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

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The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.
The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.

4.

(1) When the company distributes the surplus, it is required by law to provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.
(2) When the Company adopted IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related assets, they are reversed according to the ratio of the recognized special reserve.
By a resolution in the shareholders' meetings on June 15, 2022 and July 29, 2021, respectively, the Company adopted the earnings distribution plan for the year ended December 31, 2021 and 2020 as follows:

Legal reserve Special reserve (Reversal) Cash Dividends	2021	2021	2020	2020
	Amount (NT$ thousand)	Dividends per share (NT$)	Amount (NT$ thousand)	Dividends per share (NT$)
	$ 12,222 ( 10,452) 57,899	$ 0.60	$ 14,328 ( 57,840) 48,250	$ 0.50

Please refer to Note VI(XIX) for information on employees' remuneration and directors' and supervisors' remuneration.
As of March 22, 2023, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2022.

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(XIV) Operating Revenue

Revenue from contracts with customers		2022		2021
		$ 3,900,444		$ 4,173,178

Breakdown of revenue from contracts with customers

The Company derives revenue from the transfer of goods over time and at a point in time as follows:

as follows:
Sales revenue: Computer peripherals		2022		2021
		$ 3,900,444		$ 4,173,178

Contract assets and liabilities

The contract assets and liabilities in relation to revenue from contracts with customers recognized by the Company are as follows:

Contract liabilities: Unearned sales revenue	December 31, 2022	December 31, 2021	January 1, 2021
	$ 118	$ 640	$-

(XV) Other income

Dividend income Other income	2022 $ 6,100 195 $ 6,295	2021
		$ 5,795 220 $ 6,015

(XVI) Other gains and losses

Net foreign exchange gain (loss) Other losses Impairment loss	2022	2021
	$ 99,185 - - $ 99,185	($ 19,710) ( 2,238) ( 97,765) ($ 119,713)

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(XVII) Financial costs

Interest expenses : Borrowings Lease liabilities	2022 $ 4,985 296 $ 5,281	2021
		$ 4,866 118 $ 4,984

(XVIII) Expenses by nature

Employee benefit expenses Depreciation expenses of property, plant, and equipment Depreciation expenses of leased assets Amortization expenses of intangible assets	2022	2021
	$ 44,121 10,831 4,210 129 $ 59,291	$ 29,634 22,899 1,482 - $ 54,015

(XIX) Employee benefit expenses

Wages and salaries. Labor/Health Insurance expenses Pension Other employment expenses	2022 $ 38,585 1,793 932 2,811 $ 44,121	2021
		$ 24,432 1,545 769 2,888 $ 29,634

According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors and supervisors shall not be paid more than 6% as remuneration.
For the years ended December 31, 2022 and 2021, the estimated amount of employees' remuneration was NT$4,039 and NT$1,663, respectively, and the estimated amount of directors' and supervisors' remuneration was NT$12,118 and NT$4,988, respectively; the aforesaid amounts were recognized as payroll expenses.

For the year ended December 31, 2022, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were

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NT$4,039 and $12,118, respectively. The employees' remuneration will be distributed in the form of cash.

The employees' remuneration, NT$1,663, and directors' and supervisors' remuneration, NT$4,988, for the year ended December 31, 2021 that had been resolved by the Board of Directors were the same as the amounts recognized in the financial statements for the year then ended.

Information regarding employees' remuneration and directors' and supervisors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

(XX) Income tax

Tax expense

Components of tax expense:

Current income tax: Income tax generated in the current period Additional tax on unappropriated retained earnings Underestimate provision of previous year’s income tax Total current income tax liabilities Deferred tax : The origination and reversal of temporary differences Tax expense Tax expense and accounting profit Net profit before tax is calculated as income tax at the statutory tax rate Expenses that should be excluded according to tax laws Income exempt from taxation according to tax laws Tax effects of temporary differences Additional tax on unappropriated retained earnings Underestimate provision of previous year’s income tax Tax expense	2022 $ 70,459 3,128 1,899 75,486 ( 8,069) $ 67,417 2022	2021
		$ 47,102 7,058 893 55,053 ( 17,638) $ 37,415 2021
	$ 77,558 806 ( 1,220) ( 14,754) 3,128 1,899 $ 67,417	$ 31,928 566 ( 1,159) ( 1,871) 7,058 893 $ 37,415

Tax expense and accounting profit
The amount of deferred tax assets that arise from temporary differences from the taxable

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financial assets are set out below:

January1 $ 169 653 - 19,948 20,770 - $ 20,770	2022	2022
	Recognized in profit or loss	Recognized in other comprehensive	December31
	$ 495 $ - 1,749 - 9,547 - - - 11,791 - ( 3,722) - $ 8,069 $- 2021		$ 664 2,402 9,547 19,948 32,561 ( 3,722) $ 28,839
January 1	Recognized in profit or loss	Recognized in other comprehensive	December 31
$ 997 2,135 - $ 3,132	($ 828) ( 1,482) 19,948 $ 17,638	$ - - - $-	$ 169 653 19,948 $ 20,770

The amounts of deductible temporary differences not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31, 2022	December 31, 2021
	$ 35,394	$ 109,139

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The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2020.

(XXI) Earnings Per Share

	2022
After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings pershare (NT$)
$ 320,372 - $ 320,372	96,499 149		$ 3.32 $ 3.31
	96,648
	2021
After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
$ 122,224 - $ 122,224	96,499 71		$ 1.27 $ 1.27
	96,570

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(XXII) Changes in liabilities from financing activities

	2022
Short-termborrowings	Leaseliabilities	Total liabilities from financing activities
	$ 3,135 ( 4,178) 12,281 $ 11,238 2021	$ 229,975 ( 231,018) 12,281 $ 11,238
Short-termborrowings	Leaseliabilities	Total liabilities from financing activities $ 406,660 ( 176,685) $ 229,975
$ 402,027 ( 175,187) $ 226,840	$ 4,633 ( 1,498) $ 3,135

VII. Related Party Transactions

(I) Parent company and the ultimate controller

The Company is controlled by Yicheng International Development Co., Ltd. (incorporated in the Republic of China), which owns 29.57% of the shares of the Company. The rest is held by the public. The ultimate controller of the Company is the Colorful Group.

(II) Name of related party and relationship with the Group

Name of related party Colorful Technology Co, Ltd (Colorful)

Shenzhen Colorful Yugong Technology and Development Co., Ltd.(“Yugong”) Sitonholy (Tianjin) Technology Co., Ltd.(“Tianjin Sitonholy”) uSenlight Corporation (“uSen”)

Relationship with the Company

100% reinvestment business by Colorful Group The same person in charge as the Colorful Group Subsidiaries of the Company Associates

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(III) Significant transactions with related parties

Operating Revenue

Sales of goods: Colorful	2022 $ 2,092,517	2021
		$ 2,178,925

The Company's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different transaction object.

Purchases

Product purchase: Colorful	2022 $ 3,776	2022		2021
			$	505

The Company's transaction prices of purchases to related parties are not significantly different from those of the general manufacturers.

Accounts receivable

Colorful Less: Loss allowance	December 31, 2022 $ 525,778 ( 210) $ 525,568	December 31, 2021 $ 737,095 ( 295) $ 736,800

Receivables from related parties mainly arise from sales transactions. Payment for sales transactions is made in accordance with the payment terms after the date of sale. The receivables are unsecured and not interest-bearing.

4. Accounts payable

Colorful	December 31, 2022 $-	December 31, 2021 $ 335

The payables to related parties mainly arise from purchases, which are due 30 days after the purchase date. The payables are non-interest bearing.

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5. Operating expenses

Subsidiaries Jinghong	2022	2021
	$ 9,845	$ 9,050

The Company has commissioned a subsidiary to assist the Company in providing technical assistance such as market research and after-sales services and testing and business expansion. Expenses incurred in the aforementioned transactions shall be recorded in the operating expenses. The amounts not yet paid as of December 31, 2022 and 2021 were NT$1,595 and NT3,054, respectively, and recognized as "other payables."

6. Advertising expense

After the launch of the products jointly developed by the Company and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2022 and 2021 were NT$10,333 and NT$9,041, respectively; the amounts not yet paid as of December 31, 2022 and 2021 were NT$5,899 and NT$5,951, respectively, and recognized as "other payables."

7. Endorsements and guarantees made by related parties

Subsidiaries Tianjin Sitonholy Beijing Sitonholy	December 31, 2022 $ 79,344 35,264 $ 114,608	December 31, 2021
		$ 56,472 - $ 56,472

(IV) Key management compensation information

Wages and short-term employee benefits	2022	2021
	$ 17,174	$ 10,594

VIII. Pledged Assets

The Company's assets pledged as collateral are as follows:

Assets title Financial assets measured at amortized cost - current	Bookvalue	Bookvalue	Purpose ofcollateral
	December31,2022	December31,2021
	$ 4,621	$ 33,847	Balance of short-term borrowings

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IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments

As of December 31, 2022, the Company's guaranteed letter of credit for the purchase was US$1,500 thousand.
As of December 31, 2022, the Company issued a promissory note totaling NT$100,000 for the purchase of goods as a guarantee for the purchase of loan claims.

X. Significant Disaster Loss

None.

XI. Significant Events after the End of the Financial Reporting Period

The company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change of paid in capital on January 9, 2023.Please refer to Note VI (XII) for details.

XII. Others

(I) Capital management

The Company's objectives in capital management are to safeguard its ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(II) Financial instruments

Category of financial instruments

Financial assets Cash Accounts receivable (including related parties) Financial assets measured at amortized cost - current Refundable deposits (other non-current assets) Financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Lease liabilities	December 31, 2022 $ 601,127 716,082 4,621 756 $ 1,322,586 $ - 100,675 74,227 $ 174,902 $ 11,238	December 31, 2021 $ 353,911 1,071,999 33,847 5 $ 1,459,762 $ 226,840 353,456 57,771 $ 638,067 $ 3,135

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Risk management policies
(1) The Company's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, The risk management is carried out by the Company's finance department according to the policies approved by the Board of Directors.and price risk), credit risk, and liquidity risk.
(2) The risk management is carried out by the Company's finance department according to the policies approved by the Board of Directors. The Company's finance department identifies, evaluates and hedges financial risks in close cooperation with the Company's internal operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.
The nature and degrees of significant financial risks
(1) Market risk

Exchange rate risk

A. The Company is a multinational operation and is exposed to exchange rate risk, which is mainly denominated in USD and CNY. he related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
B. Business of the Company is involved in a number of non-functional currency (the functional currency of the Company is NTD) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

December31,2022	December31,2022
Foreign currency($ thousands)	Exchange rate	Carrying amount (NT)
$ 42,892 $ 118,472 $ 3,197	30.710 4.439 30.710	$ 1,317,213 $ 525,897 $ 98,180

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December 31, 2021 Foreign currency($ thousands) Exchange rate Carrying amount (NT) (Foreign currency: functional currency) Financial assets Monetary items USD : NT $ 52,489 27.680 $ 1,452,896 Non-monetary items Investments using equity method CNY : NT $ 128,416 4.344 $ 557,839 Financial liabilities Monetary items USD NT $ 19,198 27.680 $ 531,401 C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange profits (losses) (including realized and unrealized) which amounted to NT$99,185 and (NT$19,710), respectively, for the years ended December 31, 2022 and 2021. D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows: 2022 Sensitivity analysis (Foreign currency: functional currency) Degree of fluctuation Impact on profit and loss Impact on other comprehensive income (loss) Financial assets Monetary items USD: NT 1% $ 13,172 $ - Non-monetary items Investments using equity method CNY: NT 1% $ - $ 5,259 Financial liabilities Monetary items USD: NT 1% $ 982 $ -	December 31, 2021 Foreign currency($ thousands) Exchange rate Carrying amount (NT) (Foreign currency: functional currency) Financial assets Monetary items USD : NT $ 52,489 27.680 $ 1,452,896 Non-monetary items Investments using equity method CNY : NT $ 128,416 4.344 $ 557,839 Financial liabilities Monetary items USD NT $ 19,198 27.680 $ 531,401 C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange profits (losses) (including realized and unrealized) which amounted to NT$99,185 and (NT$19,710), respectively, for the years ended December 31, 2022 and 2021. D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows: 2022 Sensitivity analysis (Foreign currency: functional currency) Degree of fluctuation Impact on profit and loss Impact on other comprehensive income (loss) Financial assets Monetary items USD: NT 1% $ 13,172 $ - Non-monetary items Investments using equity method CNY: NT 1% $ - $ 5,259 Financial liabilities Monetary items USD: NT 1% $ 982 $ -	December 31, 2021 Foreign currency($ thousands) Exchange rate Carrying amount (NT) (Foreign currency: functional currency) Financial assets Monetary items USD : NT $ 52,489 27.680 $ 1,452,896 Non-monetary items Investments using equity method CNY : NT $ 128,416 4.344 $ 557,839 Financial liabilities Monetary items USD NT $ 19,198 27.680 $ 531,401 C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange profits (losses) (including realized and unrealized) which amounted to NT$99,185 and (NT$19,710), respectively, for the years ended December 31, 2022 and 2021. D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows: 2022 Sensitivity analysis (Foreign currency: functional currency) Degree of fluctuation Impact on profit and loss Impact on other comprehensive income (loss) Financial assets Monetary items USD: NT 1% $ 13,172 $ - Non-monetary items Investments using equity method CNY: NT 1% $ - $ 5,259 Financial liabilities Monetary items USD: NT 1% $ 982 $ -
	Sensitivity analysis
Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
1% 1% 1%	$ 13,172 $ - $ 982	$ - $ 5,259 $ -

C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange profits (losses) (including realized and unrealized), which amounted to NT$99,185 and (NT$19,710), respectively, for the years ended December 31, 2022 and 2021.
D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

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	2021	2021
	Sensitivity analysis
Degree of fluctuation	Impact on profit andloss	Impact on other comprehensive income (loss)
1% 1% 1%	$ 14,529 $ - $ 5,314	$ - $ 5,578 $ -

Price risk

A. The Company's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Company diversifies its portfolio with its diversification method based on limits set by the Company.
B. The Company's equity instruments issued by the Company are mainly invested in equity instruments issued by the domestic companies, which are affected by the uncertainty of the future value of the investment underlying the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, other comprehensive income for the years ended December 31, 2022 and 2021 will increase or decrease by NT$1,424 and NT$2,005, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

A. The Company's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Company to cash flow interest rate risk. For the years ended December 31, 2022 and 2021, the Company's borrowings issued at variable rates were mainly denominated in USD.
B. The Company's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Company is exposed to the risk of changes in future market interest rates.
C. If the USD borrowing interest rate increases/decreases by 1%, with all other variables held constant, profit before tax for the years ended December 31, 2022

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and 2021 will decrease or increase by NT$0 and NT$1,815, respectively. Changes in interest expense mainly result from floating-rate borrowings.

(2) Credit risk
A. The Company's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment and debt instruments classified as amortized cost being measured based on contract cash flows.
B. The Company manages their credit risk taking into consideration the Company's concern. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. For credit policies established internally, the individual operating entities within the Company shall undergo management and credit risk analysis before setting the terms and proposing the shipment terms and conditions for each new customer. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based on internal or external ratings and regularly monitored by the Board of Directors.
C. The Company adopts IFRS 9 to make the following assumptions as to whether the credit risk on financial instruments since initial recognition has increased by the following:
- (A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.
- (B) There are actual or expected significant changes in external credit ratings of financial instruments.
D. The Company adopts IFRS 9 to make assumptions that if the contract amount is overdue for more than 90 days in accordance with the agreed payment terms, it is regarded that a default has taken place.
E. The Company will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the simplified method to estimate the expected credit loss based on the preparation matrix.
F. The Company conducts individual assessments for defaulted accounts receivable and recognizes 10% to 30% allowance loss, while the remainder is estimated based on our credit conditions and forward-looking considerations to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for accounts receivable by the said loss rate. The

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provision matrix as of December 31, 2022 and 2021 is as follows:

December 31, 2022 Expected loss rate Total book value Loss allowance December 31, 2021 Expected loss rate Total book value Loss allowance	Individual 30% $ 22,316 $ 6,695 Individual 10% $ 68,118 $ 8,704	Not overdue 0.04% $ 700,741 $ 280 Not overdue 0.04% $ 1,013,008 $ 423	Total
			$ 723,057
			$ 6,975
			Total
			$ 1,081,126
			$ 9,127

G. The statement of allowance loss for accounts receivable of the Company using simplified approach is as follows:

January 1 Impairment loss ( reversal) December 31	2022	2021
	Accounts receivable	Accounts receivable
	$ 9,127 ( 2,152)	$ 447 8,680
	$ 6,975	$ 9,127

(3) Liquidity risk
A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements predict to ensure that it has sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.
B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in interestbearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.
C. The following tables detail the Company's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual

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maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

December 31, 2022 Non-derivative financial liabilities

Lease liabilities

Within one year Within one-two years Within two-five years

$ 5,902 $ 5,714 $ -

December 31, 2021 Non-derivative financial liabilities Lease liabilities

Within one year Within one-two years Within two-five years $ 1,617 $ 1,616 $ -

Except as stated above, the Company's non-derivative financial liabilities are due within one year.

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in level 1.
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
- Level 3: Unobservable inputs for the asset or liability. The Company's investment in equity instruments without active market is included.
For financial instruments not measured at fair value, including cash, accounts receivable (including related parties), short-term borrowings, accounts payable, and other payables, their carrying amounts are a reasonable approximation of their fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(1) The Company classifies its assets and liabilities according to the nature of assets and liabilities as follows:

181

December 31, 2022 Assets Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities Total December 31, 2021 Assets Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 $ 127,033 $ 127,033 Level 1 $ 185,135 $ 185,135	Level 2	Level 3	Total
		$- $- Level 2	$ 15,350 $ 15,350 Level3	$ 142,383 $ 142,383 Total
		$- $-	$ 15,350 $ 15,350	$ 200,485 $ 200,485

(2) Methods and assumptions the Company used to measure the fair value are as follow:
A. The instruments that the Company uses market-quoted prices as their fair values (i.e., Level 1) are listed below by characteristics:

Shares of publicly quoted entity

Quoted market price

Closing market prices

B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters commercial paper interest rate).
C. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company's financial and nonfinancial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Company's fair value evaluation model management policy and

182

related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.

D. The Company absorbs the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counterparties and the credit quality of the Company.
For the years ended December 31, 2022, and 2021, there were no transfers between Level 1 and Level 2.
The following chart indicates the movement of Level 3 for the years ended December 31, 2022, and 2021:

January 1 (i.e. December 31)	2022	2021
	Equity Instruments	Equity Instruments
	$ 15,350	$ 15,350

For the years ended December 31, 2022, and 2021, there were no transfers into or out of Level 3.
The finance department of the Company is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable, and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model, and making any other necessary adjustments to the fair value.
Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

183

Fair value as of December 31, 2022 Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350 Fair value as of December 31, 2021 Non-derivative equity instruments Shares of non-publicly quoted entity $ 15,350	Fair value as of December 31, 2022	Valuation technique	Significant unobservable input values	Relationship between input value and fair value
		Market price method Valuation technique	Lack of market liquidity discount and expected volatility of equity value Significant unobservable input values	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values. Relationship between input value and fair value
		Market price method	Lack of market liquidity discount and expected volatility of equity value	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values.

The Company carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

December 31, 2022

December 31, 2022			December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
Recognizedinothercomprehensiveincomerecognized Input value Changes Favorable changes Adverse changes Financial assets Equity Instruments Lack of market liquidity discount and expected volatility of equity value ±1% $ 154 $ 154 December31,2021 Othercomprehensiveincomerecognized Input value Changes Favorable changes Adverse changes Financial assets Equity Instruments Lack of market liquidity discount and expected volatility of equity value ±1% $ 154 $ 154	Input value	Changes	Recognizedinothercomprehensiveincomerecognized
				Favorable changes		Adverse changes
	Lack of market liquidity discount and expected volatility of equity value ±1% Input value		$	154 Changes	$ 154 December31,2021

					Othercomprehensiveincomerecognized
					Favorable changes		Adverse changes
				±1%	$ 154		$ 154

184

XIII. Supplementary Disclosures

(I) Information on significant transactions

Capital loans to others: None.
Endorsements and guarantees: Please refer to Table 1.
Marketable securities held at the end of the period (excluding investment in subsidiaries): Please refer to Table 2.
Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: Please refer to Table 3.
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 5.
Derivative transactions: None.
Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 6.

(II) Information on investees

Information on investees (not including investees in Mainland China): Please refer to Table 7.

(III) Information on investments in Mainland China

Basic information: Please refer to Table 8.
Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 9.

(IV) Information on Major Shareholders

Information on major shareholders: Please refer to Table 10.

XIV. Segment information

Exempt from disclosure.

185

Cash and cash equivalents at end of period Chaintech Technology Corporation Endorsements and Guarantees

Table 1

For the Year Ended December 31, 2022

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Endorser/Guarantor	Subject ofendorsements and	guarantees	Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsements and guarantees for the period (Note 4)	Balance of endorsements and guarantees at end of period	Endorsements and guarantees used	Endorsements and guarantees secured with collateral	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsements and guarantees for subsidiary (Note 5)	Subsidiary providing endorsements and guarantees for parent (Note 5)	Endorsements and guarantees involving Mainland China (Note 5)	Remarks
		Company name	Relationship (Note 2)
0 Cash and cash equivalents at end of period Chaintech Technology Corporation 0 Cash and cash equivalents at end of period Chaintech Technology Corporation Notes 1: Explanations are as follows:		Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,010,596 1,010,596	$ 79,344 35,264	$ 79,344 35,264	$ 79,344 35,264	$ - -	3.93% $ 1,010,596 1.74% 1,010,596		Y Y	N N	Y Y

(1) The issuer shall fills in 0.

(2) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.

Notes 2: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.

(1) Companies with which the Group conducts business;

(2) Subsidiaries in which the Group directly holds more than 50% of their common shares;

(3) Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;

(4) The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;

(5) Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or

(6) Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.

Notes 5: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

186

Table 2

Cash and cash equivalents at end of period Chaintech Technology Corporation

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures) As of December 31, 2022

Unit: NT$ thousands

(Unless specified otherwise)

Company holding securities	Type and name of securities	Relationship with the issuer of securities	Accounting item		End of period	End of period		Remarks
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Cash and cash equivalents at end of period Chaintech Technology Corporation Cash and cash equivalents at end of period Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd.	Stocks_APAQ Technology Co., Ltd. Stocks_CloudMile Co., Ltd. (Cayman Islands) Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product Beneficiary certificates_ ICBC “Tianlibao” No. 2” net- value wealth management product Beneficiary certificates _ Everbright Wealth Management Co.,Ltd. ""Sunshine Green Institution Profit" " wealth management product Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product	- - - - - -	Non-current financial assets at fair value through other comprehensive income 3,050,000 Non-current financial assets at fair value through other comprehensive income 510,204 Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current - Financial asset at fair value through profit and loss - current -		$ 127,033 15,350 110,200 1,763 1,543 1,984	3.43% 1.81% - - - -	$ 127,033 15,350 110,200 1,763 1,543 1,984	- - - - - -

187

Cash and cash equivalents at end of period Chaintech Technology Corporation

Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital

For the Year Ended December 31, 2022

Unit: NT$ thousands (Unless specified otherwise)


Table 3 Buying and selling company	Type and name of securities (Note 1)	Accounting item	Counterparty (Note 2)	Relationship (Note 2)	Beginning of period		Purchase (Note 3) (Note 4)				Sell		Unit: NT$ thousands (Unless specified otherwise) End of period
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book cost	Gain/ Loss on Disposal	Number of shares	Amount
Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	CITIC Wealth Management Happy Win Steady Daily Interest No. 2 wealth management product Industrial Bank jinxueqiu tianli express net-value wealth management product	Financial asset at fair value through profit and loss - current Financial asset at fair value through profit and loss - current	- -	- -	- $ - - 43,440		- $ 215,992 - 198,360		- $ - $ 215,992 $ 498 - - 132,240 1,197				- $ - - 110,200

Notes 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Notes 2: Investors who use the equity method for securities accounting shall fill in these two columns, and the remaining fields may not be filled in. Notes 3: The accumulated amount of purchase or disposal shall be calculated separately based on market price, whether it reaches NT$300 million or 20% of the paid-in capital. Notes 4: The purchase price includes contingent consideration.

188

Cash and cash equivalents at end of period Chaintech Technology Corporation

Purchases and Sales with Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

For the Year Ended December 31, 2022

Table 4 Company	Counterparty	Relations		Transaction	Transaction		Unusual trade conditions and its reasons	Unusual trade conditions and its reasons	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Remarks Balance to total notes and accounts receivable (payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	to total notes and accounts receivable (payable)
Cash and cash equivalents at end of period Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 2,092,517	33.76%	OA 45`～`125days	N/A	N/A	$ 525,778	51.02%	-

189

Cash and cash equivalents at end of period Chaintech Technology Corporation

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

As of December 31, 2022

Table 5 Company	Counterparty	Relations	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Unit: NT$ thousands (Unless specified otherwise) Period of receivables from related parties Amount received back later Allowances for losses	Unit: NT$ thousands (Unless specified otherwise) Period of receivables from related parties Amount received back later Allowances for losses
					Amount	Handling method
Cash and cash equivalents at end of period Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group Accounts receivable $ 525,778		3.31	$ -	-	$ 409,682	($ 210)

190

Cash and cash equivalents at end of period Chaintech Technology Corporation

Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof

For the Year Ended December 31, 2022

Table 6

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Company	Counterparty	Relationship with counterparty (Note 2)		Transaction	status
				Accounting item	Amount	Transaction terms	Percentage of consolidated total revenue or total assets
0 0 1	Cash and cash equivalents at end of period Chaintech Technology Corporation Cash and cash equivalents at end of period Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd.	Shenzhen Jinghong Digital R&D Service Co.,Ltd Shenzhen Jinghong Digital R&D Service Co.,Ltd Baotou Yihui Information Technology Co., Ltd.	Parent company to a subsidiary Parent company to a subsidiary Sub-subsidiary company to sub- subsidiary company	Operating expenses Other payables Sales revenue	$ 9,845 1,595 11,238	Agreed by both parties Agreed by both parties Agreed by both parties	0.16% 0.05% 0.18%

Notes 1: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction:

(1)The parent company is coded 0.

(2)The subsidiaries are coded from "1" in the order presented in the table above.

Notes 2: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

191

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investees (Not Including Investees in Mainland China)

For the Year Ended December 31, 2022

Table 7

Unit: NT$ thousands

(Unless specified otherwise)

Investor	Investee company	Location	Main businesses and products	The initial amo	unt of investment	Shareholding at end of period	Shareholding at end of period	Shareholding at end of period	Profit or loss of investee for the period	Gain (loss) on investment for the period	Remarks
				December 31, 2022	December 31, 2021	Number of shares	Percentage	Carrying amount
Cash and cash equivalents at end of period Chaintech Technology Corporation	uSenlight Corporation	The Republic of China	Electronics, computers, and peripherals	$ 150,000	$ 150,000	1,250,000	6.13%	$ -	$ -	$ -	Note 1

Notes 1: uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on

May 20, 2022. The company is currently undergoing dissolution procedures.

192

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investments in Mainland China - Basic Information

For the Year Ended December 31, 2022

Table 8 Investee in Mainland China	Main businesses and products	Actual paid-in capital	Method of investment (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered Accumulated investment amount remitted from Taiwan at end of period Remittance Recovery	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Unit: NT$ thousands (Unless specified otherwise) Carrying amount of investments at end of period Gain (loss) on investment recovered as of the period Remarks	Unit: NT$ thousands (Unless specified otherwise) Carrying amount of investments at end of period Gain (loss) on investment recovered as of the period Remarks
Shenzhen Jinghong Digital R&D Service Co.,Ltd Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen)Technology Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Electronic products, communication products, computer software and hardware, data processing, storage and support services Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts	$ 499,065 110,630 36,824 50,643 6,527	1 3 3 3 3	$ 499,065 - - - -	$ - $ - $ 499,065 - - - - - - - - - - - -	$ 44,639 87,943 3,336 ( 5,587) -	100 51 51 51 51	$ 44,639 44,851 1,701 ( 2,849) -	$ 610,557 636,100 51,279 20,249 6,527	$ - - - - - - - - - -

Notes 1: The method of investment in Mainland China includes the three following types:

(1) Direct investment

(2) Investment in Mainland China through a company set up in a third area; or

(3) Others: Investment in Mainland China through an reinvestment in Mainland China.

Notes 2: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

193

Company name	Accumulated investment amount remitted from Taiwan to Mainland China at end of period	Investment amount authorized by Investment Commission, M.O.E.A.	Ceiling on investment in Mainland China regulated by Investment Commission, M.O.E.A.
Cash and cash equivalents at end of period Chaintech Technology Corporation	$ 499,065	$ 544,794	$ 1,384,231

Notes 3: The Group's investment in Shenzhen Jinghong Digital R&D Service Co., Ltd., which was approved by the Investment Commission, Ministry of Economic Affairs on November 26, 2015, at a total amount of US$5 million, was remitted in full. Notes 4: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

194

Cash and cash equivalents at end of period Chaintech Technology Corporation

Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area

For the Year Ended December 31, 2022

Table 9

Unit: NT$ thousands

(Unless specified otherwise)

Investee in Mainland China	Sales (purchases)	Sales (purchases)	Property transactions	Property transactions	Accounts receivable (payable)	Accounts receivable (payable)	Endorsements and guarantees or collateral provided	Endorsements and guarantees or collateral provided		Financing			Others
	Amount	%	Amount	%	Balance	%	Balance at end of period	Purpose	Highest balance for the period	Balance at end of period	Interest range	Interest for the period
Shenzhen Jinghong Digital R&D Service Co.,Ltd $ - Sitonholy (Tianjin) Technology Co., Ltd. - Beijing Sitonholy Technology Co., Ltd. -		- - -	$ - - -	- - -	($ 1,595) - -	- - -	$ - 79,344 35,264	- Supplier credit limit utilization Supplier credit limit utilization	$ - - -	$ - - -	- - -	$ - - -	Operating expenses $9,845 - -

195

Cash and cash equivalents at end of period Chaintech Technology Corporation Information on Major Shareholders

As of December 31, 2022

Table 10

Name of major shareholders	Shareholding	Shareholding
	Number of shares	Shareholding ratio
Yeland International Development Ltd. Masterlink Securities (Hong Kong) Corporation Limited - Client A/C at CTBC Bank Li Sai-lung	28,532,080 8,444,841 6,000,000	29.57% 8.75% 6.22%

Notes 1: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.

Notes 2: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity, please refer to the Market Observation Post System.

Chaintech Technology Corporation Statement of Cash

As of December 31, 2022

Unit: NT$ thousands

	Statement of Cash As of December 31, 2022
Statement 1 Item	Summary	Un	it: NT$ thousands Amount
Cash on hand and petty cash Cheque deposits and demand deposits `－`NT$ `－`Foreign currency deposits	USD 19,184,458.92, exchange rate 30.71 HKD 169,664.77, exchange rate 3.938 CNY 17,568.63, exchange rate 4.4080		$ 62 11,164 589,156 668 77 $ 601,127

197

Statement 2 Title		Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Chaintech Technology Corporation Statement of Changes in Non-current Financial Assets at Fair Value through Other Comprehensive Income From January 1,2022 to December 31,2022 Beginning of period Increase for the period Decrease for the period	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value
		Beginning of period		From January 1,2022 to December 31,2022 Increase for the period Decrease for
					Increase for the period
	Number of shares		Fair value		Number of shares	Amount	Number of shares		Amount	Number of shares		Fair value
Stocks of APAQ Technology Co., Ltd. Stocks of CloudMile Co., Ltd. (Cayman Islands) Adjustment	3,050,000 510,204		$ 169,634 15,350 184,984 15,501 $ 200,485		- -	$ - - - - $ -	- -	$ - - - ( 58,102) ( $58,102)		3,050,000 510,204	$ 169,634 15,350 184,984 ( 42,601) $ 142,383		None None

Explanation:

List separately by name and type of financial instrument.
For financial assets invested in debt instruments measured at fair value through other comprehensive income, the column of cumulative impairment shall be filled in. If there is no cumulative impairment, please fill in 0.
For financial assets invested in equity instruments measured at fair value through other comprehensive income, please fill in the column of cumulative impairment, which is not applicable.

198

Chaintech Technology Corporation Statement of Accounts Receivable (Including Related Parties) As of December 31, 2022

Unit: NT$ thousands

			As of December 31, 2022
Statement 3 Customer name:	Summary		Amount	Unit: NT$ thousands Remarks
Non-related parties 16L002 16C002 16N003 10F001 Others Less: Loss allowance Related parties Colorful Technology Co.,Ltd Less: Loss allowance		$ 57,697 63,297 54,776 21,300 209 197,279 ( 6,765)		The balance of each individual customer does not exceed 5% of the balance of this account
		190,514 525,778 ( 210)
			525,568 $ 716,082

199

Chaintech Technology Corporation Statement of Inventories As of December 31, 2022

Unit: NT$ thousands


Statement 4 Item		Amount		Unit: NT$ thousands Remarks
	Costs		Market price (note)
Raw materials Work in progress Finished good Less: Allowance for price decline in inventories	$ 9,792 107,801 5,535 123,128 ( 4,920) $ 118,208		$ 9,366 125,986 1,386 $ 136,738	Measured at replacement cost Measured at net realisable value Measured at net realisable value

200

Chaintech Technology Corporation

Statement of Changes in Investments Accounted for Using Equity Method From January 1,2022 to December 31,2022

Statement 5 Title	Balance at beginning of the period	Balance at beginning of the period	Increase for the period	Increase for the period	Decrease for the period	Decrease for the period	Gain (loss) on investment for the period	Others(Note 1)	Balance at end of	Balance at end of	period	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total	Unit: NT$ thousands Market price or net equity Situation of collateral or pledge provided Unit price($) Total
	Number of shares	Book value	Number of shares	Amount	Number of shares	Amount			Number of shares	Equity %	Book value	Unit price($)	Total
Shenzhen Jinghong Digital R&D Service Co.,Ltd uSenlight Corporation ( Note 2)	- 5,000,000	$ 557,840 -	- -	$ - -	- -	$ - -	$ 44,639 -	$ 8,078 -	- -	100% 6.13%	$ 610,557 -	$ - -	$ 610,557 -	None None
		$ 557,840		$ -		$ -	$ 44,639	$ 8,078			$ 610,557		$ 610,557

Notes 1: The components are as follows

(1) Share of other comprehensive income of subsidiaries accounted for using equity method

Notes 2: The company was dissolved and registered on May 20, 2022, and is currently undergoing dissolution procedures.

201

Chaintech Technology Corporation

	Chaintech Technology Corporation	Chaintech Technology Corporation
Statement 6 Customer name	Statement of Accounts Payable (Including Related Parties) As of December 31, 2022 Summary Amount		Unit: NT$ thousands Remarks

Unrelated parties 002886 005507 002884		$ 57,567 37,832 5,276 $ 100,675

202

Chaintech Technology Corporation Statement of Operating Revenue From January 1,2022 to December 31,2022

Statement 7

Item Operating Revenue: Computer peripherals Less: Sales returns and allowances Net operating revenue

Unit: NT$ thousands

Quantity	Amount	Remarks
4,456 thousand pcs	$ 3,993,003 ( 92,559) $ 3,900,444

203

Chaintech Technology Corporation Statement of Operating Costs From January 1,2022 to December 31,2022

Statement 8
Item
Raw materials and materials at beginning of period
Add: Net amount of materials purchased in the current period
Less: Raw materials sold
Raw materials and materials at end of period
Raw materials consumed in this period (1)
Manufacturing cost - processing cost (2)
Manufacturing expenses - depreciation (3)
Total manufacturing costs (1)+(2)+(3)
Add: Work in progress at beginning of period
Less: Work in progress at end of period
Finished good cost
Add: Finished good at beginning of period
Purchases in this period
Less: Finished good at end of period
Reclassified operating expenses
Sales cost of finished good
Inventory falling price loss
Raw materials sold
Total operating costs

Unit: NT$ thousands
Amount
$ 84,616
2,259,478
(
543,431)
(
9,792)
1,790,871
53,359
9,530
1,853,760
73,637
(
107,801)
1,819,596
63,305
1,142,593
(
5,535)
(
542)
3,019,417
2,476
543,431
$ 3,565,324

204

Chaintech Technology Corporation Statement of Operating Expenses From January 1,2022 to December 31,2022

Unit: NT$ thousands


Statement 9 Item	Selling expenses	Administrative expenses	R&Dspendings	Unit: NT$ thousands Total
Payroll expenses Advertising expense Services expenses Royalty Shipping expenses Depreciation Miscellaneous purchases Other expenses (Note)	$ 10,498 11,933 12,306 4,025 3,753 1,860 12 4,345	$ 21,070 - 5,643 - 4 495 120 4,823	$ 7,949 18 - 516 1 3,156 958 2,486	$ 39,517 11,951 17,949 4,541 3,758 5,511 1,090 11,654
	$ 48,732	$3 2,155	$ 15,084	$ 95,971

Note: The amount of each individual item does not exceed 5% of the total amount of this account

205

Unit: NT$ thousands

Chaintech Technology Corporation Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function From January 1,2022 to December 31,2022

Statement 10

Statement 10						Unit: NT$ thousands
Function category Nature		2022			2021
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefit expenses
Payroll expenses	$ -	$ 26,179	$ 26,179	$ -	$ 19,161	$ 19,161
Labor/health insurance expenses	-	1,793	1,793	-	1,545	1,545
Pension expenses	-	932	932	-	769	769
Directors' remuneration	-	12,406	12,406	-	5,271	5,271
Other employment expenses	-	2,811	2,811	-	2,888	2,888
Depreciation expenses	9,530	5,511	15,041	22,871	1,510	24,381
Amortization expenses	-	129	129	-	-	-

Notes:

The number of employees for the current and previous years is 22 and 23, respectively, with 3 and 4 directors who are not employees.
Companies whose stocks have been listed on the stock exchange or traded on the OTC market shall disclose the following information:
(1) The average employee benefit expenses for the current year is $1,669 (the total employee benefits minus directors' remuneration for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ).
- The average employee benefit expenses for the previous year is $1,282 (the total employee benefits minus directors' remuneration for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year).
(2) The average employee payroll expenses for the current year is $1,378 (the total employee payroll expenses for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ).
- The average employee payroll expenses for the previous year is $1,008(the total employee payroll expenses for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year ).
(3) The average adjusted change of employee payroll expenses is 36.81% ( average employee payroll expenses for the current year minus average employee payroll expenses for the previous year, divided by average employee payroll expenses for the previous year).
(4) There is an audit committee established in the current year, so there is no remuneration for supervisors. The remuneration for supervisors in the previous year was $450.
(5) The remuneration policy of the Company :

The remuneration policy for directors and managers of the Company is submitted to the Remuneration Committee for review in accordance with the provisions of the " Regulations Governing the Appointment and

Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange". The remuneration policy for managers mainly takes into account personal experience, performance, level of participation in company operations, value of contributions, and company performance; The remuneration policy for employees, directors, and supervisors shall be implemented in accordance with the company's articles of association for the year in which the company has earnings. Employee remuneration includes basic salary, various allowances, job bonuses, and other bonuses. The basic salary is determined based on their academic experience, professional skills, and job value, taking into account the salary level of their peers; The distribution of bonuses depends on the company's annual operating earnings and the achievement of departmental and individual performance.

206

Appendix II: Consolidated Financial Report for the Most Recent Year

Chaintech Technology Corporation and Subsidiaries

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies required to be included in the consolidated financial statements of affiliated enterprises under the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are all the same as enterprises required to be included in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries for the year ended December 31, 2022 as provided in the IFRS 10 Consolidated Financial Statements. In addition, relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has all been disclosed in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries. Consequently, no consolidated financial statements of affiliated enterprises are prepared separately.

Hereby declared by

Company Name: Chaintech Technology Corporation

Person in Charge: Kao, Shu-Jung

March 22, 2023

207

Independent Auditors' Report (112) Cai-Shen-Bao-Zi No. 22005375

To Chaintech Technology Corporation:

Audit Opinions

The independent auditors have audited the accompanying consolidated balance sheets of Chaintech Technology Corporation and subsidiaries (hereinafter referred to as "the Group") as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying consolidated financial statements, in all material respects, give a true and fair view of the consolidated financial position of the Group as of December 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the effective "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the Financial Supervisory Commission of the Republic of China (the "FSC").

Basis of Audit Opinion

We conduct the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountant and the GAAS of Republic of China. Our responsibilities under those standards are further described in the section of Responsibilities of Certified Public Accountants for Auditing the Consolidated Financial Statements. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

Key Audit Matters

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the consolidated financial statement of the Group for the year ended December 31, 2022. These matters are addressed in the context of our audit of the consolidated financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers, Taiwan

27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 110208, Taiwan

T: +886 (2) 2729 6666, F:+ 886 (2) 2729 6686, www.pwc.tw

208

Key audit matters for the consolidated financial statement of the Group for the year ended December 31, 2022 are stated as follows:

Sales revenue cut-off

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Notes IV (XXVII) to the consolidated financial statements. For the description of sales revenue, please refer to Note VI(XVII) to the consolidated financial statements.

The Group has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Group mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. Such revenue recognition generally involves a large number of manual operations. Considering that the volume of the shipments of the Group is large, and the amount of transaction before and after the financial date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Group. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.
Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Group determine the sales recognition when the customer receives the delivery of goods and the right of control is transferred.
Perform a closing test for sales revenue from delivery of warehouses for a certain period before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.
Make an written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

209

Intangible assets- Goodwill impairment

Description

As of December 31, 2022, the balance of intangible assets -goodwill was $160473. Please refer to Note IV(XVIII) for the accounting policy on impairment assessment of non-financial assets; Please refer to Note V(II) for the estimation and assumption uncertainty in assessment of impairment of nonfinancial assets; Please refer to Note VI (XI) for the explanation of the assessment of impairment of non-financial assets. To assess whether intangible assets-goodwill are impaired, the Group estimates the future cash flows based on the cash-generating units to which the intangible assets-goodwill belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the Group's assessment of the goodwill impairment of intangible assets as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.
Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.
Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

Other Matters – Parent Company Only Financial Statements

We have also audited the parent company only financial statements of Chaintech Technology Corporation for the years ended December 31, 2022 and 2021, for which we have issued the audit report with an unqualified opinion for reference.

210

Responsibility 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 effective "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the FSC, 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, the responsibility of management includes assessing the Group's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless management intends to liquidate the Group or terminate the business, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group's financial reporting process.

Responsibilities of Certified Public Accountants for Auditing 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 auditor's 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 of Republic of China will always detect a material misstatement when it exists. Misstatements may arise from fraud and error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the consolidated financial statements, it will be deemed as material.

As part of an audit in accordance with the Auditing Standards of Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also execute the following tasks:

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 that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies adopted by management and the reasonableness of the accounting estimates and related disclosures made accordingly.

211

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, determine whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements; or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or circumstances may cause the Group to no longer continue as a going concern.
Evaluate the overall expression, structure, and contents of the consolidated financial statements (including related notes) and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Group to express an opinion about the consolidated financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

212

Pricewaterhouse Coopers

Feng, Min-Chuan

Certified Public Accountants

Lin, Ya-Hui

==> picture [120 x 50] intentionally omitted <==

==> picture [120 x 49] intentionally omitted <==

Former Securities and Futures Bureau, Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Liu-Zi No. 0960038033

Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Shen-Zi No. 1070323061

March 22, 2022

213

Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets For the Years Ended December 31, 2022 and 2021

Assets	Notes VI(I) VI(II) VI(I) and VIII VI(IV) VI(IV) VI(IV) and VII VI(V) VI(VI) VIII VI(III) VI(VII) VI(VIII) VI(IX) VI(X) VI(XXIII)	December31,2022 Amount % $ 1,061,262 33 115,490 4 31,239 1 11,831 - 455,441 14 525,568 17 3,532 - 5,636 - 401,229 13 129,049 4 2,932 - 2,743,209 86 142,383 4 - - 20,490 1 39,528 1 181,275 6 32,561 1 46,876 1 463,113 14 $ 3,206,322 100	Unit: NT$ thousands December31,2021 Amount % $ 692,998 20 64,204 2 33,847 1 - - 645,541 19 736,800 22 6,857 - - - 512,277 15 209,603 6 - - 2,902,127 85 200,485 6 - - 23,158 1 37,312 1 168,525 5 20,773 1 48,960 1 499,213 15 $ 3,401,340 100
		Amount $ 1,061,262 115,490 31,239 11,831 455,441 525,568 3,532 5,636 401,229 129,049 2,932 2,743,209 142,383 - 20,490 39,528 181,275 32,561 46,876 463,113 $ 3,206,322	Amount $ 692,998 64,204 33,847 - 645,541 736,800 6,857 - 512,277 209,603 - 2,902,127 200,485 - 23,158 37,312 168,525 20,773 48,960 499,213 $ 3,401,340
Current assets 1100 Cash and cash equivalents 1110 Financial asset at fair value through profit and loss - current 1136 Financial assets measured at amortized cost -current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets

(Continued)

214

	Chaintech Technology Corporation and Subsidiaries	Chaintech Technology Corporation and Subsidiaries	Chaintech Technology Corporation and Subsidiaries	Chaintech Technology Corporation and Subsidiaries	Chaintech Technology Corporation and Subsidiaries
			Consolidated	Balance Sheets
	For the Years Ended December 31, 2022 and 2021
								Unit: NT$ thousands
				December 31, 2022				December 31, 2021
	Liabilities and equity		Notes	Amount		%		Amount	%
	Current liabilities
2100	Short-term borrowings	VI(XII) and VIII		$	145,464		4 $	226,840		7
2130	Current contract liabilities	VI(XVII)			68,618		2	111,677		3
2150	Notes payable	VIII			115,737		4	-		-
2170	Accounts payable				324,143	10		773,163	23
2180	Accounts payable to related parties	VII			6,397		-	335		-
2200	Other payables	VI(XIII) and VII			120,380		4	119,526		4
2230	Current tax liabilities				73,462		2	54,318		2
2280	Current lease liabilities				21,326		1	14,421		-
2300	Other current liabilities	VI(XXV)			223		-	15,457		-
21XX	Total current liabilities				875,750	27		1,315,737	39
	Non-current liabilities
2570	Deferred tax liabilities	VI(XXIII)			3,722		-	-		-
2580	Non-current lease liabilities				19,181		1	23,464		1
2600	Other non-current liabilities				618		-	5,078		-
25XX	Total non-current liabilities				23,521		1	28,542		1
2XXX	Total liabilities				899,271	28		1,344,279	40
	Equity
	Equity attributable to owners of the
	parent
	Share capital	VI(XV)
3110	Ordinary shares				964,988	30		1,014,988	30
	Capital surplus
3200	Capital surplus				100		-	100		-
	Retained earnings	VI(XVI)
3310	Legal reserve				159,534		5	147,312		4
3320	Special reserve				29,249		1	39,701		1
3350	Unappropriated retained earnings				946,595	29		787,638	23
	Other equity interest
3400	Other equity interest			(	79,273) (		2 ) (	29,249 ) (		1 )
3500	Treasury shares	VI(XV)			-		- (	151,746 ) (		4 )
31XX	Total equity attributable to owners
	of the parent				2,021,193	63		1,808,744	53
36XX	Non-controlling interests				285,858		9	248,317		7
3XXX	Total equity				2,307,051	72		2,057,061	60
	Significant Contingent Liabilities and	IX
	Unrecognized Contract Commitments
	Significant Events after the End of the	XI
	Financial Reporting Period
3X2X	Total liabilities and equity			$	3,206,322	100 $		3,401,340	100

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Kao, Shu-Jung

Accounting Supervisor ： Lai, Yu-Nu

Manager ： Kao, Shu-Jung

215

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2022 and 2021

Item

Unit: NT$ thousands
(EPS in NT$)
2022
2021
Notes
Amount
%
Amount
%
VI(XVII) and
VII
$ 6,198,674
100
$ 6,518,064
100
VI(V)(XXI)
(XXII) and VII
(
5,575,814)(
90)(
5,841,667)(
90)
622,860
10
676,397
10
VI(XXI)
(XXII) and VII
(
131,223) (
2) (
174,123 ) (
3)
(
148,139) (
2) (
91,522 ) (
1)
(
33,798) (
1) (
20,980 )
-
XII(II)
4,386
- (
34,426)(
1)
(
308,774) (
5) (
321,051 ) (
5)
314,086
5
355,346
5
3,817
-
823
-
VI(XVIII)
17,166
-
10,777
-
VI(XIX)
103,653
2
(
117,225 ) (
2)
VI(XX)
(
7,838)
- (
5,724 )
-
VI(VII)
-
- (
35,808 )
-
116,798
2
(
147,157)(
2)
430,884
7
208,189
3
VI(XXIII)
(
67,419)(
1)(
45,445)
-
$ 363,465
6
$ 162,744
3

(Continued)

216

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2022 and 2021

Item

Unit: NT$ thousands
(EPS in NT$)
2022
2021
Notes
Amount
%
Amount
%
VI(III)
($ 58,102)(
1) $ 14,335
-
(
58,102)(
1)
14,335
-
11,629
- (
5,436)
-
11,629
- (
5,436)
-
($ 46,473)(
1) $ 8,899
-
$ 316,992
5
$ 171,643
3
$ 320,372
5
$ 122,224
2
43,093
1
40,520
1
$ 363,465
6
$ 162,744
3
$ 270,348
4
$ 132,677
2
46,644
1
38,966
1
$ 316,992
5
$ 171,643
3
VI(XIV)
$ 3.32
$ 1.27
$ 3.31
$ 1.27

Other comprehensive income,
net
Items that will not be
reclassified to profit or loss
8316
Unrealized valuation gain (loss)
on equity instruments measured
at fair value through other
comprehensive income
8310
Total amount of items that will
not be reclassified to profit or
loss
Items that may be reclassified
subsequently to profit or loss
8361
Exchange differences on
translation of financial
statements of foreign operation
8360
Total amount of items that may
be reclassified subsequently to
profit or loss
8300
Other comprehensive income,
net
8500
Total comprehensive income
(loss)
Net income attributable to:
8610
Owners of the parent
8620
Non-controlling interests
Total comprehensive income
attributable to:
8710
Owners of the parent
8720
Non-controlling interests
Earnings Per Share
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Kao, Shu-Jung Manager ： Kao, Shu-Jung

Accounting Supervisor ： Lai, Yu-Nu

217

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands

Notes				Equity att	ributable to owners of th	e parent	e parent		Total	Non-controlling interests	Total equity
	Ordinary shares $ 1,014,988 - - - - - - $ 1,014,988 $ 1,014,988 - - - - - - ( 50,000 ) - $ 964,988	Capital surplus- adopted Associates accounted for using equity method Equity of enterprise and joint venture changes in the net value		Retained earnings	Unappropriated retained earnings	Other equity interest Financial statements of foreign operations Exchange differences on translation Through other comprehensive income from financial assets measured at fair value Unrealized gains (losses) ($ 40,868 ) $ 1,166 - - ( 3,882 ) 14,335 ( 3,882 ) 14,335 - - - - - - ($ 44,750 ) $ 15,501 ($ 44,750 ) $ 15,501 - - 8,078 ( 58,102 ) 8,078 ( 58,102 ) - - - - - - - - - - ($ 36,672 ) ($ 42,601 )		Treasury shares
			Legal reserve	Special reserve		Financial statements of foreign operations Exchange differences on translation ($ 40,868 ) - ( 3,882 ) ( 3,882 ) - - - ($ 44,750 ) ($ 44,750 ) - 8,078 8,078 - - - - - ($ 36,672 )
VI(XVI) VI(XVI) VI(XV)		$ 100 - - - - - - $ 100 $ 100 - - - - - - - - $ 100	$ 132,984 - - - 14,328 - - $ 147,312 $ 147,312 - - - 12,222 - - - - $ 159,534	$ 97,541 - - - - ( 57,840 ) - $ 39,701 $ 39,701 - - - - ( 10,452 ) - - - $ 29,249	$ 670,152 122,224 - 122,224 ( 14,328 ) 57,840 ( 48,250 ) $ 787,638 $ 787,638 320,372 - 320,372 ( 12,222 ) 10,452 ( 57,899 ) ( 101,746 ) - $ 946,595		$ 1,166 - 14,335 14,335 - - - $ 15,501 $ 15,501 - ( 58,102 ) ( 58,102 ) - - - - - ($ 42,601 )	($ 151,746 ) - - - - - - ($ 151,746 ) ($ 151,746 ) - - - - - - 151,746 - $ -	$ 1,724,317 122,224 10,453 132,677 - - ( 48,250 ) $ 1,808,744 $ 1,808,744 320,372 ( 50,024 ) 270,348 - - ( 57,899 ) - - $ 2,021,193	$ 209,351 40,520 ( 1,554 ) 38,966 - - - $ 248,317 $ 248,317 43,093 3,551 46,644 - - - - ( 9,103 ) $ 285,858	$ 1,933,668 162,744 8,899 171,643 - - ( 48,250 ) $ 2,057,061 $ 2,057,061 363,465 ( 46,473 ) 316,992 - - ( 57,899 ) - ( 9,103 ) $ 2,307,051

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Manager Kao, Shu-Jung

Chairman: Kao, Shu-Jung

Accounting Supervisor: Lai, Yu-Nu

218

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

Cash flows from operating activities
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expenses

Depreciation expenses on right-of-use assets

Amortization expenses

Expected credit losses

Net gain on financial assets at fair value through
profit or loss

Interest expenses

Interest income
Dividend income

Share of loss of associates accounted for using
equity method

Loss on disposal of property, plant, and equipment
Impairment loss

Changes in operating assets and liabilities
Net changes in operating assets
Financial assets at fair value through profit or
loss
Notes receivable
Accounts receivable (including related parties)
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in operating liabilities
Contract liabilities
Notes payable
Accounts payable (including related parties)
Other payables
Other current liabilities
Other non-current liabilities
Cash flows generated from operations
Interest received
Dividends received
Interest paid
Income tax (paid) received
Net cash flows generated from operating
activities
Cash flows from investing activities
Net cash flows from acquisition of subsidiaries
Acquisition of property, plant, and equipment

Disposal proceeds of property, plant, and equipment
Decrease in current financial assets measured at
amortized cost
Acquisition of Intangible assets

Net cash flows generated from (used in)
investing activities
Cash flows from financing activities
Decrease in short-term borrowings

Increase (decrease) in guarantee deposits received

Repayments of lease liabilities

Cash dividends paid

Cash dividends paid of consolidated subsidiaries
Net cash flows used in financing activities
Effect of exchange rate changes
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Unit: NT$ thousands
Notes
January 1 to
December 31,2022
January 1 to
December 31,2021
$ 430,884 $ 208,189
VI(VIII)(XXI)
16,078
24,913
VI(IX)(XXI)
19,444
10,638
VI(X)(XXI)
3,687
10,281
XII(II)
(
4,386 )
34,426
VI(II)(XIX)
(
2,248 ) (
3,200 )
VI(XX)
7,838
5,724
(
3,817 ) (
823 )
VI(XVIII)
(
6,100 ) (
5,795 )
VI(VII)
-
35,808
VI(XIX)
3
-
VI(VII)(XI) XVIIII
-
97,765
(
50,339 )
171,675
(
11,831 )
3,160
448,019 (
109,471 )
3,325 (
4,250 )
103,366 (
239,295 )
80,554 (
124,816 )
(
2,932 )
-
2,084 (
8,671 )
(
43,059 )
43,069
115,737
-
(
449,144 )
402,499
1,104
18,156
(
8,407 )
14,889
(
3,803 )
-
646,057
584,871
3,817
823
6,100
5,795
(
8,088 ) (
5,527 )
(
61,977 )
7,549
585,909
593,511

- (
8,677 )
VI(VIII)
(
13,221 ) (
7,923 )
-
18
2,608
23,040
VI(X)
(
10,844 )
-
(
21,457 )
6,458

VI(XXVI)
(
81,376 ) (
175,187 )
VI(XXVI)
(
657 )
855
VI(XXVI)
(
20,343 ) (
10,287 )
VI(XVI)
(
57,899 ) (
48,250 )
(
9,103 )
-
(
169,378 ) (
232,869 )
(
26,810 ) (
4,189 )
368,264
362,911
692,998
330,087
$ 1,061,262 $ 692,998

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Kao, Shu-Jung

Accounting Supervisor ： Lai, Yu-Nu

Manager ： Kao, Shu-Jung

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Chaintech Technology Corporation and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

(I) The original East Chaintech Technology Corporation was established in November 1986, and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTClisted company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company and its subsidiaries (hereinafter referred to as the "Group") are principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.
(II) Colorful Group Ltd. (hereinafter referred to as the "Colorful Group") acquired 10% equity in the Company indirectly through Zhongjie Xingye Co., Ltd., and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, Zhongjie Xingye Co., Ltd. sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2022, the Colorful Group indirectly held 29.57% of the equity in the Company through Yicheng International Development Co., Ltd. As of December 31, 2022, the Group had 204 employees.

II. Approval Date and Procedures of the Consolidated Financial Statements

The consolidated financial statements were approved by the Board of Directors on March 22, 2023.

220

III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed and issued by the FSC

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed and issued by the FSC that are applicable in 2022:

New/Revised/Amended Standards and Interpretations	Effective date issued by the International Accounting Standards Board
Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to International Accounting Standards (“IAS”)16 “Property, Plant and Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts — Cost of Fulfilling a Contract” Annual improvement over the 2018-2020 period	As of January1, 2022 As of January1, 2022 As of January1, 2022 As of January1, 2022

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Group

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2023:

New/Revised/Amended Standards and Interpretations	Effective date issued by the International Accounting Standards Board
Amendments to IAS 1 “Disclosure of Accounting Policies” Amendment to IAS8 “Definition of Accounting Estimates” As of January 1, 2023 Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	As of January 1, 2023 As of January 1, 2023 As of January 1, 2023

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

221

(III) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by the IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

Effective date issued by the International Accounting Standards Board Pending decision by the International Accounting Standards Board" As of January 1, 2024

New/Revised/Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” As of January 1, 2024 IFRSs 17 “Insurance Contracts” As of January 1, 2023 Amendments to IFRSs 17 “Insurance Contracts” As of January 1, 2023 Amendments to IFRSs 17 “ the initial application of IFRSs 17 and As of January 1, 2023 IFRSs 9 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or NonAs of January 1, 2024 current” Amendments to IAS 1 “Non-current Liabilities with Covenants” As of January 1, 2024

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

IV. Summary of Significant Accounting Policies

The significant accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Statement of compliance

The consolidated financial statements are prepared by the Group in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC Interpretations as endorsed and issued by the FSC (the "IFRSs").

(II) Basis of preparation
Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:
- (1) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (2) Financial assets measured at fair value through other comprehensive income.

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The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note V.
(III) Basis of consolidation
Principles for preparation of consolidated financial statements
- (1) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries refer to all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
- (2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group have been eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- (3) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
- (4) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
- (5) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. For all amounts previously recognized in other comprehensive income, they shall be reclassified from equity to profit or loss.

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2. Subsidiaries included in the consolidated financial statements:

Investor Name	Subsidiary	Nature of Business	Shareholdingratio	Shareholdingratio	Explanation
			December 31, 2022	December 31, 2021
CHAINTECH Shenzhen Jinghong Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	Shenzhen Jinghong Digital R&D Service Co.,Ltd (Shenzhen Jinghong) Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. (Beijing Sitonholy) Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen)Technolog y Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Electronic products, communication products, computer software and hardware, data processing, storage and support services Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts	100% 51% 100% 100% 100%	100% 51% 100% 100% -	- - - Note 1 Note 2

Notes 1: The Group acquired 100% equity of Baotou Yihui Information Technology Co., Ltd. from its subsidiary, Sitonholy (Tianjin) Technology Co., Ltd. on October 31, 2021.

Notes 2: Sitonholy (Shenzhen)Technology Co., Ltd. was established in December 2022.

Subsidiaries not included in the consolidated financial statements: None.
Adjustments for subsidiaries with different balance sheet dates: None.
Significant restrictions: None.
Subsidiaries with significant non-controlling interests to the Group:

As of December 31, 2022 and 2021, the Group’s non-controlling interests totaled NT$285,858 and NT$248,317, respectively. What stated below is the information in respect of the Group’s significant non-controlling interests and the corresponding subsidiaries:

subsidiaries:
Subsidiary Tianjin Siton	Principal place of business	Non-controllinginterests				Explanation
		December 31, 2022		December31,2021
		Amount	Shareholding percentage	Amount	Shareholding percentage
	Mainland Chin	$ 285,858	49	$ 248,317	49

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Summarized financial information of the subsidiary:

Balance sheet

Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	December31,2022 $ 1,198,379 64,738 ( 670,554) ( 9,180) $ 583,383	December31,2021
		$ 1,058,146 67,778 ( 603,504) ( 15,651) $ 506,769

Statement of comprehensive income

Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries

Revenue Profit before tax Tax expense Profit Other comprehensive income (loss) (net amount after tax) Total comprehensive income (loss) Total comprehensive income (loss) attributable to non- controlling interests Dividends paid to non- controlling interests	2022	2021
	$ 2,238,756 87,946 ( 3) 87,943 7,249 $ 95,192 $ 46,644 $ 9,103	$ 2,247,372 90,723 ( 8,030) 82,693 ( 3,171) $ 79,522 $ 38,966 $-

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Statement of cash flows

Net cash flows generated from operating activities Net cash flows used in investing activities Net cash flows generated from financing activities Effects of changes in foreign exchange rates on Cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Sitonholy (Tianjin)Technology Co.,Ltd. andits subsidiaries 2022 2021 $ 13,942 $ 164,251 ( 20,430) ( 16,580) 193,214 - 2,895 ( 195) 189,621 147,476 181,181 33,705 $ 370,802 $ 181,181	Sitonholy (Tianjin)Technology Co.,Ltd. andits subsidiaries 2022 2021 $ 13,942 $ 164,251 ( 20,430) ( 16,580) 193,214 - 2,895 ( 195) 189,621 147,476 181,181 33,705 $ 370,802 $ 181,181
		2021
		$ 164,251 ( 16,580) - ( 195) 147,476 33,705 $ 181,181

(IV) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (i.e., functional currency). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.

Foreign currency transactions and balances
(1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the retransaction at the balance sheet date are recognized in profit or loss.
(3) Non-monetary assets and liabilities denominated in foreign currencies held at fair

226

value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

(4) All exchange gains and losses are presented in the earnings statement of profit or loss within "other gains and losses."
Translation of foreign operations

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(1) Assets and liabilities for each balance sheet presented are re-translated at the closing rate prevailing at the balance sheet date;
(2) Income and expenses for each composite income sheet are re-translated at the average exchange rates for the period; and
(3) All resulting exchange differences are recognized in other comprehensive income.
(4) When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Group still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
(5) Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at balance sheet date.

(V) Standard of assets and liabilities being classified as current and non-current

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.
(2) Liabilities held mainly for trading purposes.
(3) Assets that are expected to be realized within twelve months from the balance sheet date.

227

(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets that do not meet the aforementioned conditions are classified as non-current.

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Liabilities that are expected to be paid off within the normal operating cycle.
(2) Liabilities held mainly for trading purposes.
(3) Liabilities that are to be paid off within twelve months from the balance sheet date.
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the aforementioned conditions are classified as non-current.

(VI) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.
Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Group using trade date accounting.
At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.

(VII) Financial assets at fair value through other comprehensive income

Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:
(1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.
(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.

228

The Group adopts trade date accounting for financial assets measured at fair value through other comprehensive income.
At initial recognition, the Group measures the financial assets at fair value plus transaction costs; the Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following derecognition of the investment. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.

(VIII) Financial assets measured at amortized cost

refers to an asset that meets all of the following conditions:
(1) The financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.
(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Group adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.
The Group measures financial assets at fair value plus transaction cost at initial recognition, and subsequently recognizes interest income and impairment loss during the circulation period using the effective interest method according to the amortization procedure, and recognizes any gains or losses upon derecognition in profit or loss.

(IX) Accounts and notes receivable

Accounts receivables and notes receivables are accounts and notes of which the contractual right to consideration for goods sold or services rendered is unconditional.
Short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(X) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Group measures the credit risk that increases insignificantly since original recognition vie the 12-month expected credit loss amount through financial debt instrument at fair value through other comprehensive income and accounts receivable containing significant financial components. For those credit risk increasing significantly since

229

original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.

(XI) De-recognition of financial assets

Financial assets are derecognized when the Group's contractual rights to receive cash flows from financial assets are lapsed.

(XII) Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

(XIII) Inventories

Inventories are measured at the lower of cost and net realizable value, and cost is determined using the weighted average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production burden (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of the completion and applicable variable selling expenses.

(XIV) Investments accounted for using equity method - associates

Associates are all entities over which the Group has significant influence but has no control. Investments in associates are accounted for using the equity method and are initially recognized at cost.
The Group's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Group and its associates are eliminated to

230

the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of related enterprises have been adjusted as necessary, and are consistent with the policies adopted by the Group.

Where an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for using equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.
When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(XV) Property, plant, and equipment

Property, plant and equipment are recorded as the foundation of acquisition cost.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replacement is derecognized. All other repairs and maintenance are recognized as current gain or loss when incurred.
Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly,

231

any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Machinery and equipment	3~5 years
Transportation equipment	5 years
Derivative instruments	3 ~ 10 years
Other equipment	2 ~ 10 years

(XVI) Lease transaction in the capacity of a lessee - right-of-use assets/lease liabilities

A right-of-use asset and a lease liability are recognized for a leased asset on the date when it becomes readily available for the Group's use. When a lease contract is a shortterm lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.
On the commencement date, the Group measures lease liabilities by the present value of outstanding lease payments, using the Group's incremental borrowing rate. Lease payments include : Fixed payments less any lease incentives receivable. In subsequent periods, the Group measures lease liabilities at amortized cost using the effective interest method and recognizes interest expenses during the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.
Right-of-use assets are recognized at cost on the lease commencement date. The cost includes: The originally measured amount of lease liabilities. In subsequent periods, the Company measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.
When a lease modification decreases the scope of a lease, the carrying value of the rightof-use asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.

(XVII)Intangible assets

Acquired in a business combination, customer relationship is recognized at fair value on the acquisition date. Customer relationship is an asset of limited and durable years as amortized over an estimated useful life of 2.7 years on a straight-line basis.
Goodwill arises from the difference between the purchase price set in the equity purchase contract and the net identifiable assets.
The computer software is amortized using the straight-line method over an estimated

232

useful life of three years to recognize its cost.

(XVIII) Impairment of non-financial assets

The Group assesses on each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Except for goodwill, When circumstances contributed to the recognition of impairment loss of an asset in the previous period do not exist or are decreased, the recognized impairment loss is reversed to the carrying amount of an asset to the extent that it does not exceed the carrying amount (net of depreciation and amortization) if the impairment loss had not been recognized.
The recoverable amount of goodwill shall be evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss should not be reversed in the future.
For the purpose of impairment testing, goodwill acquired in a business merger is allocated to each of the cash-generating units. This allocation is based on the judgment of the operating units and the goodwill is allocated among cash-generating units or groups that are expected to benefit from goodwill generated in corporate mergers.

(XIX) Borrowings

(XX) Accounts payable

Account payable is the liabilities arising from the purchase of raw materials, commodities or services are taken.
Short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXI) De-recognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

233

(XXII)Offset of financial assets and liabilities

(XXIII) Employee benefits

Short-term employee benefits

Pension

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

Employees' compensation and directors' and supervisors' remuneration

(XXIV) Income tax

Income tax expense comprises current and deferred income tax. Income tax is recognized in gain or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country domicile where the Group operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Group shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.
Deferred income tax adopts the balance sheet approach, and is recognized on temporary

234

differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred income tax is not recognized, if the temporary difference arises from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income (loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXV)Share capital

Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.
When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXVI) Dividend distribution

Dividends are recognized in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities.

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Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVII) Revenue recognition

Sales of goods
(1) The Group manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product, and the Group has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.
(2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.
(3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Group has unconditional rights to the contract price since that point in time, and the Group can collect the consideration from the customer once upon the contractual time is expired.
Service revenue

The Group provides services related to processing and research and development. Revenue is recognized as revenue at a certain point in time in which the services are rendered to customers.

Financial composition

The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Group and customers are all less than one year. Therefore, the Group has not adjusted the transaction price to reflect the time value of money.

Costs to acquire contracts from customers

The Group recognizes the incremental costs incurred in the contracts with the customers

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and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

(XXVIII) Business combinations

The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business acquisition case, the Group measures the components of noncontrolling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either acquisition-date fair value or the ratio of non-controlling interests to the acquiree’s net identifiable assets. All other components of non-controlling interests shall be measured at acquisition-date fair value.
If the aggregate of (i) the value of consideration transferred, (ii) the amount of noncontrolling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree exceeds the fair value of identifiable assets acquired and liabilities assumed, the difference is recognized as goodwill on the acquisition date. If the fair value of identifiable assets acquired and liabilities assumed exceeds the aggregate of (i) the value of consideration transferred, (ii) the amount of non-controlling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree, the difference is recognized as profit or loss on the acquisition date.

(XXIX) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Group’s expense are recognized as profit or loss on a systematic basis when the expense occurs.

(XXX) Operating segments

The Group's operating segments are reported in a manner consistent with the internal management reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources to the operating segments and assessing the performance of the Group, has been identified as the members of the Board of Directors.

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V. Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Group's financial statements requires management to make critical judgments in applying the Group's accounting policies and make critical assumptions and estimates concerning future events according to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(I) Significant judgments in applying accounting policies

None.

(II) Significant accounting estimates and assumptions

Assessment of goodwill impairment

The assessment of goodwill impairment relies on the Group’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units. For more information on the assessment of goodwill impairment, please refer to Note VI(XI).

VI. Descriptions of Significant Accounting Items

(I) Cash and cash equivalents

Cash on hand and revolving funds Cheque deposits and demand deposits Transferred to financial assets measured at amortized cost - current	December 31, 2022 $ 62 1,092,439 1,092,501 ( 31,239) $ 1,061,262	December 31, 2021 $ 57 726,788 726,845 ( 33,847) $ 692,998

The Group associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.
The demand deposits as of December 31, 2022 and 2021 provided as security, have been transferred to the "current financial assets measured at amortized cost “ title according

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to their nature.

For more information on the Group's cash and cash equivalents are provided as collateral, please refer to Note VIII.

(II) Financial assets at fair value through profit or loss

Item	December 31, 2022	December 31, 2021
Financial assets at fair value through profit or loss on a mandatory basis Beneficiary certificates Adjustment Total	$ 115,490 - $ 115,490	$ 64,204 - $ 64,204

The breakdown of profit or loss for current financial assets at fair value through profit or loss is as follows:

Item	2022	2021
Beneficiary certificates	$ 2,248	$ 3,200

The Group's financial assets at fair value through profit or loss - current have never been provided as pledged assets or guarantees.
For information on the price risk and fair value of financial assets at fair value through profit or loss, please refer to Note XII (II) (III).

(III) Financial assets at fair value through other comprehensive income

Item	December 31, 2022	December 31, 2021
Equity Instruments Stocks of publicly quoted entity Shares of non-publicly quoted entity, non-emerging shares Adjustment Total	$ 169,634 15,350 184,984 ( 42,601) $ 142,383	$ 169,634 15,350 184,984 15,501 $ 200,485

The Group elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income.
The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

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Equity instruments measured at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Shareholding at end of period	2022 ($ 58,102) $ 6,100	2021
		$ 14,335 $ 5,795

For more information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII(II) and (III).

(IV) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance Accounts receivable (related parties) Less: Loss allowance	December31,2022	December31,2021
	$ 11,831 $ 492,968 ( 37,527) $ 455,441 $ 525,778 ( 210) $ 525,568 $ 992,840	$- $ 686,884 ( 41,343) $ 645,541 $ 737,095 ( 295) $ 736,800 $ 1,382,341

The aging analysis of accounts receivable and notes receivable are as follows:

Not overdue Overdue for 1-90 days Overdue for 91 days Total	December31,2022	December31,2022	December31,2021	December31,2021
	Accounts receivable	Notes receivable	Accounts receivable	Notes receivable
	$ 1,009,631 7,436 1,679 $ 1,018,746	$ 11,831 - - $ 11,831	$ 1,384,037 38,571 1,371 $ 1,423,979	$ - - - $-

‧ The aging analysis above is based on past due date.
The balance of receivables on contracts with customers as of December 31, 2022, December 31, 2021, and January 1, 2021 was NT$1,030,577, NT$1,423,979, and NT$1,312,882, respectively.
The Group had discounted $69426 of notes receivable on December 31,2022. If the drawer refuses to make payment upon maturity, the Group is obligated to settle the debt. However, in general, the Group does not expect the drawer to refuse to make payment.

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The Group's liabilities arising from discounting notes receivable are recorded under notes payable.

Without consideration of the collateral held or other credit enhancements, the maximum credit risk that best represent the Group's notes receivable as of December 31, 2022 and 2021 amounted to NT$11,831 and NT$0, respectively, and the maximum credit risk that best represent the Group's accounts receivable as of December 31, 2022 and 2021 amounted to NT$981,009 and NT$1,382,341, respectively.
For more information on the credit risk of accounts receivable, please refer to Note XII(II).

(V) Inventories

Costs Raw materials $ 9,792 Work in progress 107,801 Finished good 5,535 Goods 237,806 Inventories in transit49,197 $ 410,131		December31,2022
	Costs	Allowanceforprice decline	Carrying amount
		($ 604) ( 167) ( 4,149) ( 3,982) - ($ 8,902)	$ 9,188 107,634 1,386 233,824 49,197 $ 401,229

Costs Raw materials $ 84,615 Work in progress 73,637 Finished good 63,305 Goods 297,827 $ 519,384		December 31, 2021
	Costs	Allowanceforprice decline	Carryingamount
		($ 337) - ( 2,107) ( 4,663) ($ 7,107)	$ 84,278 73,637 61,198 293,164 $ 512,277

Cost of inventories is recognized by the Group as expenses in the current period:

Costs of sold inventories Inventory falling price loss(gain on inventories)(Note)	2022 $ 5,574,091 1,723 $ 5,575,814	2021
		$ 5,842,803 ( 1,136) $ 5,841,667

Note: The Group's reported the gain on inventories in 2021 as a result of de-stocking.

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(VI) Prepayments

Prepayment for purchases Others	December 31, 2022 $ 119,219 9,830 $ 129,049	December 31, 2021
		$ 202,256 7,347 $ 209,603

(VII) Investments using equity method

2022 January 1 $ - Share of investment gains and losses using equity method - Impairment loss - December 31 $- December 31, 2022 Associates $-	2022 January 1 $ - Share of investment gains and losses using equity method - Impairment loss - December 31 $- December 31, 2022 Associates $-	2021
		$ 133,573 ( 35,808) ( 97,765) $- December 31, 2021
	$-	$-

On January 21, 2020, the Board of Directors resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Group has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2022, the Group held a 6.13% equity interest in uSenlight Corporation, making the Group its single largest shareholder. As the other two largest shareholders (not the Group's related parties) held more than the Group’s shares, the Group had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Group had significant influence but had no control over uSenlight Corporation.
For the above investment accounted for using equity method, the Group carried out an impairment test based on the recoverable amount of such investment. Based on the above valuation result, the Group recognized a impairment loss on investments accounted for using equity method of NT$97,765.
The basic information of the associates that are material to the Group is as follows:

Company name	Principal place of business		Shareholding ratio	Shareholding ratio	Nature of relations Measurement method
		December 31, 2022		December 31, 2021

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uSenlight The Republic 6.13% 13.05% Significant Equity Corporation of China influence

(1) uSenlight Corporation compensated for losses due to capital reduction and issued new shares for capital increase in 2022. However, the Company did not subscribe according to the shareholding ratio, resulting in our shareholding ratio decreasing from 13.05% to 6.13%. Additionally, the Company has made a full reduction to the book amount of $0 for the investment target in 2021, and we do not intend to continue supporting uSenlight Corporation in the future.
(2) uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.
The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Balance sheet
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Proportionate share of net assets of associates Net equity difference Impairment loss recognized Book value of associates	uSenlight Corporation
	December 31, 2021
	$ 229,391 183,046 ( 243,232) ( 141,233) $ 27,972 $ 3,650 94,115 ( 97,765) $-

Statement of comprehensive income

Statement of comprehensive income
Revenue Profit from continuing operations (Total comprehensive income)	uSenlightCorporation
	2021
	$ 88,129 ($ 274,391)

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(VIII) Property, plant, and equipment

As of January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Disposal Depreciation expenses Net exchange differences December 31 December 31, 2022 Costs Accumulated depreciation As of January 1, 2021 Costs Accumulated depreciation 2021 January 1 Addition Acquired by business combination Disposal Depreciation expenses Net exchange differences December 31 December 31, 2021 Costs Accumulated depreciation	Machinery and equipment $ 34,130 ( 25,538) $ 8,592 $ 8,592 2,420 ( 19) ( 3,927) 137 $ 7,203 $ 36,995 ( 29,792) $ 7,203 Machinery and equipment $ - - $- $ - 4,664 5,473 - ( 1,532) ( 13) $ 8,592 $ 34,130 ( 25,538) $ 8,592	Transportation equipment	Derivative instruments	Others	Total
		$ 12,931 ( 9,285) $ 3,646 $ 3,646 - - ( 632) 55 $ 3,069 $ 13,121 ( 10,052) $ 3,069 Transportation equipment	$ 4,089 ( 4,015) $ 74 $ 74 2,985 - ( 417) 1 $ 2,643 $ 7,082 ( 4,439) $ 2,643 Derivative instruments	$ 74,287 ( 63,441) $ 10,846 $ 10,846 7,816 ( 6) ( 11,102) 21 $ 7,575 $ 82,121 ( 74,546) $ 7,575 Others	$ 125,437 ( 102,279) $ 23,158 $ 23,158 13,221 ( 25) ( 16,078) 214 $ 20,490 $ 139,319 ( 118,829) $ 20,490 Total
		$ 10,395 ( 9,356) $ 1,039 $ 1,039 2,615 - - - ( 8) $ 3,646 $ 12,931 ( 9,285) $ 3,646	$ 4,137 ( 4,007) $ 130 $ 130 - - ( 7) ( 48) ( 1) $ 74 $ 4,089 ( 4,015) $ 74	$ 73,889 ( 40,335) $ 33,554 $ 33,554 644 - ( 11) ( 23,333) ( 8) $ 10,846 $ 74,287 ( 63,441) $ 10,846	$ 88,421 ( 53,698) $ 34,723 $ 34,723 7,923 5,473 ( 18) ( 24,913) ( 30) $ 23,158 $ 125,437 ( 102,279) $ 23,158

he Group had no property, plant, and equipment pledged to others.

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(IX) Lease transaction - lessee

The Group's leased underlying assets comprise buildings, of which the lease term is usually between 3~5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.
Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

Property Property	December 31, 2022 Carrying amount	December 31, 2021 Carrying amount
	$ 39,528 2022 Depreciation expenses $ 19,444	$ 37,312 2021
		Depreciation expenses $ 10,638

For the years ended December 31, 2022 and 2021, the Group's additions of right-of-use assets amounted to NT$21,764 and NT$32,746, respectively.
Profit or loss items in connection with lease contracts are stated as follows:

Items affecting profit or loss for the period Interest expenses of lease liabilities Expenses under short-term lease contracts	2022 $ 1,360 645	2021
		$ 858 1,513

For the years ended December 31, 2022 and 2021, the Group's cash flows used in leases amounted to NT$22,348 and NT$12,658, respectively.
The Group adopted the practical expedient practice of "rent reduction related to novel coronavirus", and recognized the profit and loss of $911 from changes in lease payments arising from rent reduction as other income for the years ended December 31, 2022.

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(X) Intangible assets

Goodwill As of January 1, 2022 Costs $ 168,525 Accumulated amortization and impairment - $ 168,525 2022 January 1 $ 168,525 Addition - sourced from separate acquisition - Reclassification (Note 1) - Amortization expenses - Adjustment for the period (Note 2) ( 6,827) Net exchange differences ( 1,225) December 31 $ 160,473 December 31, 2022 Costs $ 160,473 Accumulated amortization and impairment - $ 160,473	Customer relationship	Computer software	Total
	$ 32,050 ( 32,050) $- $ - - - - - - $- $ 32,050 ( 32,050) $-	$ - - $- $ - 10,844 12,003 ( 3,687) - 1,642 $ 20,802 $ 24,477 ( 3,675) $ 20,802	$ 200,575 ( 32,050) $ 168,525 $ 168,525 10,844 12,003 ( 3,687) ( 6,827) 417 $ 181,275 $ 217,000 ( 35,725) $ 181,275

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As of January 1, 2021 Costs Accumulated amortization and impairment 2021 January 1 Amortization expenses Net exchange differences December 31 December 31, 2021 Costs Accumulated amortization and impairment	Goodwill $ 169,805 - $ 169,805 $ 169,805 - ( 1,280) $ 168,525 $ 168,525 - $ 168,525	Customer relationship $ 32,294 ( 21,928) $ 10,366 $ 10,366 ( 10,281) ( 85) $- $ 32,050 ( 32,050) $-	Total $ 202,099 ( 21,928) $ 180,171 $ 180,171 ( 10,281) ( 1,365) $ 168,525 $ 200,575 ( 32,050) $ 168,525

Notes 1: Transferred from inventories Notes 2: Income received from compensation, please refer to VI(XXV) 6 for information.

Goodwill is allocated to the Group’s cash-generating units by operating segments:

Sitonholy (Tianjin) Technology Co., Ltd	December 31, 2022 .$ 160,473	December 31, 2021
		$ 168,525

(XI) Impairment of non-financial assets

The impairment loss recognized by the Group in 2022 was NT$97,765, as detailed below.

Loss-long - Investments using equity method	2021	2021
	Profit or loss for the period recognized	Other comprehensive income recognized
	$ 97,765	$-

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The Group conducted a impairment test on the invested company-uSenlight Corporation, as of December 31, 2021. After evaluation, the recoverable amount of the invested company- uSenlight Corporation, was small. Therefore, the total impairment loss of $97,765 was recognized.
Goodwill is allocated to the Group’s cash-generating units by operating segments. The recoverable amount is determined based on the value in use, and the value in use is calculated using the pre-tax cash flow forecast of the five-year financial budget approved by management. Cash flows beyond the five-year period were estimated using the estimated growth rates stated below.

The Group’s recoverable amount calculated based on the value in use exceeded the carrying amount, so no impairment loss on goodwill was generated. Main assumptions used to calculate the value in use are as follows:

Gross profit margin Growth Rate Discount rate	Sitonholy (Tianjin)Technology Co.,Ltd.	Sitonholy (Tianjin)Technology Co.,Ltd.
	2022	2021
	14.00% 2.00% 17.80%	14.00% 2.00% 18.90%

Management determined the budgeted gross margin based on the past performance and its expectation for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect the risks specific to relevant operating segments.

(XII) Short-term borrowings

Nature of borrowings Borrowings Credit borrowings Nature of borrowings Borrowings Secured borrowings Credit borrowings	December 31, 2022 $ 145,464 December 31, 2021	Interest range	Collateral
		2.50% Interest range	None Collateral
	$ 191,228 35,612 $ 226,840	0.90%~1.13% 0.96%	Financial assets measured at amortized cost - current None

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Interest expenses recognized in profit or loss as of December 31, 2022 and 2021 were NT$6,478 and NT$4,866, respectively.

(XIII) Other payables

Payroll payable Premium payable Others	December 31, 2022 $ 51,685 33,558 35,137 $ 120,380	December 31, 2021
		$ 57,488 31,900 30,138 $ 119,526

(XIV) Pension

The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
The Company's subsidiaries in Mainland China have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People's Republic of China are based on certain percentage of employees' monthly salaries and wages. The pension funds of each employee are managed and arranged by the government, and the Group has no further obligations except the monthly contributions.
The pension costs recognized by the Group in accordance with the aforesaid pension regulations for the years ended December 31, 2022 and 2021 were NT$10,465 and NT$6,578, respectively.

(XV) Share capital

As of December 31, 2022, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$964,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.

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2. Treasury shares

(1) The reason for repurchase and movements in the number of treasury shares are as follows:

ollows:
Company name of holding securities	Reason for repurchase	December31,		2022
		Number of shares (thousand shares)		Carrying amount
CHAINTECH Company name of holding securities	For the transfer of shares to employees Reason for repurchase		- December31,	$ - 2021
		Number of shares (thousand shares)		Carrying amount
CHAINTECH	For the transfer of shares to employees		5,000	$ 151,746

(2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.
(3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.
(4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back. The Company passed a resolution by the board of directors to cancel its treasury shares on November 4, 2022, with a benchmark date of December 12, 2022. The Company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XVI) Retained earnings

Under the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, in addition to the income tax payable according to law, the Corporation shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the

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total paid-up-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.
The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.
(1) When the company distributes the surplus, it is required by law t o provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.
(2) When the Company adopted IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related assets, they are reversed according to the ratio of the recognized special reserve.
By a resolution in the shareholders' meetings on June 15, 2022 and July 29, 2021, respectively, the Company adopted the earnings distribution plan for the year ended December 31, 2021 and 2020 as follows:

Legal reserve Special reserve (Reversal) Cash Dividends	2021	2021	2020	2020
	Amount (NT$ thousand)	Dividends per share (NT$)	Amount (NT$ thousand)	Dividends per share (NT$)
	$ 12,222 ( 10,452) 57,899	$ 0.6	$ 14,328 ( 57,839) 48,249	$ 0.5

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(1) Please refer to Note VI(XXII) for information on employees' compensation and directors' and supervisors' remuneration.
(2) As of March 22, 2023, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2022.

(XVII)Operating Revenue

2022 Revenue from contracts with customers Sales revenue - consumer goods $ 3,950,532 Sales revenue - AI servers and related products 2,238,756 Service revenue 9,386 $ 6,198,674	2021
	$ 4,262,296 2,247,372 8,396 $ 6,518,064

The Group derives revenue from the transfer of goods and services over time and at a point in time.
The contract liabilities in relation to revenue from contracts with customers recognized by the Group are as follows:

December 31, 2022 December 31, 2021 As of January 1, 2021

Contract liabilities: Unearned sales revenue[$ 68,618 ] $ 111,677 $ 67,620 2022 2021 Revenue recognized that was included in the contract liability balance at the beginning of the period: $ 111,086 $ 66,426

(XVIII) Other income

Rental income Dividend income Other income - others	2022	2021
	$ 158 6,100 10,908 $ 17,166	$ 158 5,795 4,824 $ 10,777

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(XIX) Other gains and losses

Loss on disposal of property, plant, and equipment Net foreign exchange gain (loss) Gain on financial assets at fair value through profit or loss Impairment loss Other losses	2022	2021
	($ 3) 101,506 2,248 - ( 98) $ 103,653	$ - ( 20,038) 3,200 ( 97,765) ( 2,622) ($ 117,225)

(XX) Financial costs

Interest expenses Lease liabilities	2022	2021
	$ 6,478 1,360 $ 7,838	$ 4,866 858 $ 5,724

(XXI) Expenses by nature

Employee benefit expenses Depreciation expenses of property, plant, and equipment Depreciation expenses on right-of- use assets Amortization expenses of intangible assets	2022 $ 182,080 16,078 19,444 3,687 $ 221,289	2021
		$ 155,458 24,913 10,638 10,281 $ 201,290

(XXII)Employee benefit expenses

Payroll expenses Labor/health insurance expenses Pension expenses Other employment expenses	2022 $ 155,602 11,126 10,465 4,887 $ 182,080	2021
		$ 134,407 7,365 6,578 7,108 $ 155,458

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According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors shall not be paid more than 6% as remuneration.
For the years ended December 31, 2022 and 2021, the estimated amount of employees' remuneration was NT$4,039 and NT$1,663, respectively, and the estimated amount of directors' and supervisors' remuneration was NT$12,118 and NT$4,98, respectively; the aforesaid amounts were recognized as payroll expenses.

For the year ended December 31, 2022, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were NT$4,039 and $12,118, respectively. The employees' remuneration will be distributed in the form of cash.

Information regarding employees' remuneration and directors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

(XXIII) Income tax

Tax expense

Components of tax expense:

Components of tax expense:
2022 Current income tax: Income tax generated in the current period $ 70,458 Additional tax on unappropriated retained earnings 3,128 Underestimate provision of previous year’s income tax 1,899 Total current income tax liabilities 75,485 Deferred tax : The origination and reversal of temporary differences ( 8,066) Tax expense $ 67,419	2021
	$ 57,724 7,058 893 65,675 ( 20,230) $ 45,445

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2. Tax expense and accounting profit

2022
Net profit before tax is calculated as income tax at the
statutory tax rate
$ 77,560
Expenses that should be excluded according to tax
laws
806
Income exempt from taxation according to tax laws
( 1,220)
Temporary differences of assets that have not been
recognized as deferred tax assets
( 14,754)
Additional tax on unappropriated retained earnings
3,128
Underestimate provision of previous year’s income tax1,899
Tax expense
$ 67,419

2021

$ 39,958
566
( 1,159)
( 1,871)
7,058
893
$ 45,445

The amount of deferred tax assets that arise from temporary differences from the taxable financial assets are set out below:

		2022
January 1 $ 169 19,948 653 - 3 20,773 - $ 20,773	Recognized in profit or loss $ 495 - 1,749 9,547 ( 3) 11,788 3,722 $ 8,066	Other comprehensive income recognized $ - - - - - - - $ -	Acquired by business combination $ - - - - - - - $ -	December 31
				$ 664 19,948 2,402 9,547 -
				32,561
				3,722
				$ 28,839

255

		2021
January 1 $ 977 - 2,135 - 3,132 ( 2,592) $ 540	Recognized in profit or loss ($ 828) 19,948 ( 1,482) - 17,638 2592 $ 20,230	Other comprehensive income recognized $ - - - - - - $ -	Acquired by business combination $ - - - 3 3 - $ 3	December 31
				$ 169 19,948 653 3
				20,773
				-
				$ 20,773

Deductible temporary differences of assets that have not been recognized as deferred tax assets:

December 31, 2022 Deductible temporary differences $ 35,394	December 31, 2022	December 31, 2022	December 31, 2021	December 31, 2021
		$ 35,394		$ 109,139

The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2020.

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(XXIV) Earnings Per Share

		2022
After-taxamount		Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
	$320,372	96,499	$3.32
	$ 320,372 -	96,499 149	$ 3.31
	$ 320,372	96,648
		2021
After-tax amount		Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
$ 122,224		96,499	$ 1.27
$ 122,224 -		96,499 71
$ 122,224		$ 96,570	$ 1.27

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(XXV)Business combinations

In December 2018, the Group invested in Sitonholy (Tianjin) Technology Co., Ltd. through its subsidiary, Shenzhen Jinghong, and made a prepayment of RMB 10 million. On March 1, 2019, the Group acquired a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. The investment totaled RMB 86.36 million (including contingent consideration of RMB 44.36 million).

The equity interest was acquired as follows:

(1) The Group purchased a 26% equity interest from Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) at the amount of RMB 35.36 million.
(2) The Group acquired a 25% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through capital increase at the amount of RMB 51 million.

Sitonholy (Tianjin) Technology Co., Ltd. retails electronic products and communication products in China. After the acquisition, the Group expects to strengthen its presence in the retail market of electronic products and communication products in China.

Information on the consideration for acquiring Sitonholy (Tianjin) Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and portion of noncontrolling interests to the acquiree's net identifiable assets is stated as follows:

Acquisition consideration
Cash (Note 1)
Payments for equity transfer
Payments for purchase of shares
Contingent consideration (Note 2)
Share of non controlling interests in the identifiable net assets
of the acquired party
Fair value for identifiable assets acquired and liabilities and
contingent liabilities
Cash
Accounts receivable
Inventories
Other current assets
Intangible assets (customer relationship)
Property, plant, and equipment
Right-of-use assets
Other non-current assets (Note 3)
Accounts payable
Other current liabilities (Note 4)
Lease liabilities
Deferred tax liabilities
Total identifiable assets
Goodwill

$ 119,678
73,648
149,140
342,466
157,465
$ 499,931
$ 20,266
182,945
90,866
113,415
33,961
797
3,744
201,522
(
129,566)
(
184,300)
(
3,802)
(
8,490)
321,358
$ 178,573

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  - Notes 1: Acquisition consideration - cash includes payments for equity transfer and payments for purchase of shares.

     - (1) Payments for equity transfer include prepayments of NT$44,720 (RMB 10 million) made in December 2018 and NT$74,958 (RMB 16 million) paid in March 2019.

     - (2) Payments for purchase of shares amounted to RMB 16 million. The capital increase was completed in March 2019.

  - Notes 2: Contingent consideration is the present value of investment after taking into account performance compensation set forth in the investment agreement.

  - Notes 3: Other non-current assets include payments for purchase of shares receivable, RMB 16 million, in March 2019 and payments for purchase of shares, RMB 35 million, to be received when conditions of contingent consideration are established.

  - Notes 4: Other current liabilities include payments for equity transfer, RMB 18.1326 million payable by Sitonholy (Tianjin) Technology Co., Ltd. due to its acquisition of a 100% equity interest in Beijing Sitonholy.

On December 17, 2018, both parties reached an agreement on contingent consideration as follows:
(1) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 15 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 20 million within 15 working days, and should pay RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively (recognized in other non-current liabilities).
(2) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 22 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 15 million within 15 working days.
(3) If Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy fail to meet the performance target for the year within the period of performance commitment, Shenzhen Jinghong has the right to defer the aforesaid contingent consideration to

259

the next period and, based on the realization of the accumulated net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy, determine whether to pay.

As of December 31, 2019, the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 reached the agreement on contingent consideration. According to the agreement, Shenzhen Jinghong paid RMB 20 million to Sitonholy (Tianjin) Technology Co., Ltd. for capital increase and paid RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively. The audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 was not met. According to the agreement, Shenzhen Jinghong deferred the contingent consideration to the next period.
On December 28, 2020, both parties entered into a supplemental agreement to extend the original terms of the contract for two years (to the end of 2022). Both parties also agreed that compensation should be collected from the original shareholders for the portion belonging to Shenzhen Jinghong (51%) in case of failure to meet the performance target.

The amount of compensation is calculated below:

(1) If the performance target is met by the end of 2021:
- Unmet net profit target for 2018 to 2020 x 51% x 15%
(2) If the performance target is met before June 2022:
- Unmet net profit target for 2018 to 2020 x 51% x (15%+10%)
(3) If the performance target is met before the end of 2022:
- Unmet net profit target for 2018 to 2020 x 51% x (15%+20%)
The Group has received the above compensation amounted to $15,353 (RMB 3.53 million) in March 2021, and recognized compensation income amounted to $6,827 (RMB 1.51 million) and recognized a decrease in goodwill in in March 2022.
The agreement of the net profits for contingent consideration has been reached by Sitonholy(Tianjin) technology Co., Ltd and Beijing Sitonholy technology Co., Ltd in 2021. According to the agreement, Shenzhen Jinghong has made the payment for contingent consideration and refund of compensation in the first half of the year of 2022.
In October 2022, the Group acquired 100% equity of Baotou Yihui Information Technology Co., Ltd. through its mainland subsidiary - Sitonholy(Tianjin) technology Co., Ltd, with a total investment amount of RMB 2 million.
Information on the consideration for acquiring Baotou Yihui Information Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and

260

portion of non-controlling interests to the acquiree's net identifiable assets is stated as follows:

follows:
Acquisition consideration Cash Fair value for identifiable assets acquired and liabilities and contingent liabilities Cash Accounts receivable Other receivables Other current assets Property, plant, and equipment Right-of-use assets Other non-current assets Contract liabilities Accounts payable Other payables Lease liabilities Total identifiable assets	$ 8,706
	$ 29 160 846 163 5,473 1,399 3,690 ( 988) ( 326) ( 341) ( 1,399)
	$ 8,706

Our group acquired Baotou Yihui Information Technology Co., Ltd. on October 31, 2021. The operating income and net loss before tax contributed by Baotou Yihui Information Technology Co., Ltd. for the year ended December 31, 2021 is $255 and $1,580, respectively. If Baotou Yihui Information Technology Co., Ltd. were acquired by the Group in January 1, 2021, the Group's operating revenue and profit before tax would be NT$1,554 and NT$3,059, respectively, for the year ended December 31, 2021.

(XXVI) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing Impact on changes in exchange rates Impact on changes in other non-cash December 31	Short-term borrowings $ 226,840 ( 81,376) - - $ 145,464	2022	2022
		Guarantee deposits $ 1,275 ( 657) - - $ 618	Lease liabilities $ 37,885 ( 20,343) 1,201 21,764 $ 40,507	From financing activities Total Liabilities $ 266,000 ( 102,376) 1,201 21,764 $ 186,589

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2021

January 1 Changes in cash flows from financing Acquired by business combination Impact on changes in exchange rates Impact on changes in other non-cash December 31	Short-term borrowings	Guarantee deposits	Lease liabilities	Total liabilities from financing activities
	$ 402,027 ( 175,187) - - -	$ 420 855 - - -	$ 17,342 ( 10,287) 1,399 160 29,271	$ 419,789 ( 184,619) 1,399 160 29,271
	$ 226,840	$ 1,275	$ 37,885	$ 266,000

VII. Related Party Transactions

(I) Parent company and the ultimate controller

(II) Name of related party and relationship with the Group

Name of related parties The relationship with the Group Colorful Technology Co., Ltd. (Colorful) 100% reinvestment business by Colorful Group Shenzhen Colorful Yugong Technology and The same person in charge as the Colorful Development Co., Ltd. (Yugong) Group uSenlight Corporation (uSen) Associates

(III) Significant transactions with related parties

1. Operating Revenue

Operating Revenue
Sales of goods : Colorful	2022	2021
	$ 2,092,517	$ 2,178,925

The Group's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different products.

262

2. Purchases

Purchases
Product purchase: Yugong Colorful	2022 $ 24,940 3,776 $ 28,716	2021
		$ 80,270 505 $ 80,775

Goods are purchased from related parties according to general commercial terms and conditions. Purchases display cards from purchasing parties of related parties

3. Receivables from related parties

Receivables from related parties
Accounts receivable Colorful Less: Loss allowance Total	December31,2022	December31,2021
	$ 525,778 ( 210) $ 525,568	$ 737,095 ( 295) $ 736,800

4. Payables to related parties

Payables to related parties
Accounts payable Yugong Colorful Total	December 31, 2022	December 31, 2021
	$ 6,397 - $ 6,397	$ - 335 $ 335

The payables to related parties mainly arise from purchases, which are due one month after the purchase date. The payables are non-interest bearing.

5. Advertising expense

After the launch of the products jointly developed by the Group and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2022 and 2021 were NT$10,333 and NT$9,041, respectively; the amounts not yet paid as of December 31, 2022 and 2021 were NT$5,899 and NT$5,951, respectively, and recognized as "other payables."

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6. Endorsements and guarantees made by related parties

Yugong	December 31, 2022	December 31, 2021
	$ 22,040	$-

(IV) Key management compensation information

Wages and short-term employee benefits	2022	2021
	$ 17,174	$ 10,594

VIII. Pledged Assets

The Group's assets pledged as collateral are as follows:

Assets title	Book	value	Purpose ofcollateral
	December31,2022	December31,2021
Financial assets measured at amortized cost - current Financial assets measured at amortized cost - current	$ 4,621 26,618 $ 31,239	$ 33,847 - $ 33,847	Balance of short-term borrowings Guarantee for acceptance of bills

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments

As of December 31, 2022, the Group's guaranteed letter of credit for the purchase was US$1,500 thousand.
As of December 31, 2022, the Company issued a promissory note totaling NT$100,000 thousand for the purchase of goods as a guarantee for the purchase of loan claims.

X. Significant Disaster Loss

None.

XI. Significant Events after the End of the Financial Reporting Period

The company completed the registration of the cancellation of 5000 thousand shares of treasury shares and the change of paid in capital on January 9, 2023.Please refer to Note VI(XII) for details.

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XII. Others

(I) Capital management

The Group's objectives in capital management are to safeguard the Group's ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(II) Financial instruments

1. Category of financial instruments

Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash Financial assets measured at amortized cost Notes receivable Accounts receivable (including related parties) Other receivables Refundable deposits (other non-current assets) Financial liabilities Short-term borrowings Notes payable Accounts payable (including related parties) Other payables Refundable deposits (other non-current liabilities) Lease liabilities	December 31, 2022 $ 115,490 $ 142,383 $1,061,262 31,239 11,831 981,009 3,532 9,971 $ 2,098,844 $145,464 115,737 330,540 120,380 618 $ 712,739 $ 40,507	December 31, 2021 $ 64,204 $ 200,485 $692,998 33,847 - 1,382,341 6,857 9,594 $ 2,125,637 $226,840 - 773,498 119,526 1,275 $ 1,121,139 $ 37,885

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Risk management policies
(1) The Group's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.
(2) The risk management is carried out by the Group's finance department according to the policies approved by the Board of Directors. The finance department of the Group is responsible for identifying, evaluating, and avoiding financial risks in close co-operation with the Group's operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.
The nature and degrees of significant financial risks
(1) Market risk

Exchange rate risk

A. The Group is a multinational operation and is exposed to exchange rate risk arising from transactions with the Company and its subsidiaries, which is mainly denominated in USD and CNY. The related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
B. Business of the Group is involved in a number of non-functional currency (the functional currency of the Company is NTD; for subsidiaries, the functional currency is CNY) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

December 31, 2022	December 31, 2022	December 31, 2022
Foreign currency($ thousands)	Exchange rate	Carrying amount (NT$)
$ 42,892 $ 3,197	30.71 30.71	$ 1,317,213 $ 98,180

266

December31,2021	December31,2021	December31,2021
Foreign currency($ thousands)	Exchange rate	Carrying amount (NT$)
$ 53,150 $ 19,198	27.68 27.68	$ 1,471,192 $ 531,401

C. The Group's material monetary items affected by the exchange rate fluctuations were recognized as net exchange gains (losses)(including realized and unrealized), which amounted to NT$101,506 and (NT$20,038), respectively, for the years ended December 31, 2022 and 2021.
D. The Group's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

2022

		2022	2022
Foreign currency translation functional currency) Financial assets Monetary items USD : NT Financial liabilities Monetary items USD : NT		Sensitivity analysis
	Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
	1% 1%	$ 13,172 $ 982	$ - $ -

	2021	2021
	Sensitivity analysis
Degree of fluctuation	Impact on profit andloss	Impact on other comprehensive income (loss)
1% 1%	$ 14,712 $ 5,314	$ - $ -

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Price risk

A. The Group's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Group diversifies its portfolio with its diversification method based on limits set by the Group.
B. The Group primarily invests in equity instruments and beneficiary certificates issued by domestic companies, and the price of such equity instruments is affected by the uncertainty of the future value of the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, profit after tax for the years ended December 31, 2022 and 2021 will increase or decrease by NT$1,155 and NT$642, respectively due to the gain or loss on equity instruments at fair value through profit or loss, and other comprehensive income for the years then ended will increase or decrease by NT$1,424 and NT$2,005, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

A. The Group's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Group to cash flow interest rate risk. For the years ended December 31, 2022 and 2021, the Group's borrowings issued at variable rates were mainly denominated in USD.
B. The Group's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Group is exposed to the risk of changes in future market interest rates.
C. If the USD and CNY borrowing interest rate increases/decreases by 1%, with all other variables held constant, profit before tax for the years ended December 31, 2022 and 2021 will decrease or increase by NT$1,164 and NT$1,815, respectively. Changes in interest expense mainly result from floating-rate borrowings.
(2) Credit risk
A. The Group's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment and debt instruments classified as amortized cost being measured based on contract cash flows.
B. The Group has established credit risk management in the Group's corporate

268

policy. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. n accordance with the internal defined credit policy, the Group's operating entities and each new customer shall be subject to the management and credit risk analysis before making payment and delivery of the agreed payment and delivery. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based on internal or external ratings and regularly monitored by the Board of Directors.

C. The Group adopts credit risk management procedures to make assumptions except that the contract amount is overdue for more than 90-120 days in accordance with the agreed payment terms, it is regarded that a default has taken place.
D. The Group adopts credit risk management procedures to make the following assumptions as to whether the credit risk on financial instruments since initial recognition has increased by the following:
(A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.
(B) There are actual or expected significant changes in external credit ratings of financial instruments.
E. The Group will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the simplified method to estimate the expected credit loss based on the preparation matrix.
F. The Group conducts individual assessments for defaulted accounts receivable and recognizes 10% to 30% allowance loss. The remainder is estimated based on our credit conditions and forward-looking considerations to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for accounts receivable by the said loss rate. The provision matrix as of December 31, 2022 and 2021 is as follows:

269

December 31, 2022 Expected loss rate Total book value Loss allowance

December 31, 2021 Expected loss rate Total book value Loss allowance

	Individual		Not overdue	Overdue for 1-90 days	Overdue for 1-90 days		Overdue for 91 days		Total
	30% $ 22,316 $ 6,695 Individual		0.04%~10.48% $ 999,146 $ 28,757 Not overdue	11.22% $ 7,436 $ 834 Overdue for 1-90 days			11.22%~100% $ 1,679 $ 1,451 Overdue for 91 days		$ 1,030,577 $ 37,737 Total
	10% $ 68,118 $ 8,704		0.04%~9.24% $ 1,340,590 $ 29,246		17.50% $ 13,900 $ 2,432		17.50%~100% $ 1,371 $ 1,256		$ 1,423,979 $ 41,638

G. The statement of allowance loss for accounts receivable of the Group using simplified approach is as follows:

simplified approach is as follows:	as follows:
2022 Accounts Receivable January 1 $ 41,638 Impairment loss ( reversal) ( 4,386) Effect of exchange rate changes 485 December 31 $ 37,737	2022	2021
	Accounts Receivable	Accounts Receivable
			$ 7,247 34,426 ( 35) $ 41,638

(3) Effect of exchange rate changes
A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements predict to ensure that it has sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.
B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in interest-bearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.
C. The following tables detail the Group's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual

270

maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.

December 31, 2022 Within 1 year Within 1-2 years Within 2-5 years Non-derivative financial liabilities Lease liabilities $ 22,289 $ 14,615 $ 5,009 December 31, 2021 Within 1 year Within 1-2 years Within 2-5 years Non-derivative financial liabilities Lease liabilities $ 14,526 $ 13,928 $ 10,273

Except as stated above, the Group's non-derivative financial liabilities are due within one year.

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks is of Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in equity investment without active markets is of Level 3.
For financial instruments not measured at fair value, including cash, financial assets measured at amortized cost and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables, short-term borrowings, notes payable, accounts payable (including related parties), and other payables, their carrying amounts are a reasonable approximation of their fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(1) The Group classifies its assets and liabilities according to their nature; the information is as follows:

271

December 31, 2022 Assets Recurring Fair value Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total December 31, 2021 Assets Recurring Fair value Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 $ 115,490 127,033 $ 242,523 Level 1 $ 64,204 185,135 $ 249,339	Level 2	Level 3	Total
		$ - - $- Level 2	$ - 15,350 $ 15,350 Level3	$ 115,490 142,383 $ 257,873 Total
		$ - - $-	$ - 15,350 $ 15,350	$ 64,204 200,485 $ 264,689

(2) Methods and assumptions used by the Group to measure the fair value are as follows:
A. The instruments that the Group uses market-quoted prices as their fair values
- (i.e. Level 1) are listed below by characteristics:

Shares of publicly quoted entity Beneficiary certificates Quoted market price Closing market prices Net Value

B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters

272

commercial paper interest rate).

C. The valuation of derivative instruments is based on the valuation model that is widely accepted by market users, such as the discount method. Structured interest rate derivatives are valued by the estimation of future cash flows at contractual interest rates.
D. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group's financial and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Group's fair value evaluation model management policy and related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.
E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.
For the years ended December 31, 2022, and 2021, there were no transfers between Level 1 and Level 2.
The following chart indicates the movement of Level 3 for the years ended December 31, 2022, and 2021:

, 2022, and 2021:
January 1 (i.e. December 31)	2022	2021
	EquityInstruments	EquityInstruments
	$ 15,350	$ 15,350

For the years ended December 31, 2022, and 2021, there were no transfers into or out of Level 3.
The finance department of the Group is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable, and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model, and making any other necessary adjustments to the fair value.

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Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

Fair value as of Significant Relationship December 31, Valuation unobservable between input value 2022 technique input values and fair value Non-derivative equity instruments : Shares of non$ 15,350 Market price Lack of market The lack of market publicly quoted method liquidity discount liquidity discount and entity and expected higher expected volatility of equity volatility of equity value value leads to lower fair values. Significant unobservable Relationship December 31, Valuation input values input between input value 2021 Fair value technique value and fair value Non-derivative equity instruments : Shares of non$ 15,350 Market price Lack of market The lack of market publicly quoted method liquidity discount liquidity discount and entity and expected higher expected volatility of equity volatility of equity value value leads to lower fair values.

The Group carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

input value	Changes	December 31,2022	December 31,2022
		Other comprehensive income recognized
		Favorable changes	Adverse changes
Lack of market liquidity discount and expected volatility of equity value input value	±1% Changes
		Other comprehensive income recognized
		Favorable changes	Adverse changes
Lack of market liquidity discount and expected volatility of equity value	±1%	$ 154	$ 154

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XIII. Supplementary Disclosures

(I) Information on significant transactions

Capital loans to others: None.
Endorsements and guarantees: Please refer to Table 1.
Marketable securities held at the end of the period (excluding investment in subsidiaries): Please refer to Table 2.
Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: Please refer to Table 3.
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 5.
Derivative transactions: None.
Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 6.
(II) Information on investees

Information on investees (not including investees in Mainland China):

Please refer to Table 7.

(III) Information on investments in Mainland China

Basic information: Please refer to Table 8.
Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 9.
(IV) Information on Major Shareholders

Information about major shareholders: Please refer to Table 1.

275

XIV. Segment information

(I) General information

The Board of Directors of the Group operates business and makes decisions by product types, which are divided into consumer electronic products and AI servers (namely, reportable segments).

(II) Segment information

The information for departments that should issue a report to the chief operating decision maker is as follows:

2022	Consumer goods	AI servers and related products	Total	Adjust and write off
External revenue Internal department revenue Segment revenue Segment profit or loss	$ 3,959,918 9,089 $ 3,969,007 $ 329,461	$ 2,238,756 270,250 $ 2,509,006 $ 87,943	$ - ( 279,339) ($ 279,339) ($ 53,939)	$ 6,198,674 - $ 6,198,674 $ 363,465

2021	Consumer goods	AI servers and related products	Total	Adjust and write off
External revenue Internal department revenue Segment revenue Segment profit or loss	$ 4,270,692 11,887 $ 4,282,579 $ 130,843	$ 2,247,372 121,032 $ 2,368,404 $ 90,404	$ - ( 132,919) ($ 132,919) ($ 58,503)	$ 6,518,064 - $ 6,518,064 $ 162,744

(III) Information on the adjustment of segment profit or loss

No reconciliation is necessary as the Group’s chief operating decision maker assesses segment performance and decide on the allocation of resources based on profit after tax.
The measurement method used for total amount of assets reported to the chief operating decision maker is the same as that used for the total amount of assets stated in the financial statements.

(IV) Information on products and services

Please refer to Note VI(XVII)

276

(V) Geographical information

2022 Revenue Non-current assets Mainland China $ 6,189,415 $ 233,945 Taiwan 9,259 54,224 $ 6,198,674 $ 288,169	2022	2022	2021	2021
	Revenue	Non-current assets	Revenue	Non-current assets
		$ 233,945 54,224 $ 288,169	$ 6,504,073 13,991 $ 6,518,064	$ 235,050 42,905 $ 277,955

(VI) Key accounts information

10C001 16L002	2022	2021
	$ 2,092,517 491,629	$ 2,178,925 579,767

277

Chaintech Technology Corporation and Subsidiaries

Endorsements and Guarantees

For the Year Ended December 31, 2022

Table 1

Unit: NT$ thousands

(Unless specified otherwise)

Subject of endorsements and guarantees

No. (Note 1)	Endorser/Guarantor	Company name	Relationship (Note 2)	Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsements and guarantees for the period (Note 4)	Balance of endorsements and guarantees at end of period	Endorsements and guarantees used	Endorsements and guarantees secured with collateral	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsements and guarantees for subsidiary (Note 5)	Subsidiary providing endorsements and guarantees for parent (Note 5)	Endorsements and guarantees involving Mainland China (Note 5)	Remarks
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,010,596 $ 79,344 $ 79,344 $ 79,344 $ - 1,010,596 35,264 35,264 35,264 -					3.93% $ 1,010,596 Y 1.74% 1,010,596 Y			N N	Y Y

Notes 1: Explanations are as follows:

(1) The issuer shall fill in 0.
(2) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.
Notes 2: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.
(1)Companies with which the Group conducts business;
(2)Subsidiaries in which the Group directly holds more than 50% of their common shares;
(3)Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;
(4)The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;
(5)Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or
(6)Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.

Notes 3: The ceiling limit on endorsements and guarantees provided by the Company, on endorsements and guarantees for a single enterprise, and on endorsements and guarantees provided by the Company and its subsidiaries should be 50% of the net value in the most recent financial statements respectively. Notes 4: The maximum balance of endorsement/guarantee provided to others in the current year. Notes 5: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

278

Chaintech Technology Corporation and Subsidiaries

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures) As of December 31, 2022

Table 2

Unit: NT$ thousands

(Unless specified otherwise)

Company holding securities	Type and name of securities	Relationship with the issuer of securities	Accounting item		End of period	End of period		Remarks
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Chaintech Technology Corporation Chaintech Technology Corporation Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd.	Stocks_APAQ Technology Co., Ltd. Stocks_CloudMile Co., Ltd. (Cayman Islands) Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product Beneficiary certificates_ ICBC “Tianlibao” No. 2” net-value wealth management product Beneficiary certificates _ Everbright Wealth Management Co.,Ltd. ""Sunshine Green Institution Profit" " wealth management product Beneficiary certificates_Industrial Bank jinxueqiu tianli express net-value wealth management product	- - - - - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial asset at fair value through profit and loss - current Financial asset at fair value through profit and loss - current Financial asset at fair value through profit and loss - current Financial asset at fair value through profit and loss - current	3,050,000 510,204 - - - -	$ 127,033 15,350 110,200 1,763 1,543 1,984	3.43% 1.81% - - - -	$ 127,033 15,350 110,200 1,763 1,543 1,984	- - - - - -

279

Chaintech Technology Corporation and Subsidiaries

Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital

For the Year Ended December 31, 2022

Unit: NT$ thousands (Unless specified otherwise)

Table 3 Buying and selling company Type and name of securities (Note 1) Accounting item Sitonholy (Tianjin) Technology Co., Ltd. CITIC Wealth Management Happy Win Steady Daily Interest No. 2 wealth management product Financial asset at fair value through profit and loss - current Sitonholy (Tianjin) Technology Co., Ltd. Industrial Bank jinxueqiu tianli express net-value wealth management product Financial asset at fair value through profit and loss - current	Counterparty (Note 2) - -	Relationship (Note 2) - -	Beginning of period Number of shares Amount - $ - - 43,440	Purchase (Note 3) (Note 4) Number of shares Amount - $ 215,992 - 198,360		Sell

280

Chaintech Technology Corporation and Subsidiaries

Purchases and Sales with Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

For the Year Ended December 31, 2022

Table 4 Company	Counterparty	Relations		Transaction	Transaction		Unusual trade conditions and its reasons	Unusual trade conditions and its reasons	Ratio of notes receivable	Unit: NT$ thousands (Unless specified otherwise) and accounts (payable) to total notes and accounts receivable (payable) Remarks	Unit: NT$ thousands (Unless specified otherwise) and accounts (payable) to total notes and accounts receivable (payable) Remarks
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	to total notes and accounts receivable (payable)
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 2,092,517	33.76%	OA 45~125 days	Not applicable	Not applicable	$ 525,778	51.02%	-

281

Chaintech Technology Corporation and Subsidiaries

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

As of December 31, 2022

Table 5 Company Counterparty Relations Balance of receivables from related parties Chaintech Technology Corporation Colorful Technology Co.,Ltd. 100% reinvestment business by Colorful Group Accounts receivable $ 525,778	Unit: NT$ thousands (Unless specified otherwise) Turnover rate Overdue receivables from related parties Receivables from related parties recoverable after period Allowances for losses Amount Handling method 3.31 $ - - $ 409,682 ($ 210)

282

Chaintech Technology Corporation and Subsidiaries

Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof

For the Year Ended December 31, 2022

Table 6

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1) Company Counterparty Relationship with counterparty (Note 2) 0 Chaintech Technology Corporation Shenzhen Jinghong Digital R&D Service Co.,Ltd Parent company to a subsidiary 0 Chaintech Technology Corporation Shenzhen Jinghong Digital R&D Service Co.,Ltd Parent company to a subsidiary 1 Sitonholy (Tianjin) Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sub-subsidiary company to sub-subsidiary company		Transaction status	Transaction status
	Accounting item Amount Operating expenses $ 9,845 Other payables 1,595 Sales revenue 11,238		Transaction terms Agreed by both parties Agreed by both parties Agreed by both parties	Percentage of consolidated total revenue or total assets
				0.16% 0.05% 0.18%

Notes 1: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction:
(1) The parent company is coded 0.
(2) The subsidiaries are coded from "1" in the order presented in the table above.
Notes 2: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

283

Chaintech Technology Corporation and Subsidiaries

Information on Investees (Not Including Investees in Mainland China)

For the Year Ended December 31, 2022

Table 7 The initial amount of investment Investor Investee company Location Main businesses and products December 31, 2022 December 31, 2021 Chaintech Technology Corporation uSenlight Corporation The Republic of China Electronics, computers, and peripherals $ 150,000 $ 150,000	Unit: NT$ thousands (Unless specified otherwise) Shareholding at end of period Investee company Number of shares Percentage Carrying amount Profit or Loss Gain (loss) on investment for the period Remarks 1,250,000 6.13% $ - $ - $ - Note 1
	Number of shares 1,250,000

284

Chaintech Technology Corporation and Subsidiaries

Information on Investments in Mainland China - Basic Information

For the Year Ended December 31, 2022

Table 8 Investee in Mainland China	Main businesses and products	Actual paid-in capital	Method of investmen t (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted from Taiwan at end of period	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Carrying amount of investments at end of period	Unit: NT$ thousands (Unless specified otherwise) Gain (loss) on investment recovered as of the period Remarks	Unit: NT$ thousands (Unless specified otherwise) Gain (loss) on investment recovered as of the period Remarks
					Remittance	Recovery	$ 499,065 - - - -	$ 44,639 87,943 3,336 ( 5,587) -	100 51 51 51 51	$ 44,639 44,851 1,701 ( 2,849) -	$ 610,557 636,100 51,279 20,249 6,527	$ - - - - -	- - - - -
Shenzhen Jinghong Digital R&D Service Co.,Ltd Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen)Technol ogy Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices $ 499,065 Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 110,630 Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 36,824 Electronic products, communication products, computer software and hardware, data processing, storage and support services 50,643 Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 6,527		1 3 3 3 3	$ 499,065 - - - -	$ - - - - -	$ - - - - -

Notes 1: The method of investment in Mainland China includes the three following types:

(1) Direct investment;
(2) Investment in Mainland China through a company set up in a third area; or
(3) Others: Investment in Mainland China through an reinvestment in Mainland China.

Notes 2: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

Accumulated investment amount

remitted from Taiwan to Mainland Investment amount authorized by Ceiling on investment in Mainland China Company name China at end of period Investment Commission, M.O.E.A. regulated by Investment Commission, M.O.E.A. Chaintech Technology Corporation $ 499,065 $ 544,794 $ 1,384,231

Notes 4: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

285

Chaintech Technology Corporation and Subsidiaries

Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area For the Year Ended December 31, 2022

Table 9

Unit: NT$ thousands

(Unless specified otherwise)

Investee in Mainland China	Sales (purchases)	Sales (purchases)	Property transactions	Property transactions	Accounts receivable (payable)	Accounts receivable (payable)	Endorsements and guarantees or collateral provided	Endorsements and guarantees or collateral provided		Financing	Financing		Others
	Amount	%	Amount	%	Balance	%	Balance at end of period	Purpose	Highest balance for the period	Balance at end of period	Interest range	Interest for the period
Shenzhen Jinghong Digital R&D Service Co.,Ltd Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	$ - - -	- - -	$ - - -	- - -	($ 1,595) - -	- - -	$ - 79,344 35,264	- Supplier credit limit utilization Supplier credit limit utilization	$ - - -	$ - - -	- - -	$ - - -	Operating expenses $9,845 - -

286

Chaintech Technology Corporation and Subsidiaries Information on Major Shareholders As of December 31, 2022

Table 10

Name of major shareholders	Shareholding
	Number of shares	Shareholding ratio
Yeland International Development Ltd. Masterlink Securities (Hong Kong) Corporation Limited - Client A/C at CTBC Bank Li Sai-lung	28,532,080 8,444,841 6,000,000	29.57% 8.75% 6.22%

Notes 1: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.
Notes 2: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity, please refer to the Market Observation Post System.

287

AI assistant

CHAINTECH — Annual Report 2022

52073_rns_2023-06-27_408361e6-e265-4014-a57c-2e20f0fef87f.pdf

CHAINTECH Technology Corporation

2022 Annual Report

Notice to Reader:

Table of Contents

Appendices

Chapter 1. Letter to Shareholders

I. 2022 Business Results

(II) Financial Position and Profitability Analysis:

Chapter 2. Company Profile

I. Date of Founding: November 17, 1986

Chapter 3. Corporate Governance Report

I. Organization

II. Information of Directors, Supervisors, General Manager, Deputy General Manager, Assistant Manager, and Managers of Departments and Branches

1. Director Information

3. Major Shareholders as Judicial Person

(II) Information on General Manager, Deputy General Manager, Assistant Managers, and Managers of Departments and Branches

(III) Remuneration Paid During the Most Recent Fiscal Year to Directors, Supervisors, General Manager and Deputy General Manager

2. Supervisors' remuneration (disclose the name and remuneration individually)

3. Remuneration for the General Manager and Deputy General Manager (disclose the name and remuneration individually)

Table of range of remuneration

4. Remuneration for the Five Senior Officers with the Highest Remuneration (disclose the name and remuneration individually)

III. Status of Corporate Governance

by Proxy ＊ : On Leave

(2) Evaluation results:

(2) Communications between the Independent Directors, the Chief Audit Officer and the CPAs:

Information on the continuing education of the Company's directors in 2022:

Evaluation Standards for the Independence of CPAs

Other issues to be recorded:

(IX) Implementation of Internal Control System

1. Internal Control Statement

IV. Information on CPAs fees

V. Information About Replacement of CPA: None.

(II) Equity transfer information:

(III) Information on equity pledge:

Chapter 4. Funding Overview

I. Capital and Shares

1. Formation of share capital

(III) Distribution of Shares

1. Common shares

2. Preferred Shares: N/A.

Chapter 5. Operating Overview

I. Business Activities

(II) Industry Overview

Technology Dimension

Industry Applications

Application Scenarios

(3) The "iPhone Moment" of AI

II. Market, Production, and Sales Overview

2. Sales regions

(2) Disadvantages

(II) Major applications and production process of the primary products

(2) AI servers

2. Production processes of the main products

(III) Supply of Major Raw Materials

Major suppliers in the past two years

Major sales customers for the most recent two fiscal years

(V) Production volume and value in the most recent two fiscal years

(VI) Sales volume and value in the most recent two fiscal years

III. umber of Employees in the Last Two Years Up to the Printing of this Annual Report

IV. Information on Environmental Protection Expenditure

V. Labor Relations

4. Labor Relations

VI. Cyber Security

VII. Material Contracts:

Chapter 6. Financial Information

2. Condensed Parent Company Only Balance Sheet

2. Condensed Parent Company Only Statement of Comprehensive Income

II. Financial Analysis of the Last Five Years

1. Consolidated financial analysis

2. Individual financial analysis

Chaintech Technology Corporation

Supervisors' Review Report

Whereas

Sincerely,

Chaintech Technology Corporation

Chaintech Technology Corporation

Supervisors' Review Report

CHAINTECH Annual Report 2022

by Proxy `＊` : On Leave